The Investment Treaty Arbitration Review: Annulment of Investment Arbitration Awards

International arbitration awards rendered by international arbitration tribunals are final and binding on the parties to the dispute.2 However, because of the ambiguity and human error – which can range from typographical errors to in-depth analysis of the legal issues in question – the finality of arbitral awards can be challenged by a number of instruments under both international conventions and national laws.3 Because international arbitral awards are generally not subject to appeals, there is a necessity for a mechanism that allows for the correction of truly egregious errors that put in jeopardy the legitimacy of the investor–state dispute settlement system (ISDS).4

Post-award remedies are available to the parties in investment treaty arbitration in accordance with the applicable arbitration rules, international treaties and national laws. The Convention for the International Center for Settlement of Investment Disputes (ICSID Convention), as well as the UNCITRAL Model Law on International Commercial Arbitration (Model Law) each provide for a variety of post-award remedies that include the annulment of the award.5

This contribution briefly describes the different mechanisms and grounds for annulment of international investment arbitration awards, with a specific review of recent decisions issued in this regard. Given the existence of a specific self-contained annulment mechanism in the ICSID Convention, we will first address this mechanism and subsequently discuss the annulment of non-ICSID awards.

I Annulment under the ICSID Convention

Awards issued under the ICSID Convention are final and are only subject to the remedies provided for in Articles 50 to 52 of the ICSID Convention.6 Article 53 of the ICSID Convention excludes all other remedies not provided for in the Convention, including appeals.7

The existence of a specific annulment mechanism in the Washington Convention emerges from one of the distinctive features of the ICSID system (i.e, that it is a de-localised arbitration that does not rely on the domestic courts of any particular state).8 Therefore, domestic courts cannot annul ICSID awards.9

Under the ICSID Convention, annulment was designed to confer a limited scope of review of the award to safeguard from violations of fundamental principles of law in the proceedings and not as a recourse to review the substance of the award.10 Article 52 of the ICSID Convention allows the parties to request the annulment of the award on the basis of five exhaustive grounds, i.e. that:

  1. the tribunal was not properly constituted;
  2. the tribunal manifestly exceeded its powers;
  3. there was corruption on the part of a member of the tribunal;
  4. there was a serious departure from a fundamental rule of procedure; or
  5. the award failed to state the reasons on which it was based.11

To request the annulment of an award, either party to the dispute may submit an application in writing within 120 days of issuance of the award to ICSID's Secretary-General. An ad hoc annulment committee composed by three members will be appointed by the Chairman of ICSID's Administrative Council from ICSID's Panel of Arbitrators to decide the request for annulment.12

In the context of the ICSID Convention, annulment is considered as an exceptional remedy13 that in principle does not affect the enforcement of the award and the duty of the parties to comply with it. The initiation of annulment proceedings does not generally prevent a party from initiating enforcement of the award, unless a request to stay the enforcement of the award is submitted with the application for annulment. In said cases, the secretary general can provisionally stay the enforcement of the award until the ad hoc annulment committee rules on the request.14

The ad hoc committee may conclude that none of the grounds for annulment provided for in Article 52 of the ICSID Convention should prevail. Alternatively, the ad hoc committee may decide that the award shall be fully or partially annulled. If the award is annulled (either totally or partially), the parties may resubmit the same dispute for the decision of a new tribunal.15 An award that is annulled by an ad hoc committee ceases to be binding upon the parties to the dispute.

From 2011 to 2020, 225 awards were rendered under the ICSID Convention, and 88 applications for annulment were submitted before ICSID. Out of those applications, 56 were rejected, 25 were discontinued, and only seven succeeded in the annulment of the award in part or in full.16 Only a few cases have been resubmitted to a new tribunal.17

Grounds for annulment under the ICSID Convention

Article 52(1) of the ICSID Covention provides an exhaustive list of the grounds for the annulment of investment arbitration awards, on which we will briefly comment in this section.

Article 52(1)(a): 'That the tribunal was not properly constituted'

This ground refers to the improper constitution of the tribunal and includes questions concerning the constitution of the tribunal and the arbitrators, such as their nationality and possible conflicts of interest of one or more of the arbitrators.

