Professional Documents
Culture Documents
Q UAR T E R LY
a publication of the florida bar international law section
www.floridabar.org • www.internationallawsection.org
In This Issue:
The Application of the UNIDROIT
Message from the Chair..............3 Principles of International Commercial
International Arbitration in
Australia....................................4
Contracts to International Commercial
Florida Adopts UNCITRAL
Model Law on International
Arbitration as lex contractus
Commercial Arbitration to
Further Bolster Miami’s Ability By Ludwina Klein, Warsaw
to Compete as a Viable Seat....7
The Better Approach to Deciding
28 U.S.C. §1782 Applications
Introduction commercial contracts.”2 According to
the guidelines contained in the com-
for U.S. Discovery in Private The UNIDROIT Prin-
Arbitrations Abroad.................23 ments to the Preamble to the PICC, the
ciples of International
A View from Abroad: Corporate term “international” contracts should be
Commercial Contracts
Responsibility for International interpreted broadly so as to exclude only
Crimes? .................................31
(“PICC”),1 prepared
those contracts with elements connected
and published by the
The Evolution of International exclusively with one country and where
Arbitration in Latin America.....34 International Insti-
no international aspect can be found.3
Applications for Executive
tute for the Unifica-
The phrase “commercial” contracts, on
Council Members and tion of Private Law
L. Klein the other hand, is not to be understood
Treasurer Sought....................37 (“UNIDROIT”) in
in opposition to “civil” contracts, where
The Florida Bar Foundation: A 1994 and revised in 2004, can be defined
the former depends on the commercial
Cause We Can Share.............38 as “a non-legislative codification of the
The Enforcement of Foreign general part of the law of international See “UNIDROIT,” page 10
Arbitral Awards in Brazil and
the Ratification of the New York
Convention.............................39
The Necessity Defense in
Bilateral Investment Treaties:
From the Editor . . .
Looking Forward.....................46
Production of Electronic Miami, London, Sydney, Warsaw, reading for any truly international lawyer.
Documents and Information: The Hague, Montreal and Los Angeles; In this issue alone, we cover areas from
New UK Practice Direction
Targets Costs of Electronic
the geographic diversity of the authors Peter Anagnostou’s analysis of Australia’s
Disclosure...............................54 selected for this special International newly amended International Arbitration
Lost in Translation: American Litigation and Arbitration edition of the Act, to Omar Ibrahem’s fascinating piece
Juror Perceptions of Foreign International Law Quarterly is truly on the Kishenganga River arbitration
Litigants..................................56 remarkable—and the articles themselves between India and Pakistan. In addition,
Unchartered Waters: The are even more impressive. On the heels Polish lawyer Ludwina Klein provides her
Kishenganga River Project of our highly successful “Focus on China” excellent scholarship on the role of the
Dispute and Arbitration Under
the Indus Waters Treaty..........57
edition, the ILQ cannot be accused of UNIDROIT Principles of International
focusing solely on Latin America. Indeed, Commercial Contracts in resolving in-
this journal is rapidly becoming required continued, next page
International Arbitration in
Australia
By Peter Anagnostou, Sydney
International arbi- since Australia was one of the first resolving disputes.”6
tration in Austra- countries to adopt the Model Law. The impetus for such an overhaul
lia is governed by Nevertheless, Australia’s legal and of Australian international and do-
the International judicial framework did not always mestic arbitration legislation lies in
Arbitration Act create the ideal environment for the following key areas: (1) to clarify
1974 (Cth) (“IAA”). international arbitration. A number of and update the application of the IAA
On 6 July 2010, high-profile decisions gave rise to con- by adding provisions from the 2006
the International cerns about the Australian judiciary’s revision of the UNCITRAL Model
Arbitration Amend- approach to international arbitra- Law on International Commercial
P. Anagnostou
ment Act 2010 (Cth) tion.4 These deficiencies, coupled Arbitration 1985; (2) to improve the
(“IAA Amendment Act”) received with the growth of the Asia-Pacific overall operation of the IAA; (3) to
Royal Assent and passed into law. economy, have led to a strong push by provide greater guidance to the courts
The intent of the IAA Amendment Act the Australian government to reform in interpreting the IAA; (4) to provide
is to revise substantially the IAA in the current legislation in an effort additional option provisions to assist
order to promote the use of arbitra- to make Australia a major centre for the parties to a dispute; and (5) to
tion as a method of resolving disputes international arbitration in the Asia- clarify the circumstances in which a
arising out of transnational contracts Pacific region. court may refuse to enforce a foreign
and increase the attractiveness of award.
Australia as a seat for international Purpose of the IAA
commercial arbitration.
Amendment Act of 2010 Key Amendments
The IAA Amendment Act is com-
The new regime seeks to promote The following so-called “Model
plemented by other regulatory and
Australia as both the seat and place Law Plus”7 amendments of the IAA
government initiatives also intended
of choice for international arbitrations Amendment Act may be significant in
to modernise the national and domes-
as well as to provide parties with the practice of international arbi-
tic arbitration laws1 and to create an
greater certainty regarding recogni- tration in Australia. Notably, the
international venue for the settlement
tion and enforcement in Australia. amendments apply only to arbitration
of international disputes in Sydney,
On 25 November 2009, the agreements entered into after 6 July
Australia.2
Attorney-General of Australia, the 2010 unless the parties agree to adopt
The impetus behind the initial
Honourable Robert McClelland MP, them.
implementation of the IAA was to en-
shrine the New York Convention into introduced into Parliament proposed Enforcement of foreign arbitra-
Australian legislation to ensure the reforms for the IAA designed to “en- tion awards. There are a wider
recognition and enforcement of foreign sure the Act remains at the forefront range of options when enforcing ar-
arbitral awards.3 Thus, the IAA per- of international arbitration practice.” bitral awards in Australia. A foreign
mitted parties to move an Australian The amendments to the IAA were arbitration award may be enforced
court for an order staying the proceed- seen by the Attorney-General to be in Australia by a court of a State or
ings so as to enable an international essential in order to “emphasise the Territory or the Federal Court as if
arbitration to proceed. Further, it importance of speed, fairness and it were a judgment of that court. The
ensured the international enforcement cost-effectiveness in international IAA now provides an exhaustive list
of arbitration agreements and awards arbitration, while clearly defining of the grounds that mirror those set
made in other states. and limiting the role of the courts out in the Model Law and New York
The legislation was substantially in international arbitration without Convention upon which the enforce-
amended in 1989 to incorporate the compromising the important protec- ment of an award can be challenged:
provisions of the United Nations tive function they exercise.”5 (1) the party challenging the award
Commission on International Trade In general terms, the aim of the was under an incapacity; (2) the
Law (“UNCITRAL”) Model Law on In- IAA is “to facilitate international arbitration agreement was invalid;
ternational Commercial Arbitration. trade and commerce by encouraging (3) no proper notice was given to the
This amendment was widely praised the use of arbitration as a method of challenging party; (4) the dispute is
AballíMilne Kalil, P.A. is a Miami legal boutique, now in its nineteenth year, which focuses its practice
on international commercial litigation, international business transactions, tax and estate planning,
and domestic real estate transactions. The firm’s attorneys are fluent in a number of languages
including English, Spanish, Portuguese and French, and have connections with a strong network of
capable lawyers across the United States, Europe, Latin America and the Far East.
www.aballi.com
Ethics Questions?
Call The Florida Bar’s
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Log on to The Florida Bar’s website
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found under “Member Services.”
