Published by the International Institute for Sustainable Development www.investmenttreatynews.org

March 2010

PAGE 1 NEWS: NEWS: ICSID tribunal applies ad ICSID TRIBUNAL APPLIES AD HOC hoc approach to confidentiality in APPROACH TO CONFIDENTIALITY IN arbitral proceeding ARBITRAL PROCEEDING By Ugo Ukpabi* PAGE 2 In Giovanna A Beccara and Others v. the crux of the dispute centered on NEWS: A merits hearing takes place The Argentine Republic a tribunal the appropriate disclosure and use in protracted NAFTA dispute over composed of Pierre Tercier, Georges of personal information relating to US tobacco settlements Abi - Saab, and Albert Jan Van den individual claimants in the case. Berg has decided that questions of PAGE 3 NEWS: Ecuadorians battle Chevron in ICSID arbitrations should be in U.S. court over BIT arbitration confidentiality and transparency “…unless there [is] an in long-running environmental agreement of the [p]arties on damage dispute determined on a case by case basis. the issue of confidentiality/ of Argentina’s response to response PAGE 5 The dispute – one of many arising out transparency, the Tribunal NEWS: Tribunals have been shall decide on the matter constituted in ICSID cases involving to its financial crisis – concerns debt Egypt, Cambodia and Argentina Argentinesecurity issued creditors, by Argentina including and the [questions of confidentiality claimants.held by numerous In late 2001, non-Argentine Argentina and was and transparency] on a case PAGE 6 NEWS: Canadian mining firm by case basis…” accused of links to murder of underunable those to meet bond its instruments.financial obligations As an Disagreements between the parties protester, has Chiapas mine shut alternativeand failed to to pay meeting amounts its obligations owed began in March of 2008 when down under the bond issue, the Argentine Argentina requested production Republic launched an Exchange of certain electronic information PAGE 7 Offer (the “Exchange Offer”). Under regarding different claimants in the NEWS: Hearings take place in the terms of the Exchange Offer, the arbitration. Argentina’s request was dispute between Electrabel and previous bondholders could exchange grounded in arguments that the format Hungary despite snowy weather their bonds (on which Argentina had

PAGE 8 debt instruments to be issued at a later of the information previously provided IN BRIEF: Proceedings are date.already suspended payment) for new impededto it by the its claimants defence rights. was not “in a suspended in dispute between format easily accessible” and therefore French oil company and The claimants refused to participate In response, the claimants stressed in that Exchange Offer. Rather, PAGE 8 respondent information in a computer- IN MEMORIUM: Sir Ian Brownlie action amounted to a violation of readablethat they andhad searchablealready provided format. the Q.C. (1932 – 2010) itsthey obligations argued that under the respondent’sthe applicable However, the claimants indicated that

with the data requested as long as ofArgentina 2006, the – Italyclaimants Bilateral commenced Investment they were willing to provide Argentina Contact information: arbitralTreaty (the proceedings BIT). As a against result, Argentinain the fall agreement. The parties were unable, IISD, International Environment House 2 however,it agreed to signagree a onconfidentiality the proper scope 9 chemin de Balexert 1219 Châtelaine, Geneva, Switzerland Theseeking procedural compensatory questions damages. raised in this agreement. [email protected] case centered around the disputing of the claimants’ proposed confidential As the stalemate between the parties continued, preparations for arbitral claims by the parties on questions of confidentiality. In that regard, Continued on page 9 March 2010

