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GC Cheat Sheet: The Hottest Corporate News Of The Week - Law360

Google International ADR News - Fri, 2018-08-24 14:09

GC Cheat Sheet: The Hottest Corporate News Of The Week
Law360
So far, the corporate legal community has generally praised the program, which the AAA has said is the first of its kind offered by a national provider of alternative dispute resolution services. .... A guest faculty member at Harvard Law School's ...

Mediation and Conciliation in UAE - Mediate.com

Google International ADR News - Fri, 2018-08-24 10:36

Mediation and Conciliation in UAE
Mediate.com
C. Dubai International Financial Center (DIFC). The Rules ... The Rule 27.2 provides that the Judges will, in appropriate cases, invite the parties to consider whether their dispute or particular issues in it, could be resolved through alternative ...

ASEAN debates to kick off live on 1 October - The ASEAN Post

Google International ADR News - Fri, 2018-08-24 04:42

The ASEAN Post

ASEAN debates to kick off live on 1 October
The ASEAN Post
The Gandhi Memorial ASEAN Debate Competition 2018, organised by Kuala Lumpur based Gandhi Memorial Trust (GMT) is slated to kick off on 1 October in conjunction with the 148th birthday of international historical icon, Mohandas Karamchand Gandhi – more ...

Make Video History

ADR Prof Blog - Thu, 2018-08-23 17:53
You make history all the time though you probably don’t think about it that way. People often think of history as involving significant public figures and events, not average people doing things in their everyday lives.  Of course, we are the central actors in our own lives and we are part of our own and … Continue reading Make Video History →

Reinforcing the Arbitration Path in Latin America: Argentina Adopted an International Commercial Arbitration Act

Kluwer Arbitration Blog - Thu, 2018-08-23 17:25

María Inés Corrá

In what should be deemed as an authentic legislative milestone, on July 4, 2018 the Argentine House of Representatives approved the International Commercial Arbitration bill (previously passed by the Senate in 2017). The bill became a law and entered into force as Act 27,449 after its publication in the Official Gazette on July 26, 2018.

 

The International Commercial Arbitration Law (hereinafter, “ICAL”) mostly adopts the UNCITRAL Model Law on International Commercial Arbitration (UNCITRAL Model Law), as amended in 2006, with some minor differences, most of them of non-substantial nature.

 

The bill was promoted by the Argentine Ministry of Justice and elaborated by some of the most outstanding specialists of Argentina, including high reputed professors, judges and practitioners.

 

The ICAL will regulate international commercial arbitration exclusively, without prejudice of any multilateral or bilateral treaty executed by the Argentine State (Section 1).

 

As for an arbitration to be considered “international”, the ICAL adopts the general criteria set forth in Article 1(3) of the UNCITRAL Model Law, although excluding its item (c), according to which “(c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country” (Section 3).

 

On the other hand, the ICAL endorses a broad interpretation of the “commercial” nature of the arbitration. It considers “commercial” every relationship, contractual or not, completely or mostly governed by private law. It further orders that, in case of doubt, the commercial characterization of the relationship should prevail (Section 6).

 

The new law does not establish a definition for an arbitral agreement, and partially departs from Article 7(3) of the UNCITRAL Model Law, setting forth that “The arbitration agreement shall be in writing. An arbitration agreement is in writing if its content is recorded in any form”, without collecting the terms “whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means” (Section 15).

 

Regarding the arbitrators’ appointment, the ICAL follows Article 11 of the UNCITRAL Model Law, adding, however, that the arbitral clause that provides any of the parties with a privileged position for the arbitrators’ appointment is null and void (Section 24, second paragraph).

 

According to the new law, assistance to arbitral proceedings and the decision on the annulment requests will be performed by the judges and courts of appeals in commercial matters of the arbitration seat, respectively (Section 13). Notably, this provision will serve to consolidate a more uniform case law on matters dealing with the application and interpretation of the new law. It should also prevent the potential intervention by other courts that could be not familiar enough with the relevant principles governing the matter.

 

Concerning interim measures and preliminary orders, the ICAL partially modifies Article 17.G of the UNCITRAL Model Law, establishing that the party requesting an interim measure or applying for a preliminary order shall be liable for any costs and damages caused by the measure or the order to any party if the arbitral tribunal later determines that, in said circumstances, the measure or the order should not have been requested (instead of “granted”) (Section 55).

