Limits of Autonomy in International Investment Arbitration: Are Contractual Waivers of Mass Procedures Enforceable?
University of Missouri School of Law
December 11, 2013
Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2013 (Martinus Nijhoff, 2014) Forthcoming
University of Missouri School of Law Legal Studies Research Paper No. 2013-30
August 2011 marked a turning point in investor-state arbitration. That month, a majority of arbitrators in Abaclat v. Argentine Republic handed down a preliminary award on jurisdiction and admissibility that allowed 60,000 Italian claimants to proceed jointly against Argentina. Although the investment community had had some previous experience with multiparty arbitrations, Abaclat broke new ground in the world of large-scale investor-state proceedings.
While a significant amount of debate exists as to whether and to what extent mass arbitration will again be deemed appropriate in the investment arena, states are nevertheless concerned about the prospect of facing Abaclat-style proceedings. One way to avoid the possibility of large-scale arbitration may be for states or state-owned entities to include a waiver of class, mass and collective procedures in the underlying investment contract.
At this point, there are no known instances of a waiver of large-scale proceedings in the investment context. However, the Republic of Colombia recently attempted to include a waiver of investment arbitration in a model concession agreement, which suggests that the concept of waiver is beginning to make its way out of the realm of private law (where waivers of class arbitration are common) and into the public international arena.
This book chapter considers the novel but important question of whether and to what extent a contractual waiver of class, mass or collective procedures would be permissible in investor-state arbitration. The discussion covers a number of key issues that are likely to arise in the coming years, including conflict of laws concerns, methods of interpretation, questions of admissibility versus jurisdiction, and the distinction between contract and treaty claims.
TABLE OF CONTENTS
II. Abaclat v. Argentine Republic
III. Analyzing Waivers of Large-Scale Procedures in Investment Arbitration
A. Location and Form of the Waiver
1. Waivers in international investment treaties
2. Waivers in national laws concerning foreign investment
3. Waivers in individual investment contracts
4. The form of the waiver
B. Propriety of Contractual Waivers of Procedural Rights in Investment Arbitration
1. Conflict of laws concerns
2. Methods of interpretation
i. Timing concerns
ii. Privity concerns
iii. Interpretive canons
3. The admissibility versus jurisdiction analysis
i. SGS Société Générale de Suiveillance S.A. v. Philippines
ii. Waivers of domestic remedies
iii. Procedural limitations
iv. Waiting periods
4. The distinction between contract claims and treaty claims
Keywords: investment arbitration, investor-state arbitration, waiver, mass arbitration, Abaclat v. Argentine Republic, class arbitration, class waiver, investment contract, foreign direct investment
Date posted: December 12, 2013