Month: November 2012

Local business have found innovative ways to profit from the Australian plain cigarette packaging law at the hear of the investment treaty arbitrations being launched by certain tobacco companies.  The law requires manufacturers to incorporate large graphic images on three quarters of the front of Australian cigarette packs.  Examples have included photographs of gangrenous feet or a skeletal man dying of cancer. Local entrepreneurs have launched hugely successful cigarette packs boxes that intend to hide the displeasing images and offer an additional stylish accessory available in various colours and designs.  The new phenomenon raises questions as to the effectiveness of the law and adds an interesting dimension to the legal proceedings brought to date.

http://www.ft.com/cms/s/0/314c9446-91fb-11e1-867e-00144feab49a.html#axzz2DWwkw2I3
http://www.ft.com/cms/s/0/017ae6b2-3766-11e2-893a-00144feabdc0.html#axzz2DWwkw2I3

The increasingly international nature of commercial disputes in Asia, and an attempt to make China a major international dispute resolution centre, has been the major driving force behind the recent amendments to arbitration rules of China International Economic and Trade Arbitration Commission (CIETAC).  Under the new rules, CIETAC, unless otherwise agreed by the parties, may now designate the language for the arbitration (previously this was Mandarin by default).  Additionally, in the absence of an agreement, CIETAC can choose the most suitable arbitration seat, including seats outside China.

Notwithstanding these recent changes, CIETAC’s high administrative charges leave the arbitrators, in many cases, with as little as $2,000 for a simple case and $10,000 for a complex case, compared with tens or even hundreds of thousands of dollars that the arbitrators could receive in Hong Kong or Singapore.  This, in turn, forces top lawyers to either reject work or spend less time than that is usually necessary for a case.  This could result in awards of sub-standard quality.

The insufficient remuneration of CIETAC arbitrators deters reputable clients, who are looking for quality proceedings, from arbitrating their disputes under CIETAC rules.  This likely renders the recent changes obsolete and creates an international dispute resolution environment where the quality of awards is uneven.

 Sources:

•  http://www.legalweek.com/legal-week/analysis/2182629/acting-outside-box-emerging-dispute-resolution-centres-developing-innovative-attract-business

•  http://www.legalweek.com/legal-week/news/2225834/top-arbitrators-reject-china-work-as-low-rates-prompt-quality-concerns

Weather Investments, owned by Egyptian telecoms magnate Naguib Sawiris, launched a $5 billion claim against Algerian Government for alleged harassment and interference with the country’s telecoms operator Orascom Telecom Algerie.  Weather Investments havs invested over $3 billion and created 4,000 jobs after winning a competitive bid to build Algeria’s telecommunications infrastructure in 2001.  The claim has been lodged with the International Centre for the Settlement of Investment Dispute (ICSID) and is one of the largest claims to be brought before the international arbitration tribunal so far.

Weather Investments claim that the Algerian Government has repeatedly breached its responsibilities under the “agreement between the Belgo-Luxembourg Economic Union and the People’s Democratic Republic of Algeria concerning the reciprocal encouragement and protection of investments” signed by both parties in 1991.  The breaches include imposition of unjustified tax, customs blockades – preventing the company from importing necessary network equipment, and imposition of unjustified fines.

The Algerian Government, represented by Emmanuel Gaillard – head of international arbitration group at Shearman & Sterling, stated that they intend to defend the case vigorously and that they cannot see any room for the treaty breach.

Weather Investments had issued a notice of dispute earlier this year with an intention to settle within six months, and after failure to reach such settlement, the claimant had filed the ICSID arbitration which was acknowledged last Friday.

Sources:

http://www.ft.com/cms/s/0/9f78672a-316e-11e2-b68b-00144feabdc0.html#axzz2Cf71ssZC

http://english.alarabiya.net/articles/2012/11/19/250513.html

By Timothy Foden, Associate, Allen & Overy LLP and Tiernan Fitzgibbon, Trainee, Allen & Overy LLP

 

The Dublin Dispute Resolution Centre opened its doors for business on 1 November 2012 and joins a growing number of venues in Dublin, such as the Dublin International Arbitration Centre and the Ormond Building, which cater for alternative dispute resolution (ADR). This continued growth in the number of Irish ADR centres comes on the back of a concerted effort by both the private and State sector to promote Ireland as a venue for international arbitration. Following the passing of the Arbitration Act 2010, which was largely based on the UNCITRAL Model Law on International Commercial Arbitration, Arbitration Ireland was formed as a cross sector lobbying group to promote Ireland as a venue for international arbitration. To date, Arbitration Ireland has held road shows in New York, Washington, London and Paris to highlight Ireland’s advantages as a venue for international arbitration given its neutrality, arbitration friendly legislation and judicial system. This promotion was also very much in evidence at the recently held International Bar Association Annual Conference in Dublin in early October of this year which attracted legal and arbitration practitioners the world over to experience the best in Irish hospitality and help cement its growing reputation as a forum for international arbitration.

 

Sources:

http://www.irishtimes.com/newspaper/finance/2012/1105/1224326142218.html

http://www.arbitrationireland.com/

http://www.dublinresolutioncentre.ie/index.php/