 

As regards the arbitral award content, the ICAL partially departs from Article 31(2) of the UNCITRAL Model Law, and only allows the award not to state the reasons upon which it is based, if it is an award on agreed terms, thus excluding the possibility for the parties to agree that no reasons are to be given (Section 87).

 

In a significant change, the ICAL sets forth a 30-day term in order to file an annulment request (Section 100). In doing so, the new provision departs from Section 759 of the Argentine Civil and Commercial Procedural Code, according to which annulment application should be filed within 5 (five) days as from the arbitral award notification.

 

Section 106 of the ICLA explicitly endorses the non-exclusive interpretation of Article II (2) of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Furthermore, the new law abrogates Section 519 bis of the Argentine Civil and Commercial Procedural Code which formerly regulated the enforcement of foreign arbitral awards (by making reference to the provisions applicable to foreign judicial courts set forth in Section 517) (Section 107).

 

The ICAL constitutes a substantive advance in favor of arbitral practice in Argentina, which certainly reinforces the arbitration path in Latin America. Through it, Argentina will finally have a separate regulation for international commercial arbitration.

 

Until today, Argentine legislation did not distinguish between domestic and international arbitration proceedings, being both subject to the provisions contained in procedural codes and, since 2015, in the Civil and Commercial Code.

 

The new law reverses the difficulties found in the past in order to adopt a modern regulation on the mater, and confirms that a more favorable environment for arbitration is prevailing in Argentina and will hopefully consolidate in the future.

 

In this path, the ICAL endorses other recent specific regulations, such as the Renewable Energy Regulation in force since 2016 -i.e. Act 26,190, as amended by Law 27,191  and Decree No. 882/2016– and the Public-Private Partnership Contracts Regulation, also enacted in 2016 -i.e. Act 27,328 and Decree No. 118/2017-, which explicitly set forth that disputes arisen from the agreements executed under them may be submitted to arbitration.

 

Furthermore, the new favorable trend for arbitration has been expressly ratified by the Argentine Ministry of Justice at his opening speech at the IBA Arbitration Day that took place in Buenos Aires in February 2018.

 

In sum, the International Commercial Arbitration Act recently approved by the Argentine Congress contributes to position Argentina as a pro-arbitration seat, with the significant advantages that this entails for the development of the arbitral practice in the country and in Latin America.

 

More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
€ 240


The post Reinforcing the Arbitration Path in Latin America: Argentina Adopted an International Commercial Arbitration Act appeared first on Kluwer Arbitration Blog.

ICC commission targets arbitration growth in Africa - The Global Legal Post

Google International ADR News - Thu, 2018-08-23 04:20

The Global Legal Post

ICC commission targets arbitration growth in Africa
The Global Legal Post
Run by the ICC, the court has appointed 24 members from across Africa to serve on the commission, including current and former members of the ICC and vice chairs of the ICC Commission on Arbitration and Alternative Dispute Resolution (ADR).

NUJS Kolkata Hosts IMW- International Conclave On Conflict Resolution - Live Law

Google International ADR News - Thu, 2018-08-23 02:49

Live Law

NUJS Kolkata Hosts IMW- International Conclave On Conflict Resolution
Live Law
The conclave aimed to equip participants with the basics of theoretical and practical aspects of Alternative Dispute Resolution procedures and served as the pre-launch event for the second edition of the Indian Mediation Week. The event saw ...

Arbitration of Smart Contracts Part 1 – Introduction to Smart Contracts

Kluwer Arbitration Blog - Wed, 2018-08-22 22:32

Ibrahim Mohamed Nour Shehata

As described by Max I. Raskin, a blockchain is simply a decentralized ledger for recording digital data in a verified time-stamped manner without the need for a trusted third party. Blockchain technology provides, according to Joseph Bambara, et al., more “security, traceability, and transparency of records…as well as lower operational costs.” In this regard, public blockchains are protected from security threats because they maintain the information on multiple nodes where more than 51% of the nodes would have to be compromised before any security breach could occur. 