Speaking at a recent meeting of Miami was the seat of more arbitra- was authorized to solicit and act for
the Miami International Arbitration tions than any other U.S. city, with parties in federal securities matters
Society (“MIAS”), renowned interna- the exception of New York.4 Among under the FAA.14 The Florida Su-
tional arbitration expert Jan Paulsson other things, Miami-based practi- preme Court held against Rapoport
challenged MIAS members to compete tioners are seeking to exploit their and found him to have engaged in the
on behalf of Miami to host the pres- competitive advantage—geographic unauthorized practice of law.15 On the
tigious International Council for Com- location and a high number of trained heels of Rapoport, The Florida Bar
mercial Arbitration (“ICCA”) Congress practitioners of Latin American and sought to implement amendments
in the near future.1 The challenge Caribbean descent, fluent in both to the Florida Rules of Professional
came immediately on the heels of the English and Spanish—to draw arbi- Conduct making it very difficult for
adoption by the Florida legislature of trations from Latin America and the attorneys not licensed in Florida
a statute2 based on the UNCITRAL Caribbean.5 to represent clients in arbitrations
Model Law on International Com- In adopting the Model Law-based in the state.16 Realizing the poten-
mercial Arbitration with amendments legislation, Florida became the tially devastating effect this proposed
as adopted in 2006. Mr Paulsson’s seventh U.S. state to do so, joining change in rules could have had on the
suggestion was a direct reference California, Connecticut, Illinois, Loui- practice of international arbitration
to the often-asked question—what siana, Texas and Oregon.6 The Model in Miami, many international prac-
should we do next to increase Miami’s Law became effective 1 July 2010.7 titioners fought for several years to
viability as a venue for international Its passage was the direct result of carve out an exception so that foreign
arbitration? a concerted effort by members of the attorneys could represent parties in
Miami offers an interesting case of International Law Section of The international arbitrations.17 Conse-
a city trying to compete with several Florida Bar, many of whom are also quently, the revised rules contain
other urban centers around the world members of MIAS.8 The goal of the stricter requirements for out-of-state
as a preferred venue for international adoption of the Model Law was to cre- counsel representing parties in
arbitration proceedings. The adop- ate a sense of security among parties domestic arbitrations but do provide
tion of the UNCITRAL Model Law and their counsel in selecting Miami an exception for counsel representing
is not the first step in this effort but as a forum for international arbitra- parties in international arbitrations.18
merely the latest in a trend that has tion.9 Touting pro-business interests, The question arises whether the
been developing over the past several the bill steadily gained bipartisan adoption of the Model Law upgrades
decades. Efforts can be traced back support and successfully navigated its
Miami’s appeal all that much. After
to at least the early 1980’s when way through the Florida legislature.10
all, there are numerous other coun-
several prominent members of the Notwithstanding the recent legisla-
tries which have adopted the Model
Miami business and legal commu- tive victory, Miami’s progress has not
Law that are not at the top of the
nity attempted to launch an inter- been without obstacles. In response to
arbitration venue lists (e.g., Bulgaria,
national arbitration institute called the case of The Florida Bar v. Rapo-
Cambodia, etc.).19 However, as Eduar-
the International Center of Florida.3 port11 in 2003, members of the Florida
do Palmer, the Miami-based attorney
The institute lasted only a few years, legal community pushed for strict
at the helm of the push to adopt the
later merging with the World Trade rules governing the unauthorized
UNCITRAL Model Law, has stated:
Center of Florida and taking on a practice of law.12 The case involved
“This is a multi-faceted mosaic that
different purpose. But international an out-of-state lawyer soliciting
[is being pieced] together to continue
commercial arbitration in Miami clients in Florida to represent them
to build on Miami’s reputation as a
has continued to gain steam steadily. in securities arbitration cases held
For example, as of the International in Florida.13 Rapoport claimed that leading city to conduct international
Chamber of Commerce’s (“ICC”) most the Federal Arbitration Act (“FAA”) arbitration proceedings.”20
recently published statistical report, preempted Florida law and that he See “UNCITRAL,” next page
Astigarraga Davis is a boutique law firm with a practice focused on commercial litigation,
arbitration and other business disputes. Our clients include primarily multinational
companies, financial institutions and substantial public and non-public companies. We
have an extensive international practice, our lawyers having handled business disputes
emanating from virtually every country in Latin America, Mexico, the United States and
Canada. Our commercial litigation strengths include international litigation, international
arbitration, financial services litigation including creditors' rights, bankruptcy, and class
actions as well as the recovery of assets for defrauded institutions.
www.astidavis.com
The Florida Bar Lawyer Referral Service, 651 E. Jefferson Street, Tallahassee, FL 32399-2300, phone: 850/561-5810 or 800/342-
8060, ext. 5810. Or download an application from The Florida Bar’s web site at www. FloridaBar.org.
The Brazil-Canada Chamber of Commerce (BCCC) is a business association whose primary objective is
to promote, foster and facilitate stronger commercial relations and bilateral business opportunities
between Canada and Brazil. Established in 1973, the Chamber plays a vital role in keeping Canadian
companies and individuals informed of the latest political and economic developments in Brazil. BCCC
members represent a wide variety of business sectors, individuals and government agencies from
across Canada that encourage and support closer commercial and economic ties between Canada and
Brazil. The principal activities of the Chamber include the organization of conferences, seminars and
luncheons which present individual speakers and groups to Canadian audiences in order to
disseminate information on Brazil and provide networking opportunities.
www.brazcan.org
Hogan Lovells is a global law firm with more than 40 offices around the world. Building
on the foundations of our previous success as two firms, Hogan & Hartson and Lovells,
Hogan Lovells is dedicated and equipped to help clients across the spectrum of their
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international capabilities to provide exceptional service and creative advice to our clients.
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28 U.S.C. § 1782 filed with the Commission of Euro- the issue of whether a private arbitral
authorizes U.S. pean Communities. Id. at 258. Spe- tribunal is a “foreign or international
district courts to aid cifically, the Supreme Court found tribunal” observed that “[s]ince the
foreign litigants and that when Congress amended section Intel decision, a slim majority of
“international and 1782 in 1964, substituting the words federal courts have followed a simi-
foreign tribunals” “a proceeding in a foreign or interna- lar reasoning [to the Intel Court’s]
in seeking evidence tional tribunal” for the previous “any to conclude that private arbitrations
from witnesses judicial proceeding,” it did so in order fall within the scope of Section 1782.”
located within the to “provid[e] the possibility of U.S. OJSC Ukrnafta v. Carpatsky Petro-
J. La Chuisa judicial assistance in connection with
U.S. In particular, leum Corp., 2009 WL 2877156 *3 (D.
28 U.S.C. § 1782 provides: [administrative and quasi-judicial pro- Conn. Aug. 27, 2009).
ceedings abroad].” Id. at 258 (citing S. For instance, in In re Roz Trading
The district court of the district in
Rep. No. 1580, at 7-8, U.S. Code Cong. Ltd., 469 F. Supp. 2d 1221 (N.D. Ga.
which a person resides or is found
& Admin. News 1964, pp. 3782, 3788). 2006), the court concluded that: “A
may order him to give his testimony
The Supreme Court went on to hold finding that an arbitral panel located
or statement or to produce a
that the European Commission was, in in Austria4 is a ‘tribunal’ within the
document or other thing for use
fact, a section 1782 “tribunal” because meaning of §1782(a) is consistent
in a proceeding in a foreign or
it acted as a “first-instance decision- with the reasoning in Intel. Although
international tribunal. . . . The
maker” with authority to “determine Intel did not expressly hold arbitral
order may be made pursuant to a liability and impose penalties, disposi-
letter rogatory issued, or request bodies to be ‘tribunals,’ it quoted
tions that [would] remain final unless approvingly language that included
made, by a foreign or international overturned by the European courts.”
tribunal or upon the application ‘arbitral tribunals’ within the term’s
Id. at 258 (relying on 255, n.9). meaning in §1782(a).” Id. at 1224-25;
of any interested person and Since the Supreme Court’s 2004
may direct that the testimony or see, e.g., In re Hallmark Cap. Corp.,
decision in Intel, there has been 534 F. Supp. 2d 951, 957 (D. Minn.
statement be given, or the document considerable disagreement among
or other thing be produced, before a 2007) (arbitral panel is “tribunal” for
lower courts (even within the same
person appointed by the court. . . . the purposes of section 1782); In re
circuit) as to whether the definition of
Application of Babcock Borsig AG, 583
“foreign tribunal” under section 1782
28. U.S.C. § 1782(a) (emphasis added).1 F. Supp. 2d 233, 240 (D. Mass. 2008)
is broad enough to include private
The scope and meaning of “foreign or (same); OJSC Ukrnafta v. Carpatsky
arbitral tribunals.2
international tribunal” has generated Petroleum Corp., 2009 WL 2877156
While grappling with this question,
significant debate with respect to what (D. Conn. Aug. 27, 2009) (same).
most courts have afforded leeway to
adjudicative bodies qualify as “tribu- In validating the private arbitra-
“state-sponsored” arbitration (such as
nals” for purposes of 1782 applications tion as a “foreign tribunal,” the Roz
those convened pursuant to bilateral
for discovery. Indeed, the question of court noted that “[w]here a body
investment treaties) as meeting the
whether a private arbitral panel con- makes adjudicative decisions respon-
definition of “foreign tribunal,”3 while
stitutes a “tribunal” remains unsettled sive to a complaint and reviewable
courts remain heavily divided on the
and hangs in the balance today. in court, it falls within the widely
issue of whether private panels fall
In 2004, the U.S. Supreme Court in accepted definition of ‘tribunal,’ the
within the scope of 1782.
