The US Supreme Court decides BG v Argentina – right place, wrong road?

In a 7-2 majority decision on 5 March 2014, the United States Supreme Court has reinstated BG Group (BG)’s US$185 million arbitral award against Argentina.[1] The Supreme Court sought to clarify the delineation between “procedural” and “substantive” arbitrability issues in relation to pre-conditions to arbitrate. The Supreme Court found that a litigation pre-condition to arbitrate was procedural in nature, and that issues of arbitrability arising out of such a pre-condition were, therefore, for the arbitrators, not the courts, to decide. Although Article 8 of the Argentina-UK bilateral investment treaty (BIT) was a dispute resolution provision in a treaty between two sovereign nations, both the majority and the dissenters on the Supreme Court limited their analyses to principles of US commercial contracts law. All justices appeared to have found a common ground in their deliberate disregard of the rules of treaty interpretation under international law. In this respect, the decision of the District Court of Columbia that originally confirmed the award remains the only instance in the BG v Argentina US court saga that recognised the relevance of international law, and of its rules of interpretation under the Vienna Convention, in the context of treaty arbitration.

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Is your Arbitration Agreement Valid in the United Arab Emirates?

Herbert Smith Freehills’ Saloni Kantaria has published an article in issue 80.1. 2014 of the International Journal of Arbitration entitled “Is your Arbitration Agreement Valid in the United Arab Emirates?” The article gives an overview of the options for resolving disputes in the United Arab Emirates (UAE) and examines the distictions between UAE law and DIFC arbitration law on what constitutes a valid arbitration agreement. The article also gives some tips on ensuring your arbitration agreement is valid and the approach the UAE and DIFC courts are taking to arbitration agreements in circumstances where a party tries to commence parallel court proceedings.

To read the full article, please click here.

Reproduced with permission from (2014) 80(1) Arbitration © 2014 Chartered Institute of Arbitrators.

For more information, please contact Saloni Kantaria, Senior Associate, or your usual Herbert Smith Freehills contact.

Saloni Kantaria
Saloni Kantaria
Senior Associate
Email
+971 56 644 2127

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Filed under Arbitration laws, Arbitration rules, DIFC, Institutions, Middle East, News

Myanmar and the European Union to enter into an investment protection agreement

In furtherance of its commitment to foreign investment and international arbitration, Myanmar has recently been involved in negotiations with the European Union (the EU) as a precursor to signing an investment protection agreement that, among other things, will recognise international arbitration as the preferred dispute resolution mechanism.  

In addition to the enactment of the Foreign Investment Law in 2012 and the accession to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention), which came into force in Myanmar on 15 July 2013. Click here for our earlier blog post. Myanmar appears to be taking several other steps to encourage foreign investor confidence.

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Filed under Arbitration laws, New York Convention, News, Public International Law, South East Asia

Asia Arbitration Internships: Applications Now Open

Herbert Smith Freehills is now accepting applications for the next round of internships in our international arbitration teams in Hong Kong and Singapore. Click here for our previous post on the programme, which offers aspiring arbitration lawyers a chance to work closely with Asia’s leading specialist arbitration group.

Each paid internship will be for three to four months (with no extension) during the following periods:

  1. May to July or August 2014
  2. September to December 2014

To apply, please click here (Hong Kong) or here (Singapore).

Applications must be submitted on or before 21 March 2014.

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Hola free trade! The Pacific Alliance strengthens Latin American trade aspirations as the Trans-Pacific Partnership negotiations move forward

On 10 February 2014, the Presidents of Chile, Colombia, Mexico and Peru met in Colombia at the VIII Summit of the Pacific Alliance to sign the Additional Protocol of the Framework Agreement for the Pacific Alliance. The Additional Protocol eliminates 92 percent of tariffs between the members and will enter into effect after each of the members incorporates it into their domestic framework through the appropriate legislative channels. The remaining 8 percent of tariffs that have not been liberalized mainly relate to agricultural products and will be eliminated gradually over the next few years.

This is a very significant development not just for the countries involved but for the region as a whole and the rest of the world. These four countries represent nearly 40% of the Latin American GDP and have a total population of over 210 million people. Combined, the four countries represent the eighth largest economy in the word and the seventh largest exporter.

With the potential conclusion of the Trans-Pacific Partnership in the coming year, this significant step towards strengthening the trade bloc will further cement the channels of trade with Asia that these influential Latin American economies are seeking to deepen.

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Indian Supreme Court upholds ‘unworkable’ arbitration clause while ensuring that supervisory jurisdiction over the arbitration only lies with the Indian Courts

Adding to the welcome suite of recent pro-arbitration decisions from the Indian judiciary, the Indian Supreme Court in Enercon (India) Ltd and Ors v Enercon Gmbh and Anr,¹ applied the principles of severability of the arbitration clause from the underlying contract and referred a dispute to arbitration despite some flaws in the drafting of the arbitration clause.