This ground of annulment has been scarcely invoked in applications for annulment.18

On 11 June 2020, the ad hoc annulment committee in Eiser Infrastructure Limited and Energía Solar Luxembourg S.à.r.l. v. The Kingdom of Spain19 annulled the arbitral award, because of an improper constitution of the tribunal and a serious departure from a fundamental rule of procedure.20

The ad hoc committee in Eiser v. Spain considered that (1) based on an objective assessment of the facts, a third party would find the relationship between an arbitrator with one of the experts had manifest appearance of bias;21 (2) that the failure to disclose this relationship by the arbitrator prevented the party from challenging him and from having an independent and impartial tribunal;22 and (3) that this non-disclosed relationship may have had a material effect on the award.23

In Carnegie Minerals (Gambia) Limited v. Republic of The Gambia, the state filed an application for annulment before ICSID, alleging, among other grounds, that the tribunal was not properly constituted, given that the circumstances leading to the appointment of the second arbitrator unduly deprived the state of their right to appoint an arbitrator.24 The ad hoc committee rejected The Gambia's application for annulment, as it did not find that the tribunal had not been properly constituted, rather that tribunal was appointed in accordance with the agreement of the parties and that The Gambia had lost that opportunity to make the appointment.25 The ad hoc committee considered that annulling an award where its integrity has not been compromised by the grounds invoked for the challenge seems to have little justification.26 The ad hoc committee added that even if it had found that the tribunal had not been properly constituted, it would have had to 'give serious consideration to whether it should exercise its discretion not to annul the award notwithstanding a finding that the appointment process had been defective'.27

Article 52(1)(b): 'That the tribunal manifestly exceeded its powers'

This ground is one of the most commonly used in annulment requests against ICSID arbitral awards.28 To warrant annulment, the excess of powers must be manifest; that is, it must be obvious. The most common cases the manifest excess of powers has been alleged are that the tribunal lacked jurisdiction, the tribunal failed to exercise jurisdiction where it did have jurisdiction, the tribunal failed to apply proper law or the tribunal applied the law erroneously.29

Some recent annulment decisions have found a manifest excess of powers by the tribunal, because of a variety of actions. For example, in Venezuela Holdings, B.V., et al. v. Venezuela (formerly Mobil Corporation, Venezuela Holdings, B.V., et al. v. Venezuela), Venezuela applied to annul the ICSID award rendered in 2015 where ExxonMobil was awarded US$1.6 billion in damages, alleging a manifest excess of powers by the tribunal because of the incorrect application of the law.30 The ad hoc committee partially annulled the award by considering that the tribunal exceeded its powers, by applying customary international law to the case instead of the law mandated by the Netherlands–Venezuela bilateral investment treaty (BIT), which was the law agreed upon by the parties.31 The committee concluded that the tribunal based its decision on general propositions about the relationship between 'national law' and 'international law', which ended up foreclosing the proper application of the BIT to the dispute.32

Furthermore, in Occidental v. Ecuador II, the state argued, inter alia, that the tribunal had manifestly exceeded its powers by exercising jurisdiction over one of the investments of the claimant.33 The reason was that, by the time of the alleged breach, the claimant only owned 60 per cent of one of the investments whose protection it was seeking, but the tribunal awarded Occidental compensation for the 100 per cent of the lost value of the investment. On this ground, the ad hoc committee concluded that the tribunal had manifestly exceeded its powers by compensating Occidental for the 100 per cent of the lost value of the investment, while 40 per cent of that amount did not belong to the investor protected under the BIT.34 Therefore, the committee partially annulled the award, reducing the amount of damages awarded to Occidental from US$2,359,500,000 to US$1,061,775,000.35

Article 52(1)(c): 'That there was corruption on the part of a member of the Tribunal'

Corruption refers to an improper conduct by the arbitrator, which was induced by personal gain from one of the parties or an interested third party and as a consequence is biased in favour of said party.36 On this ground, corruption by a member of the tribunal has to be proven.37 Because the corrupt act may be found on a variety of time frames, the application for annulment on the ground of corruption must be made within the 120 days after discovering the corruption, but in any case no later than three years after the award was rendered.38

This ground for annulment is rare and, to our knowledge, has not yet been invoked on an annulment application.