Intel Corp. v. Advanced Micro Devices, reasoning of Intel, and the scope of
Inc., 542 U.S. 241, 246-47 (2004), § 1782(a), regardless of whether the
A “Slim Majority” of Federal body is governmental or private.” Roz
suggested that the term “foreign and
international tribunal” was broad
Courts Have Held That Trading, 469 F. Supp. 2d 1221, 1228.
enough to encompass “administra- Private Arbitrations are Taking a similar approach, in
tive and quasi-judicial proceedings,” Subject to 1782 Discovery April 2010, the Southern District of
including Intel’s antitrust complaint A recent district court decision on continued, next page
ADVERTISE AD RATES
motion to stay the lower court’s order requir-
ing a deposition and document production,
choosing instead to set an expedited briefing
Section
Rafael Ribeiro, Ministro João Otávio Noronha (speaker), Luis Claudio Ferreira (sponsor),
Fernando Serec (speaker and sponsor), Elizabeth Leonhardt (speaker), Quinn Smith (vice chair of
conference).
Section Chair Edward M. Mullins with Gary Davidson, (L-R): Neil Klein (speaker), Henk Milne (speaker and sponsor),
member of the Section’s Executive Council (R). Eduardo Palmer.
Scene
9th Annual
International
Litigation and
Arbitration
Conference
Westin Diplomat
Hollywood, Florida
February 4, 2011
(L - R): Raphael Ribeiro,Quinn Smith (ILAC Program Vice Chair ), Ministro João Otávio
Noronha, Ed Davis (Past Section Chair), Ed Mullins (Section Chair), Fernando Serec,
and Luis Claudio Ferreira.
CLE The Florida Bar Continuing Legal Education Committee and the
International Law Section present
AUDIO CD ORDERS
The audio CD for the 9th International Litigation and Arbitration Conference includes all litigation and arbitration sessions for a total
of 9 hours of CLE credit. Topics include: privacy and censorship; judge’s panel on international receivership litigation; hot topics on
international litigation; managing international arbitration or arbitrator; your client has been sued in the U.S., now what?; hot topics in
international arbitration; extraterritorial application of U.S. laws; and an international arbitration case study: The Ecuador v. Chevron case.
Friday - February 4, 2011 12:00 noon – 1:15 p.m. 4:00 p.m. – 5:00 p.m.
Luncheon (included in registration Plenary Session:
9:30 a.m. – 10:30 a.m. fee)
Plenary Session: Judge’s Panel: International Aspects to
1:30 p.m. – 2:30 p.m. Receivership Litigation
Privacy/Censorship (Blackberry cases, Moderator: Edward H. Davis, Jr.,
Breakouts Sessions:
China, etc.) Astigarraga Davis Mullins & Grossman
Moderator: Edward M. Mullins, Your Client Has Been Sued in the US –
Now What? P.A., Miami
Astigarraga Davis Mullins &
Grossman P.A., Miami Moderator: Martin Kenny 5:00 p.m. – 7:00 p.m.
Hot Topics in International Arbitration Reception (included in registration fee)
Panelists:
Richard Ovelmen, Jorden Burt L.L.P., Moderator: Richard C. Lorenzo, Hogan &
Miami Hartson L.L.P., Miami
Thomas R. Julin, Hunton & Williams, 2:30 p.m. – 2:45 p.m. Break CLE CREDITS
Miami
2:45 p.m. – 3:45 p.m.
10:30 a.m. – 10:45 a.m. Break CLER PROGRAM
Breakouts Sessions:
(Max. Credit: 9.5 hours)
10:45 a.m. – 11:45 a.m. Extraterritorial Application of U.S.
Laws General: 9.5 hours
Breakouts Sessions:
Moderator: Nick Swerdloff, Hughes Ethics: 0.0 hours
Hot Topics in International Litigation
Moderator: Carlos F. Concepción, Hubbard & Reed, Miami
CERTIFICATION PROGRAM
Concepción Martinez & Bellido, Miami International Arbitration Case Study: (Max. Credit: 9.5 hours)
Managing International Arbitration/ The Ecuador vs. Chevron Case Civil Trial: 4.5 hours
Arbitrators Moderator: Sergio A. Pagliery, Sergio A. International Law: 9.5
Moderator: C. Ryan Reetz, Squire, Pagliery P.A., Miami
Sanders & Dempsey L.L.P., Miami
Since relocating to the Nether- trials of Charles Taylor at the Special testimony at the tribunal underscores
lands, my colleagues have often asked Court for Sierra Leone (SCSL) and the public peril for those who, per-
the question: As a Florida lawyer, Radovan Karadži at the ICTY. I also haps unwittingly, associate with those
what are you doing in The Hague? attended a variety of conferences and accused of international crimes.
During my moments of weakness symposia on issues of public interna- While Ms. Campbell’s contact with
(which usually occur when it is in- tional law. Taylor was brief and perhaps unin-
tensely cold and rainy in The Neth- One common theme in The Hague tended, others purposefully embraced
erlands but perfect beach weather in this past year has been the need to the chance to profit from relationships
South Florida), I have asked myself develop more robust criminal liability with political leaders such as Taylor.
the same question. for corporations implicated in inter- One example is Guus Kouwenhoven,
Aside from the weather—which national crimes and human-rights a Dutch businessman who forged
nevertheless provides some of the abuses. It should be recalled that the a close relationship with Taylor’s
world’s most beautiful tulips—The creation of the ad hoc tribunals (the political regime to profit from a poorly
Hague (the “City of Peace and Jus- ICTY and the International Criminal regulated Liberian timber sector,
tice”) has much to offer an interna- Tribunal for Rwanda) raised the level which was heavily exploited during
tional lawyer. It is home to over 130 of consciousness in the legal commu- Liberia’s civil war. Mr. Kouwenhoven
international institutes and agencies nity and the general public about the is currently being prosecuted in
and hosts more than 300 internation- need to prosecute those responsible Dutch national courts for a variety of
al businesses. It is the headquarters for international crimes including war criminal offenses including complic-
of several international organizations crimes, crimes against humanity and ity in the commission of war crimes
and U.N. organs such as the Inter- genocide. The prosecutors at these and the violation of a United Nations
national Court of Justice (ICJ), the tribunals have typically focused their arms embargo.2
International Criminal Tribunal for attention on political and military In 2009, I served as a legal consultant
the former Yugoslavia (ICTY), the leaders. for the Truth & Reconciliation Com-
International Criminal Court (ICC), A recent example of the global at- mission for Liberia (TRC) and assist-
the Organisation for the Prohibition tention generated by such trials took ed in drafting the section of its final
of Chemical Weapons (OPCW) and place last summer in The Hague in
report related to economic crimes
Europol. It also possesses numerous the SCSL case against Charles Taylor,
committed during the Liberian civil
research centers and academic insti- the former President of Liberia who
war. The TRC Final Report succinctly
tutions, such as The Hague Academy was charged with eleven counts of
described the destructive relationship
of International Law, the TMC Asser crimes against humanity and war
between Liberian government and
Instituut, the Clingendael Institute, crimes for his alleged involvement
business:
the Institute of Social Studies and in the Sierra Leone civil war during
the Grotius Centre for International 1996 to 2002. On 5 August 2010, the S u c c e s s i v e g o v e r n m e n t s ,
Legal Studies, that focus on interna- prosecution called as a witness super- including the Taylor regime,
tional law. For this reason, The Hague model Naomi Campbell, who testified established a massive patronage
is often referred to as the de facto that associates of Taylor provided her system with domestic and
judicial capital of the United Nations. with uncut diamonds after a charity foreign-owned corporations in
In 2009, I moved to The Hague to dinner with the former warlord and several critical economic sectors,
earn an LL.M. in Public International other dignitaries in South Africa. The such as timber, mining and
Law at Leiden University, which is prosecution sought Ms. Campbell’s telecommunications, and granted
the oldest university in The Nether- testimony to prove that Taylor was illegal benefits to the corporations
lands and a research leader in public not truthful during his testimony in in exchange for financial and
international law. During my year of front of the SCSL.1 The intense media military support. Corporations and
study, I attended hearings at the ICJ scrutiny of Ms. Campbell’s involve- private individuals engaged in a
and the ICC, as well as the criminal ment with Taylor and her subsequent continued, next page
responsibility ing [the] prosecution of the war crime that contribute to the commission of
of pillage and to bring accountability international crimes.