On the facts, the Indian Supreme Court retained the Indian judiciary’s supervisory jurisdiction over the dispute by holding that the seat of arbitration was in India, despite London being chosen as the ‘venue’ of the arbitration. In making this determination, the Court was heavily swayed by the fact that the laws specifically chosen by the parties in the contract to apply to different aspects of the dispute were Indian laws, and that besides being designated as the ‘venue’ there was no other factor connecting the dispute to London. On this basis the court held that the English courts did not have concurrent jurisdiction over the dispute.

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Filed under Arbitration clauses, Arbitrators, Asia, India

The English Commercial Court considers whether a party’s failure to pay its share of the advance on costs is a repudiatory breach of the arbitration agreement

In BDMS Limited v Rafael Advanced Defence Systems [2014] EWHC 451 (Comm), the English Commercial Court considered whether the Respondent’s failure to pay its share of the advance on costs in an ICC arbitration amounted to a repudiatory breach of the arbitration agreement entitling the Claimant to pursue its claim in court. In the particular circumstances, the judge considered that whilst a failure to pay constituted a breach of the arbitration agreement, such a breach was not repudiatory. Accordingly, the court granted a mandatory stay of the court proceedings.

This case provides useful clarification as to the repercussions of a party’s failure to pay an advance of costs and the avenues available to Claimants in such circumstances.

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Draft LCIA Rules released for comment

The London Court of International Arbitration (LCIA) has released a “final draft” of its new arbitration rules to the arbitration community in advance of the Tylney Hall Symposium to be held by the LCIA on 9 May 2014. The draft is available here.

In their current form, the draft rules contain some expected modernisations to improve the handling of complex disputes, such as limited provision for consolidation. In line with other arbitral institutions, the drafting committee has sought to promote procedural efficiency. Of particular note is the requirement that an arbitrator expressly states before appointment that he or she is “ready, willing and able to devote time, diligence and industry to ensure the expeditious conduct of the arbitration” and that the tribunal set a timetable for the production of a final award.  Again, following the trend of the most recent revisions of arbitral rules, the  current draft indicates that the LCIA is considering introducing an emergency arbitrator provision.

The most talked about aspect of the current draft will be the introduction of a new Annex of general conduct guidelines which would apply to all legal representatives appearing by name before a tribunal under the LCIA rules. The guidelines themselves are relatively short and limited in scale compared to the IBA Guidelines on Party Representation, but the current draft proposes to allow a Tribunal to sanction legal representatives for their conduct where they fail to comply with them.

How soon the draft will be finalised will depend on its reception and the speed with which the LCIA Court can then move to adopt (or revise) the draft. We will cover the release of the new LCIA Rules once finalised and will hold a Webinar for clients to assess key changes. Please contact Jane Webber if you would like to attend.

For further information, please contact Vanessa Naish, Professional Support Lawyer, Hannah Ambrose, Professional Support Lawyer or your usual Herbert Smith Freehills contact.

Vanessa Naish
Vanessa Naish
Professional Support Lawyer
Email
+44 20 7466 2112
Hannah Ambrose
Hannah Ambrose
Professional Support Lawyer
Email
+44 20 7466 7585

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Filed under Arbitration rules, Institutions

JCAA introduces a new set of arbitration rules

The Japan Commercial Arbitration Association (JCAA) has introduced an amended version of its Commercial Arbitration Rules (the New Rules). The New Rules, which contain comprehensive amendments, came into force on 1 February 2014, following a consultation period. They will apply to all arbitrations initiated on or after that date. The changes are intended by the JCAA to update the rules in line with recent trends in the amendment of arbitration rules (such as the 2010 Amendments to the UNCITRAL Arbitration Rules). The changes largely achieve this aim, addressing current issues in international arbitration such as multi-party arbitration, emergency arbitrators and interim relief.

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Filed under Arbitration rules, Asia, Institutions

Upcoming Webinar: Investment Treaties and the African Continent – Change, Risk and Opportunity

Tuesday 8 April 2014, 12.30 – 1.30pm BST

Drawing together the two strands of our recent webinars on Investment Treaty Arbitration and arbitration in the EMEA regions, this webinar will focus on Investment Treaties and the African continent.

Africa is brimming with an abundance of natural resources, talent and ambition. Investment into African jurisdictions is becoming increasingly desirable and competitive, with investors hailing from all over the developed and developing worlds.

In this webinar, our speakers will draw from their knowledge and experience to discuss the differing approaches adopted by African jurisdictions towards Investment Treaties and the continent’s history in terms of Investor-State disputes. The speakers will look at sources of foreign direct investment into Africa (such as China) and the impact this has had on the Investment Treaty landscape. Our speakers will then turn to consider the likely approaches to be adopted by African jurisdictions in future, and the risks and opportunities these present to our clients in the context of an increasingly transparent investor-state dispute settlement system.

Speakers:

Chaired by:

  • Hannah Ambrose, Arbitration Practice Manager, London

If you would like to register for this event please contact Jane Webber.

A webinar is an online seminar delivered to your desktop. On the day of the webinar you will be sent a link to login to the live event.

The webinar is recorded so you can listen again. If you are unable to listen to the live event register anyway and you will be able to listen to the recorded version when convenient.

The webinar is interactive and we welcome questions from our audience. Email your comments to the speakers on the day using the appropriate tab on the player.

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Filed under Africa, Investment Arbitration, News