• Journal of Arbitration Studies
• /
• v.18 no.2
• /
• pp.3-31
• /
• 2008

At its thirty-ninth session(New York, 19 June - 7 July 2006), United Nations Commission on International Trade Law(hereinafter referred to as the Commission) agreed to give priority to the topic of revising the UNCITRAL Arbitration Rules. From the forty-fifth through the forty-seventh session, the Working Group checked various issues based on the draft revised version of the UNCITRAL Arbitration Rules prepared by the Secretariat. At its forty-eighth session, the Working Group is going to finish its first reading of articles 38 to 41 of the draft revised version of the UNCITRAL Arbitration Rules, and to commence its second reading of the draft revised version of UNCITRAL Arbitration Rules. Korea is keen on enticing foreign direct investment into its territory. From the 1960s, Korea has concluded more than 80 BITs. Korea is making efforts to conclude FTAs with its trading partners. As of January, 2008, 3 FTAs have taken into effect with respect to Korea. According to provisions on dispute settlement found in such BITs and FTAs involving Korea, the Rules can be chosen for Investor-State Arbitration. Furthermore, the Rules is followed by the arbitration rules for domestic and international arbitrations administered by the Korean Commercial Arbitration Board. If the Commission adopts the revised version of UNCITRAL Arbitration Rules, the Rules will be able to give impact on the arbitration law and practice around the world of arbitration. That is the reason why we should keep attention to the development of the deliberations of the Working Group.

• Journal of Arbitration Studies
• /
• v.25 no.1
• /
• pp.65-86
• /
• 2015

Under current international investment law clear criteria to determine standards of indirect expropriation are absent. Arbitral tribunals determine on a case-by-case whether an indirect expropriation has occurred by conducting a fact-based inquiry. However, three common determination standards can be inferred by analyzing prior arbitration cases. The appropriate analytical framework that can be applied to determine whether a state's measure constitutes an indirect expropriation is as follows. i) the degree of economic invasion of the state's action into the foreign investor's property rights and durability of the period, ii) interference with the foreign investor's distinct and reasonable investment-backed expectations, and iii) the nature, purpose and character of the state's measure. Therefore, it is necessary to fully acknowledge and to utilize strategically this determination standard. However, derived standards cannot be applied to all disputes en masse. So, it is desirable to exclude ambiguity and to clearly define the determination standard of indirect expropriation in investment agreements, since arbitral tribunals can apply different determination standards on a case-by-case basis. And, based on the discussions until now, more developed standards and direction in response to demand should be established through consistent analysis and review of precedents related to indirect expropriation. Lastly, This study is expected to be a useful guideline to prepare a necessary countermeasure to prevent dispute related to indirect expropriation beforehand or in case of dispute occurrence.

• Journal of Arbitration Studies
• /
• v.32 no.2
• /
• pp.85-114
• /
• 2022

When human rights disputes are related to the cross-border investments treaties, the investment arbitral tribunals are confronted with the question of how to adjudicate connected human rights violations. The traditional structure restricts arbitration proceedings to the parties named within an investment treaty, i.e., Investor-Claimant and State-Respondent. If human rights issues occur, States must act as proxies for citizens with human rights claims. This effectively excludes individuals or groups with human rights concerns and contradicts the premise of international human rights law that seeks to empower human rights-holders to pursue claims directly and on an international stage. The methods for intorducing human rights issues in the context of investment arbitration proceedings are suggested as follows: First, human rights arguments can be introduced into ISDS by the usual initiator of investment disputes: the investor as the complainant. Especially, if the jurisdictional and applicable law clauses of the respective international investment agreements are sufficiently broad to include human rights violations, adjudicating a pure human rights claim could be possible. Second, the host state may rely on human rights argumentation as a respondent of an investor claim. Human rights have played a role as a justification for state measures undertaken to comply with human rights laws. Third, third party interventions by NGOs and civil society groups as amici curiae may act as advocates for affected populations or communities in response to the reluctance of governments to introduce their own human rights duties into the investment dispute. Finally, arbitrators have also referred to human rights ex officio, i.e., without having a dispute party referring to the specific argument. This was mainly the case in the context of determining the scope of property rights and the existence of an expropriation. As all U.N. member states have human rights obligations, international investment laws must be presumed to be in conformity with the relevant human rights obligations.

