In association with the International Commission of Jurists

Environmental Law

07 Dec

The WTO's new Director-General Roberto Azevedo is celebrating a rare event:  The WTO's entire 159-country membership has finally reached  a new multilateral agreement.  This is the first time that the WTO's membership as a whole (as opposed to smaller groups of its member states) has reached an agreement since it was formed in 1994 and the first set of agreements under...

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01 Nov

[Michael D. Goldhaber serves as Senior International Correspondent and "The Global Lawyer" columnist for The American Lawyer and the ALM media group. His writes widely on human rights and corporate accountability, international arbitration, and global multiforum disputes. His e-book on Chevron will be published next year by Amazon. His first post can be found here.] I'm grateful for the very gracious and insightful comments shared by the eminent arbitrator Christoph Schreuer, the scourge of eminent arbitrators Muthucumaraswamy Sornarjah, and the wunderkind of arbitration scholarship, Anthea Roberts. Having solicited a wide range of commentary on my Article, I now must defend myself from friendly jabs on both flanks. Dr. Schreuer and Professor Roberts both argue thoughtfully that the relationship between tribunals and courts should be understood in a broader context. Along the way, Dr. Schreuer questions my realist view that arbitrators effectively review judges. In the course of a bracing systemic critique, Professor Sornarajah calls my desire for proportionality analysis and a plenary appeal within arbitration naive. I stand by my position that arbitrators are increasingly at odds with judges, and that they functioned like reviewing judges in several of the final awards surveyed (although I perhaps could have been more attentive to terminology). Dr. Schreuer helpfully distinguishes between vacating a decision (in an annulment) and replacing it (in an appeal), and argues that arbitrators do neither. But consider the results. When the treaty tribunal in Saipem v Bangladesh reinstated a contract arbitration award that had been nullified by a national court, it effectively vacated the court decision, and replaced it with a decision confirming the commercial arbitration. In White v. India, the tribunal stripped the national courts of jurisdiction because they were too slow, and effectively stepped in to confirm a commercial arbitration award. In Chevron v. Ecuador I, the tribunal stripped the courts of jurisdiction for being too slow, and expressly decided the court cases de novo under Ecuadorian law. Surely these results were functionally equivalent to appellate review. Likewise, when ATA v. Jordan finally terminated an ongoing court proceeding, it emphatically resolved the case in ATA's favor. I'm not sure how such a remedy should be categorized, but I cannot agree with Dr. Schreuer that it's "much weaker" than appellate review. I readily agree with Schreuer and Roberts on their main point: that judges and arbitrators interact in multifarious ways. My Article's opening passage acknowledged as much, and explained that I would dwell on arbitral review because it is the most neglected facet of their relationship Professor Roberts astutely observes that the relationship between tribunals and courts is triangular -- in the sense that arbitrators tend to review judges from poor nations, but to be reviewed by judges from rich nations. What she leaves unsaid is that judges in rich nations have historically deferred to arbitrators (whether out of ideology, correct interpretation of the law, or sensitivity to cross-border competition among the arbitration elites). I would therefore predict that the U.S. Supreme Court will overturn the D.C. Circuit's encroachment on arbitrators' turf in BG v. Argentina. If not, arbitration will simply flow away from UNCITRAL tribunals sited in the U.S., toward tribunals that are governed by either ICSID or the laws of arbitration-friendly European states. But either way, if they wish to sustain their power, arbitrators should take the hint: At least some courts in rich nations are deferring less because they perceive arbitrators as overweening. A lack of internal review may lead to external review. Although Professor Sornarajah and I share many perceptions -- for instance the need for transparency --, he views me as any self-respecting revolutionary views a reformer. He cannot understand why I would wish to fix an edifice with rotten foundations, rather than to blow it up.
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31 Oct

[Muthucumaraswamy Sornarajah is the CJ Koh Professor of Law, National University of Singapore and a Visiting Professor, Centre for the Study of Human Rights, London School of Economics.] Michael Goldhaber’s well-argued piece on the extent of the powers that investment arbitration tribunals are arrogating to themselves is evidence of a general malaise that afflicts investment arbitration. The arbitrators have assumed powers far in excess of what states intended them to have when they made investment treaties and created a unilateral power in the investor to arbitrate disputes. Consistent with prevailing ideas generated by the Washington Consensus and its desire to bring about standards of global governance, arbitrators promoting their own self-interest went on a rampage of expansionist interpretation of treaties. Goldhaber highlights one of the most glaring instances of this neoliberal expansionism, the making of interim orders restraining a respondent state from enforcing judgments of their domestic courts made in cases involving third parties. This phenomenon is but an aspect of a project to build up a neoliberal regime of inflexible investment protection. In the aspect of this project that Goldhaber describes, there has been an assiduous effort made by leading members of the “college of international lawyers”, entrusted the task of being bulwarks against injustice, promoting sectional interests of investors to the detriment of other values such as the protection of human rights and the environment. The downsizing of the notion of denial of justice so that it could accommodate lesser standards enabling easy review of domestic judicial orders is a definite project that arbitrators and “highly qualified publicists” embarked upon. Arbitrators, whose legal competence is not tested or uniform, embarked on a course of review of domestic decisions. Golhaber describes these processes with competence. As he points out, while purporting not to act as appellate courts, this is precisely what the tribunals were doing.
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30 Oct

