Young-OGEMID contributions - Arbitration and beyond
Regional rapporteurs of the Young-OGEMID (Oil-Gas-Energy-Mining-Infrastructure Dispute Management) provide information to the listserv on breaking developments across the globe in the relevant legal field. Emphasis is put on ADR-related news. Dr. Artemis Malliaropoulou is one of the Young-OGEMID reporters. Her posts are republished here. Enjoy the reading!
Court of Justice of the European Union: Opinion of Advocate General Saugmandsgaard Øe delivered on 29 October 2020 on the ECT and EU law.
The Opinion of the CJEU AG focused on the interpretation of Articles 16 (Freedom to conduct a business) and 17 (Right to property) of the EU Charter of Fundamental Rights, and of Article 10 of the Energy Charter (Promotion, Protection and Treatment of Investments), read in conjunction with Article 216(2) of the Treaty of Functioning of the European Union (International Agreements).
The preliminary reference to the Court of Justice of the European Union was made by the Regional Administrative Court of Lazio and concerned the compatibility of the decision of the Italian legislature to reduce the incentives payable to photovoltaic energy operators within its territory with EU law.
The AG suggested that the Court of Justice of the EU “should rule that Articles 16 and 17 of the Charter do not preclude a reform of the kind instituted by the Italian legislature”, while he added that he did not adopt the view that “Article 10 of the Energy Charter, read in conjunction with Article 216(2) TFEU, was applicable in the present cases”.
On the Energy Charter Treaty, the AG stated as follows in paragraph 92:
“In my view, it follows, as the German Government rightly observes, that Article 10 of the Energy Charter is intended to provide protection, within the EU legal system, for investors of other contracting parties – or in other words of third States which are also parties to the charter – throughout the territory of the Union. (53) Conversely, it does not seem to me that that provision can be relied on by investors of the Union as against institutions of the Union or Member States.”
In paragraphs 95 and 96, the AG concluded as follows:
“95. In any event, I consider that even if it were to be held, contrary to my proposed literal and contextual interpretation, that Article 10 of the Energy Charter is applicable in disputes between investors and their own Member State, the simple fact that that provision refers, in general terms, to the need to create ‘stable, equitable, favourable and transparent conditions’ cannot prevent that Member State from altering or withdrawing a support scheme which it has adopted in its territory, pursuant to Article 3(3)(a) of Directive 2009/28.
96. In particular, that provision is not intended, in my view, to give greater protection to investors opposing such a reform than is afforded by the guarantees already provided for by EU law, and more specifically by Articles 16 and 17 of the Charter.”
Please find below the link to the Opinion of Advocate General Saugmandsgaard Øe delivered on 29 October 2020 in Joined Cases C‑798/18 and C‑799/18 (ECLI:EU:C:2020:876):
18. 9. 2020
ICSID’s ad hoc Committee – decision on annulment - Orascom TMT Investments S.à r.l. v. People's Democratic Republic of Algeria (ICSID Case No. ARB/12/35)
On Thursday 17 September 2020, the decision on annulment in the context of the Orascom v. Algeria case was dispatched to the parties.
The claims in this case arose out of an alleged campaign of interference and harassment by the government against the local telecommunications company in which the claimant had invested, including tax reassessments and an attempted forced sale of part of the company to Algeria.
In an Award dated 31 May 2017, the Tribunal found that the Claimant had committed an abuse of rights by initiating parallel investment arbitrations against the same measures taken by Algeria in relation to the same investment and, thus, it dismissed the Claimant’s claims on the ground of inadmissibility. The Tribunal declared OTMTI’s claims inadmissible on one more ground, namely the preclusive effect of the OTH’s Notice of Dispute.
The Claimant sought partial annulment of the award on the following grounds: i) serious departure from a fundamental rule of procedure (Article 52(1)(d) of the ICSID Convention); ii) manifest excess of powers (Article 52(1)(b) of the ICSID Convention) and; iii) failure to state reasons (Article 52(1)(e) of the ICSID Convention).
