Browsing by Author "McLachlan, Campbell"

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Open Access
The best defence is a good offense - Sate counterclaims in investment treaty arbitration
(Te Herenga Waka—Victoria University of Wellington, 2016) Farmer, Kelsey Brooke; McLachlan, Campbell
Host state counterclaims in investment treaty arbitration are rarely pleaded and never successful, to the extent that one commentator has characterised their use as ‘thirty years of failure’. This paper navigates the obstacles that host states must contend with to assert counterclaims in investment treaty arbitration. While state counterclaims are permitted in principle under the ICSID Convention and UNCITRAL Arbitration Rules, satisfaction of the jurisdiction and admissibility requirements has proved more complex. The paper examines a number of core treaty provisions to identify the treaties that may be more or less likely to extend a tribunal’s jurisdiction ratione materiae over state counterclaims. Subsequently, this paper examines the requisite connection that must exist between a counterclaim and the principal claim. A survey of international jurisprudence supports the conclusion of this paper that recent treaty tribunal decisions have taken an unjustifiably narrow and often inconsistent approach to requisite connection, to the extent that it may be virtually impossible for states to assert counterclaims under its current articulation. This paper offers an alternative approach.
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Binding Sovereign States as Non-Signatories to Arbitration Agreements
(Te Herenga Waka—Victoria University of Wellington, 2012) Erfurth, Julian; McLachlan, Campbell
The jurisdiction of arbitral tribunals is restricted to the parties of the arbitration agreement. As formal signatories of the contract containing the arbitration clause, those parties are usually easy to determine. In some situations, however, attempts are made to compel persons or entities to arbitrate that have neither signed the arbitration agreement nor have in any other way expressed their consent to be bound to it. Those parties are commonly referred to as non-signatories to the arbitration agreement. Although predominantly occurring in commercial contracts between private corporations, also states frequently face situations where a private party, after having entered into an arbitration agreement with a state-owned entity, claims that the state itself has to be considered as true party to the agreement. Apart from the problems arising from non-signatory situations in general, those constellations give rise to a number of specific issues, primarily rooted in the distinctive features of state contracts compared to private sector contracts. Against the background of those characteristics, the paper makes an argument for a more practical approach towards non-signatory issues. Instead of purely relying on the determination of the parties’ common intention, closer account should be taken of considerations of good faith and equity.
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The choice of law contract
(Te Herenga Waka—Victoria University of Wellington, 2014) Hook, Maria; McLachlan, Campbell; Angelo, Tony
The party autonomy rule embodies the freedom enjoyed by parties to a cross-border legal relationship to choose the law applicable to that relationship. It is firmly established in the area of contract and is also increasingly being relied upon in non-contractual relationships. This thesis argues that there has been insufficient analysis of the mechanism behind the rule, the choice of law agreement, and that a better understanding of the agreement’s functions is crucial to the effective operation of the party autonomy paradigm. Rejecting the argument that choice of law agreements are of merely factual relevance in the determination of the applicable law, the thesis proposes a contractual framework for the regulation of party autonomy. By fusing principles of choice of law and contract, this framework provides guidance on the proper scope of party autonomy, as well as on the conditions that ought to be imposed on the enforcement of choice of law contracts. In particular, it demonstrates that the scope of party autonomy must be evaluated by reference to objective choice of law; that the existence and validity of the choice of law contract must be established before it is given effect; and that the law of contract is not always sufficient to achieve this task and must be supplemented by rules that are specific to the choice of law contract, termed modal choice of law rules. Championing party autonomy without also considering the attendant normative questions that define the purpose, the meaning and the limits of that power ignores the parties' right to freedom from contract and undermines the very purpose of party autonomy. The thesis concludes, therefore, that existing rules of party autonomy ought to be interpreted in a way that gives effect to the contractual nature of the choice of law agreement, and that reforms are needed to expand the use of modal choice of law rules.
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Dissenting Opinions in International Arbitration
(Te Herenga Waka—Victoria University of Wellington, 2012) Peter, Irene; McLachlan, Campbell
Contemporary international arbitration has less to risk and more to gain from dissent than ever before. This paper contends that international arbitration has matured to the extent that, the potential role for dissent is comparable in scope and value, to the established role dissent has in the common law court and International Court of Justice. The author argues that the full value of dissent can now be realised because the risks posed are less and moreover, can be adequately managed. Domestic legal systems, and institutional arbitral regimes alike, have established practices, which serve to reduce the threat traditionally posed by dissent. The author asserts that further targeted regulation is necessary in order to maximise the benefits provided by dissent and reduce the associated risks.
Open Access
The Energy Charter Treaty, investment arbitration and the Spanish solar crisis: A recipe for disaster?
