4th part - Arbitration Academy

Report
Investment Treaty Practice of
China, Japan and Korea
Arbitration Academy 2012: Class 4
Professor Hi-Taek Shin
Seoul National University
School of Law
[work under progress: Not to be quoted without permission]
Notes
• The powerpoint files are provided to
students of Arbitration Academy 2012.
• As these files are work under progress, no
quotation is permitted without the author’s
written permission.
• In preparing the lecture, the author draws
upon the expertise and previous studies by
G. Wang, W. Shan and N. Gallagher (on
Chinese practice), and S. Hamamoto and L.
Nottage (on Japanese practice). However,
all mistakes, if any, are the author’s own.
Dispute Settlement between
Investors and Host States (1)
• The existence of effective and efficient
methods for resolving investment disputes:
“the ultimate guarantee of protection for
foreign investors” (UNCTAD)
• Two methods of dispute settlement in BITs:
– Investor-State consultation and negotiation
• Pre-requisite to proceed to an arbitration
– Investor-State Arbitration
Dispute Settlement between
Investors and Host States (2)
• Jurisdictional basis of the investor-State arbitration:
“agreement to arbitrate”
– ICSID Convention Art 25(1):
The jurisdiction of the Centre shall extend to any legal
disputes arising directly out of an investment, between a
Contracting State…… and a national of another
Contracting State, which the parties to the dispute
consent in writing to submit to the Centre. ……
– The investor-State arbitration clause in a BIT functions as
a State’s consent to submit certain kinds of investment
disputes to an arbitration. It defines the scope and
conditions of such consent.
ICSID Convention Membership
• China:
– Signed: Feb. 9, 1990
– entered into force: Feb. 6, 1993
• Japan:
– Signed: Sep. 23, 1965
– entered into force: Sep. 16, 1967
• Korea:
– Signed: Apr. 18, 1966
– entered into force: Mar. 23, 1967
Statistics on investor-State arbitrations
• Total number of known treaty-based arbitration
cases (as of the end of 2011): 450
– 279 were filed with ICSID (or the ICSID
Additional Facility)
– 126 under the United Nations Commission on
International Trade Law (UNCITRAL) arbitration
rules
– 21 with Stockholm Chamber of Commerce
– 7 with International Chamber of Commerce
[Source: UNCTAD]
Investment Treaty Arbitration Cases:
China
• A Chinese Investor against Peru: Tza Yap Shum v. Peru, ICSID Case No.
ARB/07/6
– Feb 12, 2007: registered with ICSID
– June 19, 2009: Decision on Jurisdiction and Competence
– July 7, 2011: Award
– November 9, 2011: Annulment proceeding registered
– Annulment proceeding pending
• Chinese Investors against Mongolia: China Heilongjiang International
Economic & Technical Cooperative Corp and 2 others v. Mongolia
– PCA arbitration under the UNCITRAL Arbitration Rules : pending
• A Malaysian Investor against China: Ekran Berhad v. China, ICSID Case No.
ARB/11/15
– May 24, 2011: Registered with ICSID on May 24, 2011
– July 22, 2011: Proceeding suspended pursuant to the parties’
agreement
Investment Treaty Arbitration Cases:
Japan and Korea
• Japan: Saluka Investments BV (The Netherlands) v. Czech
Republic (ad hoc arbitration under UNCITRAL Arbitration
Rules 1976)
– Dutch subsidiary of Nomura Group, Japanese merchant
banking and financial services group of companies,
invoking the Netherlands-Czech and Slovak BIT of 1991
– July 18, 2001: Arbitration initiated
– March 17, 2006: Partial award
• Korea:
– A dispute notice by Belgian investors owned by a US
private equity fund invoking Korea-Belgium-Luxembourg
BIT in May 2012
China: Model BIT Provisions
Article 9:Settlement of Disputes between an Investor and a Host State
1. Any legal dispute between an investor of one Contracting Party and the
other Contracting Party in connection with an investment in the
territory of the other Contracting Party shall, as far as possible, be
settled amicably through negotiations between the parties to the
dispute.
2. If the dispute cannot be settled through negotiations within six months
from the date it has been raised by either party to the dispute, it shall
be submitted by the choice of the investor:
(a) to the competent court of the Contracting Party that is a party to
the disputes;
(b) to International Centre for Settlement of Investment Disputes (ICSID)
under the Convention on the Settlement of Disputes between States
and Nationals of Other States, done at Washington on March 18,
1965, provided that the Contracting Party involved in the dispute
may require the investor concerned to go through the domestic
administrative review procedures specified by the laws and
regulations of that Contracting Party before the submission to the
ICSID.