[Anthea Roberts holds a joint appointment as a Professor of Law at Columbia Law School and a Senior Lecturer in Law at the London School of Economics and will be in residence at Columbia Law School from 2013-2015.] Michael Goldhaber has written an interesting and timely article charting the rise of international arbitrators exercising power over and with respect to domestic courts. He gives examples ranging from Chevron to Saipem to White Industries. This is an important and growing phenomenon that has not yet received adequate attention. I believe that the rise of arbitral power over domestic courts that Goldhaber describes is the first stage in what will ultimately become a longer and more contested saga about the respective powers of arbitral tribunals and domestic courts. That is because arbitral tribunals not only exercise power over domestic courts, but their own power is also dependent on domestic courts. The power of arbitral tribunals ultimately comes down to whether their decisions will be enforced by domestic courts. While Goldhaber charts the first stage in the battle between arbitral tribunals and domestic courts where arbitrators are in the position of authority, we are likely to witness a second stage when domestic courts are asked to pass judgment on whether arbitral tribunals have exceeded their jurisdiction or violated public policy by hearing these sorts of cases or ordering certain relief. Arbitral tribunals will sit in judgment of domestic courts and domestic courts will sit in judgment of arbitral tribunals. Neither reigns supreme. BG Group v Argentina represents an early example of this type of phenomenon. The tribunal in that case chose not to enforce the requirement in the treaty that the investor resort to the domestic courts for 18 months prior to bringing an arbitral claim. Many other tribunals adopted the same approach, often painting the issue as one of admissibility rather than jurisdiction or viewing domestic remedies as futile rendering resort to them unnecessary. But when the Court of Appeals for the District Court of Columbia was asked to enforce the resulting award, it refused to do so on the basis that the tribunal had exceeded its jurisdiction because Argentina had only consented to arbitration on certain conditions, one of which was not met.
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29 Oct

[Christoph Schreuer is a Professor at the Department of European, International Law and Comparative Law, University of Vienna]  Michael Goldhaber’s erudite and well-researched article examines an important aspect of the many-sided relationship between domestic courts and investment tribunals. Other facets of this diverse relationship include the review of arbitral awards by domestic courts, anti-suit injunctions by domestic courts, the need to pursue remedies in domestic courts prior to international arbitration, the division of competences under the label of treaty claims and contract claims, fork in the road provisions, interim measures by domestic courts in support of arbitration and enforcement of awards by domestic courts. This complex relationship of courts and tribunals shows elements of competition, of obstruction, of mutual control and of support. It is startling and paradoxical because it defies any notion of a hierarchy of decision makers. Goldhaber’s excellent analysis concentrates on two issues: antisuit injunctions by arbitral tribunals and denial of justice by domestic courts. But the potential for infringements of the international rules on investor protection by domestic courts is much wider. Practically each of the typical standards of protection contained in BITs can be violated by domestic courts and each of these violations is subject to the scrutiny of investment tribunals. From the perspective of international law, an international review of domestic court decisions is neither new nor unusual. International judicial control over State activity has always included courts. The State’s responsibility for all types of the exercise of public authority is uncontested and is reflected in Article 4 of the ILC’s Articles on State responsibility.[1] There are good reasons for not differentiating between the different branches of government when it comes to State responsibility. This lack of differentiation is not merely designed to prevent states from hiding behind ‛independent’ organs. In real life the courts and other elements of the government interact in a way that defies the application of a separation of powers doctrine to questions of State responsibility. For example, court action to the detriment of foreign investors is often mandated by legislation.[2] Decisions of domestic courts are sometimes prompted by executive insinuations.[3]
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28 Oct

[Michael D. Goldhaber serves as Senior International Correspondent and "The Global Lawyer" columnist for The American Lawyer and the ALM media group. His writes widely on human rights and corporate accountability, international arbitration, and global multiforum disputes. His e-book on Chevron will be published next year by Amazon.] The ongoing media circus surrounding the Chevron v. Donziger trial in New York federal court makes it easy to forget that the arbitration between...

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27 Oct

[Anupam Chander is Professor of Law at The University of California, Davis]

I am honored to have such a brilliant and prominent set of interlocutors from across the world discussing my book, The Electronic Silk Road: How the Web Binds the World Together in Commerce. I am grateful for the sharp insights each of my commentators brings, and humbled by the praise they offer. Each of the commentators has selected a different aspect of the book to focus on in his or her remarks, and so I will respond to each in seriatim, chronologically.

