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The Frailty of the Arbitral Process in Cases involving Authoritarian States

The Frailty of the Arbitral Process in Cases... What is so special about investment arbitration? Let's take two examples. It was 1980. I was the chairman of an ad hoc Arbitral Tribunal in a large investment case including a construction dispute opposing a European consortium and the State agency of a country governed by a brutal dictatorship, where the seat of the Arbitral Tribunal was situated. During the course of the first arbitral session the Arbitral Tribunal was, out of the blue, served with an injunction from the local Court enjoining it from proceeding with the case until the Engineer, as defined then in the FIDIC (Federation Internationale des Ingenieurs-Conseils) conditions, had carried out further efforts to settle amicably the dispute, which for all practical purposes meant the suspension of the arbitral proceedings. Faced with these rather sombre developments the Arbitral Tribunal, using the escape clause to that effect in the governing contract, decided to transfer its seat to Geneva on the ground that the local Court's injunction evidenced that the freedom necessary to its proper functioning was obviously endangered if the original seat was maintained. At the following arbitration session, held in Geneva, the arbitrator appointed by the State agency of the host country-legal advisor http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of World Investment and Trade Brill

The Frailty of the Arbitral Process in Cases involving Authoritarian States

Journal of World Investment and Trade , Volume 1 (2): 7 – Jan 1, 2000

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Publisher
Brill
Copyright
Copyright © Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1660-7112
eISSN
2211-9000
DOI
10.1163/221190000X00113
Publisher site
See Article on Publisher Site

Abstract

What is so special about investment arbitration? Let's take two examples. It was 1980. I was the chairman of an ad hoc Arbitral Tribunal in a large investment case including a construction dispute opposing a European consortium and the State agency of a country governed by a brutal dictatorship, where the seat of the Arbitral Tribunal was situated. During the course of the first arbitral session the Arbitral Tribunal was, out of the blue, served with an injunction from the local Court enjoining it from proceeding with the case until the Engineer, as defined then in the FIDIC (Federation Internationale des Ingenieurs-Conseils) conditions, had carried out further efforts to settle amicably the dispute, which for all practical purposes meant the suspension of the arbitral proceedings. Faced with these rather sombre developments the Arbitral Tribunal, using the escape clause to that effect in the governing contract, decided to transfer its seat to Geneva on the ground that the local Court's injunction evidenced that the freedom necessary to its proper functioning was obviously endangered if the original seat was maintained. At the following arbitration session, held in Geneva, the arbitrator appointed by the State agency of the host country-legal advisor

Journal

Journal of World Investment and TradeBrill

Published: Jan 1, 2000

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