Once the investor has submitted the dispute to the competent court
of the Contracting Party concerned or to the ICSID, the choice of
one of the two procedures shall be final.
China: Scope of Investment Dispute (1)
 Initially China limited an investor to State arbitration to
a certain category of disputes:
• First and second Chinese Model BIT:
– “disputes involving the amount of compensation for
expropriation” to be referred to arbitration
– Significant Chinese BITs include additional wording
that “other disputes shall be submitted to ICSID on
agreement between the parties”.
 Chinese position: the competence of the arbitration
tribunal is limited to the review of the quantum of the
compensation and would not include review of
whether an actual expropriation had occurred.
Tza Yap Shum v. Peru (1):
Relevant Provisions in China-Peru BIT
• Art. 8.2. If the dispute cannot be settled through negotiations
within six months, either party to the dispute shall be entitled
to submit the dispute to the competent court of the
Contracting Party accepting the investment.
• Art 8.3. If a dispute involving the amount of compensation for
expropriation cannot be settled within six months after resort
to negotiations as specified in Paragraph 1…, it may be
submitted at the request of either party to the International
Center for Settlement of Investment Disputes (ICSID)…… Any
disputes concerning other matters …… may be submitted to
the Center if the parties to the disputes so agree. The
provisions of this Paragraph shall not apply if the investor
concerned has resorted to the procedure specified in
Paragraph 2 of this agreement
Tza Yap Shum v. Peru (2): Tribunal’s
decision on interpretation of Art. 8.3
• Question: Whether tribunal is allowed to determine whether
SUNAT’s action constituted expropriation of Tza’s investment in
TSG
• Peru’s argument:
– The language in the BIT specifically limited the scope to the
disputes involving the amount of compensation, and did not
specifically refer to arbitration of claims over liability for
expropriation
– Therefore, the tribunal was limited to determining the amount
of compensation due to the investor, once the occurrence of
expropriation had been determined through other means
– Thus, the tribunal was not allowed to determine whether
SUNAT’s actions constituted expropriation of Tza’s investment
in TSG
Tza Yap Shum v. Peru (3): Tribunal’s
decision on interpretation of Art. 8.3
• Tribunal’s decision: disagreed with Peru
– BIT’s restrictive wording was apparently designed to
“seek certain limitations” on investment protection
– The word “involving” could be read more broadly to
permit arbitration of claims concerning all aspects
of expropriation, including the question of whether
expropriation had occurred
– To force an investor to first submit a claim
regarding the occurrence of expropriation to a
domestic court would trigger the “fork-in-the-road”
clause in Art. 8.3, thus effectively precluding any
recourse to arbitration in any case
Tza Yap Shum v. Peru (4):
Implications of Tza Yap Shum case
• It is the Chinese investor that persuaded the Tribunal to
adopt a rather expansive interpretation of the restrictive
wording in the China-Peru BIT.
• Vast majority of Chinese BITs (and BITs of some transition
economies) contain dispute settlement provisions similar to
those in China- Peru BIT:
– Would foreign investors with investments in China be
able to rely on similar BITs to protect such investments
against expropriatory government measures, should
such measures take place?
China: Scope of Investment Dispute (2)
 The “third generation” BITs:
– cover “all disputes” or all “disputes relating to an investment”
and are consistent with global BIT practice.
• China retains a proviso to the arbitration clause:
– The investor “shall go through the domestic administrative
review procedures as specified by the laws and regulations of
the disputing Contracting Party before the submission to
international arbitration”.
– Often a time limit within which to pursue this domestic
administrative review (no more than three months in ChinaFinland BIT and four months in the China-Mexico BIT).
– It is uncertain whether investor could forego this requirement
by invocation of the MFN provision, unless there is an explicit
provision which limits the application of MFN in such case.
China: Arbitration Institutions and
Rules
• Prior to China’s ICSID membership in 1993, Chinese BITs refer to
“ad hoc” arbitration
– China-Japan BIT: “such dispute shall, …… be submitted to a
conciliation board or an arbitration board, to be established
with reference to the Convention on the Settlement of
Investment Disputes between States and Nationals of Other
States done at Washington on March 18, 1965 (hereinafter
referred to as "the Washington Convention").
• Recent Chinese BITs provides for
– ICSID (Korea),
– ICSID Additional Facility (India),
– ad hoc arbitration established under UNCITRAL Arbitration
Rules (Korea)
– or any other arbitration rules agreed by both parties (Korea)
Japan: Scope of Investment Dispute (1)
•
.