The best definition of a smart contract is: “a set of promises, specified in digital form, including protocols within which the parties perform on these promises.”1)Nick Szabo, Smart Contracts: Building Blocks for Digital Markets(1996). jQuery("#footnote_plugin_tooltip_9448_1").tooltip({ tip: "#footnote_plugin_tooltip_text_9448_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Accordingly, a smart contract is a computerized algorithm which automatically performs the terms of the contract. As Bambara notes, smart contracts lie on a wide spectrum ranging from vending machine contracts to fully blockchain-executed smart contracts. As described here, a recent example of fully blockchain-executed smart contracts is a smart contract for a flood insurance policy, linked to the precipitation data from the Met Office. Once the data from the Met Office feeds into the blockchain, the policy is automatically triggered, and insurance claims are paid out. Our discussion in this series of articles will focus on smart contracts executed on public blockchains such as Ethereum. Please find a chart available here explaining the concept of smart contracts that are executed on blockchains.

As Raskin notes, Smart contracts typically have the following characteristics: (1) execution is automated; and (2) performance is ensured without recourse to law enforcement. In this regard, the main difference between smart contracts and traditional legal contracts is “the ability of smart contracts to enforce obligations by using autonomous code.”2)De Filippi Primavera and Aron Wright, Blockchain and the Law: The Rule of Code(2018). jQuery("#footnote_plugin_tooltip_9448_2").tooltip({ tip: "#footnote_plugin_tooltip_text_9448_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Smart contracts do that by recording performance obligations in a strict and formal programming language (like Ethereum’s Solidity).

Generally speaking, the code of the smart contract is executed without relying upon a trusted third party3)In a forthcoming post, we recommend the inclusion of oracles in smart contracts, whereby we argue that this hypothesis is overestimated when it comes to smart contracts dealing with off-the-chain events. jQuery("#footnote_plugin_tooltip_9448_3").tooltip({ tip: "#footnote_plugin_tooltip_text_9448_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });; the code is rather implemented in a distributed manner by all of the nodes supporting the underlying blockchain-based network whereby no single party controls the blockchain4)This is the case with public blockchains only. There are private blockchains which are usually administrated and controlled by a trusted third party. jQuery("#footnote_plugin_tooltip_9448_4").tooltip({ tip: "#footnote_plugin_tooltip_text_9448_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); (i.e., Ethereum). This autonomous scheme makes the promises recorded into smart contracts to be – by default – more difficult to get amended or terminated than promises in traditional legal contracts recorded in natural language (i.e., legalese). Accordingly, as Kevin Werbach and Nicholas Cornell have written, unless the parties have incorporated some logic in their smart contract to enable the amendment and the termination of such a smart contract, then there might be no way to halt the execution of a smart contract after it has been triggered by its parties.

Legal Challenges Related To Smart Contracts

Smart contracts raise numerous enthralling legal challenges. This section will try to shed light upon some of these legal challenges as follows:

(1) Legal Effects

As a starting point, are smart contracts legal binding contracts? The answer to this question depends upon three main factors: (1) the specific use case; (2) the form of smart contract being used (i.e. entirely coded in software or a hybrid smart contract with both an encrypted coded version and a text-based version); (3) the law applicable to the contract. This means that the answer might vary significantly depending on the concerned jurisdiction. As Bambara has observed, often the certainty of the content of the contractual terms and whether they are comprehensive enough is a critical factor in determining the legal effects of any contract in numerous jurisdictions. In order to eliminate such uncertainty surrounding the legal effects of smart contracts, some states like Delaware, Tennessee, and Arizona have passed legislation to recognize the legal effects of smart contracts. In 2017, Arizona has passed the amended Arizona Electronic Transactions Act (AETA), HB 2417, which defines blockchain technology as a “distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permission less, or driven by tokenized crypto economics or token less” and indicates that the “data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth.” HB 2417 also defines smart contracts as an “event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger that can take custody over and instruct transfer of assets.” Therefore, parties to a smart contract might be able to ensure that their smart contract is legally binding if they elect the law applicable to the contract to be that of Arizona, or Delaware or Tennessee or any other jurisdiction that recognizes the legal binding effects of smart contracts. Such a choice of law has to be supplemented by choice of forum that would recognize and enforce the parties’ choice of law.

