Erga Omnes – The SCIL Blog

Background

Ex-President Al-Bashir of Sudan is accused of several counts of crimes against humanity, war crimes and genocide. The International Criminal Court (ICC) issued a warrant for Al-Bashir’s arrest in 2009 and then again in 2010. In March 2017, Jordan hosted the 28^th Summit of the Arab League in Amman. As Sudanese President at the time, Al-Bashir, attended the summit. Jordan did not arrest the visiting Head of State while he was in the country.

In May 2019, the ICC Appeals Chamber ruled that Jordan had failed to comply with its obligations under the Rome Statute by not executing the warrants. As a State Party to the Rome Statute, Jordan is required to ‘cooperate fully’ with the ICC,[1] precluding them from relying on the doctrine of State Immunity to refuse to execute an ICC warrant. UNSC Resolution 1593 had referred the situation in Darfur, Sudan to the ICC and obliged Sudan to ‘cooperate fully’ with the court.[2] Controversially, the ICC found that this meant Sudan, a country which is not party to the Rome Statute, was equally bound by the Statute’s requirements and could not have relied on State Immunity to protest its Head of State’s arrest by Jordanian authorities.

This so called ‘Security Council Route’ into the ICC’s jurisdiction has been widely criticised since the decision was published. The ICC found that UNSC Resolution 1593 meant that Sudan was bound by Art. 27(2) of the Rome Statute, which says that immunities ‘shall not bar the Court from exercising its jurisdiction over such a person.’ Therefore, Sudan could not rely on State immunity to evade the ICC’s jurisdiction. This leaves open the possibility that other States not party to the Rome Statute could be similarly compelled to give up their right to immunity. All members of the UN are obliged by Art. 25 of the UN Charter to comply with UNSC resolutions, greatly widening the potential application of the ‘Security Council Route.’

The Critics

Unsurprisingly, the ramifications of this decision have been divisive.

UNSC Resolution 1593 contains no explicit reference to State Immunity. The ICC’s reliance on the broader requirement imposed on Sudan to ‘cooperate fully’ suggests the UNSC may now implicitly prohibit reliance on immunity in response to an ICC warrant. This discretionary power enables the UNSC, already largely controlled by Western powers, China and Russia, to infringe the sovereignty of less powerful States by forcing their compliance with the Rome Statue and removing their right to immunity. The capacity to do so without the consent of the affected State only increases the UNSC permanent members’ hegemony over the international justice system.

Moreover, this power has been inconsistently used. Despite similar allegations against Bashar al-Assad, President of Syria, and a request co-sponsored by 65 States, for the UNSC refer the situation in Syria to the ICC,[3] no such resolution has been made. Meanwhile, the United States itself is not subject to the ICC’s jurisdiction and vehemently opposes ICC enquiries into its nationals. Therefore, whether the United States should hypocritically play a role in obliging other States to comply with the ICC’s directives is debateable.

The African Union has also raised concerns over whether such decisions by the ICC threaten the long-term stability of the region, stressing that ‘justice should be pursued in a way that does not impede or jeopardise efforts aimed at promoting lasting peace.’[4] The practical realities of compelling States to arrest foreign officials, who otherwise enjoy immunity from national jurisdictions, may undermine the purpose of State Immunity in facilitating international relations. International gatherings, like the Arab League’s summit in this case, and visits by foreign delegations to other States are crucial in ensuring international cooperation and civility as they provide irreplaceable forums for peaceful discussion and dispute resolution. If Heads of State cannot participate in such diplomatic events, without fear of arrest and prosecution, they are unlikely to meaningfully engage with other States. This may then only increase regional tensions and alienate States already operating on the periphery of legality, escalating conflicts in the long-term.

Why it’s not so bad

However, Al-Bashir’s alleged commission of genocide, war crimes and crimes against humanity was a heinous contravention of accepted jus cogens norms, so by all measures it is certainly preferable for Al-Bashir to be prosecuted if legally possible.