Article 52(1)(d): 'That there has been a serious departure from a fundamental rule of procedure'

This is another commonly used ground in the application for annulment of ICSID awards. For an award to be annulled under this ground there has to be a serious deviation that affects a fundamental rule of procedure and that not every departure from a rule of procedure merits annulment.39 This means that the departure must be substantial, and that it must have had a material effect on the affected party because it was deprived from the benefits of the rule in question.40 In addition, because not every procedural rule is fundamental, the departure must be from basic standards of procedure such as due process, the right to the parties to be treated equally, the right to be heard, etc.41

This ground was also invoked by Spain in its annulment application against the Eiser v. Spain award. In this case, Spain alleged that the right to an independent and impartial tribunal is a fundamental rule of procedure and that for the standard to be met, it was only necessary to demonstrate the potential effect that the departure had on the award.42 The ad hoc committee considered that independence and impartiality of an arbitrator is a fundamental rule of procedure.43 On that note, the committee concluded that the lack of disclosure by the arbitrator deprived Spain of the opportunity to challenge the arbitrator in the arbitration proceedings and from seeking the benefit and protection of an independent and impartial tribunal which the right to challenge is intended to provide, thereby affecting Spain's right of defence and fair trial, as well.44 Consequently, the committee concluded that the arbitral tribunal had incurred in a serious departure from a fundamental rule of procedure, and therefore annulled the award.45

Article 52(1)(e): 'That the award has failed to state the reasons on which it is based'

The final ground for annulment under Article 52 of the ICSID Convention is that the award failed to state the reasons on which it is based. This ground is premised on the right of the parties to know and understand the reasoning that led the tribunal to its conclusions on fact and law.46 An award could be annulled under this ground if there are insufficient reasons for the conclusions reached in an arbitral award; if the award contains contradictory reasons, given that 'two genuinely contradictory reasons cancel each other out';47 and if the award fails to deal with every question presented before the tribunal.48

II Annulment of non-ICSID awards

The annulment of non-ICSID investment awards follows the provisions for setting aside of international arbitration awards.49 Under non-ICSID arbitration, the domestic review of arbitral awards is generally also limited to jurisdictional issues and issues that concern the integrity of the arbitration.50 Under non-ICSID arbitration the role of state courts becomes relevant for the annulment and enforcement of arbitral awards.51

Particularly, the courts of the seat of the arbitration will generally analyse claims for annulment of investment arbitration awards on the basis of the applicable arbitration norms. Because the specific grounds for setting aside international arbitration awards may vary from one jurisdiction to the other, this contribution will address this issue on the basis of the UNCITRAL Model Law (2006), which has been used as reference to arbitration legislation in numerous jurisdictions. As explained below, in certain cases, the interpretation that domestic courts carry out of the grounds of annulment may seem similar to the specific grounds in the ICSID Convention.

Under Article 34(1) of the UNCITRAL Model Law, the recourse to a court against an arbitral award may only be made through an application for setting aside under the exhaustive grounds included in said provision. Gary Born stresses that the decision to annul an award is discretionary of the court when one of the grounds applies.52 Article 34(2) of the UNCITRAL Model Law contains four annulment grounds that must be proven by the party making the application and two annulment grounds that may be found by the court. As explained by UNCITRAL, this provision mirrors the grounds for refusing recognition and enforcement under Article V of the New York Convention.53

The grounds for annulment that the applicant party has the burden of furnishing proof include:

  1. that the party to the arbitration agreement was under some form of incapacity or that said agreement is not valid under the law to which the parties subjected it;
  2. the party making the application was not given proper notice of the appointment of an arbitration or of the arbitral proceedings or was otherwise unable to present its case;
  3. the award deals with a dispute not contemplated by or not falling within the terms of the submission of the arbitration or contains decisions on matters beyond the scope of submission to the arbitration; and
  4. the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties.54

In addition, the court may find that (1) the subject matter of the dispute is not capable of settlement by arbitration under the law of this state; and (2) the award is in conflict with the public policy of said state.55

By 2017, almost 230 investments awards were rendered under non-ICSID arbitrations, and approximately 71 annulment or set-aside applications had been submitted by the parties against these awards. From these applications, a decision on the application for annulment was rendered in 58 cases, in most cases upholding the award.56

To finalise this description, we will briefly refer to some examples of recent decisions on annulment of non-ICSID investment arbitration awards.57

In March 2020, the Swiss Federal Tribunal issued its decision on the set-aside proceedings of the award rendered by an arbitral tribunal administered by the Permanent Court of Arbitration in the case of Clorox v. Venezuela under the bilateral investment agreement between Spain and Venezuela.