(2) Amendment and Termination of Smart Contracts

The original smart contract concept has started with the invention of the vending machine. With a vending machine for soft drinks, one can insert a dollar for instance and gets back a soft drink. However, the process of a vending machine is not flawless. For instance, what if one changed his mind after inserting the dollar and wants to get chocolate instead of a soft drink; or, what if one changed his mind and did not want anything anymore. An even more intriguing question, what if the vending machine does not perform its obligation and dispenses the soft drink; I am sure many of us have faced such a situation and did not know what to do. These examples also apply in the realm of smart contracts which are entirely recorded on blockchains.

(3) Coding limitations

Whenever one mentions coding limitations in the world of the blockchain, the decentralized autonomous organization (“DAO”) incident has to be mentioned. As described by Raskin, the DAO was formed in 2016 to create an investing fund that “would not be controlled by any one individual, but by shareholders voting based on their stakes on a blockchain.” The DAO was able to pool funds worth $150 million. Soon after this money was raised, a hacker was able to divert about what is worth $40 million funds from the DAO in an unpredictable manner. The hacker did not “hack” the code in a malicious way but rather exposed a legal loophole in the smart contracts of the DAO. This incident shows how coding is limited and how bugs could be simply exploited by hackers. Thus, as David Zaslowsky noted here, it is not really surprising that a 2016 study of Ethereum smart contracts revealed that there are at least 100 errors per 1,000 lines of code. Bambara has raised the intriguing question of who should be liable for such mistakes or errors? In traditional contracts, the parties would be able to sue the drafting lawyer for malpractice, could a similar lawsuit be brought against the coders of smart contracts for coding errors. These are novel legal issues that do not exist with traditional text-based contracts; it will be interesting to see how courts and arbitral tribunals will deal with such incidents.

(4) Ability to design complex contracts

As the adoption of blockchain spreads, smart contracts will become increasingly complex and capable of handling highly sophisticated transactions. Currently, coders are already stringing together multiple transaction steps to form more complex smart contracts. Nonetheless, we are many years away from code being able to determine more subjective legal criteria. For instance, as Stuart D. Levi and Alex B. Lipton have written, there is no yet code that would be able to determine whether a party satisfied a commercially reasonable efforts standard or whether a force majeure clause should be triggered or not.

References   [ + ]

1. ↑ Nick Szabo, Smart Contracts: Building Blocks for Digital Markets(1996). 2. ↑ De Filippi Primavera and Aron Wright, Blockchain and the Law: The Rule of Code(2018). 3. ↑ In a forthcoming post, we recommend the inclusion of oracles in smart contracts, whereby we argue that this hypothesis is overestimated when it comes to smart contracts dealing with off-the-chain events. 4. ↑ This is the case with public blockchains only. There are private blockchains which are usually administrated and controlled by a trusted third party. function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
€ 240


The post Arbitration of Smart Contracts Part 1 – Introduction to Smart Contracts appeared first on Kluwer Arbitration Blog.

ODR Forum Reminder – November 14-15

ADR Prof Blog - Wed, 2018-08-22 20:14
From my colleague, Amy Schmitz: This is a further reminder I am sending out on behalf of Professor Ian Macduff, who is the Director of the NZ Centre for ICT Law at the University of Auckland.   This reminder is about the 18th ODR Forum, to be hosted by the NZ Centre for ICT Law in … Continue reading ODR Forum Reminder – November 14-15 →

The Four Horsemen of the Regulatory State - City Journal

Google International ADR News - Wed, 2018-08-22 15:41

City Journal

The Four Horsemen of the Regulatory State
City Journal
U.S., the Supreme Court opened the door to such transfers of authority, upholding the “flexible tariff provision” of the Tariff Act of 1922, which permitted the president to adjust tariff rates based on international price differentials. Writing for a ...

Movers and Shakers for Aug. 26 - Alaskajournal.com

Google International ADR News - Wed, 2018-08-22 13:56

Movers and Shakers for Aug. 26
Alaskajournal.com
Before joining Alaska Sea Grant, Brandon was a foreign affairs specialist for NOAA's Office of International Affairs and Seafood Inspection. Brandon has also worked for World Wildlife Fund, Juneau Economic Development Council, Pacific Fishery ...

Terms of Service - FOX10 News

Google International ADR News - Wed, 2018-08-22 13:35

Terms of Service
FOX10 News
International Users. The Services are controlled and offered by Meredith from its facilities in the United States of America. Meredith makes no representations that the Services are appropriate or available for use in other locations. Those who access ...

