Investor Presentaiton
27
such as the obligation to provide fair and equitable treatment (FET),
are at a relatively high level of abstraction and can give rise to
different interpretations. Inconsistent interpretations have led to
uncertainty about the meaning of key treaty obligations and a lack of
predictability of how they will be applied in future cases.
16
Erroneous decisions are another concern: arbitrators decide
important questions of law without the possibility of effective
review. Existing review mechanisms, namely, the ICSID annulment
process or national-court review at the seat of arbitration (for non-
ICSID cases), operate within narrow jurisdictional limits. It is
noteworthy that an ICSID annulment committee may find itself
unable to annul or correct an award, even after having identified
"manifest errors of law".17 Furthermore, given that annulment
committees like arbitral tribunals - are created on an ad hoc
basis for the purpose of a single dispute, they may also arrive (and
have indeed arrived) at inconsistent conclusions, thus further
undermining predictability of international investment law.
Arbitrators: concerns about party appointments and undue
incentives. An increasing number of challenges to arbitrators may
indicate that disputing parties perceive them as biased or
predisposed to a particular outcome, despite the fact that arbitrators
16 Sometimes, divergent outcomes can be explained by the differences in
wording of a specific IIA applicable in a particular case; however, often
they represent differences in the views of individual arbitrators.
17
See CMS Gas Transmission Company v. The Republic of
Argentina, ICSID Case No. ARB/01/8, Decision of the ad hoc Committee
on the application for annulment, 25 September 2007, paras. 97, 127, 136,
150, 157–159. Article 52(1) of the ICSID Convention enumerates the
following grounds for annulment: (a) improper constitution of the arbitral
Tribunal; (b) manifest excess of power by the arbitral Tribunal; (c)
corruption of a member of the arbitral Tribunal; (d) serious departure from
a fundamental rule of procedure; or (e) absence of a statement of reasons in
the arbitral award.
UNCTAD Series on International Investment Agreements IIView entire presentation