from preceding page
to companies that illegally trade in The legal content of pillage is well
conflict commodities.”4 The conference established under international law.
brought together judges and lawyers Under international humanitarian
host of illegal and anti-competitive from leading international tribunals law, pillage has been prohibited since
activities such as tax evasion, and institutions. It also featured an the Hague Regulations of 1907.5 It
bribery, looting, forced displacement address by Luis Moreno Ocampo, was also reaffirmed as a war crime
of civilians, money laundering, arms the ICC Prosecutor, on the future by the 1949 Geneva Conventions and
smuggling, and illegal price fixing.3 prospects of international criminal the 1977 Additional Protocol II, which
Such experiences have motivated liability for corporate actors. governs non-international armed con-
international efforts to increase While political leaders are increas- flicts. The ad hoc tribunals included
criminal liability for corporate actors ingly being held individually respon- pillage as a criminal offense under
that are involved in international sible for international crimes under their jurisdiction. Further, the Statute
crimes and human rights abuses. international criminal law, there is of the ICC provides that pillage is a
One recent event was the confer- significantly less case law in inter- crime under its jurisdiction. Although
ence, “Corporate Liability for Pillag- national or national courts that has the United States is not a party to
ing Natural Resources,” which was held corporations and their officials the ICC Statute, as of 12 October
co-sponsored by the Open Society responsible for international crimes. 2010, 114 nations have ratified it.
Justice Initiative and several other Nevertheless, the tide appears to be Under the complementarity system
institutions at the Peace Palace in turning. Legal scholars now fre- established by the statute, these state
The Hague on 29 October 2010. The quently acknowledge that the illegal parties are obligated to criminalize
purpose of the conference was to exploitation of natural resources pro- pillage in their domestic legislation.
introduce to the legal community a vides the financing for deadly conflict. As evidenced by the German Code,
recently published manual, Corporate Consequently, there is also increased however, not all will define pillage
War Crimes. The manual is intended recognition of the importance of in the same way.6 Because pillage is
to “act as a catalyst for reinvigorat- holding responsible those businesses an international crime, some states
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that are implicated in pillage.
Of course, it also should be noted
that the war crime of pillage is only Th i s W
one manner in which a corporate
actor may incur criminal liability for
Florida Quebec Forum 2011
involvement in international crimes. Live Presentation: Friday, March 18-19, 2011
International criminal law has al-
Fort Lauderdale Airport Hilton, (954) 920-3300
ready established aiding and abetting,
for example, as a form of responsibil- Course No. 1268
ity. Aiding and abetting is considered On-site registrations available.
the “practical assistance, encourage-
ment or moral support which has a For details, see page 44.
substantial effect on the perpetration
Latin America has locals. For many years, Latin Ameri- sistance among some Latin American
come a long way can states rejected international States.
from its previous arbitration due to the suspicion that Another important factor to con-
isolationist policies it granted greater rights to foreign sider when dealing with the Latin
in the field of inter- investors, in breach of the Doctrine. American region is that it is neither
national arbitra- Things have now changed substan- easy, nor is it proper, to include all
tion. Although the tially, and the mentality and target Latin American States in one gen-
region continues to of most Latin American states is to eral opinion. There is no such thing
pose challenges for attract international investors, for as “Latin American arbitration.”
J. Angulo
international ar- whom they are open to granting the Each and every state has its own
bitration practitioners, it now boasts necessary and generalized protection legislation, institutions and by-rules,
a full house of ratifications and new through the means of the Convention and even group efforts made at the
laws supporting international arbitra- on the Settlement of Investment Dis- regional level have not yielded any
tion. Latin American states have a putes Between States and Nationals uniform results. Commercial inter-
growing involvement in international of Other States (the “ICSID Conven- ests in the region vary over time and
trade across a wide range of indus- tion”) included in their Bilateral with changes of government and their
tries including energy, transportation, Investment Treaties (“BITs”).1 In the policies. What may have been true of
telecommunications, entertainment, case of investor-state arbitration, Venezuela a decade ago is no longer
chemicals, labor and agriculture. As a the foreign direct investment (“FDI”) the case, owing to a new government
result of this growth, Latin America inflow seen in the region during the that has extremely different priori-
has sought to adopt a dispute reso- 1990’s was accompanied by the execu- ties; thus, even traditional commer-
lution culture favorable to foreign tion of relevant agreements such as cial allies have been substituted by
investment. Among the most notable NAFTA and other BITs that provide others. We need to question tradition-
trends and developments adopted in for arbitration proceedings before al paradigms if we are to meet today’s
the region are the wide recognition of ICSID or ad hoc tribunals under UN- challenges.3
the arbitration clause, increased coop- CITRAL arbitration rules. Currently, The foregoing should help facilitate
eration between the arbitral tribunals the ICSID Convention is in force in a more thorough understanding of the
and the judiciary, and ratification of fourteen Latin American States. Ad- state of arbitration in contemporary
the 1958 United Nations Convention ditionally, nineteen Latin American Latin America. In light of this foun-
on the Recognition and Enforcement States have ratified the 1975 Inter- dational review, the following summa-
of Foreign Arbitral Awards (the “New American Convention on Interna- ry serves as a review of some of the
York Convention”) and UNICTRAL tional Commercial Arbitration (the
recent developments in three of Latin
model law on International Com- “Panama Convention”), while the New
America’s more active arbitration
mercial Arbitration (the “UNCITRAL York Convention has been ratified
fora—Argentina, Brazil and Ecuador.
model law”). All of the aforementioned by nineteen Latin American States.
have become key elements in over- Additionally, eleven Latin American
States have adopted, with slight Argentina
coming political, cultural and econom-
changes, the UNCITRAL Model Law Argentina is a party to the New
ic barriers in the region.
(either in its 1985 or 2006 version).2 York Convention and the Panama
The increasing importance that Convention. This ensures the enforce-
Moving Past the Calvo arbitration is assuming in Latin ment of foreign arbitral awards in Ar-
Doctrine America is today undisputed, but the gentina4 as well as awards rendered
Historically, Latin America has had future looks significantly different in Argentina for which enforcement
a hostile attitude towards interna- depending on the type of proceedings. is sought in another member state.
tional arbitration. This hostility was While commercial arbitration seems Argentina is a party to the ICSID
partly based on the Calvo Doctrine, to be evolving at a slow but steady Convention and is the State with the
which required that foreign investors pace, the explosion in investor-state greatest number of cases pending
be treated on an equal footing with arbitration has raised increasing re- resolution before the ICSID. 5 As a
FloridaBarCLE
For the Bar. By the Bar.
www.FloridaBar.org/cle
Treasurer Sought
2010, available at http://www.globalarbi-
trationreview.com/reviews/21/sections/77/
chapters/810/strengthening-international-
arbitrations-presence-americas/.
4 Argentina has made a reservation Six slots will be opening up on the Section’s Executive Council in 2011.
whereby it will apply the New York Conven- Qualified candidates should have been active in the Section for a suf-
tion only to awards on commercial matters ficient time to show commitment, and should have led a major project
issued in the territory of another member or conference or run a committee. Interested persons should forward a
state.
resume along with a cover letter explaining what you have done for the
5 World Bank website: http://worldbank.
org/icsid/cases/cases.htlm, accessed Oct. Section and why you would like to join the Executive Council.
2010.
The Section is also seeking applications for Treasurer, a position that
6 Dep’t of State website: http://www.state.
gov/e/eeb/rls/othr/ics/2010/138028.htm, ac-
puts the person in line for Chair. Applicants for Treasurer must come
cessed Oct. 2010. from the existing Council membership. Again, those interested should for-
7 Adriana Braghetta, International Com- ward a resume along with a cover letter explaining what you have done
mercial Arbitration in Latin America, Arb. for the Section and why you would like to become Treasurer.
Rev. of the Americas 2010, p.2.
8 Law No. 9,307 enacted on 23 Sept. 1996. Applicants for Executive Council and Treasurer must send their ma-
9 Ag.Reg. na Sentença Estrangeira
terials no later than March 31, 2011, by email to Chair Ed Mullins at
Contestada (SEC) 5206-7, Full Session of emullins@astidavis.com; the Chair-Elect, Nicolas Swerdloff at swerdlof@
the Federal Supreme Court (STF), report- hugheshubbard.com; and past Chairs Francisco Corrales at fcorrales@
ing Justice Sepúlveda Pertence, judgment pkslegal.com and J. Brock McClane at jbm@mcclanepa.com. Please also copy
of 12 Dec. 2001, available at www.stf.gov.br.