India: A further revamp of arbitration - for better or worse? - Lexology

Google International ADR News - Wed, 2018-08-22 11:06

Lexology

India: A further revamp of arbitration - for better or worse?
Lexology
In yet a further drive to support India's ambition to become a hub for both domestic and international commercial arbitration, the Arbitration and Conciliation (Amendment) Bill 2018 (2018 Bill) is making its way through the Indian Parliament. The 2018 ...

and more »

California loosens restrictions on counsel in international arbitrations - International Law Office

Google International ADR News - Wed, 2018-08-22 09:39

California loosens restrictions on counsel in international arbitrations
International Law Office
SB 766 will take effect on 1 January 2019. Overview. SB 766 states that "a qualified attorney [as defined] may provide legal services in an international commercial arbitration or related conciliation, mediation, or alternative dispute resolution ...

What Trump said - Politico

Google International ADR News - Wed, 2018-08-22 09:02

ABC News

What Trump said
Politico
... including S. 1787 (115), the National Geologic Mapping Act Reauthorization Act, a bill from Senate Energy Chairman Lisa Murkowski; and S. 2160 (115), from Steve Daines, which would establish a pilot program under which the Forest Service chief may ...
EPA Proposes Affordable Clean Energy (ACE) Rule | U.S. EPA News Releases | US EPAEPA

all 2,094 news articles »

Commercial Diplomacy as a Ways Forward to Resolving Disputes When They Arise in International Trade

Kluwer Arbitration Blog - Wed, 2018-08-22 03:59

Marike R. P. Paulsson

In the world of International Arbitration (“IA”), one distinguishes between commercial arbitration and investment arbitration, the latter widely referred to as Investor-State Dispute Settlement or ISDS, as a dispute resolution mechanism based on bilateral treaties, multilateral treaties, and free trade agreements. IA is lauded as the best method for dispute resolution in international trade. This is where we have derailed from the origins of the manner in which relations between parties in trade were handled, which is – amicably. If parties were not able to settle disputes amicably, they would resort to two possible methods. With State respondents involved, one could be confronted with what is called gunboat diplomacy, i.e. bringing in the army to put pressure on an investor. It is what should be avoided at all cost. On the other side of the spectrum, parties would resort to third-party assisted settlement. The latter includes methods such as mediation and conciliation. Another third-party assisted settlement method is commercial diplomacy.

Today, IA is still the preferred method for resolving disputes. However, it could simply be because over the last two decades ISDS cases have significantly increased and the method has very much been promoted by the IA community. Users – investors and clients – have not always been consulted as to what their overall needs are. Many organizations try to involve the investors by setting up users’ councils and task forces. From a user’s perspective, costs, the lack of efficiency, duration, post-arbitration enforcement and execution phase, corruption, dilatory tactics, and the prospects of actually collecting under the award and when are important.  Meanwhile, the IA community – under the leadership of institutions – focuses on improving ISDS with reforms focused on transparency, efficiency and matters such as arbitrator selection. Yet, sovereigns saw an opportunity to use criticism for radically doing away with it.1) Marike Paulsson, Kluwer Arbitration Blog: “Revisiting the Idea of ISDS within the EU and an arbitration court: the effect on party autonomy as the main pillar of arbitration and the enforceability of arbitral awards” May, 21st, 2018. jQuery("#footnote_plugin_tooltip_2652_1").tooltip({ tip: "#footnote_plugin_tooltip_text_2652_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });  

Courts and tribunals ought to rethink their role and define their mandate in changing times towards a new world order, a re-shifting of powers. Actors and influencers in international law should hold sovereigns accountable and persuade them to be mindful of obligations entered into under international instruments such as bilateral and multilateral treaties.2) Marike Paulsson, Conflict Resolution in a Changing World Order, Trade, Law and Development, National Law University, Jodhpur, India. jQuery("#footnote_plugin_tooltip_2652_2").tooltip({ tip: "#footnote_plugin_tooltip_text_2652_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Sovereignty has always been an obstacle to the flourishing of international law. Today, a discussion about a world court has taken a centre stage but the question is whether that is really a solution:

At the London Court of International Arbitration Centenary Conference in London (in 1995) some old stalwarts – Judge Howard Holtzman and Judge Stephen Schwebel (then a Sitting Judge of the ICJ) envisaged the prospect of a new international Court for resolving disputes in the 21st century. But these worthy gentlemen being experienced Arbitrators and men of the world also recognized that setting up an International Court of Arbitration would be tilting at the windmills of national sovereignty.