NEWS: A MERITS HEARING TAKES PLACE IN PROTRACTED NAFTA DISPUTE OVER US TOBACCO SETTLEMENTS By Elizabeth Whitsitt A three-member tribunal, composed of December 14, 2009, the tribunal escrow accounts based on their Mr. Fali S. Nariman, Professor S. James of the NAFTA dispute would take place what an NPM would have paid as an arguments on the merits of the dispute confirmed that hearings on the merits annualcigarette settlement sales. The amount amounts if it reflected were betweenAnaya, and Grand Mr. John River R. Enterprises Crook, has heardSix Arthur Montour’s due process rights, part of the MSA. Escrow funds are to Nations, Ltd., et al. and the United thein February tribunal 2010.expressed With its respect expectation to States. that Mr. Montour would participate in states.be held for up 25 years as insurance in A hearing on the merits of the dispute case an NPM is ever sued by one of the the hearing. Additionally, the tribunal Soon after their implementation, after arbitral proceedings in the long- Mr.confirmed Montour counsel’s to provide right evidence to object that states saw problems with the Escrow runningtook place NAFTA last month Chapter some 11 casesix years began. wouldto any questionsbe prejudicial that tomight his position require in the pending criminal case. Statutes. Specifically states felt that jurisdictionalOver the years, and arbitral arbitrator proceedings challenges. As a result, the merits hearing salesNPMs on could just paya few significantly states, and less that sums the have been delayed several times due to statutesif they concentrated were hard to their enforce cigarette against In fact, just three months ago it seemed foreign manufacturers. that proceedings might be halted once however,commenced the on proceedings February 1st. were Due again when the claimants wrote to to snow storms in Washington D.C., the tribunal asking to reschedule the enacting two new laws. To deal with merits hearing. interrupted for approximately one theStates perceived responded enforcement to these concerns problems, by week and finally concluded on Contraband Laws were enacted, The request arose out of concerns GrandFebruary River 14th. Enterprises is a requiring cigarette manufacturers related to the initiation of a federal Canadian corporation involved in criminal prosecution of Mr. Montour the manufacture and sale of tobacco and other Grand River founders, products. Its dispute with the US to certify each year that they were revolves around the Tobacco Master bannedcomplying as contraband.with the Escrow Second, Statutes, the or Settlement Agreement (MSA) signed in Escrowelse have Statues their cigarettes were amended automatically to Kenneth Hill and Jerry Montour, for 1998 between the four major American increase escrow requirements to “trafficking” and for “conspiracy tobacco manufacturers and the NPMs, such as the claimants, which had concernedto traffic” cigarettes that the US under would US use law. Specifically, the claimants were Montour during the merits hearing UnderAttorneys the GeneralMSA, the of tobacco 46 U.S. companiesstates. Asadopted a result, a regional Grand River strategy. Enterprises ofevidence, the NAFTA provided dispute, by inMr. its Arthur criminal agreed to certain marketing and is seeking between US$ 300 – 600 prosecution of Messer’s Hill and advertising limitations, as well million for alleged violations of NAFTA Montour. Articles 1102 (national treatment), exchange for protection against future 1103 (most-favored-nation treatment), Seeking to safeguard Arthur Montour’s as perpetual annual payments in 1104 (better of national or most- due process rights against self- favored-nation treatment), 1105 incrimination, the claimants requested Thelawsuits heart by of the the states. dispute centers on (minimum standard of treatment that the tribunal reschedule the provisions in the MSA related to – under international law) and 1110 hearing until after the pending criminal Non-Participating Members (NPMs) (expropriation). - companies that refused to sign on the claimants sought a declaration from agreement. In order to prevent those thetrial tribunal was concluded. that it would Alternatively, not strike the or accord less weight to Mr. Montour’s lower costs inherent in their non- Hearing,Sources: Letteravailable to Partieshere: http:// Reconfirming participation,companies from the benefiting MSA required from states the www.state.gov/documents/February 2010 Dates for Merits participating in the merits hearing. to adopt a so-called model law. organization/133833.pdf testimony should he abstain from Letter from Respondent Regarding refused the claimants’ request. In as so-called Escrow Statutes, required Claimants’ request to Reschedule aUltimately, letter dispatched however, to the all tribunalparties on NPMsThe model to make law, annual implemented deposits by into states

February 2010 MeritsContinued Hearing, on page 7 2 March 2010

NEWS: ECUADORIANS BATTLE CHEVRON IN U.S. COURT OVER BIT ARBITRATION IN LONG-RUNNING ENVIRONMENTAL DAMAGE DISPUTE By Fernando Cabrera Diaz Chevron and Ecuadorian citizens are ITN spoke to , an in U.S. court in the latest chapter of . filed against the state by plaintiffs in the Lago Argio dispute whoAmerican said that lawyer the representingagreements releasing the a 16 year battle over environmental “The dispute stems from a damage in Lago Agrio allegedly caused private claims such as those being by Texaco Petroleum (TexPet), which 1993 lawsuit launched by Texaco from liability do not apply to Chevron acquired in 2001. In January Ecuadorian citizens in the U.S. inof thisEcuador year, asked a group a U.S. of Ecuadorian District Court Mr.pursued Donziger by his also clients. argues that these District Court for the Southern toplaintiffs enforce which Texaco’s is suing alleged the promise company to that Court that it would submit to District of New York alleging the jurisdiction of Ecuadorian courts releases were obtained fraudulently that Texaco discharged billions by Texaco, accusing the company The move came in response to a BIT of gallons of contaminated consistedof lying to ofthe running government dirt over about a small where a lawsuit is currently under way. its cleanup efforts which he says arbitration initiated in September 2009 “formation water” from the number of waste pits without cleaning notice of arbitration, Chevron alleges, Lago Agrio oil field into the partner in the project, Texaco was the amongby Chevron other against things, Ecuador. that Ecuador In its and local water supply causing them of toxins. Though a minority therefore responsible for 100% of Lago Agrio plaintiffs. environmental and health exclusive operator of the oil fields and its courts have unfairly favoured the problems in the area.” Donziger. The dispute stems from a 1993 lawsuit the environmental damage, says Mr. Ecuador had argued that Chevron Kent Robertson, media relations the U.S. District Court for the Southern Districtlaunched of by New Ecuadorian York alleging citizens that in arbitration to discredit Ecuadorian plaintiffs had no legal grounds to bring courtswas merely ahead using of future this firstarbitration if thisadvisor sort at of Chevron, a claim for says damages that private to discharged billions of gallons of the Lago Agrio lawsuit in Ecuador public lands prior to a 1999 law that contaminatedTexaco, through “formation its subsidiary water” TexPet, from its part argued that after 2004 in direct contradiction to Ecuador’s thedid Ecuadoriannot go its way. courts Chevron ceased for to constitutionis now being thatapplied forbids retroactively the retroactive and andthe Lago health Agrio problems oil field in intothe area.the local be independent in the wake of application of law. water supply causing environmental several political purges of Ecuador’s Texaco argued that the case needed to Constitutional, Electoral and He disputes Mr. Donziger’s allegations be tried in Ecuadorian courts, which Supreme Courts. that Texaco obtained releases it characterized as adequate. The through fraud. “At the time of Texaco U.S. Court of Appeals, Second Circuit Meanwhile the lawsuit in Ecuador Petroleum’s remediation, sampling continues. Chevron has argued that case (Aguinda v. Texaco) to Ecuador and the Ecuadorian inagreed 2002 with on the the condition company that and Chevronsent the government are responsible for determineand analysis if thewas clean-up performed complied by accept jurisdiction there. A group of the government at every site to in Lago Agrio because Texaco and Mr. Robertson. “Moreover, two of a new lawsuit in Ecuador. cleaning any environmental damage Ecuador’swith Ecuador’s Prosecutor requirements,” Generals says Ecuadorian citizens responded by filing have commissioned subsequent ceasedits subsidiary operations TexPet in thewere region released had a different view of Ecuadorean infrom 1992. any Duringliability the shortly 1970s after and they concluded that the remediation work courtsAs reported when previously it initiated by a previousITN, Chevron wasanalysis effective of remediated and complied sites with and boththe applicable standards,” he adds. consortium1980s Texaco that and explored its subsidiary for and violatedarbitration the against Ecuador-U.S. Ecuador Bilateral in May producedwere minority oil in members Lago Agrio of underthe He also notes that since Texaco left of 2006 alleging that the country had contracts with Ecuador and state- Lago Agrio, Petroecuador has run multipleInvestment breach-of-contract Treaty (the BIT) casesbecause deplorable fashion” causing numerous its courts had failed to deal fairly with owned oil company, Petroecuador. the oil field in an “environmentally- Continued on page 4 3 March 2010

