Arbitration International Arbitration Practices 2 — Questions and Answers
Question 1: What is 'investment arbitration' under Bilateral Investment Treaties (BITs)?
- Commercial arbitration between two investment banks
- Dispute resolution between foreign investors and host states under treaty protections (Correct answer)
- Arbitration of stock market disputes
- Arbitration between two sovereign states over trade terms
Correct answer: Dispute resolution between foreign investors and host states under treaty protections
Investment arbitration allows foreign investors to bring claims directly against host states for breaches of investment protections under bilateral or multilateral treaties.
Question 2: What does ICSID stand for and what disputes does it handle?
- International Commercial and Securities Institutions Division — securities fraud
- International Centre for Settlement of Investment Disputes — investor-state disputes (Correct answer)
- International Council for Sophisticated International Disputes — complex arbitrations
- Intrastate Commercial and Sovereign Institutions Directorate — state contracts
Correct answer: International Centre for Settlement of Investment Disputes — investor-state disputes
ICSID (International Centre for Settlement of Investment Disputes) is a World Bank institution specializing in investor-state arbitration under investment treaties.
Question 3: In international arbitration, what is a 'Terms of Reference' document used for under ICC Rules?
- Defining the arbitrators' fees and payment schedule
- Summarizing the parties' claims, issues in dispute, and procedural details at the outset (Correct answer)
- Establishing confidentiality obligations for all parties
- Providing the arbitrators' professional credentials to the parties
Correct answer: Summarizing the parties' claims, issues in dispute, and procedural details at the outset
The ICC Terms of Reference is signed at the outset and defines the parties, claims, issues to be determined, and procedural matters, acting as a roadmap for the arbitration.
Question 4: What is 'forum non conveniens' and how does it affect international arbitration?
- A doctrine requiring arbitration in the most convenient geographic location
- A court doctrine that can dismiss litigation in favor of a more appropriate forum, but generally does not apply to arbitration enforcement (Correct answer)
- A rule that ICSID proceedings must occur in Washington D.C.
- The principle that parties must arbitrate in their home country
Correct answer: A court doctrine that can dismiss litigation in favor of a more appropriate forum, but generally does not apply to arbitration enforcement
Forum non conveniens allows courts to dismiss cases for more appropriate venues, but US courts generally do not apply it to enforcement of international arbitration agreements.
Question 5: What is the significance of the Panama Convention (Inter-American Convention on International Commercial Arbitration) for US practitioners?
- It replaced the New York Convention for Western Hemisphere disputes
- It provides an alternative treaty basis for recognizing arbitration agreements and awards in Inter-American contexts (Correct answer)
- It created the ICSID institution for state arbitration
- It mandates Spanish as the language for Pan-American arbitrations
Correct answer: It provides an alternative treaty basis for recognizing arbitration agreements and awards in Inter-American contexts
The Panama Convention provides an alternative treaty basis for enforcing arbitration agreements and awards among signatory nations in the Western Hemisphere.
Question 6: In international arbitration, what are 'Prague Rules' designed to address?
- Arbitration conducted in the Czech Republic
- A more inquisitorial, civil law-influenced approach to evidence and procedure as an alternative to IBA Rules (Correct answer)
- Special rules for post-Soviet state arbitrations
- Procedural rules for UNCITRAL arbitrations only
Correct answer: A more inquisitorial, civil law-influenced approach to evidence and procedure as an alternative to IBA Rules
The Prague Rules offer a civil law-influenced alternative to the IBA Rules on evidence, encouraging arbitrators to take a more active, inquisitorial role in proceedings.
Arbitration International Arbitration Practices 2
What is 'investment arbitration' under Bilateral Investment Treaties (BITs)?