The ad hoc Committee rejected OTMTI’s application for partial annulment following an extensive analysis of relevant decisions on annulment.
Please find below the link to the decision:
18. 9. 2020
Ecuador v Chevron Corporation USA and Texaco Petroleum Company - The Hague Court Ruling - Case No C/09/5 70029 / 1-LA ZA 19-268 - 16 September 2020
The District Court of The Hague ruled in favour of Chevron Corporation in its dispute with the Republic of Ecuador, upholding a 2018 arbitral award rendered by an international tribunal administered by the Permanent Court of Arbitration.
In its unanimous award, issued pursuant to the U.S.-Ecuador Bilateral Investment Treaty, the international arbitral tribunal found that a $9.5 billion Ecuadorian court judgment against Chevron was procured through egregious fraud and corruption by the plaintiffs’ legal team, including bribery of the presiding judge and ghost-writing of the judgment.
The District Court of The Hague noted that “the fraudulent character of the Lago Agrio judgement and the proceedings preceding it is common ground between the parties.”. It also held that the international tribunal acted within its remit when issuing the award, and that the award was well reasoned and complied with the applicable law and public policy.
Please find below the link to the decision in Dutch:
Rule of law redefined? – Food for thought by EU states signing a treaty to cancel intra-EU BITs
On Tuesday 5 May 2020, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, and Spain signed the following agreement for the termination of intra-EU bilateral investment treaties.
It will enter into force 30 calendar days after the date on which the Secretary-General of the Council receives the second instrument of ratification, approval or acceptance.
Once it enters into force, sunset clauses will also be "terminated", while arbitration clauses shall not serve as legal basis for new arbitration proceedings.
The transitional measures in Articles 8-10 raise several questions on efficiency and respect of fundamental rights.
Consultation on investment protection and facilitation within the European Union.
In the post-Achmea and post-termination of intra-EU BITs agreement era, the European Commission is trying to assess the current system of investment protection and facilitation within the European Union through an online questionnaire inviting stakeholders, and more generally EU citizens, to express their views on strengths or weaknesses of the intra-EU system, as well as possible ideas for improvement.
On the public interest in sustaining the finality of supervisory courts’ decisions on properly referred procedural issues arising from the arbitration.
In Carpatsky Petroleum Corp v PLSC Ukrnafta  EWHC 769 (Comm), the Commercial Court dismissed the defendant’s application to set aside an order to enforce an SCC award.
The Commercial Court highlighted that parties seeking to resist enforcement of an award in England cannot expect to easily re-open questions that have already been determined. Should an award be challenged in the supervisory courts, English courts may refuse to re-open the same questions (or even unpleaded questions that could have been raised), instead finding issue estoppel. Equally, a party will be estopped from relying on a governing law in the supervisory courts and amending its position at the enforcement stage.
The decision reads as follows: “A party is not precluded from resisting enforcement on the grounds set out in s. 103(2) of the 1996 Act by reason only of the fact that it has not challenged the award in the curial courts; and that it would 'rarely, if ever, be right to recognise or enforce [an award] solely on the grounds that [the party opposing enforcement] has failed to take steps to challenge it before the supervisory court'…Nevertheless, there may be a public interest to be accorded to sustaining the finality of decisions of the supervisory courts on properly referred procedural issues arising from the arbitration. This is reflected in s. 103(5) of the 1996 Act, which expressly provides that the English court may adjourn questions of enforcement pending a decision of the curial courts on an application to set aside or suspend an award. Furthermore, in assessing whether there is an issue estoppel arising from a decision of the supervisory courts in relation to a procedural issue in relation to the arbitration, this court should not adopt an overly-narrow approach to whether the same issue as was raised before it has been decided by the supervisory court…”.