Venezuela filed an application to set aside the award before the Swiss Federal Tribunal on the ground established in Article 190(2)(b) of the Federal Statute on Private International Law,58 alleging that the tribunal manifestly exceeded its powers by exercising jurisdiction over Clorox Spain's investment, which was not protected under the Venezuela–Spain BIT,59 given that the original investment had been made by US-based Clorox International.60 The tribunal agreed with Venezuela's position that Clorox Venezuela did not have a protected investment under the Venezuela–Spain BIT, considering there was a requirement of an active link between investor and investment, beyond the sole ownership of assets. However, the Swiss Federal Tribunal annulled the award, because it concluded that the definition of investment under the BIT was an ordinary asset-based definition of investment provided in a general clause followed by a non-exhaustive list of examples, that covered Clorox Venezuela's investment.61

In April 2017, the Paris Court of Appeals partially annulled an award in Serafín García Armas and Karina García Gruber v. Venezuela. In this case, the tribunal concluded that the claimants' nationality when making the investment was not relevant, rather the relevant dates were those pertaining to the alleged treaty breach and the commencement of the arbitration.62 Consequently, Venezuela applied for the annulment of the award before the Paris Court of Appeals, alleging the lack of jurisdiction of the tribunal under Article 1520(1) of the French Code of Civil Procedure.63 The Paris Court of Appeals considered that the nationality at the time of the investment was in fact relevant for the protection under the BIT, given that the BIT had two cumulative conditions for jurisdiction: (1) nationality of the investor and (2) protected investment; and one of them was missing.64 Accordingly, the French court partially annulled this award.

III Concluding remarks

Annulment of awards is a central mechanism in ISDS to secure the tenants of procedural correctness in arbitral decision making. It has been conceived as a limited recourse that differs from an appeal and that is generally not an opportunity to revisit the merits of the dispute.

In the context of the current revisions to the ISDS system, several proposals have been voiced that refer to post-award remedies. One alternative roots for the development of a more complete annulment mechanism.65 Another proposal favours the creation of an appeals mechanism.66 One of the areas of discussion has been whether this proposal would overlap with existing annulment mechanisms and whether it would result in a third-tier process that extends the timeline of proceeding and increases the costs.67 UNCITRAL's working group has also flagged concerns about the fact that this inclusion may result in a need to amend the ICSID Convention.68 At this stage, it is not possible to anticipate how these discussions among states will unfold and whether they will yield in any specific reforms to the existing post-award remedies in ISDS.


Footnotes

1 Claudia Benavides Galvis is a partner and María Angélica Burgos de la Ossa is a senior associate at Baker McKenzie. The authors thank Ms Mariana Reyes Múnera, Junior Associate at Baker McKenzie, for her valuable research assistance in preparation of this contribution.

2 See N Blackaby, C Partasides QC, A Redfern, M Hunter, 'Challenge of Arbitral Awards', in Redfern and Hunter on International Arbitration, 6th edn, 2021, p. 569.

3 F Li, 'The Divergence of Post-Award Remedies in ICSID and Non-ICSID Arbitration: A Perspective of Foreign Investors' Interests'. The Chinese Journal of Comparative Law, 2016, pp. 3–7.

4 V Heiskanen, L Halonen, 'Post Award Remedies', in Litigating International Investment Disputes, Chapter 16, Volume 8. Brill | Nijhoff, 2014.

5 See Convention for the International Center for the Settlement of Investment Disputes (ICSID Convention). Washington DC, 14 October 1966. Article 52; Uncitral Model Law on International Commercial Arbitration (2006), Article 34.

6 ICSID Convention, Article 53 (1) 'The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention'.

7 CH Schreur, L Malintoppi, A Reinisch, A Sinclair. The ICSID Convention: A Commentary, 2nd edn, Cambridge University Press (kindle edition).

8 International Centre for Settlement of Investment Disputes, Updated Background Paper on Annulment for the Administrative Council of ICSID, May 2016, para. 2 ('Updated Background Paper on Annulment'); Available at: https://icsid.worldbank.org/sites/default/files/publications/Background%20Paper%20on%20Annulment%20April%202016%20ENG.pdf.

9 CH Schreur, L Malintoppi, A Reinisch, A Sinclair. The ICSID Convention: A Commentary, 2nd edn, Cambridge University Press (kindle edition).

