BITS, Fair and Equitable Treatment and the Cross-Pollination of GAL

I wanted to flag an interesting post by Roger Alford over on Opinio Juris, in which he notes that a New York court has given Chevron leave to bring an arbitration claim against Ecuador under the US-Ecuador Bilateral Investment Treaty, despite the fact that Chevron is currently fighting a 17 year old lawsuit in Ecuador over rain forest contamination (an issue that it acquired when it bought Texaco in 2001). Of key interest here is the fact that Chevron wants to go to arbitration over, inter alia, a claim that it has been denied due process in the Ecuadorean courts. More generally, they are seeking a finding that

...Ecuador has breached the 1194, 1995, 1996 and 1998 investment agreements and the Ecuador-United States BIT, including its obligations to afford fair and equitable treatment, full protection and security, an effective means of enforcing rights, non-arbitrary treatment, non-discriminatory treatment, national and most favoured nation treatment, and to observe obligations that it entered into under the investment agreements.

Of course, it is not certain that an arbitration proceeding would have any impact on the cae in Ecuador; or, indeed, that the panel would find that it had jurisdiction to hear the case. However, Alford notes that "In the hearing this week, counsel for plaintiffs in the underlying Ecuadorian litigation described the arbitration as 'a collateral attack' on a future Ecuadorian judgment"; and there would seem to be some risk of this, given that Chevron are also seeking a finding that

...Claimants have no liability or responsibility for environmental impact, including but not limited to any alleged liability for impact to human health, the ecosystem, indigenous cultures, the infrastructure, or liability for any unlawful profits, or for performing any further environmental remediation arising out of the former Consortium.

Of most interest to me here, however, is Alford's analysis of why Chevron is pursuing this course of action; which, if correct, provides an interesting insight into the way in which recourse to GAL mechanisms in one context can - at least, it is hoped - lead directly to improvements in administrative law protections at other levels of governance, and can also impact upon domestic implementation of awards from other jurisdictions:

My sense is that Chevron is bringing this action not only in an attempt to succeed on the merits of its due process claim, but also to send a signal to the Ecuadorian court that any future action that denies Chevron basic due process will be subject to international scrutiny. The Ecuadorian court now faces the unpleasant prospect of knowing that the Ecuadorian government may be on the hook financially for any improper judgment rendered against Chevron.

I also think it is quite plausible that the BIT arbitration is an opening salvo in future attempts by Chevron to challenge the enforcement of the Ecuadorian judgment in foreign courts. If a BIT arbitration panel concludes that Chevron has been denied due process, this would significantly bolster arguments that the foreign judgment should not be enforced in the United States under the Hilton v. Guyot standard.

EJIL:Talk! discussion on the role of courts in the international system

A quick post to flag a discussion coming next week over at EJIL:Talk! which will undoubtedly contain much of real interest from a GAL perspective:

Starting next week, EJIL:Talk! will be hosting a discussion of the changing role courts and tribunals in the international legal system. This conversation will be structured around a discussion of two articles in the current anniversary issue of the European Journal of International Law. The articles are: Eyal Benvenisti & George W. Downs, “National Courts, Domestic Democracy, and the Evolution of International Law“ and Yuval Shany, “No Longer a Weak Department of Power? Reflections on the Emergence of a New International Judiciary”. Both are available here.

Professors Benvenisti and Downs in particular have written directly on GAL issues (see here for some of Benvenisti's solo work on the development of GAL in international institutions, and here and here for work by him and Downs together on fragmentation and on checks and balances in global governance respectively). Definitely worth both reading the articles in question, and keeping an eye on what is sure to be an interesting exchange at EJIL:Talk!.

Transparency and investment arbitration

Ineresting article in The Economist here, on the growing demand for transparency with respect to international investment arbitration. It notes that Canada and the US are pushing strongly for more openness with regard to these proceedings, but that many - in Europe in particular - are very reluctant to follow suit:

However, sticklers for secrecy may not be able to blind the public with legal science for much longer. Luke Eric Peterson, editor of the Investment Arbitration Reporter, a trade publication, expects a “pitched battle” to break out soon between backers and opponents of transparency. In part this will reflect pressure on governments from citizens and NGOs who want to know more. For example, some Germans, at least, want details of the €1 billion ($1.3 billion) arbitration claim that Vattenfall, a Swedish power firm, has brought against their government under the Energy Charter Treaty.

Hat tip to Peter Spiro over at Opinio Juris, who also makes an interesting point about the institutional competitiveness of investment arbitration:

The fact that international arbitration is institutionally competitive adds an element here not present where tribunals have a decisionmaking monopoly (as in the WTO). I’m not sure which way that cuts, though. Over the long run, arbitration platforms that are open and allow broad participation will enjoy greater legitimacy; in the short, corporate and state arbitral litigants might just prefer to keep things quiet.