The Court stated that its line of reasoning relates to decisions by the supervisory courts. There may be different considerations as to whether to recognise an issue estoppel as a result of decisions of enforcement courts other than the supervisory courts, including in particular how those decisions might relate to what has been held (or not held) by the supervisory courts.
It should be noted that the Court avoided to express a concluded view on the question whether a waiver of a right to object to the arbitrators' jurisdiction, which is effective in accordance with the terms of the rules governing the arbitration, should be regarded as an agreement to arbitrate or not.
Kabab-Ji SAL (Lebanon) v Kout Food Group (Kuwait)  EWCA Civ 6
On 20 January 2020, in Kabab-Ji SAL (Lebanon) v Kout Food Group (Kuwait), the English Court of Appeal refused the enforcement and recognition of an arbitral award handed down by an ICC Tribunal seated in Paris, on the basis that the award was made against a non-party.
This case provides helpful guidance on two significant issues: (i) how to determine the governing law of an arbitration agreement as a matter of English law and (ii) the extent to which No Oral Modification clauses will be upheld by the English courts.
Furthermore, the acceptance by the Court of Appeal that an implied choice is relevant in the context of Article V(1)(a) NYC means, in England, that in cases where that article is invoked and there is room for doubt as to the law to be applied, then, in the absence of an express choice, the next step will be to consider whether an implied choice has been made (of the law governing the contract or that of the seat). It will not be an application of the law of the seat on the basis of the “failing any indication thereon” limb.
Micula and others v Romania,  UKSC 5
On 19 February 2020, in Micula and others v Romania, the UK Supreme Court held that the Micula parties can enforce an ICSID Arbitration Award for more than £150m against Romania despite objections from Romania and the European Commission.
The Supreme Court reversed the decisions of the Court of Appeal and Commercial Court, lifting a stay on enforcement of the ICSID Award in the UK and finding that “the duty of sincere co-operation is not applicable in this case and there is no impediment to the lifting of the stay, which is an unlawful measure in international law and unjustified and unlawful in domestic law.” The Court concluded as such: "The possibility that the EU courts may consider this issue at some stage in the future is both contingent and remote. We cannot accept that in such circumstances the duty of sincere co-operation requires the imposition of a stay on the enforcement of the award.".
A, B v C, D, E  EWHC 258 (Comm)
On 2 March 2020, in A, B v C, D, E, the English High Court held that its powers in support of arbitral proceedings under Section 44 of the Arbitration Act 1996 may not be exercised against third-parties to the arbitration agreement.
Foxton J highlights that if the Claimants are to succeed in establishing that the Court has jurisdiction to make an order against the Third Defendant under section 44(2)(a) of the Arbitration Act 1996, they need to distinguish their application from the reasoning in Cruz City and DTEK.
On the question whether s.44(2)(a) extend to non-parties even though other sub-sections of s.44 do not, Foxton J argues as follows:
“It is, therefore, possible for s.44(2)(a) to be invoked without the court making an order directly against a non-party: either because it involves a request to a foreign court rather than an order against a non-party by the English court, or because it involves ordering the deposition to proceed, but not making a coercive order against the witness that he or she attend (an issue I address below). That said, the suggestion that the English court has power under s.44 to request a foreign court to exercise its coercive powers to procure evidence for use in an English arbitration, but no power to use its own coercive powers in response to a request from a foreign court for the purposes of an arbitration with a seat outside England and Wales, is not a wholly happy one. The issue of whether the English court would have jurisdiction under the Evidence (Proceedings in Other Jurisdictions) Act 1975 to respond to a request made by a foreign court for the purposes of procuring evidence for a foreign-seated arbitration, and whether such a request would satisfy the requirement of s.1(b) of that Act that "the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated", was not debated before me, and I say no more about it.
