Abstract
This chapter examines the likely impact of integrated international dispute resolution services on the investment arbitration regime in three respects: institutionalization, transparency, and enforcement. This chapter reaches the following three major conclusions. First, regarding institutionalization, integrated dispute resolution services likely will contribute to the building momentum for greater institutionalization within the investment arbitration regime. Second, regarding transparency, integrated dispute resolution services likely will give rise to additional transparency gains within the regime by placing even greater attention on the need for coherent development of law, which requires public access to decision-making. Third, regarding enforcement, integrated dispute resolution services likely will narrow the existing enforceability gap between arbitral awards, on the one hand, and court judgments and mediated settlement agreements, on the other. A narrower enforceability gap would reduce the significance of one of the key advantages of international arbitration: an unmatched global enforcement regime. The diminished significance of that advantage likely would place additional pressure on the investment arbitration regime to address key vulnerabilities, notably recurrent perceptions of incoherent jurisprudence and arbitrator conflicts of interest.
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Notes
- 1.
Working Rules of the CICC’s International Commercial Expert Committee, Article 1.
- 2.
Provisions of the Supreme People’s Court Regarding the Establishment of the International Commercial Court (27 June 2018), Article 11.
- 3.
See e.g., Huo Z, Yip M (2019) Comparing the international commercial courts of China with the Singapore international commercial court. Int Comp Law Q 68:903 (discussing the development of the CICC and the Singapore International Commercial Court (SICC)); Wong DH (2014) The rise of the international commercial court: what is it and will it work? Civil Justice Q 33:205 (discussing the development of the SICC and the Dubai International Financial Center (DIFC) Courts); Horigan DP (2015) From Abu Dhabi to Singapore: the rise of international commercial courts. Int J Humanit Manag Sci 3:78 (discussing the development of Abu Dhabi Global Market (ADGM) Courts, the SICC, the DIFC Courts, and the Qatar Financial Centre (QFC)).
- 4.
Erie M (2020 (forthcoming)) Legal hubs: the emergent landscape of international commercial dispute resolution. Va J Int Law 60.
- 5.
SICC Committee Report at 7, 10.
- 6.
SICC Committee Report at 11.
- 7.
SICC Committee Report at 11 (internal footnote omitted).
- 8.
See, e.g., Walker J (2019) Specialized international courts: keeping arbitration on top of its game. Arbitration 85:7 (the SICC “serves as a companion rather than a competitor to the SIAC”); Hwang M (2015) Commercial courts and international arbitration: competitors or partners? Arbitr Int 31:197 (observing that international commercial courts and international arbitration exist “side by side” in “complete harmony”).
- 9.
Walker, p 7.
- 10.
Bookman P (2020 (forthcoming)) The adjudication business. Yale J Int Law, Temple University Legal Studies Research Paper No. 2019–08, p 24.
- 11.
Bookman, p 33.
- 12.
See Blanke G (2015) DIFC court amends practice direction no. 2 of 2015 on referral of payment judgment disputes to arbitration: getting it right … Finally! Kluwer Arbitration Blog, July 16 (discussing DIFC Court Practice Direction allowing “judgment creditors of DIFC money judgments that remain unsatisfied by a recalcitrant judgment debtor to refer to arbitration for enforcement of the unsatisfied debt … [which] will be achieved through ‘converting’ the DIFC payment judgment into a DIFC-LCIA arbitration award”).
- 13.
Erie M (2018) The China international commercial court: prospects for dispute resolution for the ‘belt and road initiative’. ASIL Insights, August 31. See also Chaisse J, Matsushita M (2018) China’s “belt and road” initiative – mapping the world trade normative and strategic implications. J World Trade 52(1):163–186.
- 14.
Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court, Article 11.
- 15.
See Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court, Article 11 (“The International Commercial Court supports parties to settle their international commercial disputes by choosing the approach they consider appropriate through the dispute resolution platform on which mediation, arbitration and litigation are efficiently linked”).
- 16.
Chief Justice Menon S (2015) International commercial courts: towards a transnational system of dispute resolution, opening lecture for the DIFC courts lecture series, pp 31–32. See also Bookman, p 48 (“several of these [international commercial] courts promote themselves not just as adjudicators but as lawmakers”); Walker, p 18 (“there continue to be expressions of interest in the public benefits of having commercial disputes contribute to the continuum of precedential decisions. This is a further reason for commercial parties to support the use of the new specialised courts”); Hwang, p 196 (identifying as a “main aim” of the SICC the harmonization of “existing differences between legal systems in Asia, which have led to uncertainty and inconsistency, by developing a free-standing body of international commercial law”).