ECUADORIANS BATTLE CHEVRON... Continued from page 3

spills in the area for which Chevron is not responsible. and none have been found to have a askingabide by the a rulingcourt to from dismiss Ecuador. the 2 years seeking to disqualify Cabrera, In September of 2009, with the lawsuit lawsuits,Chevron hasarguing since that filed U.S. a motion courts not going well for it in Ecuador, are not authorized to hear requests legal basis,” says Mr. Donziger Chevron launched a second arbitration to bar parties from pursuing against Ecuador. arbitrations under international “Mr. Cabrera’s conflict of interest investment treaties. interestsis clear and from he theknowingly court,” countersand Mr. In its September notice of arbitration Robertson.repeatedly concealed his remediation Mr. Donziger though argues that respecting the agreements it signed his clients are not asking the court Sources: the company accuses Ecuador of not to intervene in the arbitration, but violation of Article II(3)(c) of the Decision in Aguinda v. Texaco BIT.releasing Chevron Texaco also from accuses liability Ecuador in of promise it made to that court that it Inc. available at: http://caselaw. interfering on behalf of the plaintiffs instead to hold the company to the in the lawsuit in violation of the fair and equitable treatment provisions of Awould hearing abide is scheduledby a ruling March in Ecuador. 10 in lp.findlaw.com/cgi-bin/getcase.pl?co the BIT. It asks the arbitral panel to New York, where all three parties Chevronurt=2nd&navby=case&no=017756 notice of arbitration of http:// arguments. www.chevron.com/documents/pdf/ Lagodeclare Agrio that Litigation.” Ecuador is liable “for any will present preliminary oral EcuadorBITEn.pdffiled September 23, 2009: judgement that may be issued in the A new development in the dispute

asked the Lago Agrio court hearing http://www.chevron.com/news/ “Because Ecuador’s judicial system is thearose lawsuit on February to dismiss 9, when court- Chevron Chevron company press releases: choiceincapable but of to functioning seek relief underindependently the appointed expert Richard Cabrera http://www.chevron.com/news/ of political influence, Chevron has no who had recommended in a report press/release/?id=2009-09-23; Ecuador,” said Hewitt Pate, Chevron’s that the court award US$ 27 billion vicetreaty president between and the generalUnited Statescounsel and in a “Chevron,press/release/?id=2010-02-09 Ecuador Plaintiffs Spar

against the company. Mercedes Alvaro, Dow Jones Business Thiscompany arbitration press release. is taking place at the Mr. Cabrera hid the fact that he is Over Arbitration In Court,” By Court of Arbitration in The Hague “theIn particular, co-founder, the general company manager, claims under the Rules of the United Nations PreviousNews, February ITN Reporting: 2, 2010. Commission on International Trade Law. majority stockholder, and legal “Chevron launches investment- Ambientalrepresentative Minera-Petrolera of an oilfield S.A.” In response to this second arbitration, whichremediation would company, stand to gain Compañía from a Damon Vis-Dunbar, Investment Ecuador and the Ecaudorian plaintiffs treaty claim against Ecuador,” By available here: http://www. Thedecision plaintiffs against argue the thatcompany. Ecuador Treaty News, 2 October 2009, U.S.filed District separate Court suits for in theDecember Southern court rules prohibit Mr. Cabrera news/archive/2009/10/01/ Districtand January, of New respectively, York. Both at sets the of and other experts in the case from chevron-claims-denial-of-justice-investmenttreatynews.org/cms/

arbitration Chevron violated a promise one result, and that Cabrera’s ecuador.aspx madeplaintiffs to that allege court that in by the filing previous this latest involvementtaking part in in any remediation clean-up should in in-investment-treaty-claim-against- “Chevron warns Ecuador on BIT decision of Ecaudorian courts in the claim as contract and environmental dispute.lawsuit that it would respect any Ecuador is precisely why he was “Ourqualified opinion to issue is that the it report is not ahe did. Mr. Robertson argues that Chevron disputes persist”, By Damon Vis-http:// www.iisd.org/pdf/2006/itn_Dunbar, Investment Treaty News, toconflict discredit of interest, the report. and Inthat fact this the is 26 July 2006, available here: Texacowas not made a party no to promises the Aguinda it had v. to just part of Chevron’s media strategy Texaco lawsuit and that in any event july26_2006.pdf company filed 29 motions in the last 4 March 2010

