Download acta jure imperii - Baltic Arbitration

ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
The Influence of International Public Law on the Enforcement of Arbitral Awards Rendered under Investment Treaties
Prof. Hilmar Raeschke-Kessler
Riga, 26 June 2014/2
2
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
The case:
The Kingdom of T. had authorised a foreign Company to build a motorway
between its capital and its national airport.
After two years of construction it revoked the licence and refused to pay the
company for the work done.
The Company sued the Kingdom under the BIT between Germany and the
Kingdom. The Arbitral Tribunal in its award ordered the Kingdom to pay to the
Company € 35 mio. The Kingdom refused to pay.
Riga, 26 June 2014/2
3
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
I. Basics:
1. Any action by a state is either the exercise of its sovereign rights
= acta jure imperii;
examples:
- law making,
- granting of a license to an investor,
- acts of expropriation;
Riga, 26 June 2014/2
4
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
2. or
a commercial activity
= acta jure gestionis;
examples:
- the purchase of fighter planes for the air force,
- renting out of state owned property in a foreign
country for commercial purposes.
Riga, 26 June 2014/2
5
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
3. International public law:
a) Immunity of any state
- from jurisdiction of other states,
- from execution of judgements or awards by arbitral
tribunals by courts of other states into its property or
any of its assets within the other state.
(ICJ Reports 2012, p. 99 pp., Germany v. Italy)
Riga, 26 June 2014/2
6
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
b) General rule:
(1) no jurisdiction of other states on acta jure imperii
unless consented to,
(2) jurisdiction of other states on acta jure gestionis,
(3) no execution of judgements or awards in property / assets serving
acta jure imperii.
Riga, 26 June 2014/2
7
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
c) Origin of the principles:
Customary international public law condensed to
UN-Convention of Jurisdictional Immunities of States and Their Property of
2004,
not yet in force but serves as “restatement”.
Riga, 26 June 2014/2
8
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
4. The purpose of multilateral investment treaties (ICSID) and of BITs:
Protection of foreign investors against expropriation without a fair
compensation.
Expropriation = actus jure imperii;
obstacle of state immunity has to be overcome on jurisdiction and
enforcement.
Riga, 26 June 2014/2
9
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
II. Waiver of state immunity on jurisdiction
1. Enforcement of an award requires its prior recognition by a state court;
→ needed a waiver on jurisdiction.
Art. 7 UN-Convention:
“Express consent to exercise of jurisdiction
1. A State cannot invoke immunity from jurisdiction in a proceeding before a
court of another State with regard to a matter or case if it has expressly
consented to the exercise of jurisdiction by the court with regard to the
matter
or case:
(a) by international agreement
…“
Riga, 26 June 2014/2
10
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
1. Bilateral investment treaties – BITs-establish jurisdiction of arbitral tribunals
for investment disputes between host states and investors.
So do multilateral treaties like the ICSID Convention of 1984.
Riga, 26 June 2014/2
11
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
Art. 10 (2) German Model BIT 2009:
“If the dispute cannot be settled within six months of the date on which it was
raised by one of the parties to the dispute, it shall, at the request of the investor
of the other Contracting State, be submitted to arbitration. The two Contracting
States hereby declare that they unreservedly and bindingly consent to the
dispute being submitted to one of the following dispute settlement mechanisms
of the investor's choosing:”
Riga, 26 June 2014/2
12
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
2. The choice of the investor:
(1) ICSID Arbitration,
if at least one of the states is a member of the ICSIDConvention of 1965,
(2) ad hoc arbitration under the UNCITRAL-Rules,
(3) institutional arbitration under ICC-Rules, LCIA-Rules or
Stockholm-Rules.
Riga, 26 June 2014/2
13
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
III. Enforcement of award in favor of investor
1. Immunity of states extends to enforcement of judgements or arbitral
awards.
Waiver of immunity to jurisdiction ≠ waiver of immunity of enforcement.
Required:
specific waiver, expressed or implied, allowing enforcement.
Riga, 26 June 2014/2
14
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
Art. 19 UN-Convention 2004:
“State immunity from post-judgment measures of constraint
No post-judgment measures of constraint, such as … execution, against property
of a State may be taken in connection with a proceeding before a court of another
State unless and except to the extent that:
(a) the State has expressly consented to the taking of such measures as
indicated:
(i) by international agreement
(ii) by an arbitration agreement;”
Riga, 26 June 2014/2
15
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
2. Waiver allowing enforcement of an award
a) Award rendered under ICSID Convention:
Art. 54 ICSID Convention:
“(1) Each Contracting State shall recognize an award rendered pursuant to
this Convention as binding and enforce the pecuniary obligations imposed
by that award within its territories as if it were a final judgment of a court in
that State. …“
Award ≙ final decision of state court.
No judicial review of award in recognition and enforcement proceedings by a
state court.
No review under Art. V NYC 1958.
Riga, 26 June 2014/2
16
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
b) BIT-awards rendered under UNCITRAL-Rules:
Art. 32 II UNCITRAL-R. 1976 = Art. 34 II UNCITRAL-R. 2010:
2. All awards shall be … final and binding on the parties. The parties shall
carry out all awards without delay.
Enforcement possible without judicial review of award under Art. V NYC.
Riga, 26 June 2014/2
17
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
UNCITRAL-Rules are for Commercial arbitration.
In commercial arbitration Art. 32 II 1976 = Art. 34 II 2010 do not exclude review
under Art. V NYC.
By incorporating UNCITRAL-Rules into a BIT they participate in the international public law character of the BIT.
Riga, 26 June 2014/2
18
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
→ Interpretation according to the Vienna Convention on the Law of Treaties
1969.
Article 31 Vienna Convention:
“General rule of interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary
meaning to be given to the terms of the treaty in their context and in the light
of its object and purpose.”
Riga, 26 June 2014/2
19
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
c) BIT-awards rendered under institutional rules like ICC-Rules:
Art. 34 (6) ICC-Rules 2012:
“Every Award shall be binding on the parties. By submitting the dispute to
arbitration under these Rules, the parties undertake to carry out any Award
without delay and shall be deemed to have waived their right to any form
of recourse insofar as such waiver can validly be made.”
→ No review of award
(Cour de Cassation. civ. 1re, 6.7.2000 – Creighton Ltd.,
US-Court of Appeals 5th Cir., 395 F.3d 229, Walker v. Republic of Congo
(2004).
≙ no. 26.9 LCIA Rules 1998.
Riga, 26 June 2014/2
20
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
d) BIT-awards rendered in ad-hoc arbitration:
execution possible,
but at the request of the host state full review of award under
Art. V NYC, unless excluded in modern BITs:
Art. 10.3 German Model-BIT 2009:
“(3) … The award shall be enforced by the Contracting States
as a final and absolute ruling under domestic law.
Riga, 26 June 2014/2
21
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
3. State property available for execution of the award:
all objects serving for acta jure gestionis are suitable for execution
= property used for commercial-non official purposes,
(Swedish Supreme Court of 1.7.2011 – ö 170-10);
example: state owned building rented out to third parties unrelated to the
government,
disputed: bank accounts at a foreign national bank or commercial
bank.
Riga, 26 June 2014/2
22
ZIEMONS & RAESCHKE-KESSLER
RECHTSANWÄLTE BEIM BUNDESGERICHTSHOF
4. Objects not suitable for execution of the award:
all objects serving acta jure imperii;
example:
embassy building,
air traffic fees due from airline to state
(BGH VII ZB 9/05, 4.10.2005).
Riga, 26 June 2014/2
23