Japan – Korea BIT, Art 15
1. For the purposes of this Article, an investment dispute is a dispute
between a Contracting Party and an investor of the other Contracting
Party that has incurred loss or damage by reason of, or arising out of,
an alleged breach of any right conferred by this Agreement with
respect to investments of investors of that other Contracting Party.
Japan: Scope of Investment Dispute (2)
• Japan's first BIT with Egypt(1977) and earlier BITs:
– 'any legal dispute that may arise out of investment'
• Post-2002 new generation BITs:
– 'investment dispute' is defined as one between the investor and
the host state 'that has incurred loss or damage by reason of, or
arising out of, an alleged breach of any right conferred in this
Agreement with respect to an investment of an investor'.
– This wording limits host state's consent to arbitration to breach of
BIT's substantive standards, to the exclusion of claims arising from
a contract in connection with the investment.
– If the particular treaties include a separate 'umbrella clause',
breaches of a contract relating to the investment could become
breach of treaty obligations.
Japan: Alternatives given to Investor
Japan – Korea BIT, Art 15
•2. ……
. If it is not so settled, the investor may submit the investment
dispute for resolution under one of the following alternatives: (a) in
accordance with any applicable, previously agreed dispute-settlement
procedures; or (b) in accordance with the terms of paragraph 3 …...
3. If the investment dispute cannot be settled within three months from
the date on which the investor requested the consultation or negotiation
in wring and if the investor concerned has not submitted the investment
dispute for resolution under paragraph 2(a) of this Article or judicial or
administrative settlement, the investor concerned may submit the
investment dispute for settlement by binding arbitration:
(a) to the Center, if both Contracting Parties are parties to the ICSID
Convention;
(b) in accordance with the UNCITRAL Arbitration Rules; or
(c) if agreed by both parties to the dispute, to any other arbitration
institution or in accordance with any other arbitration rules.
Japan: 'Fork-in-the-road' Provisions (1)
• Art. 15 (3) further stated that:
– “Unless otherwise agreed by both parties to the investment
dispute, once the investor concerned submits the investment
dispute for resolution under paragraph 2 and 3 of this Article,
the investor concerned may not submit the investment dispute
for settlement by any of the other alternatives….
• Japan-Korea BIT: limits the investor to its original choice once it
has commenced
– any previously agreed upon procedure for dispute settlement,
or
– judicial or administrative settlement, or
– arbitration under ICSID, UNCITRAL Rules, or another agreed
procedure for arbitration, unless both parties agree otherwise.
Japan: 'Fork-in-the-road' Provisions (2)
• Japan-Chile FTA: a bit clearer 'fork in the road'
provision:
– If the claimant has 'initiated any proceedings
before any administrative tribunal or court …
For greater certainty, if the investor elects to
initiate such proceedings, that election shall
be definitive and the investor may not
thereafter submit the claim to arbitration'.
– Exception: interim injunctive measures
Japan: Consent to arbitration (1)
Japan-Cambodia BIT Art. 17
.7. (a) Each Contracting Party hereby consents to the submission of
investment disputes by a disputing investor to conciliation or
arbitration set forth in paragraph 4 chosen by the disputing
investor.
(b) The consent given by subparagraph (a) and the submission by a
disputing investor of a claim to arbitration shall satisfy the
requirements of:
(i) Chapter II of the ICSID Convention or the Additional Facility Rules
of the International Centre for Settlement of Investment Disputes,
as may be amended, for written consent of the parties to a dispute;
and
(ii) Article II of the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, as may be amended (hereinafter referred
to as “New York Convention”), for an agreement in writing
Japan: Consent to arbitration (2)
• Japan's first BIT with Egypt (some of the later BITs): each State 'shall
consent to submit any legal dispute that may arise out of investment
made by a national or company' of the other State to arbitration or
conciliation, 'at the request of' the foreign investor.'
• What if the host State refuses to give consent despite such wording?
- a mere promise to give consent does not amount to consent itself.
- subject to inter-State dispute resolution processes
• In recent BITs:
– Japan-Korea BIT states explicitly that the host state 'hereby gives its
consent to the submission of an investment dispute to international
arbitration'.
• Japan-Cambodia BIT: further clarification as to the legal implication
of consent specified in the BIT.
