Arbitration Agreement Investment Law

April 8, 2021

Often, the choice of the arbitration institution is made available to investors, whom they wish to entrust to the management of their dispute. This decision depends on the terms of the arbitration agreement on which the dispute is submitted. The most well-known arbitration institution that manages investment arbitrations is the International Centre for Settlement of Investment Disputes (ICSID). IcSID arbitrations, based in Washington and involving parts of Europe or Asia, often take place at the World Bank headquarters in Paris. Most investment arbitration agreements provide for a 6-month cooling-off period, during which the investor and the host state are invited to negotiate for an amicable solution. The starting point of the cooling-off period is usually a declaration of intent for the opening of arbitration proceedings against the host state. If the dispute over the cooling-off period is not resolved, as is customary (many states prefer to wait and see if a foreign investor is actually willing to pay the high costs necessary to follow an investment arbitration procedure), the foreign investor must apply for arbitration in accordance with the current arbitration rules. The vast majority of disputes remain unresolved at this stage. The parties must cover the costs of the arbitration tribunal, the arbitration proceeding, expert fees and lawyers` fees.

Some specialized arbitration law firms, known as arbitrations, offer legal services for investment arbitration at more competitive legal fees that can reduce the total cost. Aceris is an example of such a shop. Installation referees have been criticized as a “small, secret clubby” group of “great old men,” but more female referees are appearing in investment arbitration today. While parties to ICSID referees are free to select arbitrators within the ICSID panel of arbitrators, they are not required to do so and the parties are generally free to choose who they want, subject to certain nationality and qualification requirements. If a party is having difficulty covering the costs of arbitration, it is also possible to obtain funds from third-party developers who make available funds to follow investment arbitration procedures in exchange for a financial participation in the financial outcome of the case. However, obtaining third-party funding is a difficult and time-consuming process and is only intended for apparently the strongest cases. Today, investor-state arbitration has arguably become the most controversial form of international litigation. Arbitration proceedings under the International Centre for Investment Conflict (ICSID) or UNCLOS (United Nations Commission for International Trade Law) allow an investor to sue a host country before an ad hoc arbitration tribunal for violation of bilateral investment agreements (ILOs) or trade and investment agreements (z.B the North American Free Trade Agreement (NAFTA). If successful, the investor can enforce a judgment against the host state in ordinary courts around the world. This regime has been dominated as a network of secret courts or “shadows” by a clique of elite arbitrators, who are not motivated by justice, but by the personal acquisition of wealth, a system in which multinational corporations unleash blue chip cabinets in some of the world`s poorest countries, impose multi-million dollar colonies or earn even greater rewards. , sometimes more than a nation impoverished the entire annual budget for health and public safety.

Among the reform proposals was the replacement of arbitration procedures with an investment judicial system based either on bilateral agreements or a separate multilateral institution (as currently proposed by the EU and Canada). The selection of an arbitral tribunal for an investment arbitration procedure is perhaps the most critical step in this process.

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