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Investment Mediation

Investment Mediation. Recommendations to overcome internal obstacles May 11, 2017. Recommendations. Time, money and effort. The Nature of Disputes. Authority Matters. Peru: International Investment Dispute State Coordination and Response System (Law 28933/06).

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Investment Mediation

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  1. Investment Mediation Recommendations to overcome internal obstacles May 11, 2017

  2. Recommendations

  3. Time, money and effort

  4. The Nature of Disputes

  5. Authority Matters

  6. Peru: International Investment Dispute State Coordination and Response System (Law 28933/06) 7.1 The Special Commission shall be associated to the Ministry of Economy and Finance and will have as its object the representation of the State in International Investment Disputes, both in its preliminary stage of consultations as well as in the arbitration and conciliation stages…. 8. The functions of the Special Commission are: • evaluate the possibilities of negotiation in the consultations phase and adopt a strategy to achieve it. d) propose the engagement of attorneys and other professionals necessary to participate in the consultations phase and in the arbitration and conciliation stages. g) To approve the disposition of the resources that are necessary for to participate in negotiation during the consultation phase and to bring it to its conclusion….

  7. Argentine crisis

  8. Argentine crisis ICSID awards

  9. Argentine crisis claims: Discontinued proceedings

  10. Law 25561/2002 (Emergency Law) Law 25790/2003 ART. 2.Decisions adopted by the National Executive in the development of the renegotiation process shall not be limited or conditioned by the stipulations contained in the regulatory frameworks governing the concession or licensing contracts of the respective public services. ART. 3.The renegotiation agreements may cover partial aspects of the concession or license agreements, contemplate formulas of contractual adaptation or transitional amendments of the contract, include the possibility of scheduled periodic reviews and establish the adjustment of the parameters of quality of the service contracts. ART. 9. The National Executive Power is authorized to renegotiate [public utility and works contracts]…In public utility/service contracts, the following criteria must be taken into account: (1) the impact of tariffs on the competitiveness of the economy and on the distribution of revenues; 2) the quality of the services and the investment plans, when they were contractually foreseen; 3) the interest of the users and the accessibility of the services; 4) the security of the included systems; and 5) the profitability of companies.

  11. October 3, 2007 • Sempra (US; 43%) and Camuzzi (Italy, 57%) joint venture in 2 natural gas distribution companies. • Camuzzi agreed to indemnify Argentina for the Sempra the US$ 172 million award against Argentina. • UNIREN settlement encompassed retroactive large consumer price adjustments.

  12. Sempra Energy International v. Argentine Republic UNIREN • Reaching out to Investor: Nov. 2003 • Public hearing: April 2005. • Tentative agreements: December 2009. • Agreements ratified: June 2010 ICSID Case No. ARB/02/16) • Date Registered: December 2002 • Award rendered September 2007 • Annulment registered: September 2008 • Award annulled: June 2010 • Claim resubmitted: November 2010 • Proceeding suspended: July 2013 • Discontinued: April 2015

  13. Trans-Pacific Partnership Article 9.18: Consultation and Negotiation 1. In the event of an investment dispute, the claimant and the respondent should initially seek to resolve the dispute through consultation and negotiation, which may include the use of non- binding, third party procedures, such as good offices, conciliation or mediation. 2. Theclaimant shall deliver to the respondent a written request for consultations setting out a brief description of facts regarding the measure or measures at issue[…]

  14. EU-Canada Comprehensive Economic and Trade Agreement Article 8.19: Consultations 1. Any dispute should as far as possible be settled amicably. Such a settlement may be agreed at any time, including after the arbitration has been commenced. Unless the disputing parties agree to a longer period, consultations shall be held within 60 days of the submission of the request for consultations pursuant to paragraph 4.

  15. EU-Canada Comprehensive Economic and Trade Agreement Article 8.19: Consultations 4. The investor shall submit to the other Party a request for consultations setting out….. 5. The requirements of the request for consultations set out in paragraph 4 shall be met with sufficient specificity to allow the respondent to effectively engage in consultations and to prepare its defence.

  16. EU-Canada Comprehensive Economic and Trade Agreement Article 8.20: Mediation 1. The disputing parties may at any time agree to have recourse to mediation. 2. Recourse to mediation is without prejudice to the legal position or rights of either disputing party under this Chapter and is governed by the rules agreed to by the disputing parties…

  17. EU-Canada Comprehensive Economic and Trade Agreement Article 8.20: Mediation 4. The disputing parties shall endeavour to reach a resolution of the dispute within 60 days from the appointment of the mediator. 5. If the disputing parties agree to have recourse to mediation, Articles 8.19.6 [3y limitation to initiate consultations] and 8.19.8 [18 months too submit a claim after consultations] shall not apply from the date on which the disputing parties agreed to have recourse to mediation to the date on which either disputing party decides to terminate the mediation.

  18. Enforcement of conciliated settlement agreements.

  19. Institutional Organization and Authority: 1.Establish/confirm a lead agency with: • Technical competency; • Administrative independence to enter settlements; • Financial autonomy (both process and settlement). 2. Authorization of the lead agency by statute or regulation to resolve disputes through amicable methods, including negotiation, mediation/conciliation or any third-party facilitated process. 3. Implement mechanisms of coordination within the administration that empowers the lead agency and encourages process buy-in, particularly from supervisory or disciplinary/criminal authorities.

  20. Mediation Awareness and Objectives • Make conflict avoidance and dispute resolution through negotiation, mediation/conciliation or third-party facilitated agreement an objective of the lead agency even after an arbitration has been initiated. • Authorize the lead agency to engage external counsel to advise only on mediation/conciliation and to instruct them on State interests (not positions). 3. Encourage the mediation counsel to assist evaluating potential agreements through means other than monetary payment.

  21. Procedure 1. Implement internal dispute management protocols that: • Encourage open and continued communication; • Encourage administrative self-correction mechanisms to de-escalate or avoid aggravating disputes; • Encourage the attainment of partial settlements including those related to arbitral procedure (narrowing of issues, document production, etc.). 2. Commission independent assessments (e.g. early neutral evaluations) of interests (not positions) and dispute strengths and weaknesses that may help inform amicable settlement strategy (including that of arbitration following document production), instruction of counsel and pursuit of mediation objectives.

  22. Thank you. Hernando Otero Fellow and Lecturer Center on International Commercial Arbitration American University Washington College of Law E-mail: Otero@american.edu

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