Japan: Notice Requirement
BIT Art. 15
.Japan-Korea
4. An investor submitting an investment dispute pursuant to paragraph
3 of this Article shall give to the Contracting Party in dispute a written
notice of intent to do so at least ninety days before the claim is
submitted. The notice of intent shall specify:
(a) the name and address of the investors concerned;
(b) the specific measures at issue of such Contracting Party in
dispute and a brief summary of the factual and legal basis of the
investment dispute sufficient to present the problem clearly,
including the provisions of this Agreement alleged to have been
breached;
(c) the relief sought including, as necessary, the approximate
amount of damages claimed; and
(d) the dispute-settlement procedures set forth in paragraph 3(a) to
(c) of this Article which the investor concerned will seek.
Japan: Time bar
.
Japan-Korea BIT Art. 15
5. ……an investor may not make a claim
pursuant to paragraph 3 of this Article if
more than three years have elapsed from the
date on which the investor first acquired, or
should have first acquired, knowledge that
the investor had incurred loss or damage.
Japan: Composition of Tribunal
Japan-Cambodia BIT Art. 17
.10. Unless the disputing parties agree otherwise, an arbitral
tribunal established under paragraph 4 shall comprise three
arbitrators, one arbitrator appointed by each of the disputing
parties and the third, who shall be the presiding arbitrator,
appointed by agreement of the disputing parties. If the
disputing investor or the disputing Party fails to appoint an
arbitrator or arbitrators within 60 days from the date on which
the investment dispute was submitted to arbitration, the
Secretary-General of the International Centre for Settlement of
Investment Disputes (hereinafter referred to in this Article as
“ICSID”), may be requested by either of the disputing parties, to
appoint the arbitrator or arbitrators not yet appointed from the
ICSID Panel of Arbitrators subject to the requirements of
paragraphs 11 and 12.
Japan: Negative qualification of
arbitrators and place of arbitration
. Japan-Cambodia BIT Art. 17
11. Unless the disputing parties agree otherwise, the third
arbitrator shall not be a national of either Contracting Party,
nor have his or her usual place of residence in the territory of
either Contracting Party, nor be employed by either of the
disputing parties, nor have dealt with the investment dispute in
any capacity.
12. In the case of arbitration referred to in paragraph 4, each of
the disputing parties may indicate up to three nationalities, the
appointment of arbitrators of which is unacceptable to it. In
this event, the Secretary-General of the ICSID may be
requested not to appoint as arbitrator any person whose
nationality is indicated by either of the disputing parties.
13. Unless the disputing parties agree otherwise, the arbitration
shall be held in a country that is a party to the New York
Convention.
Japan: Arbitral tribunal and
procedures
• Japan-China BIT,
– 'arbitration board' must comprise one arbitrator
appointed by each party within 60 days of the request
for arbitration, who then appoints a third within another
90 days(not being a national of either State). Otherwise
that President is appointed by a 'third party agreed in
advance' by the States, being a 'national of a third
country which has diplomatic relations' with both States.
The arbitral procedures shall be determined by this
board or tribunal 'with reference to' the ICSID
Convention.
• Japan-Cambodia BIT (same with Japan-Laos BIT): Strong
indication to control composition of tribunals
Japan: Applicable rules
.
Japan-Cambodia BIT Art. 17
14.An arbitral tribunal established under
paragraph 4 shall decide the issues in
dispute in accordance with this
Agreement and applicable rules of
international law.
Japan: Non-Disputing State’s Right
.
Japan-Cambodia BIT Art. 17
16.The Contracting Party which is not the
disputing Party may make submissions to
the arbitral tribunal on a question of
interpretation of this Agreement, upon
written notice to the disputing parties.
Japan: Limited Authority of Tribunal
on Interim Measure
.
Japan-Cambodia BIT Art. 17
17. The arbitral tribunal may order an interim measure
of protection to preserve the rights of the disputing
investor, or to facilitate the conduct of arbitral
proceedings, including an order to preserve
evidence in the possession or control of either of
the disputing parties. The arbitral tribunal shall not
order attachment or enjoin the application of the
measure alleged to constitute a breach referred to
in paragraph 1.
Japan: Award
.Japan-Cambodia BIT Art. 17
18. The award rendered by the arbitral tribunal shall include:
(a) a judgment whether or not there has been a breach by the
disputing Party of any obligation under this Agreement with
respect to the disputing investor and its investments; and
(b) a remedy if there has been such breach. The remedy shall be
limited to one or both of the following:
(i) payment of monetary damages and applicable interest;
and
(ii) restitution of property, in which case the award shall
provide that the disputing Party may pay monetary damages
and any applicable interest in lieu of restitution.
