CYIL vol. 7 (2016)

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VOJTĚCH TRAPL

CYIL 7 ȍ2016Ȏ

established under the Unified Agreement for the Investment of Arab Capital in the

Arab States.

However, the answer – arbitration or court proceedings – will mostly

depend on the design of the ITI and the dispute settlement bodies contained in the

CETA and in the EU-Vietnam FTA are quite instructive for a possible solution of the

dispute ruling and sharing features of both arbitration as well as of courts.

With respect to the avoidance of both competitive terms “court” and “judges”, it is

better to speak of “tribunals” and “members” who issue “awards”. The procedure should

be governed by applicable arbitration rules (with choices spanning from the UNCITRAL

Arbitration Rules to the ICSIDConvention and Additional Facility Rules). Furthermore,

the respondent’s consent to the submission of a claim under the treaty shall satisfy the

requirements of Article II of the New York Convention (NYC) for an “agreement in

writing”.

The Transparency Rules (which by their own terms are intended to apply to

“investor-State

arbitrations

”)

apply to their proceedings. They rely on the existing rules

on enforcement of arbitral awards contained in the ICSID and New York Conventions.

The system lacks a fixed structure, in the sense that no permanent secretariat or registry is

createdand the costs of the individual disputes are mostly borne by the disputing parties.

The essential features that an ITI needs is dependent on their nature as either

arbitration or an international court. The difficulty in this respect is that “there is

no universally accepted definition of arbitration”.

Nevertheless, reviewing the

various definitions, it is possible to identify a number of features which distinguish

arbitration from other mechanisms: (i) it is a dispute settlement mechanism; (ii)

it is based on the parties’ voluntary submission; (iii) it is a private mechanism in the

sense that the decision-maker is not part of the judiciary and arbitration is instituted in

derogation from the State judicial system; (iv) the outcome is binding on the parties;

furthermore, because of the consensual nature (v) the parties must play a role in the

selection of the arbitrators. Moreover, the impartiality of arbitrators and due process

rights apply. In the context of the ITI, the usual “without privity” mechanism is to

say that the investor-claimant freely accepts the State’s standing offer to settle disputes

contained in a treaty by starting the proceedings – similarly to what happens currently

with investor-State arbitration based on IIAs or domestic laws. The second definitional

element is that of a private system of adjudication. This is understood to mean that an

arbitral tribunal is neither “part of the state’s judicial apparatus”,

nor a “governmental

States of America and the Government of the Islamic Republic of Iran (Claims Settlement Declaration,

“CSD”), 19 January 1981.

See Unified Agreement for the Investment of Arab Capital in the Arab States (“Unified Agreement”),

26 November 1980, Chapter IV, Articles 25 to 36.

CETA, Article 8.25.2(b); EU-Vietnam FTA, Article 10(4)(b).

GABRIELLE KAUFMANN-KOHLER & ANTONIO RIGOZZI (2015),

International Arbitration:

Law and Practice in Switzerland,

ed., Oxford University Press, p. 6, para. 1.16.

KAUFMANN-KOHLER & RIGOZZI (2015), p. 6, para. 1.19; POUDRET & BESSON (2007),

pp. 6 f. and 10.