• Journal of Arbitration Studies
• /
• v.19 no.1
• /
• pp.121-145
• /
• 2009

South Korea has investment agreements such as FTAs, BITs with several countries. Up to now, no single case has been registered against the Korean government on breach of investment agreements, but it is likely that the number of such cases would increase. Therefore, an investor-state dispute settlement system, an arbitral procedure by which a foreign investor may seek compensation of damage against the host country, is gaining its importance. The provision of the ISDS has been one of the hottest issues in Korea while the Kor-US FTA was being signed. In this respect, with the growing number of regional agreements such as BITs and FTAs, a careful scrutiny on the ISDS is necessary for Korea. I have therefore studied theoretically subjects including the National Treatment(NT), the Most-Favored Nation(MFN), Fair and Equitable Treatment and Expropriation - those that have been the objects of protection on investors. And I have analyzed ICSID arbitral awards and provided implications. In the ICSID arbitral awards, the Fair and Equitable Treatment turned out to be the most recognized violation on investors by the host State in terms of investor protection. On the other hand, Indirect Expropriation - a matter of which public anxiety was shown led by civic groups - was not generally recognized in arbitral awards. This study is written for sake of governments, local autonomous entities and public enterprises that are in charge of FTAs and BITs.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.43
• /
• pp.481-507
• /
• 2009

Along with continuous increase in international investments encouraged by wide spread bilateral investment treaties (BIT) including free trade agreements (FTA), international investment disputes have been also increasing. This means that a host State, an importer of foreign investments, and a investor who exports its investment to foreign State, need to take measures to prevent international disputes arising from international investment or to prepare for the arbitration for resolving the disputes. Under these circumstances, this paper compares ICSID arbitration rules and UNCITRAL arbitration rules in respect of (i) the institution of arbitration, (ii) the appointment of arbitrators and the composition of arbitral tribunal, and (iii) the procedures for, and the form of, arbitral awards. On base of this comparison, this paper further suggests certain practical issues that the host State's government and the foreign investors should be aware of in order to be ready for the resolutions of disputes by ICSID or UNCITRAL arbitrations.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.71
• /
• pp.195-216
• /
• 2016

In determining the content of the FET standard, the tribunals stated protection of investor's legitimate expectations, due process and denial of justice, transparency, discrimination and arbitrariness, good faith, etc. The most major elements of the FET standard is the protection of the investor's legitimate and reasonable expectations. It is necessary to consider whether it is possible to what the expectations of investors are protected as legitimate and it is formed under any circumstances. If host state frustrate investor's legitimate expectations, it found a breach of the FET. The host state's specific assurance may reinforce investor's expectations, but such explicit statement is not always necessary. The host state must preserve a stable environment for investments. However, It must not be understood as the inalterability of the host state's legal framework. It implies that the host state's subsequent changes should be made consistently and predictably. The host state is entitled to exercise a reasonable regulatory authority to respond to changing circumstances in the public purpose. Therefore, whether the violation FET shall be determined through a balanced against the investor's legitimate expectations and the host state's reasonable regulatory exercise in the public interest. And investor should keep in mind that the principle of proportionality is applied unless host state provides stabilization clause or similar commitments to investor. Also host state should establish the basis of an argument about reasonable regulatory authority for public interest.

• Journal of Arbitration Studies
• /
• v.25 no.3
• /
• pp.185-226
• /
• 2015

As in some developing countries and more recently some developed countries worldwide and in the Asian region, Australia has faced significant internal opposition and public debate especially over treaty-based investor-state dispute settlement (ISDS). As outlined in Part II(1), concerns have re-emerged and escalated since the first-ever claim was brought against Australia regarding its tobacco plain packaging legislation, in 2011 by Philip Morris Asia under an old BIT with Hong Kong. However, Australia signed bilateral FTAs with Korea in 2014 and with China in 2015, including ISDS protections, prompting several sets of parliamentary inquiries (Part II(2)). Australia's close trading partner, New Zealand, had already concluded an FTA with China in 2008 that included more expansive ISDS-backed investor protections. In 2015, the New Zealand Parliament has been debating ratification of its own FTA with Korea, with ISDS also now attracting growing scrutiny, as elaborated in Part III below. In both bilateral FTA negotiations, the present Korean government seems to have reverted to a strong preference for concluding investment agreements with extensive ISDS protections, despite public and parliamentary debate around 2011 in the context of ratifying its FTA with the United States. As mentioned briefly in the concluding Part IV, Korea's stance has significant implications for the future trajectory of treaty-based ISDS - and indeed international arbitration more generally - in the Asia-Pacific region, and perhaps even globally.

