TTIP: Investor-State Dispute Settlement and Constitutional Law

The latest issue of “Rabels Zeitschrift für ausländisches und internationales Privatrecht  – The Rabel Journal of Comparative and International Private Law” (RabelsZ) has been released. I just wanted to highlight an article by Armin Steinbach titled Investor-Staat-Schiedsverfahren und Verfassungsrecht. Here is the abstract:

“Investment treaties allow foreign investors to claim damages against states before tribunals of investor-state dispute settlement (ISDS). More frequently, such dispute settlement procedures tend to replace proceedings before national courts. This has given rise to the heated debate surrounding the ongoing negotiation about the free trade agreements between the European Union and the United States of America. This article identifies and discusses the constitutional law implications of such tribunals. The composition of the tribunals of private persons, the lack of a legal ground for public policy reasons to override investors’ rights, the dynamic development of the adjudication based on vague legal terms and the lack of publicity and transparency in the proceedings – all this raises questions from the perspective of democratic principle and rule of law. Based on democratic principle doctrine, this article classifies rulings of tribunals as acts of public authority and highlights the lack of material and personal legitimacy and examines whether a state monopoly of adjudication can be derived from the separation of powers principle. It discusses the publicity and control of ISDS tribunals as an obligation enshrined in the democratic principles and highlights the missing legal reviewability of ISDS rulings compared to tribunals established under German administrative law. Finally, the article explores possible compensatory instruments addressing the identified deficits based on an application of investments treaties in line with constitutional law principles.”

For another voice highly critical of the current proposals for investor-state dispute settlement, see the recent statement of Deutscher Richterbund, the association of German judges.

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Federal Supreme Court: Sedelmayer vs. Russia – No Set-off with Tax Claims

stock-photo-15986220-sign-quot-bundesgerichtshof-quotThis decision published by the Federal Supreme Court (Bundesgerichtshof) a couple of days ago on its website appears to be the latest instalment in the on-going saga of Franz Sedelmayer’s quest to enforce an investment treaty award  against Russia. Of course, the Federal Supreme Court sticks to Germany’s practise of anonymous court reporting. The facts reported in the decision are so unique, however, that it cannot be anything else but the Sedelmayer case.

Franz Sedelmayer was awared damages under the German-Russian Investment treaty in an arbitration seated in Stockholm in 1998, and has spent more than 15 years enforceing it. The details have been reported extensively, see for example, this piece in the New York Times. Continue reading

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What You Read in 2015 – The Top Ten Posts

labyrinthDear Readers,  as 2016 begins, I had a look at what you read in 2015. There are two topics that emerge as favourites: On the one hand, investor state arbitration, and on the other hand, sports arbitration. Out of the top ten, posts no. 2, 6 and 7 all relate the decision of the Munich courts in the Pechstein case, where an award of the Court of Arbitration for Sport  in a doping case was not recognized in Germany.

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IBA Arbitration Committee: Study on Public Policy as a Defence in Recognition and Enforcement of Arbitral Awards

IBA LOGOThe IBA’s Subcommittee on Recognition and Enforcement of Arbitral Awards in 2014/2015 conducted a comparative study that looked at ‘public policy’ as a defence to the recognition and enforcement of arbitral awards under the New York Convention. The country reports that the Subcommittee had solicited from Arbitration Committee members across various jurisdictions have now been published. Continue reading

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