(Te Herenga Waka—Victoria University of Wellington, 2015) Stuart, Thomas; McLachlan, Campbell
Spain is a world leader in solar energy production and until 2009 operated a feed-in tariff policy that provided solar energy producers with a preferential price for the electricity they fed back into the grid. This policy was scaled back in 2009 when Spain found itself facing severe economic downturn. It has now been repealed entirely. While domestic investors in solar energy had to absorb the resulting loss in profits, foreign investors sought compensation under the Energy Charter Treaty. They alleged that Spain had breached its obligations as a signatory state and commenced arbitral proceedings accordingly. These arbitral proceedings signal the first time that the Energy Charter Treaty has been used to resolve a dispute over renewable energy investment as well as the first time that the treaty has been used by multiple investors to claim against a host state. The novelty of this situation has tested the efficiency of the established rules and procedures of investment treaty arbitration and has put a spotlight on the issues that arise when multiple investor claims are arbitrated separately. This paper examines the precise nature of those issues, reflects on the evolution of arbitration into the investor-state arena and proposes a number of ways in which the system might be better streamlined to handle multiple-investor claims.
Open Access
Is a requirement of resort to prior remedies jurisdictional?
(Te Herenga Waka—Victoria University of Wellington, 2015) Rahim, Muniroh; McLachlan, Campbell
The doctrine of resort to prior remedies has been a hot debate in some international investment proceedings in arbitration tribunals. Some groups argue that resort to prior remedies in international investment disputes under bilateral investment treaties is akin to exhaustion of local remedies in diplomatic protection doctrine. Therefore failure to exhaust local remedies before bringing the international investment claims to international plane leads to the case declared inadmissible before the international tribunals. The groups also further argue that in the event that the Bilateral Investment Treaty requires that disputes should be brought to local courts where the investment has been made, such requirement is jurisdictional. Therefore, failure to bring the disputes to local courts for remedies leads the tribunal in question lacks of jurisdiction to hear the case. Accordingly, this paper provides an in depth examination of whether or not a requirement of resort of prior remedies jurisdictional. The paper concludes that a requirement to resort to prior remedies in international investment disputes under international investment treaties is not a jurisdictional requirement because of two reasons. First, jurisdiction means that the tribunal has power and competent to hear the investment disputes. Such power extends to any legal disputes between contracting parties and national of another contracting parties and the availability of consent of Contracting Party and national of another contracting party to bring the disputes to the tribunal in question. Second, the issue of resort to prior remedies in international investment disputes does not relate at all to the jurisdiction of the tribunal to hear the disputes. The issue is related to the claims itself whether or not the claims is matured enough to be brought to the international tribunal. To add more benefit, this paper also considers impacts of the issue of resort to prior remedies on Indonesian law. Such consideration is important as there is an aspiration among the Indonesian government officials to include provisions on exhaustion of local remedies in the BITs. In reaching a conclusion on the (un)feasibility of the inclusion of exhaustion of local remedies in the BITs, investigation has been made on two issues, namely, an availability of Indonesian court remedies to deal with international investment disputes and an analysis on ASEAN Australia New Zealand Free Trade Agreement on Investment Chapter where Indonesia is a party, and its impact on the Indonesia’s aspiration.
Open Access
Is the Court of Arbitration for Sport really arbitration?
(Te Herenga Waka—Victoria University of Wellington, 2015) Pashorina-Nichols, Viktoriya; McLachlan, Campbell
The Court of Arbitration for Sport is an arbitral tribunal, which was originally created with the aim of resolving disputes that have some connection to sports. Its predominant dispute settlement method is arbitration. Thus far the Court of Arbitration for Sport has achieved a great reputation for being a highly fair, effective and respected forum for the settlement of sports disputes in a relatively inexpensive and speedy manner since its inception in 1984. This paper seeks to test CAS’s arbitral procedure to see whether or not certain traditional elements of arbitration are present and, as a result, whether or not the various benefits of arbitration are offered to sports disputants. The elements discussed are: party consent, party autonomy, institutional independence, independence and impartiality of arbitrators, privacy and confidentiality, and enforcement of awards. Also, this paper provides recommendations where it has found that CAS ought to reflect the listed elements better, so that sports disputants can extract more advantages offered by arbitration.
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The Proper Limitation Regime for Transnational Sales Contracts in International Commercial Arbitration
(Te Herenga Waka—Victoria University of Wellington, 2012) Huser, Daniel; Butler, Petra; McLachlan, Campbell
The following dissertation addresses the question of how the relevant limitation period for international sales contracts can be determined in international arbitration proceedings. However, the evaluation of the relevant – and appropriate – limitation regime for international sales contracts in international arbitration can hardly be described as a straight “gateway to justice” – as N H Andrews generally qualified the law on limitation. Instead, one of the “most important and beneficial of legal institutions”, in the words of Friedrich Carl von Savigny, is proving difficult to clarify in the ordinary dispute resolution process of the international trade community – or more precisely, in international arbitration proceedings. This observation is primarily distressing because arbitration proceedings are commended for their accuracy, efficiency and predictability. Additionally, it must be considered that the primary aim of limitation periods is to provide certainty by warding off delicate problems of evidence and long drawn-out processes. However, the dissertation develops proposals and establishes parameters according to which the proper limitation regime for international sales contracts can be satisfactorily determined. Underlying idea of these proposals is the conviction that disputes arising from international sales contracts must be decided in accordance with international rules. Consequently, the dissertation argues that the UNIDROIT Principles 2004 and the UN Limitation Convention 1974 apply best to the present question.