The prevailing opinions of Justice Nelson current Executive Committee Members Richard Lorenzo at richard.lorenzo@
Jobim and Ellen Gracie are published in the hoganlovells.com and C. Ryan Reetz at ryan.reetz@post.harvard.edu.
Revista de Direito Bancário, do Mercado de
Capitais e da Arbitragem, No. 11, Jan/Mar
2001, pp 361-374 and No. 13, Jul/Sep 2001,
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Introduction Brazilian law since the Ordenações tionized Brazilian arbitration pro-
Filipinas9 in the sixteenth century, ceedings, Brazil still had not ratified
Since the sixteenth
there has often been a conflict be- the New York Convention itself. For
century, when
Brazil was still a tween the Brazilian legislation— international investors, ratification
Portuguese colony, it mainly the LICC10 (Introduction would signal that Brazil was ready to
has evolved unique- Law of Brazilian Civil Code)—and provide the true juridical protection
ly with accompany- the principle of party autonomy, the for their investments. Finally, in 2002,
ing consequences to main component of the institution of Brazil ratified the New York Conven-
its commerce with arbitration. Thus, the institution of tion and, since then, international
L. Lima arbitration was always kept under a arbitration in Brazil has changed
the world.1 Even
though the huge South American na- certain level of repression by Brazil- significantly.17 This article discusses
tion has always depended on the ex- ian legislation. the evolution of the enforcement of
port of primary goods—or goods sold The divergence between provisions foreign arbitral awards in Brazil
as they are found in nature2—through in Brazilian law prevented parties to through ratification of the New York
the years Brazil has succeeded in an international contract established Convention.
diversifying into a highly industrial- within the country from choosing
ized nation.3 their rules. On the other hand, the A. Enforcement of Foreign
At this level, as one of the largest interpretation of LICC11 and its pref- Arbitral Awards in Brazil
economies in the world, Brazil’s role erence for the law of the place where Before Ratification of the
in international commerce has be- the act occurred12 always prevailed,
causing a level of discontent among
New York Convention
come critical.4 With the largest gross
international investors, who wanted 1. Brazilian economic changes
domestic product in Latin America,
more autonomy to choose the arbitra- and consequences concerning
Brazil has continued to increase
tion rules most convenient for them. arbitration
its exports even through the global
With the 1996 enactment of Lei No. Until 1822, as a Portuguese colony,
economic crisis.5 Inevitably, with the
9.307 de 23 de Setembro de 1996—the Brazil had little significance in inter-
growth of its economy, there has also
Brazilian Arbitration law (hereinafter national trade. Its commerce, consist-
been increasing international invest-
“Lei 9307/96”)—arbitration proceed- ing primarily of agricultural exports,
ment and, consequently, a rise in
ings in Brazil began the process of was considered to be that of Portu-
international contracts settled in the
catching up to modern investor expec- gal.18
country.
tations. This law introduced essen- By the beginning of the twenti-
Plainly, with this increase in
tially the same provisions as the New eth century, Brazil had left behind
contracting, Brazil needed to ensure
York Convention,13 which had not yet its dependence on the exportation
a modern legal system that would
been ratified by the Brazilian govern- of agricultural products and become
provide sufficient protection to all in-
ment. In the new law, outmoded provi- a country with a considerable and
vestors conducting business there. In
sions were removed, like the obliga- solid industrial base.19 With devel-
this regard, to deal with the eventual
tion to formalize a new submission opment policies, Brazil built core
conflicts that come from these private
agreement (compromisso arbitral) to industries, like iron smelting, mining
agreements,6 arbitration arose.7 To
complement the arbitration clause in and oil, that improved its economic
give support to its new role in the
the contract14; the need for a Brazilian status and, consequently, increased
international trade community, Brazil
had to adjust its legislation8 concern- court to “homologate”15 any arbitral its participation in the international
ing international arbitration proceed- award; as well as the requirement of market.20 Brazil then entered into
ings, since the provisions previously double homologation where the inter- secondary industries, like auto manu-
applied were not compatible with the national arbitration award was made facturing, resulting in further devel-
demands of the international invest- (duplo exequatur).16 opment. After the two world wars,
ment community. Despite the importance of the Brazil realized spectacular growth in
Although arbitration existed in enactment of that law, which revolu- continued, next page
Section Calendar
made in Brazil had to be approved by
the Supremo Tribunal Federal, the
Federal Brazilian Supreme Court,
which would use a “homologation
procedure” to determine if Brazilian Mark your calendars for these important dates.
law had been properly applied.41 For more information contact: Angela Froelich: 850-561-5633 /
Thus, international arbitration was afroelic@flabar.org
an unattractive option in Brazilian
disputes:
[F]irst, when arbitrating in April 13-15, 2011
Brazil there was a requirement to ILS Reception at ABA Sections of Litigation and
conclude a post-dispute submission Criminal Justice Conference
agreement (o compromisso)
Fountainbleau Resort, Miami Beach
to supplement the arbitration
clause in the contract (a cláusula
compromissória), in the absence of
May 2-3, 2011
which the judicial courts retained International Bar Association
jurisdiction; secondly, the award “Global Investments in Real Estate” Conference
had to be formally approved by Mandarin Oriental Hotel, Miami
the Brazilian courts in a process of
“homologation”; thirdly, when the May 5-6, 2011
dispute had been arbitrated outside
of Brazil the courts of the place of
2nd International Bar Association
arbitration and the Brazilian courts Conference of the Americas
needed to “homologate” the award Mandarin Oriental Hotel, Miami
to ensure that the requirements
of both the law of the place of June 24, 2011
arbitration and Brazilian law had (At The Florida Bar Annual Convention)
been fulfilled.42
“New Frontiers in Arbitration” (1214R)
In many cases, in an interna- ILS Executive Council Meeting
tional dispute involving the cláusula
compromissória, a Brazilian party Gaylord Palms Resort & Convention Center, Orlando
defied the obligation of application of
arbitration proceedings made in the
CLE The Florida Bar Continuing Legal Education Committee and the
International Law Section present
Friday, March 18, 2011 2:00 p.m. – 2:50 p.m. Saturday, March 19, 2011
U.S. Income & Estate Tax Consequences
8:30 a.m. – 9:00 a.m. of U.S. Investment Structures for 8:30 a.m. – 9:00 a.m.
Late Registration & Welcoming Remarks Canadians Opening Remarks
by Florida and Quebec Attorneys William H. Newton III, 9:00 a.m. – 9:40 a.m.
9:00 a.m. – 9:50 a.m. William H. Newton III, P.A., Miami Accidents In Florida Involving
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Clients in Florida and Quebec. Ethics. Boca Raton Nancy Lapierre, Plantation
Using Notaries Claude Gélinas, Quebec
2:50 p.m. – 3:40 p.m. Lu Chan khuong, Quebec
Pamella A. Seay, Florida Gulf Coast Current Mortgage Laws and
University, Port Charlotte Considerations in Florida 9:40 a.m. – 10:10 a.m.
Andrew Penhale, Quebec Thomas L Raleigh, III, Akerman Senterfitt, Consumer Protection Laws: How to
William H. Hill, Jr., Ponte Vedra Beach Orlando Protect Yourself
9:50 a.m. – 10:40 a.m. Laurence D. Gore, Laurence D. Gore & Rachel Journeault, Quebec
Execution of a Foreign Judgment in Associates, P.A., Fort Lauderdale Francisco A. Corrales, Silverberg & Weiss,
Quebec and Florida; Practical, Financial P.A., Weston
and Legal Aspects & Ethics 3:40 p.m. – 4:00 p.m. Break Nancy Lapierre, Plantation
Francesca Russo, Espinosa Trueba P.L., 4:00 p.m. – 4:50 p.m. 10:10 a.m. – 10:20 a.m. Break
Miami Current Immigration Rules and Practices
Frédérique Sabourin, Quebec 10:20 a.m. – 10:50 a.m.
in Canada and the U.S. Criminal Current Immigration Rules and Practices
Valerie Duane-Dray, Valerie Y. Duane‑Dray, Antecedents, Request for Pardon and
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Extradition Herschel Gavsie, Greenspoon Marder P.A.,
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Non‑Residents and Insurance Law Mark R. Weiner, Weiner Law Group, P.A., Taxation of Individuals and Tax Planning
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Lu Chan khuong, Quebec Lucius Smejda, LEX International Law Firm,
Claude Gélinas, Quebec 4:50 p.m. – 5:40 p.m. P.A., Miami
Acquiring and Managing Florida Daniel Veilleux, President, Dejardins Bank,
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Establishing and Managing a Florida Lucius Smejda, LEX International Law Firm,
Enterprise 11:20 a.m. – 12:00 p.m.
