Investor Presentaiton
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under the 1958 New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards. And, finally, international
arbitration had been used for centuries to resolve international
commercial disputes.
However, the actual functioning of ISDS under investment
treaties has led to concerns about systemic deficiencies in the
regime. They have been well documented in literature and can be
summarized as follows."
Legitimacy and transparency. In many cases foreign investors
have used ISDS claims to challenge measures adopted by States in
the public interest (for example, policies to promote social equity,
foster environmental protection or protect public health). Questions
have been raised whether three individuals, appointed on an ad hoc
basis, have sufficient legitimacy to assess the validity of States' acts,
particularly if the dispute involves sensitive public policy issues.
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Host countries have faced ISDS claims of up to $114 billion¹²
and awards of up to $1.77 billion. Although in most cases the
amounts claimed and awarded are lower than that, they can still
exert significant pressures on public finances and create potential
11 See further, M. Waibel et al., 2010; Gaukrodger and Gordon, 2012;
Eberhardt and Olivet, 2012; UNCTAD, 2013, pp. 111-112.
12 This figure is the aggregate amount of compensation sought by the three
claimants constituting the majority shareholders of the former Yukos Oil
Company in the ongoing arbitration proceedings against Russia. See Hulley
Enterprises Limited (Cyprus) v. The Russian Federation, PCA Case No.
AA 226; Yukos Universal Limited (Isle of Man) v. The Russian Federation,
PCA Case No. AA 227; Veteran Petroleum Limited (Cyprus) v. The
Russian Federation, PCA Case No. AA 228.
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Occidental Petroleum Corporation and Occidental Exploration and
Production Company V. The Republic of Ecuador, ICSID Case
No. ARB/06/11, Award, 5 October 2012.
UNCTAD Series on International Investment Agreements IIView entire presentation