• Title/Summary/Keyword: Investment treaty

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A Study in the Differences between Commercial Arbitration and Investment Treaty Arbitration (상사중재와 투자조약중재에 관한 비교연구)

  • Kim, Sung-Ryong;Ahn, Keon-Hyung
    • Journal of Arbitration Studies
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    • v.24 no.1
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    • pp.59-83
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    • 2014
  • In the past, the mention of "international arbitration" would have brought to mind only commercial arbitration. However, the frequency of investment treaty arbitration has seen remarkable grow thanks to the rise of globalization and the spread of multi-national corporations. Reflecting on the current state of the world, this paper introduces the meaning, characteristics, and differences between commercial arbitration and investment treaty arbitration in the context of procedural considerations. To this end, this paper examines some major procedural differences among the said types of arbitration, by dividing commercial arbitration into institutional arbitration and ad hoc arbitration, and dividing investment treaty arbitration into ICSID arbitration and UNCITRAL Rules arbitration.

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A Study on the Applicability of MFN Clause for Investment Dispute Settlement Provisions: Focusing on the ICSID Arbitration Cases (투자분쟁해결규정에 MFN 조항의 적용여부에 관한 연구: ICSID 중재사례를 중심으로)

  • Hwang, Ji-Hyeon
    • Korea Trade Review
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    • v.42 no.4
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    • pp.139-157
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    • 2017
  • Whether an investor can invoke a dispute settlement procedure stipulated in other BIT based on the MFN clause in the original BIT is an important issue. There is a difference in the interpretation of MFN clause in which the scope of the treatment stipulates the slightly different contents for each investment treaty. Therefore, this study considered ICSID arbitration cases related to the applicability of MFN clause for investment dispute settlement provisions. There are two different approaches for the applicability of MFN clause by arbitral tribunals. At first, the expanded interpretation of the MFN clause can be applied to procedural regulations, in that the purpose of the investment treaty is to protect foreign investors and to ensure their status. So, foreign investors can invoke a BIT of a third country that is advantageous to them. Second, the limited interpretation of the MFN clause can not be applied to procedural regulations. Without explicit regulation, the term treatment can not be considered to include dispute resolution provisions. And the BIT that the host state has concluded with third country is a treaty that applies only to the contracting party, so it can not be used by foreign investors of other nationality. Therefore, this study suggests concretely stipulating the scope of MFN clause under the investment treaty, highlighting that certain restrictions should be applied to the MFN clause. Furthermore, it is required continually investigating and analyzing the database of the scope of MFN clause.

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Investment Treaty Arbitration Policy in Australia, New Zealand and Korea?

  • Nottage, Luke
    • Journal of Arbitration Studies
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    • v.25 no.3
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    • pp.185-226
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    • 2015
  • As in some developing countries and more recently some developed countries worldwide and in the Asian region, Australia has faced significant internal opposition and public debate especially over treaty-based investor-state dispute settlement (ISDS). As outlined in Part II(1), concerns have re-emerged and escalated since the first-ever claim was brought against Australia regarding its tobacco plain packaging legislation, in 2011 by Philip Morris Asia under an old BIT with Hong Kong. However, Australia signed bilateral FTAs with Korea in 2014 and with China in 2015, including ISDS protections, prompting several sets of parliamentary inquiries (Part II(2)). Australia's close trading partner, New Zealand, had already concluded an FTA with China in 2008 that included more expansive ISDS-backed investor protections. In 2015, the New Zealand Parliament has been debating ratification of its own FTA with Korea, with ISDS also now attracting growing scrutiny, as elaborated in Part III below. In both bilateral FTA negotiations, the present Korean government seems to have reverted to a strong preference for concluding investment agreements with extensive ISDS protections, despite public and parliamentary debate around 2011 in the context of ratifying its FTA with the United States. As mentioned briefly in the concluding Part IV, Korea's stance has significant implications for the future trajectory of treaty-based ISDS - and indeed international arbitration more generally - in the Asia-Pacific region, and perhaps even globally.