10 ICSID Background Paper on Annulment (2016), para. 71. With regard to the scope of annulment under the ICSID Convention see: 'ICSID ad hoc committees have affirmed in their decisions, and this Committee agrees, that (a) the grounds listed in Article 52(1) are the only grounds on which an award may be annulled; (b) annulment is an exceptional and narrowly circumscribed remedy and the role of an ad hoc committee is limited; (c) ad hoc committees are not courts of appeal, annulment is not a remedy against an incorrect decision, and an ad hoc Committee cannot substitute the tribunal's determination on the merits for its own; (d) ad hoc committees should exercise their discretion not to defeat the object and purpose of the remedy or erode the binding force and finality of awards; (e) Article 52 should be interpreted in accordance with its object and purpose, neither narrowly nor broadly: and (f) an ad hoc committee's authority to annul is circumscribed by the Article 52 grounds specified in the application for annulment, but an ad hoc committee has discretion with respect to the extent of an annulment, i.e., either partial or full.' (Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/1, Decision on Annulment, 1 February 2016, para. 167).

11 See ICSID Convention, Article 52.

12 See ICSID Convention, Article 53 (3).

13 M.C.I. Power Group L.C. and New Turbine, Inc. v. Republic of Ecuador, ICSID Case No. ARB/03/6, Decision on Annulment, 19 October 2009, para. 24; '[A]nnulment is an exceptional, narrowly circumscribed remedy, and the role of an ad hoc committee is limited'. (Antoine Abou Lahoud and Leila Bounafeh-Abou Lahoud v. Democratic Republic of the Congo, ICSID Case No. ARB/10/4, Decision on the Application for Annulment of the Democratic Republic of the Congo, 29 March 2016, para. 108 [unofficial translation from French]).

14 ICSID Convention, Article 52 (5).

15 ICSID Convention, Article 52(6); Updated Background Paper on Annulment, para. 69. For example, in Victor Pey Casado and Foundation Presidente Allende v. The Republic of Chile, an ad hoc committee partially annulled the award on the merits of the dispute in 2012, and in 2013 the claimants resubmitted the dispute to a new tribunal. The award was issued in 2016 and the decision on annulment that confirmed the second award was issued on 2020. (See Victor Pey Casado and President Allende Foundation v. Republic of Chile, ICSID Case No. ARB/98/2, Decision on the Application for Annulment (18 December 2012); Award (13 September 2016); Decision on Annulment (8 January 2020).)

16 See ICSID Statistic Caseload, Issue 2021-2, p. 16. Available at https://icsid.worldbank.org/sites/default/files/publications/The%20ICSID%20Caseload%20Statistics%20%282021-1%20Edition%29%20ENG.pdf (visited on 14 April 2021).

17 In 2016, the ICSID Secretariat reported that seven resubmission proceedings had been registered to date (Updated Background Paper on Annulment, para. 70).

18 Until 2016, ICSID Secretariat reported that this ground had only been invoked in five opportunities. Updated Background Paper on Annulment para. 79.

19 At the time of writing, as per information available at ICSID's website, a request for a supplemental decision of the decision on annulment on this case was pending: https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/13/36 (visited on 14 April 2021).

20 See Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/36, Decision on Annulment, 11 June 2020, para. 253.

21 id., paras 218–225, para. 229.

22 id., para. 241.

23 id., para. 253.

24 See Carnegie Minerals (Gambia) Limited v. Republic of The Gambia, ICSID Case No. ARB/09/19, Decision on Annulment, 7 July 2020, paras 7; 106.

25 id., paras 170–172.

26 id., paras 7; 170; 171.

27 id., paras 7; 170.

28 See Updated Background Paper on Annulment, para. 75.

29 See Klöckner Industrie-Anlagen GmbH and others v. United Republic of Cameroon and Société Camerounaise des Engrais, ICSID Case ARB/81/2, Decision on Annulment, 3 May 1985, para. 79; See Amco Asia Corporation and others v. Republic of Indonesia, ICSID Case No. ARB/81/1, Decision on Annulment, 16 May 1986, para. 93.

30 See Venezuela Holdings, B.V., et al v. Bolivarian Republic of Venezuela (formerly Mobil Corporation, Venezuela Holdings, B.V., et al. v. Bolivarian Republic of Venezuela), ICSID Case No. ARB/07/27, Decision on Annulment, 9 March 2017, para. 114.