• Journal of Arbitration Studies
• /
• v.28 no.1
• /
• pp.27-42
• /
• 2018

Due to the increasing number of foreign investments made by state-owned enterprises, there has been a growth in the number of investment arbitration claims submitted by them. However, international investment treaties including the ICSID Convention are intended to apply to investor-state disputes and according to Article 25 of the ICSID Convention, the claimant has to be "a national of another Contracting State." This raises the question of whether state-owned companies can be considered as "nationals of another Contracting State" or private investors. This issue has been discussed in the ICSID Decision on Jurisdiction in BUCG v. Yemen which has been released in 2017. Since there would be more claims related to the standing of state-owned enterprises as claimants, it is required to understand whether state-owned enterprises could be permitted access to the ICSID under the ICSID Convention Article 25. Moreover, the ICSID cases addressing the jurisdictional issues including BUCG v. Yemen has to be closely analyzed. In particular, as the Broches test was applied in order to decide the standing of state-owned companies, it is necessary to examine how the Broches criteria has been interpreted and adopted in the ICSID cases.

• Journal of Arbitration Studies
• /
• v.29 no.1
• /
• pp.31-52
• /
• 2019

As international transactions have grown more numerous, situations of disputes related to the transactions are getting more complicated and more diverse. Cost-effective remedies to settle the disputes through traditional methods such as adjudications of a court will be insufficient. There fore, nations are attempting to more efficiently solve investor-state disputes through arbitration under organizations such as the ICSID Convention, the ICSID Additionary Facility Rules, and the UNCITRAL Arbitration Rules by including the provisions on investor-state dispute settlement at the conclusion of an investment agreement. In case of an arbitration under the ICSID Convention, ICSID directly exercises the supervisorial function on arbitral proceedings, and there is no room for the intervention of national courts. In time of the arbitration where the ICSID Convention does not apply, however, the courts have to facilitate the arbitral proceedings. When the recognition and enforcement of an arbitral award under the ICSID Convention are guaranteed by the Convention, it should be considered that the New York Convention does not apply to them under the Convention Article 7 (1) fore-end. In exceptional cases in which an arbitral award under the ICSID Convention cannot be recognized or enforced by the Convention, the New York Convention applies to the recognition and enforcement because the award is not a domestic award of the country in which the recognition or enforcement is sought. It is up to an interpretation of the New York Convention whether the New York Convention applies to ISDS arbitral awards not based on the ICSID Convention or not. Although an act of the host country is about sovereign activities, a host country and the country an investor is in concurring to the investment agreement with the ISDS provisions is considered a surrender of sovereignty immunity, and it will not suffice to exclude the investment disputes from the scope of application of the New York Convention. If the party to the investment agreement has declared commercial reservation at its accession into the New York Convention, it should be viewed that the Convention applies to the recognition and enforcement of the ISDS awards to settle the disputes over an investitive act, inasmuch as the act will be considered as a commercial transaction. When the recognition and enforcement of an arbitral award on investment disputes about a nation's sovereign act have been sought in Korea and Korea has been designated the place of the investment agreement arbitration as a third country, it should be reviewed whether the disputes receive arbitrability under the Korean Arbitration Act or not.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.38
• /
• pp.155-180
• /
• 2008

The purpose of this paper is to examine the major elements of Arbitration Clause in international investment contracts and to help the investor, especially foreign investors, considering these elements when they draft the contracts. First of all, to describe the extent of the arbitrable issues broadly is very important by using the phrase such as "disputes in connection with". Furthermore in order to be enforceable, the issues must be a subject-matter to be submitted to arbitration in accordance with the laws of the place of arbitration and the law application to the merits of the disputes (N.Y. Convention, Art. II). Second, the appointment of the arbitrators usually shall be based on the principle of freedom of contract. If the parties do not agree on the appointment, it is decided in accordance with the arbitration rules of the institution by the tribunal. Third, the procedural rules of the arbitration are the arbitration rules of the arbitration institution in case of institution arbitration, unless otherwise agreed. Forth, what is the most importance element of Arbitration Clause is the place of arbitration. In this case, also the principle of freedom of contract has priority. Unless otherwise agreed, Washington is the place of arbitration in case of ICSID Arbitration, but in case of ICC Arbitration, neutral third country may be the place of arbitration. However in case of ad hoc arbitration, both parties should indicate the place. If not, the whole arbitration may be paralysed by an uncooperative party. Besides the major elements, I examined the relation between the arbitration clause and award enforcement in terms of sovereign immunity. The enforcement of awards in the field of state contracts many encounter the problem of the sovereign immunity, which means that the State itself or the State enterprise is the contract partner. To avoid the this problems, it is advisable for the parties insert the clause such as ICSID Model Clause XIX.