The ICC criticised the alternative proposed by some States, where States Parties to the Rome Statute or those referred to the ICC could be permitted to rely on State Immunity to refuse to execute warrants: ‘the Court depends on State cooperation to execute warrants of arrest. The result would be that, in effect, the Court would be barred from exercising its jurisdiction because of the existence of immunities.’[5] Such a result would incapacitate the ICC. Currently, the ICC is the only permanent international court capable of prosecuting individuals who have been accused of perpetrating the most reprehensible crimes: genocide, war crimes, crimes against humanity and crimes of aggression. Many of these crimes have jus cogens status and attract the universal condemnation of States. Therefore, preventing the ICC from exercising its jurisdiction when such crimes have been committed would be incongruous with the international community’s expectation that these crimes cannot go unpunished.

Additionally, concerns that this decision is an unprecedented infringement of State sovereignty are perhaps also overstated. As Talita de Souza Dias from Oxford University observes, ‘limitations on State sovereignty are the very purpose of Chapter VII resolutions, which are meant to impose coercive measures on UN member States.’[6] Members of the UN have already acquiesced to the possibility of being bound by UNSC resolutions by assenting to Art. 25 of the UN Charter. To accept that the UNSC may also oblige them to submit their nationals to the ICC’s jurisdiction, in the limited situations where these nationals have behaved with the utmost disregard for the most fundamental jus cogens norms, does not put a substantially greater burden upon the principle of State sovereignty.

While requiring States to execute warrants against the heads of other States may indirectly jeopardise future peace, the continuing commission of war crimes, genocide or crimes against humanity more directly endangers peace in the present. The very nature of these violent unconscionable crimes invites rebellion and intervention by other States. In turn this precipitates wars, like in Syria, or equally violent reactions in pursuit of justice, like the actions of rebel groups in Palestine. Allowing States to harbour accused war criminals like Al-Bashir would reflect an implicit acknowledgement by the ICC of its inability to effectively prosecute these crimes. In the absence of individual accountability, Heads of States would not be deterred from committing such crimes and would not resign from their positions, voluntarily relinquishing their immunity. Therefore, with this decision, the ICC possibly counters the perception that Heads of State, so long as they remain in power, are in effect immune from prosecution, discouraging the perpetuation of violence and the corresponding emergence of cycles of violence.

Conclusion

The ‘Security Council Route’ is an imperfect system, still allowing powerful States to escape the ICC’s jurisdiction. However, the net good achieved by prosecuting the perpetrators of the most egregious crimes, even when these perpetrators are current Heads of State, outweighs any strain it places on the principle of State sovereignty or international relations.

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[1] Rome Statute, Art. 86.

[2] https://www.icc-cpi.int/NR/rdonlyres/85FEBD1A-29F8-4EC4-9566-48EDF55CC587/283244/N0529273.pdf

[3] https://www.theguardian.com/world/2014/may/22/russia-china-veto-un-draft-resolution-refer-syria-international-criminal-court

[4] http://www.iccnow.org/documents/AU_142-communique-eng.pdf

[5] Prosecutor v Al-Bashir (Pre Trial) (International Criminal Court, Appeals Chamber Case No ICC-02/05-01/09 OA2, 6 May 2019), [122]. https://www.icc-cpi.int/CourtRecords/CR2019_02856.PDF

[6] https://www.ejiltalk.org/the-discussion-of-the-security-council-roots-to-the-derogation-from-personal-immunities-in-the-al-bashir-case-how-explicit-must-security-council-resolutions-be/#more-16485

As part of a research project jointly funded by HKU and USydney over 2019 (see background and five earlier related postings via https://japaneselaw.sydney.edu.au), Sydney Law School will host a second symposium on Asia-Pacific business dispute resolution, all day on 15 November (the Friday before Australia Arbitration Week, this year in Brisbane), with support from CAPLUS, SCIL, TDM and various other ADR or international law related organisations. Registration and speaker bios are here, and presentation Abstracts and/or online publications are being uploaded below.