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Sovereign Immunity and the Execution of Arbitral Awards Against Sovereign States
(Te Herenga Waka—Victoria University of Wellington, 2012) Devine, Erica; McLachlan, Campbell
This paper seeks to examine the tension that arises between the sovereign immunity of states and the execution of arbitral awards against sovereign states. This is specifically examined in the context of Democratic Republic of Congo v FG Hemisphere Associates LLC [2011] HKEC 747, where the Hong Kong Court of Final Appeal found that Hong Kong is bound to apply the doctrine of absolute sovereign immunity, consistent with the policy applied in the People’s Republic of China. The effect of this was to prevent FG Hemisphere Associates LLC from enforcing the awards that had been rendered against the Democratic Republic of the Congo in previous ICC arbitrations. This paper progresses through an examination of the scope of the international commercial arbitration regime and the theory of sovereign immunity at international law. It addresses many issues that arise in the context of this case and the enforcement of international commercial arbitration awards more generally, through the interplay of the international arbitration regime and the doctrine of sovereign immunity.
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Umbrella clauses in investment treaties: True function ascertained
(Te Herenga Waka—Victoria University of Wellington, 2015) Arora, Rohit; McLachlan, Campbell; Lewis, Meredith Kolsky
Umbrella clauses are provisions in investment treaties that require the contracting States to observe contractual undertakings or commitments to foreign investors. Umbrella clauses have been subject to much controversy and debate because arbitral tribunals and academic writings are not in agreement with respect to their true function and interpretation. Umbrella clauses are widely understood as substantive provisions in investment treaties which convert a contractual breach committed by a State under municipal law into an international law breach. Another view is that umbrella clauses confer jurisdiction on international arbitral tribunals to adjudicate on contract claims but the proper law of the contract does not change. A purported function of umbrella clauses is that they create a cause of action under international law. This thesis argues that unlike the substantive provisions of an investment treaty whose cause of action lies in public international law, umbrella clauses are not substantive. Different typologies of umbrella clauses are discussed in the thesis. They do not go so far as to show an intention to create a substantive power for umbrella clauses. By applying the rules of interpretation of the Vienna Convention on the Law of Treaties, it is established that umbrella clauses have only a jurisdictional role. The effect of such a role may allow an international arbitral tribunal to exercise jurisdiction over contractual breaches which arise out of sovereign acts of the host State. This thesis establishes that umbrella clauses do not create a cause of action under international law. The procedural laws of the dispute settlement proceedings may change, but the lex causae of the dispute remains as established in the investment contract.
Open Access
What is the proper scope of the power of an arbitral tribunal to issue an order restraining a party from pursuit of parallel proceedings in a national court?
(Te Herenga Waka—Victoria University of Wellington, 2015) Luxford, Stephanie Lie; McLachlan, Campbell
The proper scope of tribunal-ordered anti-suit injunctions to combat parallel proceedings has been subject to much debate. Some have argued that arbitrators’ use of the injunctions requires restriction, while others argue that existing conditions and limitations are sufficient. This paper provides an outline of the sources from which arbitrators are empowered to order anti-suit injunctions, the development of the injunctions through cases, and the recent European Court of Justice decision in Gazprom. It briefly touches on court-ordered anti-suit injunctions, and the implications of the Brussels I Regulation for tribunal-ordered anti-suit injunctions. It concludes that the scope of anti-suit injunctions does not require further restriction. Reasons for this conclusion include the 2006 amendments to the UNCITRAL Model Law; commercial reasons; the need to prevent conflicting decisions; and the nature of arbitration as arising from private commercial arrangements between parties.
Open Access
You can't always get what you want: Analysing the effectiveness of the OECD’s arbitration protocol in the Model Double Tax Convention
(Te Herenga Waka—Victoria University of Wellington, 2015) Aird, Joshua Charles Raymond; McLachlan, Campbell
This paper explores the addition of arbitration into the Mutual Agreement Procedure of the OECD’s Model Double Tax Convention. Through a critical analysis of the provisions it determines that the arbitration clause does not uphold the core tenets of arbitration. The provisions is more akin to fact finding or an advisory opinion. It is suggested that this is an unsatisfactory state of affairs. The purpose of implementing the arbitration provision was to provide for effective and efficient dispute settlement—the result however, is vastly different. The provision is not completely condemned however. This paper suggests a number of improvements to the provision including binding arbitration, a waiver to further remedies and publication of arbitral awards. It is suggested that these improvements will facilitate effective and efficient dispute settlement and progress the OECD’s nascent proposal into a cornerstone of international tax disputes.