Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Page 27
Page 28
Page 29
Page 30
Page 31
Page 32
Page 33
Page 34
Page 35
Page 36
2011INTERNATIONALARBITRATIONREPORTTHECOMPATIBILITYOFEULAWWITHBILATERALINVESTMENTTREATIESBETWEENEUSTATES14GlobalRSMProductionCorporationv.GrenadaRSMRSMProductionCorporationvGrenadaGlobalRSMGlobalRSMGlobalGlobalRSM2010InternationalArbitrationReportEurekoBVv.theSlovakRepublicPCACaseNo2008-13trShortlyafterthedecisioninthetribunalinICSIDCaseNoARB106upheldGrenadasRule415objectiontotheclaimsitfaced.InthecasetheclaimwasbroughtbyaU.S.companyRSManditsthreeshareholdersR.GrynbergS.GrynbergandM.GrynbergundertheGrenada-U.S.BilateralInvestmentTreaty.TheclaimaroseoutofapetroleumexplorationagreementbetweenRSMandGrenadawhichpermittedRSMtoapplyforapetroleumexplorationlicencewithin90daysoftheagreementseffectivedate.RSMsubsequentlyappliedforalicencewhichwasdeniedbyGrenadaonthebasisthatitwasuntimely.InAugust2004RSMhadbroughtanICSIDarbitrationagainstGrenadaICSIDCaseNoARB0504.ThetribunalinthatarbitrationdismissedallRSMssubstantiveclaimsagainstGrenadainanawarddated13March2009.RSMbroughtasecondarbitrationagainstGrenadaon15January2010andGrenadaobjectedunderRule415onthebasisthatthelegalandfactualcontentionsunderlyingtheclaimshadbeenfullydealtwithinthepreviousarbitration.Inadecisionrenderedon10December2010thetribunalagreedwithGrenadaanddismissedthesecondarbitration.ThetribunalnotedthatRule415wasequallyapplicabletoissuesofjurisdictionasinthecaseorthemeritsasinthepresentcase.Thetribunalconsideredthatgiventhepotentiallydecisivenatureofanarticle415objectionitisappropriatethataclaimantsRequestforArbitrationbeconstruedliberallyandthatincasesofdoubtoruncertaintyastotheclaimantsallegationsanysuchdoubtoruncertaintyshouldberesolvedinfavouroftheclaimant.Thetribunalconcludedthatitwasboundbyandcouldnotrevisittheconclusionsofthetribunalinthepreviousarbitrationbetweenthepartiesandthereforeitdeterminedthattheclaimsinthepresentcaseweremanifestlywithoutlegalmerit.Unlikethetribunalthetribunalheldthattherespondentshouldbefullyindemniedbytheclaimantforthecostsithadincurred.ThetworecentdecisionsconrmthatanobjectionunderRule415maygoeithertojurisdictionortothemeritsandthattosucceedinitsapplicationtherespondentmustbeabletoestablishalegalimpedimenttoaclaimclearlyandobviously.Asthetribunalinthecasenotedthestandardissethighandtribunalswillconstrueanydoubtoruncertaintyagainsttherespondent.Nonethelessthedecisionsinandnodoubtwillbewelcomedbystatesfacingfrivolousclaims.WhileitislessclearhowatribunalwilldealwithcostsintheeventofasuccessfulRule415applicationthereisariskthatclaimantswholoseaRule415applicationwillbesanctionedinrespectofcostswhichmayactasadeterrenttofrivolousclaims.TheIssue2includedadiscussionofthefutureofbilateralinvestmenttreatiesBITsenteredintobetweenEUMemberStatesandnon-EUstatesfollowingtheentryintoforceoftheLisbonTreaty.RecentmonthshavehoweverseenanequallyhighlevelofattentionfocusingonthestatusofarbitrationprovisionsininvestmenttreatiesconcludedbetweentwoEUmemberstates.TheEuropeanCommissionhasnowexpressedseriousdoubtsastowhetherarbitraltribunalshavejurisdictiontohearclaimsunderintra-EUBITsandastowhethersuchBITsarecompatiblewithEUlaw.TherecentjurisdictionaldecisionbytheUNCITRALarbitrationtribunalinthecaseofhoweverfoundthattheBITbetweenSlovakiaandtheNetherlandswasnotterminatedbySlovakiasaccessiontotheEUandwasnotincompatiblewithEUlaw.NeverthelessthisremainsacontroversialandemergingareaoflawandEUpartiesinvestinginotherEUstatesmayfindthathoststatesattempttorelyuponEUlawasadefencetoinvestmentclaimsbroughtunderthearbitrationprovisionsofintra-EUBITs.