Challenges and opportunities for Asia-Pacific international commercial arbitration symposium

15 November 2019

Building on Reyes & Gu (eds), The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia-Pacific (Hart, 2018), this symposium examines more recent challenges for international commercial arbitration (ICA), especially the proliferation of international commercial courts, the 2018 UN Convention on enforcement of mediated settlement agreements, and dispute resolution for the Belt & Road initiative. The main focus is on Hong Kong and Singapore (competing jurisdictions in the top “Stage 4” for ICA venues, as identified by Reyes & Gu), Australia (a “Stage 3” venue), China and Japan (“Stage 2” venues).

The symposium will also compare approaches in these jurisdictions to investor-state dispute settlement (ISDS). Building on Chaisse and Nottage (eds) International Investment Treaties and Arbitration Across Asia (Brill, 2018), participants will chart evolving treaty practices and high-profile ISDS cases (including eg in Indonesia), assess whether these do or might impact on public attitudes even towards ICA or other forms of arbitration, and explore alternatives or complements to ISDS.

Speakers:
Professor Shahla Ali, University of Hong Kong
Professor Simon Bronitt, Dean, The University of Sydney Law School
Professor Simon Butt, The University of Sydney Law School

Professor James Claxton, Kobe University

The Hon Dr Clyde Croft AM SC, Supreme Court of Victoria

Daniel Forster, Sparke Helmore Lawyers & The University of Sydney Law School
The Hon Roger Gyles AO QC, ABA rapporteur and formerly Federal Court of Australia
Dr Benjamin Hayward, Monash University
Brenda Horrigan, ACICA President & Herbert Smith Freehills
Dr Jeanne Huang, The University of Sydney Law School
Wilson Mbugua, University of Hong Kong
James Morrison, ACICA & Morrison Law
Professor Luke Nottage, The University of Sydney Law School
Jonathan Redwood, Banco Chambers
Yi Tang, University of Hong Kong
Dr Nobumichi (Nobu) Teramura, University of Adelaide
Professor Leon Trakman, UNSW
Professor The Hon Marilyn Warren AC QC, former Chief Justice of the Supreme Court of Victoria

VIEW THE DRAFT PROGRAM (as at 9 August 2019)

ABSTRACTS:

Ali, Shahla, “ICA and ISDS Developments in Hong Kong in the Context of the Belt and Road Initiative“
This paper examines the impact of both the Belt and Road Initiative and the UNCITRAL Model Law on International Arbitration (the Model Law) on both international commercial and investor-state arbitration practice in Hong Kong. Measures taken to modernize the practice of arbitration including training programmes, and legislative reforms are examined with a view to gaining insights into challenges and future developments.

Claxton, James M. and Nottage, Luke R. and Teramura, Nobumichi, “Developing Japan as a Regional Hub for International Dispute Resolution: Dream Come True or Daydream?” Journal of Japanese Law, Issue 47, 2019; Sydney Law School Research Paper No. 19/01. Available at SSRN: https://ssrn.com/abstract=3299097
The Japanese government, supported by various stakeholders, has recently been attempting to develop Japan as another regional hub for international business dispute resolution services. Tracking this development is important for both theoretical and practical reasons. How it unfolds should reveal which of various theories for explaining Japanese law-related behaviour have more traction nowadays. Assessing the new initiatives is also important for legal practitioners and others interested in the practical question of where to arbitrate or mediate cross-border business disputes. This paper therefore reports on current attempts to promote existing and new international arbitration centres in Japan as well as the recent establishment of the Japan International Mediation – Kyoto, in the context of intensifying competition from other regional venues for dispute resolution services. [Our presentation also updates on the Japan-Korea trade and investment tensions that escalated from mid-2019, and the various dispute resolution options that could be engaged.]