The Key Issues of Lone Star Investment Treaty Arbitration and the Korean Government Strategy (론스타의 투자조약중재 제기 쟁점과 한국 정부의 전략적 대응방안)

  • Oh, Hyun-Suk;Kim, Sung-Ryong
    • Journal of Arbitration Studies
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    • v.27 no.4
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    • pp.133-156
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    • 2017
  • The purpose of this paper is to take a countermeasure of the investment treaty arbitration that Lone Star claimed to the Korean government. In particular, this study suggests procedural measures to be prepared by the Korean government after the arbitration award. The actual remedy in ICSID arbitration is the annulment procedure of arbitration award. Therefore, this study analyzed the measures that the Korean government can prepare based on the annulment grounds: the inadequacy of the constitution of the arbitral tribunal, the excessive power of the arbitrator, the corruption of the arbitrator, and the serious violation of the rules. First, the Korean government should decide whether to proceed with the annulment procedure after the arbitration award. Second, if they decide to do it, they should review the grounds of annulment. For example, it is possible to analyze whether the relationship between the arbitrator and Lone Star can be properly in the constitution of the arbitral tribunal, whether Lone Star is eligible to apply for ICSID arbitration, or whether arbitration tribunal ignores the crucial evidence that can affect the arbitration award. Independently, the Korean government needs to discuss the investment arbitration appeal system in a long-term perspective.

Interpretation of the Umbrella Clause in Investment Treaties (국제투자조약상 포괄적 보호조항(Umbrella Clauses)의 해석에 관한 연구)

  • Jo, Hee-Moon
    • Journal of Arbitration Studies
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    • v.19 no.2
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    • pp.95-126
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    • 2009
  • One of the controversial issues in investor-state investment arbitration is the interpretation of "umbrella clause" that is found in most BIT and FTAs. This treaty clause requires on Contracting State of treaty to observe all investment obligations entered into with foreign investors from the other Contracting State. This clause did not receive in-depth attention until SGS v. Pakistan and SGS v. Philippines cases produced starkly different conclusions on the relations about treaty-based jurisdiction and contract-based jurisdiction. More recent decisions by other arbitral tribunals continue to show different approaches in their interpretation of umbrella clauses. Following the SGS v. Philippines decision, some recent decisions understand that all contracts are covered by umbrella clause, for example, in Siemens A.G. v. Argentina, LG&E Energy Corp. v. Argentina, Sempra Energy Int'l v. Argentina and Enron Corp. V. Argentina. However, other recent decisions have found a different approach that only certain kinds of public contracts are covered by umbrella clauses, for example, in El Paso Energy Int'l Co. v. Argentina, Pan American Energy LLC v. Argentina and CMS Gas Transmission Co. v. Argentina. With relation to the exhaustion of domestic remedies, most of tribunals have the position that the contractual remedy should not affect the jurisdiction of BIT tribunal. Even some tribunals considered that there is no need to exhaust contract remedies before bringing BIT arbitration, provoking suspicion of the validity of sanctity of contract in front of treaty obligation. The decision of the Annulment Committee In CMS case in 2007 was an extraordinarily surprising one and poured oil on the debate. The Committee composed of the three respected international lawyers, Gilbert Guillaume and Nabil Elaraby, both from the ICJ, and professor James Crawford, the Rapportuer of the International Law Commission on the Draft Articles on the Responsibility of States for Internationally Wrongful Acts, observed that the arbitral tribunal made critical errors of law, however, noting that it has limited power to review and overturn the award. The position of the Committee was a direct attack on ICSID system showing as an internal recognition of ICSID itself that the current system of investor-state arbitration is problematic. States are coming to limit the scope of umbrella clauses. For example, the 2004 U.S. Model BIT detailed definition of the type of contracts for which breach of contract claims may be submitted to arbitration, to increase certainty and predictability. Latin American countries, in particular, Argentina, are feeling collectively victims of these pro-investor interpretations of the ICSID tribunals. In fact, BIT between developed and developing countries are negotiated to protect foreign investment from developing countries. This general characteristic of BIT reflects naturally on the provisions making them extremely protective for foreign investors. Naturally, developing countries seek to interpret restrictively BIT provisions, whereas developed countries try to interpret more expansively. As most of cases arising out of alleged violation of BIT are administered in the ICSID, a forum under the auspices of the World Bank, these Latin American countries have been raising the legitimacy deficit of the ICSID. The Argentine cases have been provoking many legal issues of international law, predicting crisis almost coming in actual investor-state arbitration system. Some Latin American countries, such as Bolivia, Venezuela, Ecuador, Argentina, already showed their dissatisfaction with the ICSID system considering withdrawing from it to minimize the eventual investor-state dispute. Thus the disagreement over umbrella clauses in their interpretation is becoming interpreted as an historical reflection on the continued tension between developing and developed countries on foreign investment. There is an academic and political discussion on the possible return of the Calvo Doctrine in Latin America. The paper will comment on these problems related to the interpretation of umbrella clause. The paper analyses ICSID cases involving principally Latin American countries to identify the critical legal issues arising between developing and developed countries. And the paper discusses alternatives in improving actual investor-State investment arbitration; inter alia, the introduction of an appellate system and treaty interpretation rules.