P.A., Miami
Joseph B. McFarland, Lavigne, Coton & Acquisition, Financing and Rental of
Robert Kiderchah, LEX International Law
Associates, P.A., Orlando Real Estate in Florida
Firm, Quebec
Francisco A. Corrales, Silverberg & Weiss, Lucius Smejda, LEX International Law Firm,
P.A., Weston 6:00 p.m. – 7:30 p.m. P.A., Miami
Honors Reception Robert Kiderchah, LEX International Law
12:40 p.m. – 2:00 p.m. Firm, Quebec
Lunch (Canadian Consul - Invited) Marie-Eve Paré, Quebec
(included in registration fee)
12:00 p.m. – 1:00 p.m.
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The necessity is the only way for the State to tribunals, the necessity defense has
defense is a corner- safeguard an essential interest proven critical to the determination of
stone of internation- against a grave and imminent peril; Argentina’s liability. This article will
al law. Essentially, and examine those cases and describe the
it is the recogni- recurring issues arbitrators have con-
does not seriously impair an
tion that although sidered when analyzing the necessity
essential interest of the State or
States may contract defense.
States towards which the obligation
with other States
exists, or of the international
P. Miller to oblige them to
community as a whole.
Tribunal Decisions 2005-
certain activities, 2009
they cannot abdicate their fundamen- 2. In any case, necessity may not be
In the late 1980’s and early 1990’s,
tal responsibility to maintain order invoked by a State as a ground for
Argentina began a vast privatization
within their societies. At its core it is precluding wrongfulness if:
regime of its formerly government-
a pragmatic doctrine, acknowledging (a) the international obligation owned utilities industry5 by asking
that no one obligation is more impor- in question excludes the possibility private foreign companies to partner
tant than the integrity of the interna- of invoking necessity; with local, formerly government-
tional system as a whole. owned entities, to provide services
or
The term “state of necessity” refers more efficiently. Argentina also
to exceptional cases where the only (b) the State has contributed to
the situation of necessity.2 passed various regulatory measures
way for a State to safeguard an es- to incentivize those foreign inves-
sential interest against a grave and The recent Argentine financial cri- tors.6 Concurrently, Argentina signed
imminent peril is to breach a less se- sis has demonstrated that the neces- numerous BITs with other capital-
rious or less urgent international ob- sity defense can play a decisive role exporting countries, hoping to as-
ligation.1 This language underscores in international investment adjudica- suage foreign investor fears about
the fact that states of necessity occur tion.3 Argentina may be liable for as entering the newly privatized market.
in very rare circumstances. Numerous much as $17 billion dollars due to the Argentina even introduced a pegged
jurists have highlighted the poten- emergency measures undertaken at currency system that calculated the
tial for abuse that would arise from the peak of the crisis—measures that Argentine peso to the U.S. dollar at a
granting a broad reading of what is effectively shifted substantial losses ratio of one-to-one.7 In the early years,
“necessary”; several tribunals have upon foreign investors.4 In response, the privatized utility industries gave
decided that the measures undertak- those investors have filed claims in Argentina efficient and reliable en-
en were not the only means of avert- international tribunals like the Inter- ergy, and the overall economy looked
ing an imminent peril. Although the national Centre for the Settlement of quite promising.
defense has been met with very strict Investment Disputes (“ICSID”), under The constraints of maintaining the
interpretations, it is still a prevailing the protections granted them through pegged currency later forced Argen-
doctrine of customary international bilateral investment treaties (“BITs”). tina into macroeconomic dysfunction
law and has been codified in the fol- In virtually every action where a and, by 1999, the country began a
lowing language by the International tribunal found jurisdiction over the precipitous economic decline.8 Once
Law Commission’s Articles on State claim, Argentina has asserted the there became significant distrust over
Responsibility: necessity defense as a justification for the viability of the peg and the ability
its alleged treaty violations. The tri- of Argentina to pay its foreign debts,
Article 25. Necessity
bunals have analyzed necessity based many Argentines began converting
Necessity may not be invoked by on International Law Commission their savings from pesos to dollars.9
a State as a ground for precluding (“ILC”) Article 25 (entitled “Neces- “In one day alone, the Argentine peso
the wrongfulness of an act not in sity”), as well as the specific Necessity lost 40% of its value.”10 This then
conformity with an international Provision (Article XI) in the U.S.- created a run on the banking indus-
obligation of that State unless the Argentina BIT. In the few cases that try, and the Argentine government
act: have been decided on the merits by reacted by capping the amount of
necessity defense the State’s contribution may have pre- the analysis would be more restrictive
from preceding page cluded necessity even if an emergency under customary international law.
had been found.34 This is a dramatic pronouncement
LG&E tribunal stated that the that goes further than the first four
claimant had the burden of proving tribunals toward granting deference
difficult to justify the position that that Argentina contributed to the to Argentina, but the real shift is the
only one of them was available in crisis, and that it had not.35 This has tribunal’s decision that WTO jurispru-
the Argentine case.”30 This reasoning been criticized as contrary to the gen- dence should guide its interpretation
creates a situation that if any alter- eral course of affirmative defenses,36 of what is necessary to protect an es-
native is available, Article XI cannot but it seems reasonable if one consid- sential security interest. The tribunal
be invoked. Other courts in different ers the notion that a State contribut- found that the older U.S. Friendship,
contexts have used a much more nu- ing to an emergency is actually more Commerce and Navigation Treaties
anced approach by asking questions like an affirmative defense against provided the basis for the later model
like: What policy has the best chance the affirmative defense of necessity. BIT language, and that since these
of succeeding? Does this policy have a Just for good measure, the tribunal treaties were also the basis for GATT
less violative effect than others? What also added that “the attitude adopted Article XX and later WTO jurispru-
policies could be reasonably enacted by the Argentine Government has dence, it was appropriate to look to
during an emergency situation? shown a desire to slow down by all those WTO decisions for interpreta-
The LG&E tribunal did not ap- the means available the severity of tive guidance.41
proach its analysis of the tariff read- the crisis.”37 The tribunal found that in the
justment by considering whether it The Continental Casualty case WTO context, tribunals have granted
was the only available option: “Article arose from similar facts, but the broad scope for what constitutes an
XI refers to situations in which a analysis here is separate because the essential security interest, and the
State has no choice but to act. A State interpretative method is quite differ- situation before it fell within that cat-
may have several responses at its ent from the previous four cases. The egory. In deciding whether it was the
disposal to maintain public order or tribunal began by noting that it was only option, the tribunal referred to
protect its essential security inter- required to interpret the language of the Article XX holdings that it should
ests. In this sense, it is recognized the treaty before turning to custom- balance several factors: “the relative
that Argentina’s suspension of the ary international law and the ILC importance of interests or values fur-
calculation of tariffs in U.S. dollars Articles on State Responsibility.38 The thered by the challenged measures,
and the PPI adjustment of tariffs tribunal then advised that since ILC the contribution of the measure to the
was a legitimate way of protecting its Article 25 Necessity may be claimed realization of the ends pursued by it
social and economic system.”31 The in a variety of circumstances, whereas and the restrictive impact of the mea-
tribunal considered whether or not Article XI of the BIT may be invoked sure on international commerce.”42 It
the State’s only option was to act and only in the specified conditions under found that the measures “were in part
then concluded that the activity was the treaty, a tribunal must read the inevitable, or unavoidable, in part in-
legitimate. ILC language more restrictively than dispensable and in any case material
As far as whether or not Argentina the Article XI language. 39 or decisive in order to react positively
contributed to the crisis, the tribunals The CMS Annulment Panel also to the crisis, to prevent the complete
generally fall along the same line. The criticized the tribunal for interpret- break-down of the financial system.”43
CMS tribunal found that through its ing “necessity” based on ILC language The tribunal also quickly dismissed
economic policies of the 1980’s and before the BIT language. Although the notion that Argentina contributed
1990’s, Argentina actually contributed it concluded that the tribunal inti- to the financial crisis, noting that the
to the crisis, negating its use of Article mated that the same analysis would
international financial community
XI under customary international take place under the treaty, and that
promoted those very economic poli-
law.32 The Enron tribunal discussed it had demonstrated a rationale for
cies.44 The tribunal concluded that
this issue but did not make a conclu- its decision, that precluded annul-
the measures Argentina took were
sive determination because there was ment.40 The later cases have all found
allowed under the circumstances of
conflicting testimony. The tribunal that the lex specialis rule applies and
the treaty and under Article XI and
simply concluded that since the other have considered the BIT language
awarded Continental Casualty a mere
aspects of necessity were not met, it before examining customary interna-
$3 million damages for a subset of one
did not need to rule expressly on the tional law, though they usually have
of their claims.
contribution issue.33 Sempra came found that the vague language of
This brings up the final contro-
to a similar determination that the the treaty eventually directs them to
versial element of the necessity
evidence was mixed as to whether it customary international law and the
defense—the question of to what
was endogenous or exogenous factors, ILC Articles anyway. Continental is
but the tribunal also intimated that unusual because it expressly states continued, next page
THE FLORIDA BAR MEMBER BENEFITS Financial Crisis and Enforcement of ICSID
Awards in Argentina, 28 U. Pa. J. Int’l Econ.