Judge Schwebel recalled the theme of a song of a popular film at the time “the Man of La Mancha” where the principal character Don Quixote, who is a dreamer – always dreamed, “the impossible dream”. An International Court of Arbitration, Schwebel said, was like an impossible dream. Is it still? The proposed permanent investment arbitration court in the EU-Canada Comprehensive and Economic Trade Agreement (CETA) seems to be that impossible dream of the Man of La Mancha, or even worse, a deception. Article 8.29 of the CETA provides that the Contracting States to the treaty shall establish a multilateral investment tribunal. On the basis of Article 8.27 the CETA Joint Committee shall appoint fifteen members to the tribunal.  Yet, they remain sovereign appointments.3)Marike Paulsson, Conflict Resolution in a Changing World Order, Trade, Law and Development, National Law University, Jodhpur, India. jQuery("#footnote_plugin_tooltip_2652_3").tooltip({ tip: "#footnote_plugin_tooltip_text_2652_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Resolving investment disputes with sovereigns through arbitration is now not only costly and lengthy, it comes with a collateral damage. Once the notice of arbitration is filed, let alone the award rendered, it is hard for an investor to preserve its original relationship with the State. Furthermore, IA leads mostly to monetary damages, and not so often to tailored non-monetary and creative solutions. Also, what those in IA overlook is that investors do not only look at what could be awarded in arbitration but when it could be collected and what percentage of what was awarded. Many investors look to more amicable methods of preventing or resolving disputes. Methods such as mediation and commercial diplomacy focus on negotiating with governments to seek constructive conditions that are persuasive for both investor and State. The investor can continue its business operations whereas the State preserves its reputation for being an attractive place to invest and will continue to attract FDI. For States, disputes are not merely legal: they are political and commercial and sometimes have an impact on cultural and environmental aspects as well. Sometimes, parties in international commercial arbitration agree to multi-tiered or hybrid dispute resolution clauses that provide for attempts to amicable settlement through direct negotiation first, followed by mediation and if all fails, international arbitration. It is a sequenced set up of dispute resolution methods.

One could imagine a parallel track: the so-called “carrot and stick” approach. In order to place pressure on a State, an investor could initiate the arbitration based on a BIT, for example. Not only is it a way for an investor to signal that it contends to have a merit-based claim, it also enables a government to take action. On a parallel track – and perhaps more in cloak-and-dagger style – an investor could employ a strategy of commercial diplomacy to deal with the government directly. Commercial diplomacy factors in geopolitical risk at all stages of a pending dispute. As mediation, commercial diplomacy has been around for centuries. As far back as the 1920s, the ICC in Paris promoted diplomacy to resolve investment disputes. As IA is called alternative dispute resolution (“ADR”) to courts, commercial diplomacy is perhaps a form of complementary dispute resolution (“CDR”). More amicable dispute resolution processes create a win-win that allows future growth in the host State.

Commercial diplomacy, like mediation and conciliation, consists of some core stages and competencies albeit it is not subject to mediation or conciliation rules nor does one need certified mediators or conciliators. The core stages focus not only on a legal assessment of the merits of a claim, but the focus is expanded to scoping any economic incentives and political pressure points or policy matters that weigh heavily in a State-Respondents assessment of its willingness to settle. Negotiators would scale out those pressure points to engage with stakeholders taking on the honest broker role. It is focused on an efficient execution – the so-called money in the bank strategy – without having to face lengthy and frustrating enforcement and execution hurdles under the New York Convention, the ICSID Convention and local laws on seizing and executing assets. The settlement is not only focused on financial compensation but also non-monetary ways of bringing parties together and preserving their relationship.