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A Study on the Interpretation and Application of Investment Treaties for Arbitral Award under International Investment Disputes (국제투자분쟁에서 중재판정시 투자조약의 해석과 적용에 관한 연구)

  • Hwang, Ji Hyeon;Park, Eun Ok
    • THE INTERNATIONAL COMMERCE & LAW REVIEW
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    • v.59
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    • pp.59-78
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    • 2013
  • The interpretation and application of investment treaties takes place mostly by ad hoc tribunals. Their composition varies from case to case. But in interpreting and applying investment treaties are bound to exist on a ground rule and coherent criteria. Given summarizing contents of this study, those are as follows. When interpreting investment treaties, (i) most tribunals is based on Article 31 and 32 of the VCLT, (ii) tribunals rely on previous decisions, (iii) tribunals resort to travaux pr$\acute{e}$paratoires, (iv) tribunals consider the interpretative statement. When applying investment treaties, (i) treaties apply only in relation to acts or events that occurred after their entry into force, (ii) tribunals have applied different inter-temporal rules to jurisdictional clauses and substantive provisions in treaties, (iii) the relevant date for purposes of jurisdiction is the date of the institution of proceedings, (iv) Under the ICSID convention, the host state and investor's nationality must be a party to the convention on the date the proceedings are instituted. This study is expected to possibly become guideline in the interpretation and application standards of investment treaties. So future disputes can be prevented and prepared in advance.

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Analysis of the Effects of Investment Facilitation Levels on China's OFDI: Focusing on RCEP Member States

  • Yong-Jie Gui;Jin-Gu Kang;Yoon-Say Jeong
    • Journal of Korea Trade
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    • v.27 no.3
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    • pp.161-178
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    • 2023
  • Purpose - purpose of this paper is to analyze the effects of the investment facilitation levels of 11 RCEP countries (excluding Myanmar, Brunei, and Laos due to lack of data) on China's outward foreign direct investments(OFDI) using balanced panel data from 2010 to 2019. Design/methodology - First, four investment facilitation measurement indicators (regulatory environment, infrastructure, financial market, ease of doing business) were selected,investment facilitation scores of the 11 countries were obtained using the principal component analysis, an investment gravity model was established with nine explanatory variables (investment facilitation level, market size, population, geographic distance, degree of opening, tax level, natural resources, whether the country is an APEC member or not, and whether a valid bilateral investment treaty with China has been concluded) were used to establish an investment gravity model, and regression analyses were conducted with OLS and system GMM. Findings - The results of the regression analyses showed that investment facilitation levels had the greatest effect on China's OFDI, all four first-level indicators had positive effects on China's OFDI, and among them, the institutional environment had the greatest effect. In addition, it was shown that explanatory variables such as market size, population, geographical distance, degree of openness, natural resources, and whether or not a valid bilateral investment treaty has been concluded would have positive effects on China's OFDI, while tax levels and APEC membership would impede China's OFDI to some extent. Originality/value - Since the Regional Comprehensive Economic Partnership (RCEPT) came into effect not long ago, there are not so many studies on the effects of investment facilitation levels of RCEP member states on China's OFDI, and the investment facilitation measurement index constructed in this paper is relatively systematic and scientific because it includes all the contents of investment facilitation related to the life cycle of company's foreign direct investments.

