El reclutamiento de niños, niñas y adolescentes por los paramilitares

4.2.1 Investment Protection

The world has been undergoing rapid development and profound changes, which not only introduce unprecedented opportunities but also indubitably bring unexpected challenges that has the potential to cause the global economy to be unstable. The 2007-2008 global financial crisis, the 2010 European sovereign debt crisis and other economic crises make it an extraordinary time for foreign investment, which, in turn, calls for further strengthening protection for investors in the global capital market.⁴⁸ Against this background, foreign investors have to be more prudent in gauging the risks to their investments and respond properly to possible disputes arising out of investments. The latest Yukos award⁴⁹

sovereign rights are transferred to international tribunals, the more significant impacts would be imposed on host States and civil society. This is also one of the reasons why the U.S. Congress has enacted trade legislation that gives an intention to restrict investor-State arbitration in investment treaties (see ibid, 699).

powerfully proves again how important ECT (or international investment treaties in a boarder context) is for foreign investors and how investor-State arbitration functions necessarily as the last resort to seek justice. As to investment dispute resolution, it is discernible that ICSID and non-ICSID arbitration provide different levels of procedural

48 For example, as currency devaluation and fiscal policies adopted by Argentina to stabilize the national economy and restore political confidence imposed direct and heavy costs on foreign participants in Argentina’s economy, the 1998-2002 Argentine great depression saw the rise of international investment arbitration. At least 30 financial crisis-related investment treaty claims have been filed against Argentina, the majority of which were initiated under the auspices of the ICSID Convention.

49 Recently, Russia was found in three UNCITRAL cases to be in breach of art 13(1) of the ECT for its

‘devious and calculated’ expropriation and was ordered to pay over an amount of U.S. $50 billion in damage to Yukos shareholders (which was the largest award ever in the history of arbitration), U.S. $60 million in fees of legal representation and U.S. $5.6 million in costs of arbitration (see Yukos Universal Limited (Isle of Man) v. The Russian Federation, UNCITRAL, PCA Case No AA 227, Final Award, 18 July 2014; Hulley Enterprises Limited (Cyprus) v. The Russian Federation, UNCITRAL, PCA Case No AA 226, Final Award, 18 July 2014; Veteran Petroleum Limited (Cyprus) v. The Russian Federation, UNCITRAL, PCA Case No AA 228, Final Award, 18 July 2014).

19 protection and substantive benefits for investors, and the selection of ICSID or non-ICSID arbitration becomes more crucial in such extraordinary times.

Though in a large number of cases investors’ recourse to ICSID arbitration is subject to States’ sovereign choice when concluding investment treaties, it is noteworthy that at the present the vast majority of investment treaties provides for both ICSID and non-ICSID arbitration. Ordinarily, it is the investor who has a choice to select the dispute resolution mechanism⁵⁰ since State’ prior consent to international arbitration has been expressed in relevant investment treaties. Veeder has observed that over the past few years, it has been

‘clear that many claimant investors are deliberately not choosing ICSID arbitration, preferring non-institutional UNCITRAL arbitration’ and ‘even the SCC and the ICC for investor-State disputes’.⁵¹ This phenomenon leads to the question as to whether non-ICSID arbitration is more conductive to the protection of investors’ interests. Investors’ selection of ICSID or non-ICSID arbitration is not a philosophical or theoretical question but an intensely practical matter. An inquiry into the underlying motives for foreign investors’

choice cannot, but be on the basis of the delineation of characteristic traits of a whole range of investment dispute resolution fora that are potentially accessible, and the evaluation of appropriateness, effectiveness and efficiency of different fora and their leading to justice.

Accordingly, a study aimed at bringing out special features of ICSID and non-ICSID arbitration will assist in assessing which forum is more desirable for a particular dispute. It will further shed light on the identification of methods of better understanding various relationships in investor-State arbitration, providing direction for States to strike a balance between investors’ rights and State sovereignty, and thereby promoting the viability of international investment arbitration in the long run.