Teramura, Nobumichi, Luke Nottage and James Morrison, “International Commercial Arbitration in Australia: Judicial Control over Arbitral Awards” (updated June 2019)
Geographical remoteness has not prevented Australia from pursuing its ambition to become a major hub for international commercial arbitration (ICA). While regional competitors in the Asia-Pacific region such as Singapore and Hong Kong have already achieved great success in the arbitration world, Australia’s ‘Tyranny of Distance’ requires extra efforts to attract ICA cases. Recent marketing from the Australian government emphasises (1) a harmonised legal framework for ICA in line with international standards; (2) sophisticated arbitration institutions; and (3) some of the world’s leading arbitration practitioners.
While these factors do reveal strong potential to attract ICA cases, to ensure that this goes beyond a mere possibility, the Australian government and judiciary are making quite concerted broader efforts. The former has recently become more vigorous in marketing Australia-based ICA in and out of the country. The latter has generally tried to issue pro-arbitration judgments particularly over the last ten years, and in public speeches or publications leading judges have been actively summarising and promoting Australian developments both domestically and world-wide. However the court system has structural problems, due to the shared ICA jurisdiction of State and Territory Courts alongside the Federal Courts, compared to the unitary system in Hong Kong and Singapore. There are also persistent delays in court-related ICA matters under the IAA, even in the Federal Court of Australia. Nonetheless, perfection is never attainable.
The rest of this paper argues that Australia has significantly improved legal environment for ICA in line with international standards, focusing on the main topics identified for a wider cross-jurisdictional research project: (1) arbitrator bias; (2) conflicts of interests; (3) procedural irregularities and arbitrator’s misconduct during proceedings; (4) arbitrability (objective arbitrability) (5) judicial interpretation of arbitration clauses (subjective arbitrability); and (6) enforceability of arbitral awards (especially regarding public policy).

Nottage, Luke, “Confidentiality versus Transparency in International Commercial Arbitration and ISDS in Australia and Japan”

Both Australia and Japan lie geographically on the periphery of the Asian region, where international arbitration has been burgeoning especially over the last 15 years. Both countries have struggled to attract significantly more arbitration cases, despite quite extensive efforts (especially by Australia); most cases still go to Hong Kong, Singapore and (especially where local parties are involved) China. This is despite increasingly strict confidentiality obligations being introduced through the rules of the major arbitration institutions, and/or legislation, in Japan and especially Australia. Although aiming to meet the usual expectations of businesspeople and their legal advisors in international commercial dispute resolution, these changes may be “too little, too late”. By contrast, transparency obligations have been added increasingly around the investor-state dispute settlement (ISDS) option included in almost all investment treaties concluded respectively by Australia and Japan. This tendency arguably reflects growing concerns about the public interests implicated by ISDS cases (especially in Australia). Australia has gone the next step of revising its legislation in 2018 to automatically exempt some investment treaty arbitrations from the confidentiality obligations otherwise imposed by default on parties and others in Australia-seated international arbitration proceedings since 2015. Japan does not need to, because its legislation does not apply confidentiality to arbitrations by default. This presentation explores possible tensions between these two trajectories in each country. The lessons may be particularly interesting for other jurisdictions (perhaps like Italy) interested in how best to promote and attract international arbitration cases amidst evolving expectations in business and wider communities. The tensions may also influence the EU’s ongoing negotiations for investment protection treaties with respectively Australia and Japan.

The Academic Forum for Investor-State Dispute Resolution was established through the University of Geneva (incidentally, an institutional partner of USydney) to provide input from (now around 120) professors expert in international investment law, mainly for the ongoing UNCITRAL deliberations into potential reforms of the ISDS system. Six working groups and related “Concept Papers” were published in April 2019, on topics that have attracted growing concern from the public and now various policy-makers. For each of the six topics, papers succinctly considered how particular concerns might be addressed by further targetted improvements to ISDS, the addition of an appellate review mechanism, the adoption of multilateral investment court (along EU lines), or abandoning ISDS (relying on domestic courts and/or inter-state arbitration).
Professors Chester Brown and Luke Nottage at USydney join with three others from Australian universities on the Forum. Chester co-chaired with Federico Ortino the working group (including Julian Arato) that wrote the paper addressing possible inconsistency or incoherence in ISDS awards, while Luke contributed (with Chiara Giorgetti and others) to the paper on independence, impartiality and neutrality of arbitrators or other adjudicators of international investment disputes. Below we reproduce (without hyperlinks) the introductions to short summaries of each paper written for the European Journal of International Law blog.