L. 449, 479 (2007).
www.floridabar.org/memberbenefits 5 Harout Samra, Five years Later: The
CMS Award Placed in the Context of the
Argentine Financial Crisis and the ICSID
Arbitration Boom, 38 U. Miami Inter-Am. L.
• BANK PROGRAMS • INSURANCE & Rev. 667, 674 (2007).
RETIREMENT 6 For instance, Argentina passed the
• LEGAL RESEARCH
PROGRAMS “Gas Law” referred to in paragraph 38 of
• LEGAL the LG&E decision. The Gas Law created
• EXPRESS SHIPPING an agency to calculate tariffs and to oversee
PUBLICATIONS the energy industry. See LG&E v. Argentine
• GIFTS & APPAREL Republic, ICSID Case No. ARB/02/01 (3 Oct.
• CAR RENTALS
2006), para. 38.
7 Id. at para. 36.
8 Samra, supra note 5, at 676.
FloridaBarCLE
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8th Inter
Litigation national
28 Practice Areas • Over 200 Programs & Arbitr
Conferenc ation
e
CLE
Lecture Program:
Opening Remarks
Program Chair: Ava Borrasso, Astigarraga Davis Mullins & Grossman P.A., Miami
Moderator: Nicolas Swerdloff, Hughes Hubbard & Reed L.L.P., Miami, Incoming Chair, ILS
The Development of International Law in Florida, including Passage of the UNCITRAL Model Law
Eduardo Palmer, Eduardo Palmer P.A., Coral Gables
Class Actions in Consumer Arbitration Agreements and Recent Supreme Court Law
Jaime A. Bianchi, White & Case L.L.P., Miami
The new Practice ceived shortcomings in complying with any document retention/destruc-
Direction (PD 31B) paragraph 2A’s requirement to meet tion policies that might apply.
on the disclosure to discuss the scope of the reasonable • The preservation of electronic
of electronic docu- search for electronic documents. documents.
ments will certainly
• The scope of the reasonable search
focus in-house The New Regime: for electronic documents. Some
counsel on their Key Points non-exhaustive factors that may
company’s record-
On 1 October 2010, PD 31B be relevant include: the number of
management poli-
N. Mirchandani replaced paragraph 2A. PD 31B documents involved; the ease and
cies and litigation
strategies. This, formally applies only to multi-track expense of retrieval of any particu-
however, may not be claims—that is, claims that are not lar document; the availability of
a bad thing if it al- suitable for allocation to the small- the documents or contents of docu-
lows these organisa- claims track or the fast track (CPR ments from other sources; and the
tions to take greater 26.1(2)) that were started on or after significance of any document that
control of the costs 1 October 2010. Judges, however, are is likely to be located.
of electronic produc- given express discretion to apply PD • The tools and techniques (for
tion or disclosure. 31B in any case. As they are likely to example, filtering or searching)
do so if electronically stored informa- that should be considered to reduce
M. Davis
tion is a significant part of disclosure, the burden and cost of disclosing
we expect that PD 31B will come to
The Story So Far electronic documents.
represent best practice for dealing
Parties involved in litigation in • The exchange of electronic docu-
with any electronic disclosure issue
England and Wales must disclose only ments, including their format and
that might arise, even in cases where
the documents on which they rely, or the accompanying information to
it does not formally apply.
that support or adversely affect their be provided.
A key change is that, as soon as
own, or another party’s, case. Civil • The basis for charging for, or shar-
litigation is contemplated, parties’
Procedure Rule (“CPR”) 31.6. The par- ing, the cost of the disclosure of
ties are obliged to carry out a “reason- legal representatives must notify
their clients of the need to preserve electronic documents.
able search” (CPR 31.7) for disclosable
documents. “Document” is defined as disclosable electronic documents. PD 31B states that the primary
“anything in which information of any PD 31B also sets out the points that source of disclosure is normally “rea-
description is recorded” (CPR 31.4), parties should (where appropriate) sonably accessible data” and that a
which includes electronically stored discuss before the first case manage- party requesting the specific disclo-
information. Since 1 October 2005, ment conference (“CMC”) (a hearing sure of electronic documents that
disclosure of electronic documents at which the judge will typically make are not reasonably accessible must
has been covered by paragraph 2A of the first order for directions in a case, demonstrate that the relevance and
the Practice Direction to CPR Part 31 setting down the timetable to trial). materiality of the documents justify
(paragraph 2A). These points of discussion include: the cost and burden of retrieving
Two key decisions on electronic • The categories of electronic docu- them.
disclosure are Digicel (St Lucia) & Ors ments within the parties’ control; To facilitate the required discus-
v. Cable & Wireless Plc & Ors ([2008] the computer systems, electronic sions, PD 31B appends an Elec-
EWHC 2522) and Earles v. Barclays devices and media on which any tronic Documents Questionnaire that
Bank Plc ([2009] EWHC 1). In both relevant documents may be held; contains a statement of truth. The
cases, the judges commented on per- the storage systems that exist; and questionnaire is voluntary (unless its
Unchartered Waters:
The Kishenganga River Project Dispute and
Arbitration Under the Indus Waters Treaty
By Omar K. Ibrahem, Miami
The Indus Waters Treaty (the plant on the Kishenganga River (the examine the dispute.10 Before the
“Treaty”)1 is regarded as one of the “Kishenganga Project Dispute”).6 This provinces could reach a final agree-
most significant and successful agree- article provides a brief overview of the ment, however, the subcontinent was
ments ever executed between India arbitral provisions of the Treaty and partitioned in 1947. The resulting
and Pakistan.2 The Treaty’s resilience the ongoing arbitration of the Kishen- international boundary between India
through multiple wars and political ganga Project Dispute. and Pakistan was drawn through the
instability between the two parties is state of Punjab. With the source of the
in large part due to its well-thought- Background of the Treaty Indus waters in India, Pakistan was
out, multi-layered, dispute-resolution left threatened by the prospect of In-
The Indus waters begin in the
mechanisms. One of the mechanisms dian control over the tributaries that
Himalayan Mountains of Indian-held
provided for in the Treaty is arbitra- fed water into the Pakistani portion of
Kashmir and flow between Pakistan
tion under the auspices of a to-be-cre- the basin.11
ated court of arbitration.3 Interesting- and India, eventually emptying into
the Arabian Sea south of Karachi, Between 1947 through 1951 India
ly, the creation of this unique court of and Pakistan engaged in fruitless
arbitration could involve the President Pakistan. Disputes over the Indus
waters predate the independence of bilateral negotiations to resolve the
of the World Bank, the Secretary Gen- disputes over the Indus waters. The
eral of the United Nations, the Presi- India and Pakistan from British rule.
