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www.fulbright.comApril2011DEVELOPMENTSININVESTMENTTREATYARBITRATIONRESPONDENTSSUCCEEDFORTHEFIRSTTIMEINPERSUADINGATRIBUNALTHATTHECLAIMSTHEYFACEDHADNOLEGALMERITGlobalTradingResourceCorpandGlobexInternationalIncv.UkraineGlobalTrans-GlobalPetroleumIncv.HashemiteKingdomofJordanBrandesInvestmentPartnersLPv.BolivarianRepublicofVenezuelaGlobalGlobalTrans-GlobalGlobal13In2006theInternationalCentreforSettlementofInvestmentDisputesICSIDintroducedasignicantamendmenttoitsarbitrationrules.Rule415whichcameintoeffecton10April2006permittedeitherpartyintheabsenceofagreementonanotherexpeditedproceduretoapplytotheICSIDtribunalatanearlystageintheproceedingstodismisstheclaimonthebasisthattheclaimwasmanifestlywithoutlegalmerit.Oneoftheoccasionalcriticismsofarbitrationisthatitdoesnotusuallyincorporateasummaryjudgmentordismissalprocedureclaimantsevenwhenghtingagainstanemptychairhavetoprovetheircasetothesatisfactionofthearbitratorsandsimilarlyrespondentscannotusuallysubmitonasummarybasisthatthereisnocasetoanswer.TheamendmenttotheICSIDarbitrationruleswasthereforeasignicantdeparturefromusualarbitrationprocedure.SignificantlyanapplicationunderRule415hastobemadenolaterthan30daysaftertheconstitutionofthearbitraltribunalandinanyeventbeforethetribunalhasconveneditsfirstsession.ThenewRule415thereforeprovidedrespondentswithanopportunitytohavemeritlessclaimsdismissedbeforebeingforcedtospendfurthertimeandresourcesdefendingthecase.On1December2010thetribunalinICSIDCaseNo.ARB0911becamethersttribunaltodismissacaseunderRule415.PriortothedecisionintherehadbeentwocaseswheretherespondenthadsoughttorelyonRule415ICSIDCaseNo.ARB0725andICSIDCaseNo.ARB083.Inbothofthesepreviouscasestherespondentswereunsuccessfulinpersuadingthetribunalthattheclaimsweremanifestlywithoutlegalmerit.GiventheunusualnatureoftheapplicationbeforeitthetribunalnotedthatitwasparticularlyconsciousofitsresponsibilitytocontributetoshapingbothanunderstandingoftheRuleitselfandoftheprocedurewhichoughttobefollowedunderit.Thetribunalheldthatabalanceneededtobestruckbetweentherightgiventotheobjectingpartytohaveapatentlyunmeritoriousclaimdisposedofbeforeunnecessarytroubleandexpenseisincurredindefendingitandthedutyofthetribunaltomeettherequirementsofdueprocess.Inconsideringthestandardthatwastobeappliedindeterminingwhetheraclaimwasmanifestlywithoutlegalmeritthetribunalendorsedthepositiontakenbythetribunalandquotedfromitsdecisionwhichhadheldthattheordinarymeaningofthewordrequirestherespondenttoestablishanobjectionclearlyandobviouslywithrelativeeaseanddispatch.Thestandardisthussethigh.AfterconsideringalltherelevantfactsbeforeitthetribunaldeterminedthatthecontractsonwhichGlobalandGlobexreliedinbringingtheirclaimbeforeICSIDdidnotconstituteaninvestmentforthepurposesoftheICSIDConventionandthereforetheclaimwasmanifestlywithoutlegalmerit.ThetribunaldidnothowevermakeanorderforcostsagainsttheclaimantsholdingthatgiventhenewnessoftheRule415procedureandthereasonablenatureoftheargumentsconciselypresentedtoitbybothpartiesthattheappropriateoutcomeisforthecostsoftheproceduretoliewheretheyfall.