NEWS: TRIBUNALS HAVE BEEN CONSTITUTED IN ICSID CASES INVOLVING EGYPT, CAMBODIA AND ARGENTINA By Elizabeth Whitsitt In the past two months, arbitral Ukraine. Mr. Cremades has also presided tribunals have been convened in a few v. Ecuador. Mr. Alvarez was also ICSID arbitrations. including the consolidation tribunal in Presidentv. Argentina, of theand ICSID Noble tribunal Energy in Cornover tribunalsProducts inInternational. many disputes, v. Mexico, Liberian Eastern Timber Corporation Motorola Credit Corporation v. Turkey. Most recently, a tribunal was constituted Management v. Mexico, Société and arbitrator, who also sits as in relationa dispute to initiated the alleged by an expropriation American d’Exploitationv. Liberia, Lanco des v. MinesArgentina, d’Or Wastede Sadiola arbitratorMr. Hossain, in isthe a Bangladeshipending ICSID lawyer cases, ofinvestor its investment against the in the Republic Arab Republic’s of Egypt S.A. v. Mali, and Archer Daniels Midland Caratube v. Kazakhstan and Impregilo (II) v. Argentina. Along with Judge Buergenthal, Mr. Hossain sat on Inhotel the and H&H tourism Enterprises industry. Investments, VeijoCompany Heikanen v. Mexico. is a partner with Swiss committee. Mr. Hossain also sat as international arbitration, including arbitratorthe Gruslin in v. Vacuum Malaysia Salt annulment Products v. VeijoInc. v. Heiskanen, Egypt matter, and under the respondent the US - investmentlaw firm, Lalive. arbitration, He specializes and public in Ghana. nominatedEgypt BIT (1992), Hamid theG. Gharavi. claimant Spanish selected international law. He has acted as counsel and arbitrator in numerous Cremades will serve as President.* international arbitration proceedings. It lawyer and arbitrator, Bernardo M. v.*** Ecuador Neil Kaplan (see “Pereco-nominatedhas recently been ICSID tribunal appointment. appointed to fill a vacancy in Perenco appears that this is Mr. Heikanen’s first comments in ICSID dispute with MarsansAdditionally, over in Argentina’s an ICSID case alleged Hamid G. Gharavi is founding partner arbitrator disqualified for interview commenced by Spanish investor Grupo airline, Aerolineas Argentinas, the been appointed to the LCIA Court, the Ecuador,” By Fernandohttp://www. Cabrera claimantsexpropriation have of nominated the country’s Henri largest C. Commissionof the firm Derains on Arbitration & Gharavi. of theHe ICChas Diaz, Investment Treaty News, 14 Álvarez and the respondent has chosen and the Panel of ICSID Arbitrators. In news/archive/2010/02/10/perenco-February 2010, at: Kamal Hossain. Thomas Buergenthal investmenttreatynews.org/cms/ has been selected as President of the Mr. Gharavi is an ICSID arbitrator in Shell interview-comments-in-icsid-dispute- Tribunal.** Nigeriaaddition Ultra to H&H Deep Enterprises Limited v. v.Nigeria. Egypt, with-ecuador.aspxnominated-arbitrator-disqualified-for-. Mr. Kaplan was

** Judge Buergenthal is the American judge serving on the International Court also President in the ADC Affiliate sector,Finally, the in a claimant claim involving has appointed Cambodia’s of Justice. In addition, he has been a Limited v. Hungary arbitration. electricity generation and distribution panelist in numerous ICSID arbitrations, including Vivendi v. Argentina, Lucchetti GEAToby v. Landau Ukraine. is a Mr. UK Landau barrister has who also is John Beechey, and the respondent has v. Peru, and Maffezini v. Spain. Judge beencurrently a panelist serving in astwo an other arbitrator ICSID in serveselected as PresidentBritish lawyer, of the Toby tribunal. Landau. *** UK Buergenthal also served on the arbitrations: Impregilo v. Pakistan and lawyer and arbitrator Neil Kaplan will annulment committee in Gruslin v. Biwater v. Tanzania. * Bernardo M. Cremades is a partner the ICSID dispute between Chevron and Bangladesh.Malaysia and is currently presiding in Universidadat the Spanish de law Madrid. firm B. Mr. Cremades Cremades John Beechey is a UK national and y Asociados and Catedrático of Mr. Alvarez is a Partner with the law counsela Partner and at thearbitrator law firm in ofnumerous Clifford arbitrator and president of arbitral Chance. Mr. Beechey has served as tribunalshas acted inas acounsel, number party-appointed of disputes. an arbitrator in ongoing ICSID disputes ICSID panelist in the Ares International firm of Fasken Martineau. He also sits as andICC cases.MetalGeo Previously v. Georgia he arbitration.sat as an Total S.A. v. Argentina and Libananco AGCurrently, Frankfurt he isAirport a panel v. memberPhilippines, in a against Argentina and Turkey (i.e. For previous related ITN reporting see: variety of ICSID cases, including Fraport also sat on arbitral panels in Compagnie Unglaube v. Costa Rica, Reinhard Hans MinièreHoldings Internationale v. Turkey). Mr. v. Alvarez Peru, Aguas has del Gustav F W Hamester v. Ghana, Marion Tunari v. Bolivia, Camuzzi v. Argentina, investor against Argentina over airline v. Costa Rica, and Inmaris Perestroika v. “ICSID registers claim by Spanish Unglaube v. Costa Rica, Quadrant Pacific Compañía General de Electricidad. dispute,” By FernandoContinued Cabrera Diaz, on page 10 5 March 2010

