National court intervention in arbitration as an investment treaty claim
Source TitleInternational and Comparative Law Quarterly
PublisherCambridge University Press
University of Melbourne Author/sGarnett, Richard
AffiliationFaculty of Law
Document TypeJournal Article
CitationsGarnett, R. (2011). National court intervention in arbitration as an investment treaty claim. International and Comparative Law Quarterly, 60(2), 485-498.
Access StatusOpen Access
© 2009 Cambridge University Press. Online edition of the journal is available at http://journals.cambridge.org/ILQ
International commercial arbitration has long been a popular method for resolving cross-border business disputes. The opportunity for parties to choose their adjudicators and the dispute resolution procedure, the scope for privacy and the greater capacity for enforcement of awards compared to court judgments are all important reasons that parties prefer international arbitration over litigation. Reinforcing this trend in favour of international commercial arbitration has been a general consensus among national courts and legislatures that support, rather than interference, should be provided to the arbitral process. Such a philosophy is apparent, for example, in the requirements in the widely adopted New York Convention for States to recognize and enforce both foreign arbitration agreements and awards, and in international instruments such as the 1985 UNCITRAL Model Law on International Commercial Arbitration, which authorize national courts to assist, rather than intervene, in the conduct of arbitrations within their borders. Moreover, international commercial arbitration has proven to be sufficiently flexible as a dispute resolution method to be used both in disputes between private parties, and between private and State entities. In the case of disputes between private corporations and State enterprises, international arbitration under institutional rules such as the ICC or ad hoc arbitration under the UNCITRAL Rules have commonly been employed. More recently, a parallel dispute resolution system has emerged known as ‘investor-state arbitration’. Unlike international commercial arbitration, which derives its existence from a contractual stipulation to arbitration, investor–state arbitration is created by treaty between States typically conferring rights of arbitration on ‘investors’ against ‘host states’. Such arbitral mechanisms are often found in bilateral investment treaties (BITs) or free trade agreements such as the NAFTA. The object of this article will be to examine the role of investor-state arbitration in adjudicating disputes concerning the conduct of States in relation to international commercial arbitration. It will be suggested, by reference to a recent ICSID tribunal decision in Saipem v Bangladesh, that investors now have scope for review of State action—both by the executive and the judiciary—in respect of arbitrations. Such a pathway has the potential to enhance the arbitral process by providing redress for salient abuses by States.
Keywordsinternational arbitration; international commercial arbitration; cross-border business disputes
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