Continue reading “Academic Forum for ISDS: arbitrator neutrality and inconsistent decisions”

Whether free trade agreements (“FTAs”) can be used to promote trade-related environment concerns are widely debated. Since the North American Free Trade Agreement, the U.S. has strongly pushed its trading partners to sustainable trade liberalization without scarifying environment. Vessel-sourced pollution is a serious threat for global marine environment. The major international conventions to regulate vessel-sourced pollution are including the International Convention for the Prevention of Pollution from Ships and its Protocols (collectively “MARPOL 73/78”), and the UN Convention on the Law of the Sea (“UNCLOS”). Starting from 2006, the U.S. has incorporated MARPOL 73/78 into four of its bilateral FTAs and used trade law to combat vessel-sourced marine pollution (namely, the U.S.-Peru FTA, the U.S.-Colombia FTA, the U.S.-Panama FTA, and the U.S.-South Korea FTA.) The most recent U.S.-Mexico-Canada Agreement also incorporates MARPOL 73/78. Moreover, based on the U.S. proposal, with its successful conclusion in 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) becomes the first megaregional FTA to incorporate MARPOL 73/78 (see Art. 20.6). All these FTAs require its members to adopt, maintain, and implement laws, regulations, and all other measures to fulfil their obligations under MARPOL 73/78 (e.g., Art. 18.2 of the U.S.-Peru FTA, and Art. 18.2 of the U.S.-Colombia FTA.)
Besides MARPOL 73/78, the CPTPP and the U.S. FTAs that incorporates MARPOL 73/78 all expressly incorporate to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (hereinafter “CITES”) as well. However, CPTPP and longer-standing US FTA practice is good for enforcing environmental treaties like CITES but not quite so good for MARPOL 73/78. One important reason is that all these FTAs require the victim countries of a vessel-sourced pollution to demonstrate the pollution “affect[s] trade or investment between the parties”, but such requirement is not imposed to violations of CITES.
For violations of CITES, although members are encouraged to address any related disputes through CITES, a member’s failure to adopt, maintain and implement its laws and regulations incorporating CITES obligations allows other CPTPP members to bring a claim by utilising the CPTPP’s dispute resolution mechanism (Art. 20.17.2 and footnotes 23-24 of the CPTPP). Nevertheless, for MARPOL 73/78, a member’s failure to maintain its implementation laws and regulations does not allow other CPTPP members to bring a claim by utilising the same dispute resolution mechanism. The claimant needs to prove the non-implementation affected trade or investment between the parties (CPTPP, art. 20.5.1, art. 20.6, footnotes 5 and 8). Following this vein, commencing the CPTPP dispute settlement mechanism requires more than a violation of MARPOL 73/78; the violation must be (1) sustained and recurring and (2) affecting trade or investment between the parties (CPTPP, art. 20.3.4). Therefore, a MARPOL 73/78 violation is not a violation of the CPTPP unless it affects trade or investment between the parties.
In Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, the World Trade Organization (hereinafter “WTO”) Appellate Body laid down a test to determine whether a domestic measure affects trade between the parties:
“The analysis…requires a careful examination “grounded in close scrutiny of the ‘fundamental thrust and effect of the measure itself’”, including of the implications of the measure for the conditions of competition between imported and like domestic products. This analysis need not be based on empirical evidence as to the actual effects of the measure at issue in the internal market of the Member concerned. Of course, nothing precludes a panel from taking such evidence of actual effects into account.” (Para 129 of WT/DS371/AB/R.)
In other words, when imported and like domestic products are subject to a single regulatory regime, only the imported products must comply with additional requirements. This would imply that imported products are treated less favourably so the measure affects trade between the parties. Without requiring empirical evidence on negative trade effect, this test is favourable for environmental-related trade disputes.