NEWS: CANADIAN MINING FIRM ACCUSED OF LINKS TO MURDER OF PROTESTER, HAS CHIAPAS MINE SHUT DOWN By Fernando Cabrera Diaz

still willing to negotiate with the Calgary-based mining firm Blackfire Chiapasthe paper government says the company over the is re- In a previously released statement NAFTAExploration Chapter has 11reportedly arbitration threatened in opening of the mine or appropriate claimprovided to the to ITNcongress Blackfire of the says State of responseMexican officials to the closure in Chiapas of its with barite compensation if this is not possible. Chiapasthat in May seeking 2009 their it “filed assistance a formal to mine in the southern Mexican state determine if a donation of funds to the of Chiapas. The mine’s closure came Chicomeuselo Annual Fair had been on the heels of intense local protests to answer questions related to the against the mine following the murder ITN contacted Blackfire who refused intended purpose.” of a local activist who led opposition to provide information contained in inappropriately diverted from their the mine. previousdispute. However, press releases the company including did Meanwhile, a coalition of Canadian the following statement: “It is a bad NGOs and labour rights groups On November 27, 2009 Mariano rumour that we are taking legal action including Common Frontiers-Canada, Abarca, leader of the Mexican against the government. Rather we Canadians and United Steelworkers, resolve our various issues and to get MiningWatch Canada, the Council of assassinatedNetwork of those in front Affected of his by home. Mining Mr. backare looking to work at as every a mining option venture possible in to Mounted Police to investigate the Abarca(REMA ledby its a local initials movement in Spanish) against was Mexico.” have called on the Royal Canadian

Chicomuselo Chiapas. Locals accuse the ofcompany’s protesters alleged citing corruption the Canadian of mineBlackfire’s of contaminating barite mine neararea farmsthe town and of more ammunition to proponents of CorruptionMexican officials of Foreign and intimidationPublic Officials using up water resources. Bill-C300The Blackfire in Canada controversy introduced is providing last Act.

According to the Globe and Mail three Sources: February by Canadian Member of Mining,Parliament Oil andJohn Gas Mackay. Corporations Also known in “Empresa canadiense, inconforme men have been arrested by Mexican Developingas the Corporate Countries Accountability Act, the bill of con el cierre de mina de titanio, andpolice two in othersconnection who workedwith the for slaying, would hold Canadian companies who one a current Blackfire employee receive support from the Canadian por 800 mdd,” Milenio Online, government responsible in Canada Demandarán al gobiernohttp://impreso. de Chiapas the company in the past. Company for human rights and environmental milenio.com/node/8716870 President Brent Willis has denied the abuses in developing countries. February 10, 2010: thecompany Chiapas had mine any isconnection being run toin thean “RCMP asked to investigate Canadian killing and has repeatedly stated that meets Canadian standards. Globe and Mail obtained legal December 19, 2009 environmentally responsible way that documentsIn a bizarre oftwist a complaint to the story, against The mining company,” Vancouver Sun, Less than two weeks after Mr. Abarca’s the Congress of Chiapas in June 2009 murder and amidst growing protests, on December 7th state environmental “The mayor, the model and the authorities in Chiapas ordered the Cesaralleging Velazquez that the companyCalderon. was being mining company; Canadian firm extorted by Chicomuselo mayor Julio Blackfire unearths more controversy According to the Globe and Mail, in by alleging politician sought cash roletemporary in their closure decision of andthe mine.instead Chiapas cited Decemberbribe and ‘sexual 12, 2009. evening,” By pollutionofficials denied and toxic the emissionsmurder played as the a Andy Hoffman, The Globe and Mail, reason. its complaint Blackfire says that it “Citing environment, Mexican state preventpaid the membersmayor a total of a ofco-operative over US$ shuts down Canadian-run mine after farm17,000 near in monthlythe mine instalments from “taking to up Cruz, Canadian Press, December 9, launchAccording NAFTA to reports Chapter in 11Mexican arbitration Daily 2009.slaying of activist,” By Manuel de la againstMilenio, Mexico Blackfire seeking has threatened almost US$ to 800 arms” against the company and that million as compensation for the illegal ait sexualstopped evening paying with the bribesMexican when nude the Text of Bill C-300: http://www2.parl. closing of its mine in Chiapas. Citing modelmayor’s Niurka demands Marcos. escalated to include gc.ca/HousePublications/Publication.