Settlements take place more and more as one saw in the Chevron v Ecuador case.4)Laura Roddy, Conoco and Ecuador settle ICSID Feud, Global Arbitration Review (December 4, 2017). jQuery("#footnote_plugin_tooltip_2652_4").tooltip({ tip: "#footnote_plugin_tooltip_text_2652_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Argentina has settled a string of cases in order to attract more FDI.5) See, for instance, Douglas Thomson, Argentina and Total settle, Global Arbitration Review (July 19, 2017). jQuery("#footnote_plugin_tooltip_2652_5").tooltip({ tip: "#footnote_plugin_tooltip_text_2652_5", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Therefore, there is momentum as States are willing to look into other processes to handle conflicts with investors. At the same time, one must remember that States only enter into BITs for their own interest, so that investors will invest at a lower cost because there is a dispute resolution protection in place. However, many States are not sophisticated enough to understand the intricacies and impact of treaties. Diplomatic efforts though are less foreign to them.

So when is a case most likely to settle? What is important in these settlement efforts, is, among others, whether the timing is good. If it is early in the case, a claimant would not have much ammunition on the merits. In that case, it could consider the idea of an authoritative opinion.  Thus a settlement could be negotiated early in the case, or at certain points during the procedural timeline. Even after the award is rendered, settlement through diplomatic channels is most effective when one wants to collect under the award.

Important factors to consider are who are the counsels for both the investor and the State, and their willingness to look for holistic and alternative approaches that complement a strategy. The timing and geopolitical factors such as upcoming elections and the pro-investor attitude of a new government are crucial.  One would also do research in order to determine how important the presence is of a particular investor in a market such as the energy market. Key stakeholders at the government level need to be able to trust negotiators when engaging in commercial diplomacy. The position those negotiators hold vis-à-vis the investor and the government is important. They need to be able to operate at arm’s length so that they are in fact, what one would call, an honest broker. In a climate where IA is being subject to reforms and even radical replacement, one ought to go back to the origins of dispute settlement: a more amicable way of resolutions which is a step forward towards the flourishing of international trade that complements, and not replaces the traditional idea of IA.

References   [ + ]

1. ↑ Marike Paulsson, Kluwer Arbitration Blog: “Revisiting the Idea of ISDS within the EU and an arbitration court: the effect on party autonomy as the main pillar of arbitration and the enforceability of arbitral awards” May, 21st, 2018. 2. ↑ Marike Paulsson, Conflict Resolution in a Changing World Order, Trade, Law and Development, National Law University, Jodhpur, India. 3. ↑ Marike Paulsson, Conflict Resolution in a Changing World Order, Trade, Law and Development, National Law University, Jodhpur, India. 4. ↑ Laura Roddy, Conoco and Ecuador settle ICSID Feud, Global Arbitration Review (December 4, 2017). 5. ↑ See, for instance, Douglas Thomson, Argentina and Total settle, Global Arbitration Review (July 19, 2017). function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
€ 240


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Post-acquisition dispute resolution challenges - Financier Worldwide

Google International ADR News - Wed, 2018-08-22 03:59

Financier Worldwide

Post-acquisition dispute resolution challenges
Financier Worldwide
The courts are usually the default form of dispute resolution for domestic acquisitions, but arbitration is common for international acquisitions.” Arbitration and other forms of alternative dispute resolution (ADR) are appearing more frequently in SPAs.

Post-acquisition dispute resolution challenges - Financier Worldwide

Google International ADR News - Wed, 2018-08-22 03:59

Financier Worldwide

Post-acquisition dispute resolution challenges
Financier Worldwide
The courts are usually the default form of dispute resolution for domestic acquisitions, but arbitration is common for international acquisitions.” Arbitration and other forms of alternative dispute resolution (ADR) are appearing more frequently in SPAs.

ICC commission targets African arbitration growth - African Law & Business (ALB)

Google International ADR News - Wed, 2018-08-22 03:44

ICC commission targets African arbitration growth
African Law & Business (ALB)
One of the world's leading arbitration institutions has created a commission to help it expand its market on the continent. The ICC International Court of Arbitration (ICC) will launch an Africa Commission to co-ordinate its growth and activity in ...

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Fitzpatrick, Cella, Harper & Scinto to Join Venable - Global Banking And Finance Review (press release)

Google International ADR News - Wed, 2018-08-22 02:06

Global Banking And Finance Review (press release)

Fitzpatrick, Cella, Harper & Scinto to Join Venable
Global Banking And Finance Review (press release)
... litigation, appeals, post-grant patent challenges (e.g., IPRs), alternative dispute resolution, licensing, opinions, corporate transactions and due diligence. Fitzpatrick represents an international client base from Fortune 500 companies to start ...

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