Costs may also be awarded in accordance with the applicable
arbitration rules.
Japan: Enforcement of Award
.Japan-Cambodia BIT Art. 17
19.The award rendered in accordance with
paragraph 18 shall be final and binding upon
the disputing parties. The disputing Party
shall carry out without delay the provisions
of the award and provide in its Area for the
enforcement of the award in accordance with
its relevant laws and regulations.
Japan: Diplomatic Protection
.Japan-Cambodia BIT Art. 17
20. Neither Contracting Party shall give diplomatic protection,
or bring an international claim, in respect of an
investment dispute which the other Contracting Party and
an investor of the former Contracting Party have
consented to submit or submitted to arbitration set forth
in paragraph 4, unless the other Contracting Party shall
have failed to abide by and comply with the award
rendered in such investment dispute.
Diplomatic protection, for the purposes of this paragraph,
shall not include informal diplomatic exchanges for the
sole purpose of facilitating a settlement of the investment
dispute.
Korea: Investor-State Arbitration
Mechanism
• The first Korean BIT with Investor-State arbitration
mechanism: Korea-The Netherlands of 1975
• According to Korean Ministry of Foreign Affairs, 81
out of 86 BITS currently in force have ISA
mechanism.
• Korean Model BIT has relatively straight-forward
provisions common in many European model BITs.
Korea: Scope of Investment Dispute (1)
Model BIT 2001 Article 8: Settlement of
Investment Disputes between a Contracting
Part and an Investor of the Other Contracting
Party
1. Any dispute between a Contracting Party
and an investor of the other Contracting
Party including expropriation or
nationalization of investments shall, as far as
possible, be settled by the parties to the
dispute in an amicable way.
Korea: Scope of Investment Dispute (2)
 Korean BITs: split with respect to the scope of dispute settlement to be
referred to investor State arbitration.
• A broad version: “any legal disputes concerning the investment”
without limiting the basis of claim (e.g., 2001 Korean Model BIT):
– Does not specify whether the dispute must be related to the breach
of treaty.
• A narrowly stated version (recent BITs such as Korea-China, KoreaKuwait): a dispute relating to an investment 'that has incurred loss or
damage by reason of, arising out of, an alleged breach' of the BIT.
Korea: 'Fork-in-the-road' Provisions (1)
Model BIT 2001 Article 8: Settlement of Investment Disputes between a
Contracting Part and an Investor of the Other Contracting Party
2. The local remedies under the laws and regulations of one Contracting Party in
the territory of which the investment has been made shall be available for
investors of the other Contracting Party on the basis of treatment no less
favourable than that which would be accorded to investments of its own
investors or investors of any third State, whichever is more favourable to
investors.
3. If the dispute cannot be settled within six (6) months from the date on which
the dispute has been raised by either party, and if the investor waives the rights
to initiate any proceedings under paragraph (2) of this Article with respect to
the same dispute, the dispute shall be submitted upon request of the investor of
the Contracting Party, to the International Centre for Settlement of Investment
Disputes (ICSID) established by the Washington Convention of 18 March 1965
on the Settlement of Investment Disputes between States and Nationals of other
States.
4. The investor, notwithstanding that it may have submitted the dispute to the
ICSID under paragraph (3) may seek interim injunctive relief, not involving the
payment of damages, before the judicial or administrative tribunals of the
Contracting Party that is a party to the dispute for the preservation of its rights
and interests.
Korea: 'Fork-in-the-road' Provisions (2)
• 2001 Korean Model BIT: 'fork-in-the-road' approach.
• Resorting to arbitration under ICSID is permitted only if the
investor waives the rights to initiate any local proceedings
regarding the same dispute.
• Korea-China BIT: Among Korean BITs, Korea-China BIT is
distinctive in that 'the Contracting Party involved in the dispute
may require the investor concerned to go through the domestic
administrative review procedures specified by the laws and
regulations of that Contracting Party before the submission to
international arbitration.'
• The investment chapter of the Korea-US FTA provides that the
'fork-in-the-road' approach will apply when Korea is the
respondent, while the waiver approach will be used when the US
becomes the respondent.
Korea: Arbitration Institutions and
Rules
• 2001 Korean Model BIT (BITs with the UK, Sri Lanka, and Hungary):
only to ICSID.
• Recent Korean BITs: various options granted to investors
– ICSID,
– the UNCITRAL Arbitration Rules,
– any other arbitration institution or in accordance with any
other arbitration rules upon agreement by both of the
disputing parties.
