CYIL Vol. 7, 2016

VOJTĚCH TRAPL CYIL 7 ȍ2016Ȏ ITI shall be considered “to arise out of a commercial relationship or transaction for purposes of Article I of the New York Convention”. Finally, doubts could arise if the ITI Statute were to provide a two-tiered adjudication process. However, it is accepted under many national arbitration laws that the parties may agree on a two-level arbitration process. The presence of an internal appellate mechanism does not change the nature of the process. In this context, awards issued by the first-tier tribunal may only be enforced under the Convention once the time limit for the appeal has expired. Finally, it should be added that during the drafting works of the NYC it was also confirmed that the Convention does not preclude two- tier arbitration in any way. Because of its very function an Appeal Mechanism would naturally endeavor to pursue coherence and consistency across separate IIAs. However, an Appeal Mechanism would be able to require de facto adherence to its own rulings, since an investor-State tribunal would, even in the absence of a formal rule of stare decisis, expect the Appeal Mechanism to apply the same principles to any new award that is appealed. A number of issues will need to be considered in the design of the Appeal Mechanism. These include: (i) the grounds of appeal and the standard of review; (ii) the effect of the appellate decision; and (iii) the binding nature (vis-à-vis whom?) of the decision. One important aspect would be the determination of the awards subject to appeal. Under the ICSID Convention framework, there is only one “award”, i.e. the final award putting an end to the arbitration. The Opt-in Convention, for its part, extends those options to existing IIAs. In other words, the Opt-in Convention is the instrument by which the Parties to IIAs express their consent to submit disputes arising under their existing IIAs to the ITI/ AM. Further, the Opt-in Convention approach targets one discrete issue of IIA reform, i.e. only the treaties’ investor-State arbitration provisions. Hence, the non-dispute settlement-related issues of the IIAs would not be affected, and the new dispute resolution bodies (whether the ITI or the AM) would apply the existing substantive standards in investment treaties. With respect to dispute settlement related matters, the scope of, and requirements for, jurisdiction and admissibility provided in the IIA would also remain unchanged. Moreover, the Opt-in Convention would primarily be aimed at existing treaties. Indeed, the extension of the new dispute resolution mechanisms to future treaties appears easier to effect, as States may simply refer to the ITI or AM Statutes in their newly concluded treaties, if they so wish. In this respect, the UNCITRAL may also consider possible work on providing model clauses for future IIAs and legislation on investment. A further general observation is in order on the choice in the Opt-in Convention in favor of either the ITI or the AM or both. While inspired by similar concerns, the ITI and the AM reflect somewhat different philosophies of reform of the IIA dispute resolution regime: through the creation of an AM, investor-State arbitration maintains most of

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