Prior to 1935, the Indus waters were impasse was broken when David
dent of the Massachusetts Institute of Lilienthal, the former head of the Ten-
Technology, the Rector of the Imperial under the jurisdiction of one politi-
cal authority, British India, and any nessee Valley Authority, suggested in
College of Science and Technology a Collier’s Magazine article that the
in London, the Lord Chief Justice of disputes regarding the Indus waters
were resolved by executive order.7 In dispute over the Indus waters could
England, and the Chief Justice of the be resolved better by engineers from
United Parties Supreme Court.4 1935 the Government of India Act put
the two parties with the World Bank
While other dispute-resolution water under provincial jurisdiction
acting as a neutral mediator, rather
mechanisms provided for in the Trea- and disputes began to arise between
than by the parties’ politicians.12 The
ty have been utilized, before 2010, in the provinces, most notably Punjab
President of the World Bank, David
the approximately fifty-year history of and Sindh.8 The disputes centered
Black, who was a close friend of Lil-
the Treaty, the arbitral provisions of around Sindh’s concern that the Pun-
ienthal, acted on this suggestion and
the Treaty have never been invoked jabi irrigation works would disrupt
offered up the World Bank to serve as
to resolve a dispute.5 In June 2010, the water flow to the Indus, negative-
a neutral mediator.13 Both India and
however, Pakistan for the first time ly affecting Sindhi irrigation.9 In 1935
Pakistan accepted the World Bank’s
invoked the arbitral provisions of the and 1941 the British government
offer and, after almost a decade of
Treaty in an action to resolve a dis- established two dispute-resolution
negotiation, the Treaty was born.
pute regarding India’s plans to build commissions—the Anderson Com-
a 330-megawatt hydroelectric power mission and the Rau Commission—to continued, next page
The Kishenganga Project umpire from category (ii). And, the February 6, 2011).
Dispute and Arbitration Lord Chief Justice of England was 2 Manav Bhatnagar, Reconsidering the
selected to appoint the umpire from Indus Waters Treaty, 22 Tul. Envtl. L.J. 271,
Under the Treaty 278 (Summer 2009).
category (iii).38
As previously noted, in June 2010 The Secretary General of the
3 Indus Waters Treaty, supra note 1, at
Pakistan for the first time invoked the art. IX and annex. F.
United Nations appointed Stephen 4 Id. at annex. F.
arbitral provisions of the Treaty to re- Myron Schwebel, an American jurist
solve the Kishenganga Project Dispute 5 Amol Sharma and Tom Wright, India
who previously served on the Inter- and Pakistan Feud Over Indus Waters, Wall
with India.31 The essence of the dispute national Court of Justice.39 Professor St. J., March 30, 2010.
is Pakistan’s claim that India, by di- Howard S. Wheater was selected as 6 Amy Kazim, India and Pakistan to
verting the course of the river to build an umpire by the Rector of the Impe- Arbitrate Water Feud, Fin. Times (June
the Kishenganga hydroelectric power rial College of Science and Technology 18, 2010), available at http://www.ft.com/
plant, would reduce Pakistan’s water cms/s/0/2587c9b4-7aba-11df-8549-00144feab-
in London. The Lord Chief Justice of dc0.html#axzz1DDGugDBe.
flow by one-third during the winter, England selected Justice Sir Franklin
thereby constituting a violation of the 7 Aaron T. Wolf and Joshua T. Newton,
Beman, as the third umpire.40 Water Conflict Management and Transfor-
Treaty.32 India argues that it is well With the Court of Arbitration mation at Oregon State University, Case
within its Treaty rights to build the Study of Transboundary Dispute Resolution:
finally constituted, hearings began
Kishenganga power plant, which it has the Indus Waters Treaty, (2008), http://www.
in the dispute on 14 January 2011.41 transboundarywaters.orst.edu/research/case_
been planning since the late 1980’s.33
Although the dispute concerns a pub- studies/Documents/indus.pdf (last visited
Prior to Pakistan initiating arbitration, Feb. 6, 2010).
lic matter—water rights—the Treaty
Pakistan and India had attempted 8 Id.; see also, Bhatnagar, supra note 2, at
provides that “deliberations” by the
to reach a resolution for the past two 272-73.
members of the court of arbitration
decades but were unable to do so. 34 9 Id.
are private, and “discussions” in the
As provided for in the Treaty, when 10 Bhatnagar, supra note 2, at 272-73.
court of arbitration are private, absent
Pakistan instituted arbitral proceed- 11 The Henry L. Stimson Center, The Indus
agreement from both the parties and
ings it nominated Bruno Simma, a Waters Treaty: A History, http://www.stimson.
the tribunal. As such, the public will org/research-pages/the-indus-waters-treaty-
German jurist currently serving as a
likely not learn much about the arbi- a-history/ (last visited Feb. 6, 2011).
justice on the International Court of
tration until its ultimate resolution. 12 Wolf and Newton, supra note 7; Colleen
Justice, and Jan Paulsson, an inter-
P. Graffy, Water, Water Everywhere, Nor Any
nationally recognized attorney and Drop To Drink: The Urgency of Transnational
arbitrator, as its party-appointed Conclusion Solutions to International Riparian Disputes,
arbitrators.35 India, for its appointed In the approximately fifty-year his- 10 Geo. Int’l Envtl. L.Rev. 399, 426-27 (Win-
tory of the Treaty, its complex and ter 1998).
arbitrators, selected Peter Tomka, a
Slovak national who, like Bruno Sim- multi-layered dispute-resolution 13 Wolf and Newton, supra note 7; see also,
Bhatnagar, supra note 2, at 273
ma, is a justice on the International mechanism has effectively functioned
14 Indus Waters Treaty, supra note 1, at
Court of Justice, and Lucius Caflisch, to facilitate peaceful outcomes be-
arts. VIII-IX, annex. F and annex. G.
a professor at the Graduate Institute tween the two parties. Although not
15 Indus Waters Treaty, supra note 1, at
of International Studies in Geneva.36 yet resolved, the mere fact that an art. VIII.
Because the standing panel called arbitration panel has been conformed 16 Sandeep Gopalan, India-Pakistan Rela-
for in the Treaty was not properly in the Kishenganga Project Dispute is tions: Legalization and Agreement Design, 40
constituted, India and Pakistan first testament to the success of the Trea- Vand. J. Transnat’l L. 687, 699 (May 2007).
attempted to agree on the selection ty’s dispute-resolution mechanism 17 Indus Waters Treaty, supra note 1, at
of the remaining three umpires from in deftly navigating Indo-Pakistani art. IX.
the categories noted above, but they politics toward the peaceful resolution 18 Indus Waters Treaty, supra note 1, at
annex. F.
were unable to do so.37 The next step of potentially explosive issues.
19 Id.
was to determine if they could agree
20 Id.
on one or more persons to assist them Omar K. Ibrahem, an attorney in
in selecting the three umpires. Again, Miami, focuses his practice on com- 21 Indus Waters Treaty, supra note 1, at
art. IX and annex. F.
they were not able to reach an agree- mercial litigation and arbitration. He
22 Id.
ment. As a result, in July 2010, they can be reached at Omar@okilaw.com.
23 Id.
drew lots. The Secretary General of
24 Salman M. A. Salman, The Baglihar
the United Nations was selected to Endnotes:
Difference and its Resolution Process- A Tri-
appoint an umpire from category (i) 1 Indus Waters Treaty, India-Pak., Sept. umph for the Indus Waters Treaty?, 10 Water
to become the chair of the Court of 19, 1960, 419 U.N.T.S. 125, also available at Pol’y 105, 107 (2008).
http://web.worldbank.org/WBSITE/EXTER-
Arbitration. The Rector of the Impe- 25 Indus Waters Treaty, supra note 1, at
NAL/COUNTRIES/SOUTHASIAEXT/0,,cont
rial College of Science and Technology entMDK:20320047~pagePK:146736~piPK:58 annex. F.
in London was selected to appoint an 3444~theSitePK:223547,00.html (last visited continued, next page
indus waters treaty 32 Sharma and Wright, supra note 5. Kishanganga arbitration court, The Hindu,
33 Id. Oct. 30, 2010, http://www.thehindu.com/
from previous page
news/national/article857632.ece (last visited
34 Id.
Feb. 6, 2011).
26 Indus Waters Treaty, supra note 1, at 35 UN court to hear Pakistan-India water
dispute, The Peninsula, Jan. 14, 2011, http:// 39 Id.
annex. G.
www.thepeninsulaqatar.com/pakistan/ 40 Mushtaq Ghumman, International
27 Id. afghanistan/139014-un-court-to-hear-paki- Court of Arbitration to hear Kishanganga
28 Id. stan-india-water-dispute.html (last visited project dispute on January 14, Bus. Recorder,
29 Indus Waters Treaty, supra note 1, at Feb. 6, 2011). Jan. 3, 2011, http://www.brecorder.com/news/
annex. G. 36 Id. top-stories/1143059:news.html (last visited
30 Id. 37 Id. Feb. 6, 2011).
31 Kazim, supra note 6. 38 Gargi Parsai, Stephen Schwebel to head 41 Id.