Nevertheless, “[a]ffecting trade or investment between the Parties” may seriously impede an FTA’s efficacy to enhance the MARPOL 73/78 compliance. This can be demonstrated by the following example. Suppose, the Oceanside, a Panama-registered oil tanker, collided with a Hong Kong-registered bulk freighter. The tanker was sailing from Iran to South Korea to deliver tonnes of condensate, an ultralight crude oil which is highly volatile when exposed to air and water. The bulk freighter was carrying grain from the U.S. to China. The Oceanside caught fire as soon as it hit the freighter. Further suppose that the collision site is within the Zhoushan Fishing Ground which is one of the biggest in the East China Sea, particularly for mackerel and Atlantic croaker. After the collision, the Oceanside slowly drifted into Japan’s exclusive economic zone. It ultimately exploded and sank. If the large-scale spill occurs, it will be devastating to the marine life and fishery economy in the East China Sea. After examining the Oceanside shipwreck, the investigators concluded that had the Oceanside fully complied with the technical requirement for ship building under MARPOL 73/78, the collision would not lead to such a large-scale oil spill. This is largely due to the flag state failing to effectively require the Oceanside to comply with MARPOL 73/78.
The limitations of FTAs to enhance MARPOL 73/78 compliance can be found in the following three aspects.
First, FTAs generally have very limited membership, which often do not include flag of convenience (“FOC”) states that relax MARPOL 73/78 requirements in order to attract foreign registration. For example, in the Oceanside incident, Panama is not a CPTPP member and has not concluded an FTA with either with China or Japan.
Second, supposing that Panama is a CPTPP member, Japan would still carry the onus to prove causation between the spill and the harm to its trade or investment, and Panama’s failure to meet its obligations under the CPTPP. Although the spill occurred in Japan’s exclusive economic zone, this does not necessarily mean that the spill would harm trade or investment between Panama and Japan. Panama, like most of FOC states, does not have a large trading volume with Japan. In other words, the spill has done significant damage to the fishery resources in Japan’s economic zones and will impact on Japanese fishery trade, but not necessarily the trade between Japan and Panama.
Third, even if we broaden FTAs to include the WTO regime, in the case of the Oceanside, the victim coastal countries like China and Japan cannot seek the remedies through the WTO dispute settlement proceedings with any of the relevant parties. (Among the three relevant parties, Panama and Hong Kong are WTO Members while Iran is not.) In contrast, other WTO Members may withdraw their market commitments and stop the imports of seafood from these two countries for the sake of water pollution. Article XX(b) of the GATT and Article 2.1 of the Sanitary and Phytosanitary Agreement authorize WTO Members the right to take necessary measures to protect human, animal or plant life or health provided that such measures are not inconsistent with the provisions of this Agreement. In this regard, the prohibition of this seafood is allowable only if a WTO Member imposes it in conformity with relevant WTO rules. Therefore, it is ironical that, while the victim coastal states like China and Japan cannot seek remedies from the flag states like Panama in the Oceanside incident, they may even face the economic loss due to the polluted fishing industry.
Therefore, the requirement of “[a]ffecting trade or investment between the Parties” is designed to prevent parties from bringing disputes not related with trade and investment to the CPTPP dispute resolution mechanism.
However, in practice, this requirement can essentially keep most of MARPOL cases outside of the FTA dispute resolution mechanism. Arguably, the requirement of “[a]ffecting trade or investment between the Parties” should be deleted for MARPOL 73/78 violation as the CPTPP does for the CITES violation. In this way, FTAs, despite having been heavily criticised, might in fact protect the marine environment further (ie. raise the bar of environmental protection and not merely make sure that trade and investment liberalisation do not have negative impacts on the environment).
For further reading, see https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3259734

The central administrations of the University of Hong Kong and the University of Sydney have provided A$17,000 each for this joint research project over 2019, centred around two conferences at HKU on Monday 15 July and at USydney on Monday 18 November. The lead co-investigators are respectively A/Prof Shahla Ali and Prof Luke Nottage. Below we set out the project’s Aims, Significance and Outcomes. Further updates are expected on this Blog.