4.2.2 Arbitration Industry

50 In most cases international investment arbitration is filed by foreign investors against host States. So far there only one case has been commenced by a State, namely, Gabon v. Société Serete S.A. (ICSID Case No ARB/76/1). The case was based on an investment contract and was settled by the disputing parties. There is also one case in which a State initiated a counterclaim. In Spyridon Roussalis v. Romania (ICSID Case No ARB/06/1), Romania’s counterclaim was admitted by the tribunal on the ground of the umbrella clause in the Romania-Greece BIT.

51 V. V. Veeder, ‘The Investor’s Choice of ICSID and Non-ICSID Arbitration Under Bilateral and Multilateral Treaties’ in Arthur W. Rovine (ed), Contemporary Issues in International Arbitration and Mediation: The Fordham Papers (2009) (Martinus Nijhoff Publishers, 2010) 5.

20 In the contemporary world of commerce, the landscape of international arbitration has been transformed, while still sustaining the enduring element of its intrinsic and long-established significance as a dispute settlement means. More precisely, it has been claimed that international arbitration is evolving into a veritable industry, ⁵² and in such lucrative industry international arbitration is, to some extent, deemed a money-making machine.⁵³ As Organisation for Economic Co-operation and Development (hereinafter ‘OECD’) researchers observe, the international arbitration industry is led by entrepreneurial counsels advising potential clients about options for solving investment disputes between investors and States through international arbitration that would not have been considered only a few years ago.⁵⁴ The role of legal counsels in investor-State arbitration is undeniably measurable since investor-State arbitration has grown largely from the integral impulse of counsels to arbitration. In the light of the important role of counsels and their possible misconduct that virtually obstructs the legitimate protection of investment, lex arbitri⁵⁵ and counsels’ professional or disciplinary bar rules⁵⁶ have provided legal frameworks for counsels’ activities. However, there is still a possibility that counsels redirect their conducts in ways that are of no consequence for the efficiency of arbitration (eg, challenge of arbitrator or jurisdiction on knowingly unfounded grounds) or even have an overall detrimental impact on the arbitral process (eg, engagement in ex parte communications with arbitrators without appropriate appointments and knowingly making false statements).

Furthermore, the different approaches taken by international tribunals in dealing with a challenge to counsel⁵⁷

52 Nicolas C. Ulmer, ‘The Cost Conundrum’ (2010) 26(2) Arb Intl 221, 224 .

may cause, exacerbate and prolong the conflicts of divergent interests in investment cases. Normally, investors’ choice between ICSID and non-ICSID

53 Pia Eberhardt and Cecilia Olivet, Profiting from Injustice (Corporate Europe Observatory and the Transnational Institute, 2012) 15.

54 David Gaukrodger and Kathryn Gordon, ‘Investor-State Dispute Settlement: A Scoping Paper for the Investment Policy Community’, OECD Working Papers on International Investment, 2012/03, 7.

55 For example, the most notable and original aspect of the 2014 LCIA Arbitration Rules is perhaps the Annex A. The Annex, entitled ‘General Guidelines for the Parties’ Legal Representatives’, is intended to promote the good and equal conduct of legal representatives.

56 For example, The International Bar Association (hereinafter ‘IBA’)’s Guidelines on Party Representation were inspired by the principle that party representatives should act with integrity and honesty and should not engage in activities designed to produce unnecessary delay or expense, including tactics aimed at obstructing the arbitration proceedings. See the Preamble of the IBA Guidelines.

57 The challenge to counsels has occurred in two ICSID cases: Hrvatska Elektroprivreda d.d. v. Republic of Slovenia, ICSID Case No ARB/05/24, Order Concerning the Participation of a Counsel, 6 May 2008, paras 26-28; The Rompetrol Group N.V. v. Romania, ICSID Case No ARB/06/3, Decision on the Participation of a Counsel, 14 January 2010, paras 16-22.

21 arbitration is reliant mainly on counsels’ opinion, and therefore counsels’ role in fostering investment protection in extraordinary times has to be taken into account when critically evaluating ICSID and non-ICSID arbitration.