Mode=1&File=27#1 an unnamed Blackfire spokesperson 6 aspx?DocId=3658424&Language=e& March 2010

NEWS: HEARINGS TAKE PLACE IN DISPUTE BETWEEN ELECTRABEL AND HUNGARY DESPITE SNOWY WEATHER By Elizabeth Whitsitt Despite snow storm interruptions a contracts from which the dispute arose, tribunal, composed of Mr. V.V. Vedeer, the Commission found that the power were subject to EU law, and thus subject to Ms. Gabrielle Kaufmann-Kohler, and Ms. purchaseimpeded competition.agreements provided Specifically, state aid Commission’s jurisdiction. Brigitte Stern, heard the merits of the to power generators and prevented new Sources: The European and Middle Eastern Arbitration Review 2010 (Global month.dispute between Belgium-based energy entrants into Hungary’s energy sector. Arbitration Review) firm Electrabel SA and Hungary last “With claims totaling Along with AES Summit Generation in excess of US$ 700 “European Commission to intervene in ICSID dispute,” 15 December 2008 (Global million, both arbitrations Arbitration Review) Limited v. Republic of Hungary, the address the Hungarian Electrabel SA v. Republic of Hungary “ICSID tribunal will permit European arbitration is one of two Energy Charter government’s efforts electricTreaty (ECT) power disputes, sector in arising the wake from of its to minimize the anti- accessionHungary’s to efforts the European to restructure Union its (EU). ArbitrationCommission Reporter, to file legal 11 briefDecember in Energy 2008. competitive effects of Charter Treaty arbitration,” Investment long-term power purchase “European Commission moves to 700 million, both arbitrations address agreements…” intervene in another ICSID arbitration,” theWith Hungarian claims totaling government’s in excess efforts of US$ to minimize the anti-competitive effects of 2009. long-term power purchase agreements tribunals have permitted participation Investment Arbitration Reporter, 11 May Interestingly, in both cases the ECT Previous ITN Reporting on Non-Disputing entered into before Hungary’s accession by the European Commission, a non- to the EU on May 1, 2004. participating party in the dispute. “InnovativeParty Procedure: Steps are Introduced Into

While the parties written submissions While the Commission’s intervener itselfare not in publiclypart on theavailable, ground reports that it submissions are not publicly available, News,Non-Disputing 3 November Party 2009, ICSID available Procedure,” here: wasindicate obliged that to Hungary make changes is defending to those it is widely known that the Commission By Elizabeth Whitsitt, Investment Treaty intervened to defend Hungary’s actions European Commission determined that soughtas being to required challenge by the EU jurisdiction Community of org/cms/news/archive/2009/11/01/ thoselong-term agreements contracts. were Apparently, illegal under the thelaw. tribunal, Apparently on grounds the Commission that portions also innovative-steps-are-introduced-into-non-http://www.investmenttreatynews.

EU law because they unnecessarily of the dispute, and the underlying disputing-party-icsid-procedure.aspx A MERITS HEARING TAKES PLACE... Continued from page 2 available here: http://www.state.gov/ documents/organization/133832.pdf and Damon Vis-Dunbar, Investment 2006, available here: http://www.iisd. aboriginal rights,” By Fernando Cabrera org/pdf/2006/itn_aug10_2006.pdfInvestment Treaty News, 10 August Letter from Claimants requesting here: org/cms/news/archive/2009/01/29/Treaty News, 29 January 2009, available For a description of the U.S. objections Merits Hearing, available here: http://www.investmenttreatynews. to one of the arbitrators see: “US http://www.state.gov/documents/to Reschedule February 2010 nafta-dispute-over-u-s-tobacco- persists with challenge to arbitrator in organization/133831.pdf settlements-canada-intervenes-with-parties-file-memorials-in-long-running- arbitrator’s human rights work assisting law-related-to-aboriginal-rights.aspx Grand River Enterprises NAFTA case; memorials in long-running NAFTA opinion-on-customary-international- Eric Peterson, 15 November 2007, Previous ITN Reporting: “Parties file “Despite time-bar ruling in NAFTA availableNative Americans here: http://www.iisd.org/ in spotlight”, By Luke Canada intervenes with opinion on arbitration, Grand River claim will pdf/2007/itn_nov15_2007.pdf dispute over U.S. tobacco settlements; customary international law related to proceed in part”, By7 Fiona Marshall, March 2010

IN BRIEF: PROCEEDINGS ARE SUSPENDED IN DISPUTE BETWEEN FRENCH OIL COMPANY AND ECUADOR

Thomas Bingham, President of the ICSID tribunal in Perenco Ecuador news/archive/2010/02/10/perenco- Limited v. Ecuador has resigned. JudgeUK lawyer Charles and Brower. arbitrator Following Neil Kaplan investmenttreatynews.org/cms/ thewas resignation chosen by Perenco of Thomas to replace Bingham, for-interview-comments-in-icsid- At the center of the dispute between proceedings in the case are suspended dispute-with-ecuador.aspxnominated-arbitrator-disqualified- Perenco and Ecuador is a windfall