31 id., paras 153–159.

32 See Mobil Cerro Negro Holding, Ltd., Mobil Cerro Negro, Ltd., Mobil Corporation and others v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Annulment, 9 March 2017, paras 180–184.

33 Occidental Petroleum Corporation and Occidental Exploration and Production Company v. Republic of Ecuador (II), ICSID Case No. ARB/06/11, Decision on Annulment, 2 November 2015, para. 256.

34 id., paras 266–271.

35 id., para. 586.

36 CH Schreur, L Malintoppi, A Reinisch, A Sinclair. The ICSID Convention: A Commentary, 2nd edn, Cambridge University Press (kindle edition).

37 ibid.

38 See ICSID Convention Arbitration Rules, Article 50(3)(b)(ii); ICSID Convention, Article 52(2).

39 Updated Background Paper on Annulment, paras 98–99.

40 Wena Hotels Ltd. v. Arab Republic of Egypt, ICSID Case No. ARB/98/4, Decision (Annulment Proceeding), 5 February 2002, para. 58.

41 id., para. 57; Duke Energy International Peru Investments No. 1, Ltd. v. Republic of Peru, ICSID Case No. ARB/03/28, Decision of the ad hoc Committee dated 1 March 2011, para. 168; Iberdrola Energía, S.A. v. República de Guatemala, ICSID Case No. ARB/09/5, Decision on the Application by Iberdrola Energía S.A. for Annulment of the Award dated 13 January 2015, para. 105.

42 Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/36, Decision on Annulment, 11 June 2020, para. 112; 230.

43 id., para. 239.

44 id., para. 241.

45 id., paras 240–243.

46 '[T]he requirement to state reasons is satisfied as long as the award enables one to follow how the tribunal proceeded from Point A. to Point B. and eventually to its conclusion, even if it made an error of fact or of law' (Maritime International Nominees Establishment (MINE) v. Republic of Guinea, ICSID Case No. ARB/84/4, Decision on Annulment 22 December 1989, para. 5.09).

47 See Amco Asia Corporation and others v. Republic of Indonesia, ICSID Case No. ARB/81/1, Decision on Annulment, 16 May 1986, para. 236.

48 Even though the failure to deal with every question is not a ground provided by Article 52(1)(e), previous Annulment Committees have held that, since Article 48(3) of the Convention mandates that 'The award shall deal with every question submitted to the Tribunal, and shall state the reasons upon which it is based', the requirement to deal with every question is also contained within the scope of Article 52(1)(e). (See for example Klöckner v. Cameroon, Decision on Annulment, 3 May 1985, 2 ICSID Reports para. 137; Amco v. Indonesia, Decision on Annulment, 16 May 1986, 1 ICSID Reports 517/8; MINE v. Guinea, Decision on Annulment, 22 December 1989, 4 ICSID Reports paras 82, 87–89, 96, 104–7).

50 A De Luca, M Feldman, M Paparinskis, C Titi. Responding to Incorrect ISDS Decision-Making: Policy Options. Academic Forum on ISDS Concept Paper 2020/1, January 2020, Journal of World and Investment Trade, Vol. 21 (2020), p. 7. Available at www.jus.uio.no/pluricourts/english/projects/leginvest/academic-forum/papers/2020/4-responding.pdf.

51 N Horn, Current Use of the UNCITRAL Arbitration Rules in the Context of Investment Arbitration. LCIA Arbitration International, Vol. 24, No. 4, 2008, p. 587.

52 GB Born. International Arbitration: Law and Practice, Wolters Kluwer, 2012, p. 305.

55 ibid.

56 United Nations Conference on Trade and Development (UNCTAD). International Investment Agreements Issues Note, Issue 3, November 2017, p. 7. Available at https://unctad.org/system/files/official-document/diaepcb2017d7_en.pdf.

