In its recent judgment in Progas Energy Limited and ors v Pakistan , the English High Court (the Court) granted Pakistan’s request for security for their costs in defending a challenge to an investment treaty award. The Court declined Pakistan’s application for security for its unpaid costs in the arbitration awarded to them by the tribunal. The case is of particular interest because the Court considered the relevance to the applications of the fact that the Claimants were funded by a third-party funder.
Security for costs granted by English Court in investment treaty award challenge in which claimants are receiving third-party funding
State-to-State dispute settlement under the EU’s draft Withdrawal Agreement: CJEU jurisdiction not arbitration
We have known for some time now that the UK and EU have very different views regarding the state-to-state dispute resolution mechanism to be contained in the Withdrawal Agreement between the EU and the UK. The EU has never made any secret of its intention for the CJEU to adjudicate on disputes between the UK and the EU over the interpretation of, and compliance with, the Withdrawal Agreement. Yesterday the EU released a draft Withdrawal Agreement for the UK’s consideration which contains a state-to-state dispute resolution provision which is consistent with that approach. This post provides an initial reaction to this draft provision.
North American trade and investment developments: No new NAFTA (for now), and Mexico signs the ICSID Convention
One month into 2018, the future of NAFTA continues to hang in the balance. The negotiating parties will reportedly convene in Ottawa for the sixth of seven planned negotiating sessions from January 23 – 29th. The parties initially hoped to conclude the negotiations before the end of 2017, but US President Donald Trump indicated on January 11, 2018 that there was “no rush” in the negotiations. In the same interview, Mr. Trump said that it may be difficult to reach an agreement before the July 1, 2018 federal election in Mexico, suggesting that the negotiations may continue for months. The parties’ agreement to keep the negotiations confidential means that few concrete details about the negotiating texts and parties’ proposals have been made public.
For more analysis of the NAFTA renegotiations, see our previous updates:
3rd EFILA annual conference 2018: parallel states’ obligations in investor-state arbitration – 5 February 2018, London
The European Federation for Investment Law and Arbitration (EFILA) will be holding its third Annual Conference on 5 February 2018 at the Senate House in London. The conference will focus on four topics:
- non-disputing third parties and their influence on arbitration;
- investment regulation and arbitration;
- human rights, environment and arbitration; and
- the proposed Investment Court System.
UK Supreme Court confirms the limited scope of state and diplomatic immunity from employment claims: Benkharbouche and Reyes
In two judgments handed down on 18 October 2017, the Supreme Court (the “Court”) has allowed certain employment claims made by foreign nationals employed as domestic workers at the embassies of foreign states and a diplomat’s residence to proceed despite claims of immunity. The judgments consider important aspects of state and diplomatic immunity, the differences between the two, and wider considerations of the interplay between domestic, EU and international law.
In Benkharbouche (Respondent) v Secretary of State for Foreign and Commonwealth Affairs (Appellant) and Secretary of State for Foreign and Commonwealth Affairs and Libya (Appellants) v Janah (Respondent)  UKSC 62, the Court held that certain provisions of the State Immunity Act 1978 (“SIA”) barring the claims were not justified by any rule of customary international law and were therefore incompatible with both Article 6 (right to a fair trial) of the European Convention on Human Rights (“ECHR”) and Article 47 (right to an effective remedy and to a fair trial) of the EU Charter of Fundamental Rights (the “Charter”). The Court affirmed the Court of Appeal’s decision to (i) disapply these provisions of the SIA to the extent that they conflicted with EU law (Article 47 of the Charter), thereby allowing the employment claims that derive from EU law (discrimination, harassment and holiday pay) to proceed, and (ii) to make a declaration of incompatibility in respect of the SIA provisions under Article 6 of the ECHR – this being the only remedy available in respect of the domestic claims not derived from EU law (including unpaid wages and unfair dismissal), which therefore remained barred.
In Reyes (Appellant/Cross Respondent) v Al-Malki and another (Respondents/Cross-Appellants)  UKSC 61, the Court found that a diplomat’s immunity after leaving his or her post is limited by Article 39 of the Vienna Convention on Diplomatic Relations 1961 (the “Vienna Convention”) to acts performed in the exercise of their diplomatic functions, regardless of whether the diplomat was otherwise entitled to immunity at the time the relevant acts took place. The Court held that the employment and mistreatment of domestic staff does not fall under the category of acts performed in the exercise of diplomatic functions and allowed Ms Reyes’ appeal.
27 November 2017 at 6pm
The FA Mann lecture is an annual event in honour of the late Dr F A Mann QC (Hon) (1907-1991) arranged by the partners of Herbert Smith Freehills LLP, and given under the auspices of the British Institute of International and Comparative Law. The lecture is open to the public and there is no formal registration process. If you would like to attend please arrive in good time for the start of the lecture at 6 p.m.
Venue: Middle Temple Hall
Chair: Lord Collins of Mapesbury
Speaker: Lord Mance
For further information, please contact Adam Johnson, Partner.
- The ministers responsible for the Trans-Pacific Partnership (TPP) of 11 countries have announced that the core elements of a Comprehensive and Progressive Agreement for Trans-Pacific Partnership are agreed (CPTPP). While much of the original TPP looks to remain intact, 20 provisions of the TPP are suspended, in particular with respect to Investor–State Dispute Settlement (ISDS) disputes for initial approvals of investments and financial services. There are also 4 items to be finalised by the Parties’ consensus.
- The final impact of these changes can only be determined after the release of the full text. Current indications are that the differences will not significantly change the shape of ISDS under the TPP. Investors making investments into these 11 countries will still want to proactively consider how to take advantage of the protections given by this agreement if it comes into force.
- This is a significant step forward to implementing a mega-regional agreement for the Asia-Pacific region, which substantially is the form rejected by the United States early this year.
On 19 October the UK Government published the text of a proposed new Sanctions and Anti-Money Laundering Bill (the “Bill“), which seeks to create a post-Brexit domestic legislative framework for the imposition and enforcement of sanctions. The introduction of the Bill follows the publication on 2 August of the Government’s response to the consultation on the UK’s future legal framework for sanctions (see our previous blog post).
The new proposals would give the Government broad discretionary powers to impose a wide range of sanctions by way of secondary legislation, including asset freezes and other financial sanctions, travel bans and immigration restrictions and trade restrictions affecting goods and services. The Bill also provides for the creation of exceptions and licences in relation to any sanctions, including a new ability for the Government to issue general licences to permit particular types of conduct, such as (according to the impact assessment for the Bill) the operation of NGOs in Syria.
The Government has expressly stated that the Bill is not designed to bring any substantive policy changes in respect of the current sanctions regime, with the main aim being to make it easier to impose sanctions and respond to future events while maintaining the existing sanctions regime, which currently comprises a mixture of EU and UK legislation. The proposals also give the Government wide-ranging powers to supplement or amend the UK’s existing anti-money laundering (“AML“) regime, although the Bill itself does not impose any new AML-related requirements. Continue reading