- 17.
Justice Chong S (2015) The Singapore international commercial court: a new opening in a forked path. British Maritime Law Association Lecture, pp 16, 26.
- 18.
Submission of the European Union and its Member States to UNCITRAL Working Group III, Establishing a Standing Mechanism for International Investment Disputes (January 18, 2019), para 41 (quoting Diel-Gligor K (2017) Towards consistency in international investment jurisprudence: a preliminary ruling for ICSID arbitration (Brill), 164).
- 19.
UNCITRAL, Report of Working Group III (Investor-State Dispute Settlement Reform) on the Work of its Thirty-Seventh Session, A/CN.9/970 (April 9, 2019), para 81.
- 20.
UNCITRAL, Report of Working Group III (Investor-State Dispute Settlement Reform) on the Work of its Thirty-Seventh Session, A/CN.9/970 (April 9, 2019), para 71. See Chaisse J, Vaccaro-Incisa M (2018) The EU investment court: challenges on the path ahead. Columbia FDI Perspect 218:1–3.
- 21.
Submission from the Government of China, Note by the Secretariat, A/CN.9/WG.III/WP.177 (July 19, 2019), p 3.
- 22.
See e.g., UNCITRAL Working Group III, Possible Reform of Investor-State Dispute Settlement (ISDS): Consistency and Related Matters, A/CN.9/WG.III/WP.150 (28 August 2018) paras 32, 41, 47 (“At its thirty-fourth and thirty-fifth sessions, the Working Group heard some preliminary views regarding how inconsistency and incoherence could be addressed so as to enhance predictability of the ISDS framework. Suggestions included … the creation of a standalone appellate mechanism. The main functions of an appellate body is to ensure procedural and substantive correctness of decisions … [in addition] Certain recent investment treaties have foreseen the creation of a court, set up as a permanent international institution”).
- 23.
See e.g., Comprehensive Economic and Trade Agreement (“CETA”) arts 8.27 and 8.28 (establishing Investment Court System composed of a first instance Tribunal and an Appellate Tribunal); EU-Vietnam Investment Protection Agreement arts 3.38 and 3.39 (establishing Investment Tribunal System composed of a first instance Tribunal and an Appeal Tribunal); CAFTA-DR Annex 10-F (requiring Parties to establish a “Negotiating Group to develop an appellate body or similar mechanism to review awards rendered by tribunals under this Chapter”).
- 24.
See e.g., Justice Ramesh K (2018) International commercial courts: unicorns on a journey of a thousand miles. In: Conference on the rise of international commercial courts, p 4 (“Confidentiality of the arbitral process, the award and its reasons, a key hallmark of arbitration, presents an inherent shackle to arbitration’s ability to fully develop and contribute to global commercial jurisprudence”); Justice Chong Lecture, pp. 15–16 (“there is a real risk that, without transparency, many arbitrators might feel relatively free to do what they want rather than give effect to the law”); Walker, p. 15 (“Appellate review is not a widely sought feature of international commercial dispute resolution, but where it is important to the parties, it would appear that the specialised courts currently have a clear advantage”).
- 25.
See e.g., Chief Justice Menon Lecture, pp. 31–32 (a “network of international commercial courts helmed by a community of renowned international commercial judges can emerge as a very significant platform for the development of a body of consistent jurisprudence”).
- 26.
See note 8.
- 27.
See e.g., Coyle J (2012) Business courts and interstate competition. William Mary Law Rev 53:1915, 1928 (“A thriving system of private arbitration may be said to compete with the courts on the supply side”); Drahozal C (2009) Business courts and the future of arbitration. Cardozo J Conflict Resol 10:491, 492 (“Supporters of business courts commonly cite the need for courts to compete more effectively with arbitration as a justification for the creation of business courts”).
- 28.
See note 23.
- 29.
NAFTA FTC Interpretation (July 31, 2001), www.state.gov/documents/organization/38790.pdf
- 30.
Statement of the Free Trade Commission on Non-Disputing Party Participation, www.state.gov/documents/organization/38791.pdf
- 31.
See ICSID Arbitration Rules 32 and 37.
- 32.
See Report of Working Group II (Arbitration and Conciliation) on the Work of its Fifty-Third Session, A/CN.9/712 (October 20, 2010), p 3.
- 33.
UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (effective April 1, 2014).
- 34.
United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (adopted December 10, 2014; opened for signature March 17, 2015).
- 35.