Finally, applications for coercive orders against non-party witnesses under s.44(2)(a) might be said to raise additional complications over and above those which arise in relation to such applications under other sub-sections. If the court's power under s.44(2)(a) is the "same power of making orders" as it has "for the purposes of and in relation to legal proceedings", then that might suggest it has powers equivalent to CPR 34.8. However, an order under CPR 34.8 does not have coercive effect against the witness and does not require the witness to attend (Stuart v Balkis (1884) 50 LT 479). If a witness refuses to attend a deposition ordered by the court under CPR 34.8, the examiner will fill in a certificate of non-attendance, at which point the party requiring the deposition may apply to court under CPR 34.10 for an order requiring the witness to attend. That order is coercive in effect, and as the notes to the White Book record at para. 34.10.1, "persons who fail to comply with orders to attend are in contempt of court and committal proceedings may be taken against them". The RSC predecessor to CPR 34.10, RSC Order 39 r 4, provided that "the attendance of that person before the examiner … may be enforced by writ of subpoena in like manner as the attendance of a witness … at a trial may be enforced".
S.43 of the Arbitration Act 1996 makes specific provision for securing the attendance of witnesses for arbitration hearings, but in terms limited to securing the attendance before the tribunal rather than before an examiner, and only when "the arbitral proceedings are being conducted in England and Wales". The first of these restrictions may reflect a desire to ensure that the coercive powers of the Court could not be used to require witnesses to attend for pre-hearing deposition (Merkin and Flannery ¶43.2).
It might be said that, if s.44(2) orders cannot generally be made against non-parties, it would be surprising if coercive orders could nonetheless be made against non-party witnesses under s.44(2)(a), when s.43 already makes specific provision for securing the attendance of witnesses, but does so subject to two limitations which are not found in s.44.”
Multiparty Interim Appeal Arbitration Arrangement between 16 states.
Further to the Davos statement of 24 January 2020, on 27 March 2020, the EU and 16 other members of the WTO (Australia; Brazil; Canada; China; Chile; Colombia; Costa Rica; Guatemala; Hong Kong, China; Mexico; New Zealand; Norway; Singapore; Switzerland; and Uruguay) decided on an arrangement that will allow them to bring appeals and solve trade disputes among them despite the current paralysis of the WTO Appellate Body.
The Multiparty Interim Appeal Arbitration Arrangement mirrors the usual WTO appeal rules and can be used between any members of the Organisation willing to join, as long as the WTO Appellate Body is not fully functional.
CIL as a potential ground for corporate civil liability in cases of human rights violations in Canadian courts.
On 28 February 2020, in Nevsun Resources Ltd v Araya, the Supreme Court of Canada held that customary international law can give rise to a direct claim in Canada with respect to allegations of forced labour; slavery; cruel, inhumane and degrading treatment; and crimes against humanity. The Court also held that corporations may be liable for violations of customary international law.
Please find below the parts that clarify the position of the Court on customary international law:
"Customary international law is the common law of the international legal system, constantly and incrementally evolving based on changing practice and acceptance. Canadian courts, like all courts, play an important role in its ongoing development. There are two requirements for a norm of customary international law to be recognized as such: general but not necessarily universal practice, and opinio juris, namely the belief that such practice amounts to a legal right or obligation. When international practice develops from being intermittent into being widely accepted and believed to be obligatory, it becomes a norm of customary international law. Within customary international law, there is a subset of norms known as jus cogens, or peremptory norms, from which no derogation is permitted. The workers claim breaches not only of norms of customary international law, but of norms accepted to be of such fundamental importance as to be characterized as jus cogens. Crimes against humanity have been described as among the least controversial examples of violations of jus cogens. Compelling authority confirms that the prohibitions against slavery, forced labour and cruel, inhuman and degrading treatment have attained the status of jus cogens. Refusing to acknowledge the differences between existing domestic torts and forced labour, slavery, cruel, inhuman or degrading treatment, and crimes against humanity, may undermine the court’s ability to adequately address the heinous nature of the harm caused by this conduct.