Achmea BV v. Slovakia: The End of the Intra-EU BIT and the Investor State Dispute? (최근의 EU 회원국간 양자투자협정과 투자자-국가 분쟁 동향 - Achmea BV v. Slovakia 사건을 중심으로 -)

  • Kang, Sung-Jin
    • Journal of Arbitration Studies
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    • v.28 no.2
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    • pp.201-216
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    • 2018
  • After the adoption of the Lisbon Treaty, the European Union's Common Commercial Policy now belongs to the exclusive competence area of the EU, including the foreign direct investment (FDI) policy. Regarding the bilateral investment protection treaties (BITs) between the EU Member States, the European Commission is of the view that such BITs should be discarded. On March 6, 2018, the Court of Justice of the European Union (CJEU) held in the Achmea BV v. Slovakia case that a BIT between the EU Member States, as well as arbitral awards based on that BIT, is not subject to request for preliminary rulings under the Treaty on the Functioning of the European Union (TFEU), and thus they are not compatible with the EU law. However, the judgment did not silence the controversy. Instead, many people questioned the legal reasoning and the legitimacy of judgment, and therefore the problem is still ongoing.

A Study on Matters to be Attended when Drafting National Treatment Clause in International Investment Treaty (투자협정상 "내국민대우(National Treatment)" 조항 작성시 유의사항에 관한 연구)

  • Oh, Won-Suk;Seo, Kyung;Li, Jing-Hua
    • THE INTERNATIONAL COMMERCE & LAW REVIEW
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    • v.49
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    • pp.519-544
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    • 2011
  • Clauses on national treatment in the bilateral investment treaties including FTA state that, the foreign investor and his investments are 'accorded treatment no less favourable than that which the host state accords to its own investors'. Hence the purpose of the clause is to oblige a host state to make no negative differentiation between foreign and national investors when enacting and applying its rules and regulations and thus to promote the position of the foreign investor to the level accorded to nationals. As a matter of legal drafting technique, while the basic clause is generally the same, the practical implications differ due to more or less wide-ranging exemptions of certain business sectors. It is generally agreed that the application of the clause is fact-specific. This paper deals with problems in drafting clauses on national treatment in practice, introduces several considerations to adjust the level of national treatment, so it can be made more represents the interest of our country.

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A Study on the Resolution Mechanism for Dispute between Investor and State in China (중국의 투자자-국가 간 분쟁 해결제도에 관한 연구)

  • Ha, Hyun-Soo
    • Journal of Arbitration Studies
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    • v.23 no.4
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    • pp.29-53
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    • 2013
  • Chinese ISD has been changed a lot since the reformation policy in 1978 and it is expected that China will present a changed attitude toward its advantage as its industrialization continues to advance. This study generally examines the ISD in BIT and also considers not only the attitude of China with regard to ISD but also the changes on the Chinese side. Moreover, this study determines the areas on which the Chinese government focuses. In order to conduct this study, the author attempts to classify the attitudes on ISD into chronical change and treaty powers based on the analysis of BIT. In addition, the paper examines the main contents of ISD in BIT which previously involved an agreement such as arbitral institution, arbitral range, counter-measures of local country, standard for admitting the nationality of corporate investors, and recognition and enforcement of arbitral award. Based on analysis, this paper mentions matters that require attention and caution in the Korea-China FTA as regards investment negotiation, and also suggests instructions for investors who may face dispute with the Chinese government.

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