Dispute Resolution and International Arbitration Lawyer
Almost every serious investor dreams of expanding into lucrative, overseas markets. However, as with every great reward, there are risks to be considered. International investment litigation is one of the most common cases that you might become involved in. These high-pressure cases can attract a lot of media attention and may prove especially difficult when dealing with countries known for high levels of corruption and nepotism.
International investment arbitration falls into two different types of arbitration. The first, known as investor-state dispute settlements, involve investors bringing suits against countries they operate in. More often than not, the dispute arises from the host state failing to honor treaty agreements that should offer certain protections, rights and privileges to the foreign investor.
The second type of dispute refers to traditional investments in private foreign organizations much as one might invest in a domestic corporation or limited liability company. If an investment contract is properly structured, it will allow for arbitration before an international arbitrational forum. While these fora have different rules and procedure, they are all intended to provide a fair forum to hear disputes. Some of these for are the International Chamber of Commerce’s International Court of Arbitration, the London Court of Arbitration and the American Arbitration Association, among others.
How Does International Investor-State Litigation Work?
The United Nations Commission on International Trade Law and the International Centre for the Settlement of Investment Disputes make provisions for investor-state arbitration. These are the provisions that allow investors to bring an arbitration against a foreign country to answer to allegations of violating multi-lateral (one word) trade agreements or bilateral investment treaties.
There are some of the protections investors might accuse host states of violating:
- Fair and equitable treatment
- Protection from expropriation
- Most Favored Nation provisions
- National Treatment provisions
Corruption is an ever-present concern in international investment, and the interplay between an investment, government corruption and outright fraud can be complex and difficult investigate, but we have the experience and training to resolve these issues. An arbitral tribunal body hears the case and makes a decision. When investors successfully prove that the host country failed to uphold the relevant treaty or agreement, they can then seek monetary compensation. These settlements can reach millions of dollars.
How Does This Differ From International Commercial Disputes?
The main distinguishing factor is the type of claims addressed in arbitration. Investor-state disputes specifically tackle instances where a host state may have failed to uphold public agreements, such as treaties.
In contrast, ICDs relate to contractual disagreements or breaches. The New York Convention represents the only current legal framework to govern these cases. When investors turn to this option for seeking reparations, the host country’s laws govern the litigation process.
The strength or relevance of the case may also rest on national laws, as opposed to international laws. Subsequently, if the host country acted in accordance with its own laws, it may not need to answer to international law failings during international commercial disputes.
If you are not sure which of these two types of litigations might best suit your current situation, our experienced arbitration lawyer can review your case. You can then proceed knowing what the risks are and how to mitigate them. Contact the international investment arbitration and litigation lawyers at Boyle & Jasari.
Can Either Party Challenge a Settlement?
Like many other types of litigation, when investor-state dispute settlements fail to satisfy one or both parties, either party can attempt to set the award aside. The ICSID allows either party to seek a review of the reward for any of the following reasons:
- The challenging party discovered new information that may affect the relevance and fairness of the award and of which the tribunal was not aware at the time of arbitration.
- The challenging party raises concerns regarding the scope or meaning of the awarded damages.
- The challenging party successfully receives an annulment of the award by an ad hoc committee, separate from the original tribunal.
Note that for this separate committee to successfully reach this decision, the claim must satisfy one or more of the following criteria:
- The challenging party proves that at least one member of the tribunal is guilty of corruption.
- The arbitration process did not follow established and fundamental procedures.
- The awarded settlement included no proper basis for its existence.
- The tribunal was not properly formed.
- The tribunal exceeded its appointed powers.
Requests for annulments are relatively rare. Between 2004 and 2006, the ICSID received only eight registered requests.
The ICSID prohibits domestic courts in the host country from intervening in these matters and attempting to revise the decisions made by the arbitration courts. There are instances where international laws might not address the grievances of the challenging party. These cases might require pursuing matters at the local levels.
A Successful Attorney Knows How Cultural Differences Impact International Arbitration
The complexity of international investment disputes can be daunting. Finding a resolution involves skilled negotiations as well as an awareness of cultural differences in practitioners. While international arbitration promotes neutrality for dispute resolution, there is no uniform arbitration culture or practice. It is imperative you have an experienced Washington DC international investment arbitration lawyer by your side to guide you through the process and protect your interests.
The main elements of international investment arbitration and how cultural differences can affect them are as follows:
- Attorneys will make statements of case
Notable differences in culture are typically linked to a country’s practice of civil law or common law. Common law systems like Singapore and Australia tend to use formal pleadings. The statements of case set out the cause of action, the facts that caused to action, and the remedy sought. Civil law systems, like Germany and France, prefer to present their statements of case using memorials, or narrative statements that include supporting documents and witness statements.
- Next, evidence is disclosed
IBA Guidelines were designed to bridge differences between civil and common law. The matter of privilege can be difficult. While it is a common law concept, various jurisdictions may have a diverse interpretation of what constitutes privileged information. Civil law systems do not have a concept of privilege. Expert evidence also presents complications to the arbitration process. Some jurisdictions prefer tribunal-appointed experts, while others prefer party-appointed experts. Also, in some jurisdictions, it is common practice that the expert is paid to be a technical assistant and therefore loyal to those that pay them. Other jurisdictions prefer experts who are independent of control whose sole duty is to the tribunal.
- Cases are presented
Witnesses: some courts allow witnesses to be coached while others will not permit the preparation of a witness. In Switzerland, coaching a witness is considered a criminal offense. In America, a failure to prepare a witness is seen as professional negligence. Furthermore, the length of trials may vary. Common law jurisdictions, like Hong Kong, prefer all matters be dealt with orally at trial. Civil jurisdictions, like Latin America, prefer paper-heavy trials.
- Selected decision-makers will reach a conclusion
Fairly new international arbitration centers, like Seoul or Dubai, have preferred using former judges from common law jurisdictions in their arbitration tribunals, favoring impartiality, reasoning, and case management. Other jurisdictions believe litigation and arbitration should be kept separate. Under-developed legal systems lack trust in judges, believing former judges are not capable of addressing technical and complex matters. Civil jurisdictions prefer academics who have not practiced law. Asia Pacific jurisdictions favor mediation accredited arbitrators.
- Standard of Proof
Common law jurisdictions take into account all the variables and rely predominantly on the seriousness of the matter. For fraud or corruption, the standard of proof should be raised. In contrast, for lesser matters, the standard should be lowered. Most European countries do not believe in a standard of proof. Instead, the alleging party must prove their case.
It is important that your international investment arbitration lawyer is familiar with jurisdiction and the varying legal processes that will determine a successful arbitration in your favor.
Why Should You Hire Boyle & Jasari?
International law is one of the most complex legal practice areas, though it can also prove to be one of the most interesting. Our attorneys are passionate about international investment litigation and are committed to increasing the chances of you reaching the outcomes you seek.
Investment disputes also rank among the most controversial cases all around the world. This can add to the already mounting pressure and make it difficult to maintain a clear head when pursuing the award you deserve. Having a committed international investment arbitration and litigation lawyer on the case with decades of experience can help provide some peace of mind to see it through.
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