G20 Guiding Principles for Global Investment Policymaking, Principle III.
- 36.
Mauritius Convention, preamble.
- 37.
See e.g., Fry J, Repousis OG (2015) Towards a new world for investor-state arbitration through transparency. New York Univ J Int Law Polit 48:805 (“the payment of compensation in connection with the arbitration award may have a severe impact on the respondent state’s economy”).
- 38.
See e.g., Knahr C, Reinisch A (2007) Transparency versus confidentiality in international investment arbitration – the Biwater Gauff compromise. Law Prac Int Courts Tribunals 6:97, 113(“the subject matter of investment disputes regularly concerns governmental measures. This often transforms investment arbitration into a functional equivalent of judicial review of governmental measures which would otherwise be reserved to the national courts”). See also Calamita NJ (2014) Dispute settlement transparency in Europe’s evolving investment treaty policy. J World Inv Trade 15:648–49 (referring to challenges to the “state’s exercise of public power”).
- 39.
Magraw Jr. DB, Amerasinghe NM (2008–2009) Transparency and public participation in investor-state arbitration. ILSA J Int Comp Law 15:337, 339.
- 40.
See e.g., Walker, 10 (“Although the specialised international courts each serve slightly different roles from one another, they offer a similar range of benefits for commercial parties in respect of the effectiveness with which they promise to resolve international disputes”).
- 41.
See e.g., Chief Justice Menon Lecture, p 11 (international commercial courts “represent an avenue for the advancement of the rule of law as a normative ideal in global commerce. This is because there will be greater external scrutiny of their decisions and processes, with increased pressure to justify decisions against international norms”).
- 42.
Mourre A (2009) Arbitral jurisprudence in international commercial arbitration: the case for a systematic publication of arbitral awards in 10 questions. Kluwer Arbitration Blog, May 28.
- 43.
International Chamber of Commerce International Court of Arbitration, Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration (January 1, 2019).
- 44.
Lord Thomas, Lord Chief Justice of England and Wales, 2016. The BAILII Lecture 2016, Developing Commercial Law through the Courts: Rebalancing the Relationship Between the Courts and Arbitration, para 23.
- 45.
See e.g., Abu-Mannah R, et al (2016) Is arbitration damaging the common law? Int Arb Law Rev:65 (examining “the challenges facing the English courts and arbitral institutions in the coming years through the prism of Lord Thomas’ criticisms of the current position”); Bor H (2016) Comments on Lord Chief Justice Thomas’ 2016 Bailii Lecture. Kluwer Arbitration Blog, April 11 (“Even those companies with a social conscience are most unlikely to allow a case to enter a court room and go public in order to assist the development of the law, especially if a judicial determination is unlikely to go their way”).
- 46.
See e.g., Knahr and Reinisch, p 111 (“The publication of judicial and arbitral decisions is a precondition for the evolution of a consistent case law which creates legal certainty in the form of assuring that all cases are treated equally”) (footnote omitted).
- 47.
See e.g., China UNCITRAL Submission p 3 (the existing investor-State dispute settlement mechanism, which has produced “numerous inconsistencies” in investment arbitration awards, “clearly cannot meet the requirements for realizing the rule of law in international investment”).
- 48.
See UNCITRAL, Status, United Nations Convention on Transparency in Treaty-Based Investor-State Arbitration, http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/2014Transparency_Convention_status.html
- 49.
See UNCITRAL, Status: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, https://uncitral.un.org/en/texts/arbitration/conventions/foreign_arbitral_awards/status2
- 50.
See ICSID, List of Contracting States and other Signatories of the Convention (as of April 12, 2019), https://icsid.worldbank.org/en/Documents/icsiddocs/List%20of%20Contracting%20States%20and%20Other%20Signatories%20of%20the%20Convention%20-%20Latest.pdf
- 51.
See HCCH, Status Table, Convention of 30 June 2005 on Choice of Court Agreements, https://www.hcch.net/en/instruments/conventions/status-table/?cid=98
- 52.
See HCCH, Status Table, Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, https://www.hcch.net/en/instruments/conventions/status-table/?cid=137
- 53.
See UNCITRAL, Status: United Nations Convention on International Settlement Agreements Resulting from Mediation, https://uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements/status
- 54.
Justice Chong Lecture para 46. See also Justice Ramesh Lecture para 27 (“some have commented that judgments from [international commercial] courts do not enjoy the scope of enforceability allowed under the New York Convention”).
- 55.
Justice Ramesh Lecture, p 20 (internal footnotes omitted).
- 56.