Continue reading “New Frontiers in International Arbitration for the Asia-Pacific Region (1): HKU/USyd research project”

Written by: Ana Ubilava (PhD in Law candidate) and Prof Luke Nottage
[This is a version of a submission to the Attorney-General’s Department in response to the call by ICSID to comment on its comprehensive draft revisions to its rules governing various types of investor-state dispute settlement (ISDS) procedures.]
In August this year the International Centre for the Settlement of Investment Disputes (ICSID) announced its fourth and most extensive changes to dispute resolution rules, to date. The proposed amendments only concern the rules and not the Convention itself. ICSID Additional Facility (AF) rules will now be applicable to cases where neither respondent nor claimant is the ICSID Contracting State or national of a Contracting State, whereas previously at least one side had to be a (national of a) Contracting State. Thus, these dispute settlement facilities will be more widely available world-wide.
These proposals are important not only due to their scale, but also some unique aspects. ICSID is proposing a new dispute settlement mechanism, the Mediation Rules, deemed to be part of the ICSID AF Rules. These will be the first set of institutional rules for investor-state mediation (ISM) released by the world’s main arbitral institution for investment disputes. The International Bar Association published ISM Rules in 2012 but so far these seem to have had little impact in practice. The new ICSID Rules are likely to have more impact, but States like Australia should do more than just agree to AF Rules in its investment treaties or contracts.

Continue reading “ICSID’s New Mediation Rules: A Small but Positive Step Forward”

Written by: Luke Nottage (USydney) & Nobumichi Teramura (UNSW, PhD candidate)
With some fanfare, on the sidelines of the ICCA Congress hosted in Sydney over 15-18 April, the Australian Trade and Investment Commission (Austrade) unveiled a glossy brochure entitled “Australia’s Capability in International Commercial Arbitration”. This blog posting explains its key contents, identifying both convincing and unconvincing aspects. Our later blog posting will compare Japan as another Asia-Pacific jurisdiction that is similarly still struggling to attract many international commercial arbitration (ICA) cases.

Continue reading “Australia’s (In)Capacity in International Commercial Arbitration”

Guest blog written by: Nobumichi Teramura (UNSW PhD in Law candidate)
Ongoing dramatic geopolitical transitions in the world have inevitably impacted on the international business environment of the Asia-Pacific region. This requires Australia and other countries in the region to re-examine their legal infrastructure for transnational business disputes. Convergence and divergence of legal systems of competing and sometimes cooperating states in the Asia-Pacific require the Australian government and other stakeholders to address unprecedented legal complexities in private to private, private to public, and public to public commercial dispute resolution.
On 19 April 2018, the Sydney Centre for International Law (SCIL) at the University of Sydney Law School organised a post-ICCA symposium: “International Commercial Dispute Resolution for the 21st Century: Australian Perspectives”. The symposium, the second recently with the University of Western Australia (UWA) Law School and also supported by Transnational Dispute Management (TDM), brought together leading experts in international arbitration, investment law and international business law from all over the world. They examined broad and perhaps increasingly overlapping fields such as investor-state dispute settlement (ISDS) in a changing legal and political environment, cross-border litigation in the Asian region, other international commercial dispute resolution mechanisms (arbitration and mediation), and inter-state dispute settlement.