South American Republic. According to until the vacancy on the ICSID panel measures in dispute with French oil Ecuador,tax enacted Perenco in 2006 owes (Law some 42) US$327by the Previoushas been ITNfilled. Reporting: “Ecuador defies provisional million under Law 42. Perenco, on the other hand, contends that the law is in “Perenco-nominated arbitrator 2009,company,” is available By Damon here: Vis-Dunbar, http://www. violation of its contract with Ecuador Investment Treaty News, 8 June and the France-Ecuador BIT. news/archive/2009/06/05/ecuador- Fernandodisqualified Cabrera for interview Diaz, Investment comments investmenttreatynews.org/cms/ Mr. Bingham’s resignation came on in ICSID dispute with Ecuador,” By available here: http://www. aspxdefies-provisional-measures-in- Treaty News, 14 February 2010, dispute-with-french-oil-company. February 17, 2010, only month after IN MEMORIUM: SIR IAN BROWNLIE Q.C. (1932 – 2010) By Elizabeth Whitsitt Public International Law, which is public international law passed now in its seventh edition, and one A prominent figure in the field of BrownlieOxford, and completed was awarded a doctorate a first-class at at age 77. According to reports, degree. Subsequently, Professor on the subject. Ian Brownlie’s Professorunexpectedly Brownlie on January died in 3, a2010 car otherof the writingsmost widely cover read such discourses topics as accident while vacationing with his Oxford on the use of military force African boundaries, the law of state by states, and was called to the bar at ProfessorGray’s Inn. Brownlie began his rule of law. family in Egypt. academic career at Nottingham responsibility, human rights and the Brownlie some two months ago The untimely death of Sir Ian returned to Oxford as a fellow andUniversity, lecturer. in In1957, 1976 but he he became soon BrownlieA widely-recognized was serving leader as a panelist in the Indeed,has undoubtedly news of his left tragic a void passing in the has a professor of international law at infield two of ICSID international arbitrations law, atProfessor the beeninternational met with legal great community. sadness. the London School of Economics. Ian Brownlie had presided in two to the Chichele chair in public othertime of ICSID his passing.* arbitrations: Previously, Occidental internationalFour years later law, he which was elected he held of Pakistan, Inc. v. Islamic Republic wasWith elected a career three spanning times moreto the until his retirement from academia of Pakistan and Compagnie Minière Internationalthan 40 years, Law Professor Commission. Brownlie The in 1999, and to a fellowship of All Internationale Or S.A. v. Republic of esteemed barrister was involved in Soul’s College, Oxford (he was made a Peru. In both instances the parties distinguished fellow in 2004). agreed to settle their disputes the International Court of Justice, the resulting in a discontinuance of the Europeansome of the Court most of significant Human Rights cases and at During the course of his career arbitral proceedings. Professor the European Court of Justice. He Professor Brownlie also authored Bronwlie was also an arbitrator was also a member of the Institut de numerous works on a wide range in Scimitar Exploration Limited v. droit international, and was knighted of topics in international law. His Bangladesh and Bangladesh Oil, Gas for his service in the area of public and Mineral Corporation, a case that was dismissed at the jurisdictional first book, International Law and stage of the proceedings. Ianinternational Brownlie grewlaw last up year.in Liverpool, the Use of Force by States (1963) where he attended Alsop high school. identified the United Nations Charter He read law at Hertford College, as a significant development for the rules governing military force. Three Ian Brownlie is survived by his years later, he published Principles of daughter Hannah andContinued son James; on page 10 8 March 2010

ICSID TRIBUNAL APPLIES AD HOC APPROACH... Continued from page 1 proceedings continued. The claimants and the respondent continued to tribunal went on to discuss the issue exchange documents and in the spring Having confirmed its jurisdiction, the duty of confidentiality. Specifically, of 2009 both parties submitted their tothe “general claimants updates attempted on the to status limit any of designation of witnesses, experts notedof confidentiality that while various in ICSID provisions arbitrations of disclosure about the case by the parties and documents for the jurisdictional thegenerally. ICSID Convention, In that regard, Administrative the tribunal resisted the claimants’ request and phase of the proceedings. At this time, and Financial Regulations and reiteratedthe case.” Notits position surprisingly, that there Argentina is