• The investment chapter of the Korea-US FTA:
– wide range of arbitration choices based on the ICSID, ICSID
Additional Facility Rules, UNICTRAL Arbitration Rules, and to
any other arbitration institution or under any other arbitration
rules upon the disputing parties' consent.
Korea: Consent to Arbitration (1)
Model BIT 2001 Article 8: Settlement of
Investment Disputes between a Contracting
Part and an Investor of the Other Contracting
Party
5. Each Contracting Party hereby consents to
the submission of a dispute to arbitration in
accordance with the procedures set out in
this Agreement.
Korea: Consent to Arbitration (2)
• Most Korean BITs: explicit that the State party gives consent to
arbitration by entering into the particular BIT.
– Therefore, an arbitration agreement in accordance with the
provisions of the particular BIT exists if and when an investor
consents to arbitration when a dispute arises.
– Exception: Korea-Hungary BIT: Disputes other than on
nationalization or expropriation requires the contracting
parties to separately agree to the submission to ICSID.
• The 2001 Korean Model BIT confirms that the award made by
ICSID is final and binding on the parties to the dispute and
obligates each contracting State to ensure the recognition and
enforcement of the award in accordance with its relevant laws and
regulations.
Korea: Award
Model BIT 2001 Article 8: Settlement of Investment Disputes
between a Contracting Part and an Investor of the Other
Contracting Party
6. The award made by ICSID shall be final and binding on the
parties to the dispute. Each Contracting Party shall ensure the
recognition and enforcement of the award in accordance with
its relevant laws and regulations.
• The 2001 Korean Model BIT confirms that the award made by
ICSID is final and binding on the parties to the dispute and
obligates each contracting State to ensure the recognition and
enforcement of the award in accordance with its relevant laws and
regulations.
Investor to State Dispute Settlement (1)
• “[A] dispute concerning the amount of compensation” in the expropri
China-Japan
(1988)
ation clause to be submitted to ICSID conciliation or arbitration
• “Any dispute concerning other matters” with respect to investment – r
equires mutual agreement to be submitted to ICSID conciliation or ar
bitration (Art. 11)
• “[A]lleged breach of any right conferred by this Agreement with respe
Japan-Korea
(2002)
ct to an investment”
• 3 month consultation or negotiation period
• ICSID, UNCITRAL Arbitration rules, or any other arbitration institution
BIT
or rule
• “[A]n alleged breach of this Agreement with respect to an
investment” (Art. 9.1)
KoreaChina
(2007)
• 4 month consultation period
• ICSID, UNCITRAL Arbitration rules, or any other arbitration rules (Art.
9.3) - May require the investor to go through the domestic administr
ative review procedures
• “[L]aw of the Contracting Party to the dispute… the provisions of this
Agreement as well as the principles of international law accepted by
both Contracting Parties” (Art. 9.6)
Investor to State Dispute Settlement (2)
• “[A]ny dispute…in connection with an investment” (Art. 139.1)
FTA Investment Chapter
China-Peru
(2009)
• 6 months negotiation period
• ICSID, UNCITRAL Arbitration Rules, or other arbitration institution or
rules
• “in accordance with this Agreement and applicable rules of
international law” (Art. 139.3)
• “[A]lleged breach of any obligation under this Agreement” (Art. 18)
Japan-Peru
(2011)
• 6 months consultations or negotiations period
• ICSID, UNCITRAL Arbitration Rules, or other arbitration institution or r
ules
• “in accordance with this Agreement and applicable rules of
international law” (Art. 18.15)
Korea-Peru
(2011)
• “[A]lleged breach of an obligation under investment chapter of FTA”
(Art. 9.16.1)
• Consultation period, Arbitration Institution and Rules, Applicable
Rules: same as Japan-Peru BIT (Art. 9.16.7)
Findings
• Converging Trends: “looking similar”
– China is moving forward to enhanced protection of investors
– The differences are being narrowed
• BIT provisions tend to get “detailed and longer”
– Negotiators are alert for potential “legal liability” arising from
BIT
– Efforts to clarify or supplement loose ends
– To reduce potential abuse by investors
– Narrowing the discretion of arbitrators – an attempt to reduce
uncertainty
• Reflection of State’s desire to preserve public policy space
• Tendency to inject additional items: market access, performance
requirements, transparency, environmental concerns and labor
and human rights concerns
Final Important Words
• Thank you for your attention,
Merci.
• Enjoy your stay in Paris !!!
• Let’s keep in touch – stay
connected!
• [email protected]

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