Professor Michael Birnhack (Tel-Aviv) focuses on glocalization—the conforming of a global service to the local laws of the countries that it serves. Professor Birnhack is familiar with this phenomenon, having studied it himself in connection with the transfiguration of global copyright as it encounters local norms. Both glocalization and and its limiting principle—harmonization—are highly complicated processes. Professor Birnhack wisely observes that glocalization and harmonization are both subject to power variations across the world. This is an important insight—certain countries, industries, corporations, transnational organizations or interests are likely to hold more sway than others in determining any eventual balance between glocalization and harmonization. That would probably be true even if there were a global plebiscite, a possibility that seems quite remote. But Professor Birnhack notes that these shortcomings in the glocalization and harmonization principles I suggest do not render them unwise, as other alternatives are likely to prove worse along the metric he describes.

The University of Bern’s Mira Burri , editor with Professor Thomas Cottier of an important collection of papers on digital trade governance, elegantly describes the major shifts in international trade made possible by the Internet. Her broad perspective makes her an ideal interlocutor. She strikingly observes that “we are faced with a radically ‘messy’ governance landscape with many and overlapping institutions and actors of state and non-state nature, the effects of whose actions transcend national boundaries and cannot be neatly contained and controlled.” She characterizes the principles proposed in The Electronic Silk Road as follows: “The freeing of trade is matched by a batch of principles of regulating trade that are meant to ensure balance, provide for security and trust in cyberspace.”

I proposed that Opinio Juris invite Professor Paul Stephan (Virginia) because I admire his writing and hoped for a critical voice, and he hasn’t disappointed.

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24 Oct

[Jake Colvin is Vice President of Global Trade Issues at the National Foreign Trade Council.] How is global trade different in the digital age? As Anupam Chander makes clear in his new book The Electronic Silk Road, the internet is changing who trades, what is traded, and how we trade, all of which have implications and complications for businesses, consumers and policymakers. Upfront, his book outlines the great promise of the internet to democratize global trade.  Businesses and entrepreneurs around the world can hang a digital shingle to offer goods and services online to a global audience, and consumers and intermediary businesses have new options for tapping into information, goods and services from far away.  While Chander focuses much of his attention on what he labels net-work – functions like medical services from India and customer service operations from the Philippines that can be done anywhere with increasing ease – to illustrate the effect that the internet is having on who trades and what is traded, it is worth putting a finer point on the role that the internet is having on trade in goods. Thanks to cloud, logistics, financial and related services that reduce the red tape associated with international transactions, small businesses and entrepreneurs can participate in global markets from an early stage on a broad scale for the first time in history.  Many of them are using the internet to sell physical things. Take Maryland-based Kavita Shukla, who founded a company called Fenugreen that manufactures a low-cost solution to keeping produce fresh for up to four times longer.  She can connect, market and sell her product around the world thanks to services provided by companies including BigCommerce.com, Google, Intuit and UPS. The online craft marketplace Etsy reports that over 25 percent of its transactions are international.  eBay has produced several studies that quantify extraordinarily high participation of the commercial sellers that operate on its platform in the global marketplace.  The electronic silk road is a critical conduit for physical goods as well as services. Amid this opportunity, Chander deftly highlights and makes sense of a number of issues that businesses and governments are confronting as they dig into the complexities of engaging in global trade in the digital age,
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23 Oct

[Joost Pauwelyn is Professor of International Law at the Graduate Institute of International and Development Studies in Geneva]

The Electronic Silk Road is a fantastic read, literally bridging Bangalore with Silicon Valley, showing us how the activity of trade has dramatically changed and how these changes require us to think about “Trade 2.0” rules.  Prof. Chander discusses both private and public law issues, domestic and international rules.

I want to focus my comments on international trade law rules, of the WTO type, that is, the rules imposed by treaty on governments, which generally prevent governments from doing certain things (e.g. prevent them from restricting trade or enacting domestic laws that discriminate against foreigners). When discussing “rules” and the internet, internet companies get nervous: they assume that the rules will limit them and thereby limit innovation.  The rules I am talking about here are limiting what governments can do and, in general, are there to protect or enable (not restrict) internet-reliant companies.  Although Silk Road describes in detail what has changed and sets out basic principles as to how rules could respond to these changes, I was, at times, missing a level of detail allowing us to make progress on the ground.

I see two main types of governmental actions that need curtailing by trade rules. First, governments restricting the flow or storage of data across/outside their territorial borders (e.g. a country requiring that Google or Citibank store all of its data within the country, or a country stopping or censoring the flow of information/network connection coming from/going abroad).  Second, governments taking, or eavesdropping on, information stored or transferred by companies or individuals in (or even outside) their territory (e.g. a country forcing Facebook to hand over certain data or “spying” on data transferred over the internet).

Are today’s WTO rules able to reign in these two types of government interventions with the toolbox of either rules on “trade in goods” or “trade in services”?

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