Canada has long followed the conventional path of automatically incorporating customary international law into domestic law via the doctrine of adoption, making it part of the law of Canada. Therefore, customary international law is automatically adopted into domestic law without any need for legislative action. The fact that customary international law is part of our common law means that it must be treated with the same respect as any other law.
A compelling argument can, therefore, be made that since customary international law is part of Canadian common law, a breach by a Canadian company can theoretically be directly remedied. Since the workers’ claims are based on norms that already form part of our common law, it is not “plain and obvious” that our domestic common law cannot recognize a direct remedy for their breach. Appropriately remedying the violations of jus cogens and norms of customary international law requires different and stronger responses than typical tort claims, given the public nature and importance of the violated rights involved, the gravity of their breach, the impact on the domestic and global rights objectives, and the need to deter subsequent breaches. Nevsun has not demonstrated that the Eritrean workers’ claim based on breaches of customary international law should be struck at this preliminary stage.
The Court is not required to determine definitively whether the Eritrean workers should be awarded damages for the alleged breaches of customary international law. It is enough to conclude that the breaches of customary international law, or jus cogens, relied on by the Eritrean workers may well apply to Nevsun. Since the customary international law norms raised by the Eritrean workers form part of the Canadian common law, and since Nevsun is a company bound by Canadian law, the claims of the Eritrean workers for breaches of customary international law should be allowed to proceed."
i) AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Company)  SGCA 33 and
ii) SIAC 2019 Annual Report.
1) The AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Company)  SGCA 33 judgement, dated 7 April 2020.
The key issue before the Court related to the standard of review: when a debtor raises a dispute which is the subject of an arbitration agreement to resist a winding-up application filed on the basis of an unsatisfied debt, should the triable issue or prima facie standard of review apply?
The Court holds that, in respect of a winding-up application that is premised on a debt which is subject to arbitration, the prima facie standard of review applies, such that the debtor needs simply to show that there is a dispute in relation to the debt which is the subject of an arbitration agreement. Applying this prima facie standard of review, the Court allows the appeal and sets aside the order for the appellant to be wound up.
2) SIAC 2019 Annual Report
On 8 April 2020, the Singapore International Arbitration Centre announced the official release of its 2019 Annual Report.
It is worth focusing, besides all the rest interesting data provided, on the gender diversity considerations included. It is stated that 36,5% of the arbitrators appointed by SIAC are female, 30,3% of the members of the SIAC’s Court are female, and 60% of the SIAC’s Secretariat and Management are women.
Furthermore, the chart provided on page 18 of the Report reflects a high degree of geographical diversity in arbitrator appointments.
BIICL Concept Note on the effects of the pandemic on commercial contracts and legal consideration in mitigating mass defaults (emphasis put on negotiations and mediation mechanisms).
Speaking on the BBC's Today programme (27 April 2020), Lord Neuberger, former President of the UK Supreme Court, introduced the "breathing space project", saying that "the legal world has a duty to the rest of the world to prepare itself". It was highlighted that "as the economy begins to reopen, the best policy approach is to encourage parties to negotiate rather than focus on their contractual rights, which in any event are going to be uncertain". According to Lord Phillips, former President of the Supreme Court, "parties should consider mediation, and conciliation should be encouraged at an early stage of the legal proceedings". BIICL will contribute to this as a global exchange of ideas hub.
Petrochemical Logistics Ltd ("Petrochemical") and Mr Krueger v. PSB Alpha AG and Mr Ghertsos  EWHC 975 (Comm)
On 27 April 2020, following a remote hearing with counsel representation on S 44 Arbitration Act 1996 application to continue an interim injunction, Moulder J concluded that the connection with the English court was insufficient and the application was refused. The Claimants failed to persuade Moulder J on the risk of dissipation and connection to the jurisdiction. The judgment carefully recited the test for both aspects and highlighted other targets to hit for applicants to succeed in this form of interim relief.