57 Other recent cases include the annulment by the Paris Court of Appeals of the award in Oschadbank v. Russia on 30 March 2021 and the annulment of an ICC award against Madagascar by the Paris Court of Appeals on 15 March 2016. See: Oschadbank v. Russian Federation, PCA Case No. 2016-1, Decision on Annulment of the Paris Court of Appeals, 30 March 2021; Paris Court of Appeals, 15 March 2016. As well as the decision of the Supreme Court of the Netherlands to reject Ecuador's request for annulment of the award rendered in the case Chevron and TexPet v. Ecuador (II), the decision of the US District Court for the District of Columbia that rejected Mesa Power's request for annulment in Mesa Power v. Canada, and the decision of the Hague Court of Appeal to dismiss Russia's request to set aside the awards ordering the state to pay the majority shareholders of Yukos Oil Company US$50 billion in damages in Yukos Shareholders v. Russian Federation. See Chevron Corporation and Texaco Petroleum Company v. The Republic of Ecuador (II), PCA Case No. 2009-23, Judgement of the Supreme Court of the Netherlands, 12 April, 2019; Mesa Power Group LLC v. Government of Canada, PCA Case No. 2012-17, Decision of the US Court for the District of Columbia, 15 June, 2017; and Yukos Universal Limited (Isle of Man) v. The Russian Federation, UNCITRAL, PCA Case No. 2005-04/AA227, Decision of the Hague Court of Appeal, 18 February 2020.

58 Article 190(2) of the Swiss Federal Statute on Private International Law provides that: 'The award may only be annulled: . . . b) if the arbitral tribunal wrongly accepted or declined jurisdiction . . .'.

59 The claimant to this case was Clorox Spain, a subsidiary of US-based Clorox International, that was a shareholder of Clorox Venezuela from 1990 to 2011. However, in April 2011, Clorox Spain was constituted and was immediately assigned all shares of Clorox Venezuela. (See Clorox Spain S.L. v. Bolivarian Republic of Venezuela, PCA Case No. No. 2015-30, Award, 25 March 2020, para. 811).

60 Clorox Spain S.L. v. Bolivarian Republic of Venezuela, PCA Case No. 2015-30, Decision by the Swiss Federal Tribunal, 25 March 2020, para. 3.2.

61 id., paras 3.4.2.8; 4.

62 Serafín García Armas and Karina García Gruber v. Bolivarian Republic of Venezuela, PCA Case No. 2013-3, Decision on Jurisdiction, 15 December 2014, paras 215–217.

63 The French Code of Civil Procedure: Article 1520: 'An action for annulment is only available if: 1. the arbitral tribunal has wrongly declared itself competent or incompetent . . .'.

64 Serafín García Armas and Karina García Gruber v. Bolivarian Republic of Venezuela, PCA Case No. 2013-3, Decision of the Paris Court of Appeal on the Set Aside Application, 25 April 2017, paras 45–57.

65 See United Nations Commission on International Trade and Law (UNCITRAL), Working Group III (Investor-State Dispute Settlement Reform), Working Paper No. A/CN.9/WG.III/WP.150, 28 August 2018, p. 14. Available at https://undocs.org/en/A/CN.9/WG.III/WP.150.

66 See United Nations Commission on International Trade and Law (UNCITRAL), Working Group III (Investor-State Dispute Settlement Reform), Working Paper No. A/CN.9/WG.III/WP.185, 29 November 2019, p. 8. Available at https://undocs.org/en/A/CN.9/WG.III/WP.185; A De Luca, M Feldman, M Paparinskis, C Titi. Responding to Incorrect ISDS Decision-Making: Policy Options. Academic Forum on ISDS Concept Paper 2020/1, January 2020, Journal of World and Investment Trade, Vol. 21 (2020), p. 7. Available at www.jus.uio.no/pluricourts/english/projects/leginvest/academic-forum/papers/2020/4-responding.pdf; G Kaufmann-Kohler, M Potestá, Reform of ISDS: Marching Concerns and Solutions, European Journal of International Law: EJIL: Talk!, 3 April 2019. Available at www.ejiltalk.org/reform-of-isds-matching-concerns-and-solutions/.

67 See United Nations Commission on International Trade and Law (UNCITRAL), Working Group III (Investor-State Dispute Settlement Reform), Working Paper No. A/CN.9/WG.III/WP.185, 29 November 2019, p. 11. Available at https://undocs.org/en/A/CN.9/WG.III/WP.185.

68 United Nations Commission on International Trade and Law (UNCITRAL), Working Group III (Investor-State Dispute Settlement Reform), Possible reform of investor-state dispute settlement (ISDS), A/CN.9/WG.III/WP.202, 12 November 2020, paras 48–49.

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