Continue reading “Australian Perspectives on International Commercial Dispute Resolution for the 21st Century: A Symposium”

[Update of 22 August 2018: the JSCOT Report No 181 recommending CPTPP ratification is now available. It refers to this Submission, my oral evidence given at hearings in Sydney (transcribed here), and further statistical information jointly with PhD student Ana Ubilava (incorporated also into an article for the Sept 2018 issue of the Intl Arb L Rev).]
The Trans-Pacific Partnership was signed in February 2016 by Australia, Japan, the US and 9 other Asia-Pacific countries, but the new Trump Administration withdrew signature in January 2017, so the remaining 11 re-signed a variant (TPP11 or CPTPP) in March 2018. Inquiries into ratification are now being conducted by the the Australian Parliament’s Joint Standing Committee on Treaties (JSCOT, where the Government always had a majority of members, so will almost certainly recommend ratification) and the Foreign Affairs, Defence and Trade Committee in the Senate (where the Government lacks a majority overall). The Inquiry reports do not bind the Government anyway, so the big question remains: will the opposition Labour Party subsequently vote with the Government to enact tariff reductions consistently with this treaty, to allow the Government then to ratify the treaty so it can come into force?
A particular stumbling block will remain the TPP11’s investor-state dispute settlement (ISDS) provisions, given as an option additional to inter-state arbitration for investors directly to enforce substantive commitments offered by host states to protect foreign investment, given that the Labour Party’s policy remains opposed to including ISDS in treaties. Despite that policy position, going back to the the Gillard Government Trade Policy Statement in 2011 (in force until Labour lost power in 2013), the Labour Opposition nonetheless voted pragmatically with the Government to allow FTAs containing ISDS to come into force with Korea and China.
Below is my Submission to both Parliamentary Committees, focusing on the investment chapter and supporting ratification of the TPP11. It is based in part on my latest paper with A/Prof Amokura Kawharu focusing on recent ISDS cases and investment treaties (re)negotiated by Australia, and New Zealand where a new Labour Government has also renounced ISDS for future treaties, but pragmatically agreed to rather minimal changes to ISDS and the investment chapter overall in TPP11. The footnoted original versions of the Submission, available by the Committee websites, refer to some of my other recent writings concluding a 4-year ARC cross-institutional research project on international investment dispute management. One is a 21-chapter book on ‘International Investment Treaties and Arbitration Across Asia‘, launched by former Chief Justice Robert French on Thursday 13 April as part of a SCIL-supported symposium on international commercial dispute resolution, including Australian perspectives.

Continue reading “The TPP is Back: Submission to Australian Parliamentary Inquiries”

Written by: Luke Nottage & (Kobe University Law Faculty Prof) James Claxton
[This is an non-hyperlinked / unfootnoted version of a posting published by the Kluwer Arbitration Blog on 26 January 2018.]
Prime Minister Shinzo Abe himself is certainly back – having led the Liberal Democratic Party (LDP) to a fifth consecutive election in October 2017. If Abe remains in power for another three years, he will become the longest serving Japanese prime minister since World War II. Although the electorate probably responded mostly to his government’s hawkish security policy, given the recent sabre-rattling from North Korea, voters also seem to be giving the government the benefit of the doubt on his “Abenomics” economic policy. Introduced after the LDP regained power in 2012, Abenomics involves shooting “three arrows” – for monetary, fiscal and structural reform – to try to jumpstart the Japanese economy out of its lethargic performance since the “bubble economy” burst in 1991.
Against this political backdrop, and Abe’s ambitious announcement in 2013 that “Japan is back” on the world stage, some LDP policy-makers recently have proposed enhancing Japan as regional hub for international dispute resolution services. On 18 May 2017 the Nikkei Asian Review announced: “Japan to Open Center for International Business Arbitration”, which:

… could be set up as early as this year in Tokyo. Lawyer groups, corporations and other private-sector actors will take the lead in its operation. The Japan Commercial Arbitration Association [JCAA] could use the facility as its base while mediating international corporate disputes. Similar associations from other countries may use it as well.
Japan’s Foreign Ministry, Justice Ministry and Ministry of Economy, Trade and Industry [METI] will have joint jurisdiction over the new center. They will provide institutional support, such as by crafting necessary legislation and providing staff training.

Continue reading ““Japan is Back” – for International Dispute Resolution Services?”