Challenge of arbitrators

[UPDATED with full analysis] – Another challenge to Gary Born is rejected, this time by Bruno Simma and Daniel Bethlehem in the KS Invest & TLS Invest v. Spain case | Investment Arbitration Reporter

More precisely, Spain sought the disqualification of Mr. Born on the ground that he allegedly “reached an immutable and biased position on key issues at stake in this arbitration,” such as “the assessment of investors’ expectations (which he does not seem to balance against any other consideration in his dissent); the legal effect of regulatory measures concerning renewable energy prices (which he views as unqualified commitments of stabilization) and the applicability and effects of EU Law (which he largely downplays if not to reinforce investor’s expectations).”

As to Mr. Born’s conduct during the Masdar and KS Invest hearings, Spain notably saw bias in his interruption of the cross-examination of a witness for Spain, and in an allegedly “disdainful comment” he made to this witness. Spain compared this “attitude” to the circumstances that led to the successful challenge of Francisco Orrego Vicuna as an arbitrator in Burlington v. Ecuador (see here).

Concluding, the unchallenged arbitrators held that Mr. Born “acted entirely properly, within the bounds of independence and impartiality required of an arbitrator,” and found “no basis” to Spain’s suggestions that his impartiality and independence were impaired.

Challenge filed against Eduardo Zuleta as hearings loom | Investment Arbitration Reporter

As we’ve chronicled, Spain has sought to dislodge several arbitrators in the battery of renewable energy arbitrations currently pending. A pair of challenges directed at Gary Born were rejected by his co-arbitrators, however Mr. Born later resigned from the ICSID cases in question. A separate challenge to Stanimir Alexandrov led to a split decision between the remaining tribunal members, leading him to resign despite insisting that the challenge had no merits.

Issue conflict of arbitrators

Arbitrator Zachary Douglas reverses course and resigns as ruling on disqualification loomed from PCA; parallel challenge in ICSID case is next battleground | Investment Arbitration Reporter

An arbitrator has resigned in the face of a challenge in an ongoing arbitration under the U.S.-Colombia Free Trade Agreement.

Arbitrator Zachary Douglas notified the parties of his resignation on August 23rd in the case of Alberto Carrizosa Gelzis, Felipe Carrizosa Gelzis, and Enrique Carrizosa Gelzis v. Colombia.

Investors lodge challenge to Zachary Douglas, alleging prejudgment of a core legal issue that arises in their investment treaty arbitration | Investment Arbitration Reporter

The challenge raised by the claimants to Mr. Douglas is rooted in a so-called “issue conflict”, specifically the claimants belief that Mr. Douglas has taken a fixed (and restrictive) view in several academic writings as to the scope for using a generic MFN clause to expand the jurisdiction of an international tribunal. The claimants allege that Mr. Douglas takes a principled view that cuts across different cases and fact-patterns, and reaches a negative answer (unless the relevant MFN clause explicitly reaches to dispute settlement).

Reasons to keep or eliminate NAFTA

Carlos Alvarado wrote in 200 Billion Reasons for Keeping NAFTA

If President Trump’s administration wants to keep U.S. investors in Mexico happy, he will definitely need to think carefully about NAFTA. Chapter Eleven will be certainly a relevant part of the negotiations between NAFTA’s three signatories, but if President Trump is really ready for leaving NAFTA, he should have a plan B for protecting the more than US $200 billion invested by U.S. investors in Mexico. In the meantime, do not be surprised if notices of intent of arbitration under NAFTA’s Article 1119 from U.S. investors to Mexico increase significantly, in order to gain the benefit of NAFTA’s substantive protections and anticipate establishment of jurisdiction of an investment arbitration panel.

If he hates companies investing in Mexico so much, he would purposefully undermine protection for US FDI there.

India’s bilateral investment pacts under cloud

India has discontinued bilateral investment treaties (BITs) with most of its prominent trading partners, with termination notices given to as many as 58 countries, including EU states.

All the BITs expired on April 1. According to sources, just a handful of countries — Tajikistan, Turkmenistan, Kyrgyz Republic, Switzerland, Oman, Qatar, Belarus, Thailand, Armenia, UAE and Zimbabwe — have agreed to renegotiate the treaties after the draft model BIT was approved by the Union Cabinet in December 2015.

India’s bilateral investment pacts under cloud