See e.g., Chief Justice Menon Lecture, pp. 31–32 (“[a] network of international commercial courts helmed by a community of renowned international commercial judges can emerge as a very significant platform for the development of a body of consistent jurisprudence”).
- 57.
See e.g., Walker, pp. 10–11 (“The requirement of an agreement in writing between the parties fundamentally constrains the scope of arbitral tribunals to join additional parties without the consent of both the party to be added and the parties to the agreement. It also constrains the potential for consolidating related arbitrations absent the consent of all parties”).
- 58.
See e.g., Walker, p 13 (“Just as there are benefits to the specialized courts’ capacity to add parties and consolidate proceedings without the agreement of all the parties, so too are there benefits to be derived from the ease of local enforcement of interim and interlocutory relief applications made in specialised court proceedings”).
- 59.
For example, the SICC is a “branch of the Singapore High Court,” and the CICC is a “permanent adjudication organ” of the SPC. See Chief Justice Menon Lecture, p 17; Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court (June 25, 2018), Article 1.
- 60.
Schreuer C (2010) The future of investment arbitration, looking to the future: essays on international law in Honor of W. Michael Reisman (Brill), pp 787–788 (“In the absence of other arrangements, a dispute between a host State and a foreign investor will normally be settled by the host State’s domestic courts. From the investor’s perspective, this is not an attractive option. Rightly or wrongly, the courts of the host State are not seen as sufficiently impartial in this type of situation”).
- 61.
See e.g., SICC Committee Report para 15 (“Singapore is reputed for its efficient, competent and honest judiciary. A new international court would allow Singapore to further emphasize its value as a neutral third party venue with respected judges and sophisticated commercial jurisprudence”); Judge Gao Interview, p 7 (identifying shared characteristics of international commercial courts in London, Dubai, Qatar, Abu Dhabi, Singapore, Amsterdam, Frankfurt, Belgium and Astana, which include “high quality” adjudication and “fair and predictable” applicable laws).
- 62.
Chief Justice Menon Lecture, p 23.
- 63.
See e.g., UNCITRAL Working Group III, Possible Reform of Investor-State Dispute Settlement (ISDS): Consistency and Related Matters, A/CN.9/WG.III/WP.150 (August 28, 2018) para 5 (“At the thirty-fourth session of the Working Group, it was indicated that criticism of a lack of consistency and coherence was one of the reasons behind the Commission’s decision to embark on work on possible ISDS reform, thereby acknowledging the importance of ensuring a coherent and consistent ISDS regime”).
- 64.
See e.g., UNCITRAL Working Group III, Possible Reform of Investor-State Dispute Settlement (ISDS), Background Information on a Code of Conduct (July 31, 2019), para 5 (“At the thirty-fifth and thirty-sixth sessions of the Working Group, broad agreement was expressed on the importance of codes of conduct for ISDS tribunal members … At those sessions, it was suggested that measures enhancing confidence in the independence and impartiality of ISDS tribunal members would be in the interest of both States and investors”).
- 65.
See e.g., Chief Justice Menon Lecture, p 8 (“international commercial arbitration … became the pre-eminent mode of cross-border civil dispute resolution due to institutional structures such as the New York Convention and the Model Law”).
- 66.
See e.g., Mortenson JD (2010) The meaning of “investment”: ICSID’s Travaux and the domain of international investment law. Harvard Int Law J 51:257, 265(“The ICSID Convention has uniquely binding enforcement provisions”).
- 67.
Notably, efforts to support the development of more coherent jurisprudence through institutionalization can raise challenging questions concerning the enforceability of awards issued by tribunals operating within a more institutionalized regime. See e.g., Calamita NJ (2017) The challenge of establishing a multilateral investment tribunal at ICSID. ICSID Rev 32:611, 612(“the new EU model of ISDS does not appear to be compatible with the ICSID Convention”).
- 68.
Schnabel T (2019) The Singapore convention on mediation: a framework for the cross-border recognition and enforcement for mediated settlements. Pepperdine Dispute Resol Law J 19:1, 2.
- 69.
Schnabel, p. 2 (“mediation is seen as not only a faster, less expensive form of dispute resolution but also as more likely to preserve commercial relationships”).
- 70.
See e.g., Love B (2019) New UN Singapore convention drives shift to mediation of trade disputes. Financial Times, August 5 (“A priority is to keep commercial disputes out of local courts, where … there may be bias in favour of local operators”).
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Feldman, M. (2020). “One-Stop” Commercial Dispute Resolution Services: Implications for International Investment Law. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-5744-2_11-1
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