governing ICSID arbitrations. Argentinanew concerns submitted about confidentiality documents Arbitration Rules deal with specific no general rule of confidentiality relatingwere raised to its by examination the claimants of when theconfidentiality actions of parties duties themselves.of tribunals and For its part, the tribunal sought to GivenICSID, suchthey silencedo not expresslyin ICSID’s address legal chart a middle course approach the claimants for the jurisdictional framework, the tribunal determined different from the polar opposite hearingwitnesses that and contained experts designated expert opinions by that: and transcripts from other arbitral and the respondent. In the Tribunal’s proceedings. …unless there [is] an agreement view,positions it was adopted important by the to claimantstake into of the [p]arties on the issue of consideration, the nature of the information at stake because different the Tribunal shall decide on the Specifically, the claimants argued that confidentiality/transparency, protectionsthe exhibits insought the other to be arbitral relied on by inconsiderations a differentiated of confidentiality treatment of that and proceedings.the respondent The ignored claimants confidentiality also casematter basis [questions and, instead of confidentiality of tending information.transparency Themay tribunal apply, resulting also noted contended that Argentina’s submission towardsand transparency] imposing aon general a case ruleby in that the stage of the proceedings of those exhibits violated the principle was another important factor when the claimants did not have access to balancesfavour or theagainst general confidentiality, interest this regard, the tribunal noted that of equality of the parties because try to achieve a solution that greaterconsidering caution confidentiality should be taken issues. while In lead Argentina to use such evidence arbitration proceedings are on-going those proceedings, a reality that could offor certain transparency information with specificand/or documents.interests for confidentiality Inselectively response, and Argentina out of context. argued that: arbitration,– especially respectgiven considerations for the parties’ such Having refrained from articulating a as ensuring the orderly conduct of the general principle of law concerning exacerbation of the dispute. (i) it had not submitted any document equality of rights and avoiding the governingfiled in sealed ICSID proceedings, arbitrations, (ii) and there arbitrations, the tribunal went on (iii)was itno had general never rule been of deprivedconfidentiality of toconfidentiality categorize the questions competing in ICSIDclaims the tribunal went on to both allow andWith restrict the above disclosure considerations of information in mind, proceeding. related to various aspects of the using such documents in any ICSID surrounding confidentiality in the arbitration. For example, with respect following manner: (a) confidentiality to a general discussion of the case, the expression of divergent views on as to the record of the proceedings; tribunal determined that the parties With the parties’ continued (b) confidentiality as to the protection could engage in such discussions arbitration, the tribunal announced in of the claimants’ information; and theissues fall of of confidentiality 2009 that it would in investment make a information(c) the admissibility, arising in in another the present discussion is restricted to what is decision on the matter. arbitrationproceedings, proceeding. of certain confidential publicly, provided that any such public resolution of the dispute.** necessary, and is not used to frustrate noting that it had powers to determine the proceeding theIn its conduct ruling, ofthe proceedings tribunal started brought by (a) Confidentiality as to the record of of the claimants’ information (b) Confidentiality as to the protection ICSID Arbitration Rules. As a result, noted that in their latest request Going back to the events that kick- thebefore tribunal it by virtuereasoned of Rule that 19 it hadof the the With respect to this issue the tribunal power to make orders concerning claimants had asked that the entire between the parties (i.e. Argentina’s for a confidentiality order, the requeststarted thefor confidentialitycertain electronic dispute confidentiality. proceedings be covered by a general Continued on page 10 9 March 2010

ICSID TRIBUNAL APPLIES AD HOC APPROACH... Continued from page 9 information about the claimants), the of Nigeria and the Province of Alberta, tribunal noted that it was important to introduce certain exhibits (i.e. Canada. Ugo Ukpabi is a sole legal expertFinally, reports as to the or attempt transcripts by Argentina of legislation (e.g. Italian Code and EC examinations of those experts) provisions)to pay heed protectingto the applicable the claimants’ from other arbitral proceedings, **practitioner The tribunal based also in made Calgary, determinations Alberta. the tribunal observed that the regarding the parties’ disclosure of : to grant the respondent complete exhibits were issued in arbitrations awards, decisions, orders and directions accessprivacy. to As the such, requested while it information, was willing different from the present case. In of the tribunal (other than awards), the it imposed limitations on its use. particular the tribunal noted that minutes and records of the hearing, the arbitrations involved different pleadings, written memorials, other that: (i) disclosure of the requested claimants, circumstances, BITs and written submissions, documents and informationSpecifically, thebe fortribunal the sole determined purpose alleged substantive violations of exhibits related to pleadings, written of conducting the arbitration, (ii) those BITs. As a result, the tribunal memorials or other written submissions, concluded that exhibits from those and correspondence between the parties arbitration be allowed access to the and/or the tribunal exchanged in respect information,only persons (iii)connected alterations with to the the “transposed one to one to the present of the arbitration. information be disallowed, and (iv) case”proceedings and refused could to not admit easily those be disclosure to unauthorized third exhibits as evidence in the present Sources: proceedings. consent. parties occur only with the claimants’ * Ugo Ukpabi obtained his PhD from Order) in Re Giovanna is available here: http://ita.law.uvic.ca/documents/Procedural Order No. 3 (Confidentiality in a different arbitration proceeding Toronto. He is a member of the Bars (c) Confidentiality of documents used (Osgoode Hall) York University, BeccaraConfidentialityOrder.pdf

TRIBUNALS HAVE BEEN CONSTITUTED... Continued from page 5

“Argentina moves to expropriate airline archive/2008/11/30/argentina-moves- 2009, available here: http://www. under threat of US$1 Billion arbitration to-expropriate-airline-under-threat-of- Investment Treaty News, 20 February us-1-billion-arbitration-claim.aspx archive/2009/02/23/icsid-registers- investmenttreatynews.org/cms/news/ 2008,claim,” available By Fernando here: Cabrera http://www. Diaz, argentina-over-airline-dispute.aspx Investment Treaty News, 30 November claim-by-spanish-investor-against- investmenttreatynews.org/cms/news/

IN MEMORIUM: SIR IAN BROWNLIE... Continued from page 8 his other daughter, Rebecca, was killed appointed to serve as an arbitrator Bilbao Biskaia, Bilbao Biskaia Ur in the car accident, in which his wife in Conocophillips’ ongoing dispute Partzuergoa and Argentina over water with Venezuela (ICSID Case No. concession services (ICSID Case No. ARB/07/26). Christine Appleby was also injured. to be appointed in a dispute involving UrbaserARB/07/30). S.A. and An Consorcio arbitrator de has Aguas yet * Following this tragedy, Professor Georges ABI-SAAB (Egyptian) has been

Disclaimer: The views expressed in Investment Treaty News are factual and analytical in nature; Apart from clearly identified IISD Perspectives or Viewpoints, ITN- arti cles do not necessarily reflect the views of the International Institute for Sustainable Development, its partners, or its funders. Nor does the service purport to offer legal advice of any kind.

10