Procedural Issues in International Investment Arbitration

By Jeffery Commission and Rahim Moloo

Oxford University Press; 2018; 464 pages; ISBN: 9780198729037

Procedural aspects of treaty-based investor-State arbitration have recently attracted particular attention. While some intergovernmental organizations have conducted dedicated training sessions on the subject,1 Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) is exploring ‘the possible reform of investor-State dispute settlement’2 – a system that, while possessing an essentially ‘public law character’, relies on a procedural approach that ‘typically follows the model of international commercial arbitration’.3

The book under review, authored by arbitration practitioners Jeffery Commission and Rahim Moloo and published in the Oxford International Arbitration Series, ‘takes the reader through the life-cycle of an investor–State arbitration … based on the law as it currently stands’ (p. xii). The discussion proceeds in eleven chapters, entitled: 1) The Law Applicable to Procedural Issues; 2) The First Procedural Order; 3) Provisional Measures; 4) Challenges to Arbitrators, Counsel, and Experts; 5) The Splitting of Issues for Separate Determination (Bifurcation/Trifurcation); 6) Non-Disputing Party Participation and Transparency; 7) Evidentiary Issues; 8) Hearing Procedures; 9) Other Procedures; 10) Statements or Submissions on Costs; and 11) Post-Award Applications.

In each chapter, the authors examine the most common procedural frameworks for investment proceedings – the International Centre for Settlement of Investment Disputes (ICSID) Convention and Rules and the UNCITRAL Arbitration Rules, with the latter category of proceedings often being administered by the Permanent Court of Arbitration (PCA). In addition to highlighting the legal standards governing each issue, the authors explain how parties and arbitrators have approached it in practice. While relevant awards and decisions are reviewed in detail, the book is not limited to providing commentary on the case law. Procedural Issues in International Investment Arbitration is written as an analytic guide through the arbitration process.

While the authors rightly emphasize the many similarities in proceedings conducted in the ICSID and UNCITRAL frameworks, the book also helpfully highlights key differences. For example, in respect of arbitrator challenges, the different legal tests and institutional mechanisms of the ICSID and UNCITRAL challenge regimes lead to markedly different outcomes: while only 5% of challenges led to the disqualification of an arbitrator at ICSID, 26% of challenges were successful under the UNCITRAL Arbitration Rules (p. 65). The authors’ statistics also show that, as a result of the ‘loser pays’ approach being enshrined in the UNCITRAL Arbitral Rules, a substantial majority of UNCITRAL tribunals ‘made some form of adjusted costs order’, compared to only a minority of ICSID tribunals (p. 199). Naturally, the legal differences in the ICSID and UNCITRAL regimes have given rise to different post-award proceedings, which are explained by the authors in detail.

The selection of topics covered in the book is convincing. The authors are to be commended, in particular, for including substantial analysis of more novel issues, such as non-disputing party participation and transparency, or less common manners of evidence-gathering such as site visits, the use of tribunal experts, or witness and expert conferencing at hearings. And while one can always draw up a personal wish list of additional topics,4 this cannot detract from the many strengths of Commission and Moloo’s excellent book. Procedural Issues in International Investment Arbitration is a concise handbook, which is informed by the authors’ first-hand experience with investment disputes and garnished with extensive footnote references to relevant case law. There is no comparable step-by-step explanation of the investor-State arbitration process on the market, and the book deserves a wide readership. Less experienced counsel or arbitrators will appreciate the book as a primer to investment arbitration, which, for a legal text, makes for an astonishingly good cover-to-cover read. Advanced practitioners will find a competent expert compendium of each step of the arbitral process. The authors have succeeded in writing an advanced book that remains highly accessible.

The limitations of the handbook format and the breadth of the subject matter do not allow every case to be treated in the main text. This is where the exhaustive appendices, running over more than 100 pages, become important. In them, the authors provide a summary of all known decisions on provisional measures requests; challenges; decisions on bifurcation requests; instances of third-party participation; decisions on the place of arbitration; decisions on manifest lack of legal merit applications; site visits; engagements of tribunal experts; costs; applications for reconsideration, revision, rectification and correction; requests for supplementary decisions and interpretation; and stays of enforcement.

The information in the appendices is presented as a straightforward tabular listing, and the data points selected are precisely what counsel (and arbitrators) are likely to look for when they wish to gain an overview of the status of the case law. To maintain the unique value inherent in a complete presentation of the known case law, this book, or any new edition, could benefit from periodical updates of the appendices, especially if such updates could be made accessible to readers in electronic format.

1
See the annual United Nations Institute for Training and Research (UNITAR) training entitled ‘Introduction to Investment Arbitration’ (http://www.unitar.org/fr) or the annual Energy Charter Secretariat training entitled ‘Investment Arbitration Masterclass’ (https://energycharter.org/what-we-do/knowledge-centre/overview/).

2
Report of Working Group III (Investor-State Dispute Settlement Reform) on the work of its thirty-fourth session (Vienna, 27 November–1 December 2017), 19 December 2017, A/CN.9/930/Rev.1, para. 6.

3
Chester Brown, ‘Procedure in Investment Treaty Arbitration and the Relevance of Comparative Public Law’ in Stephan W Schill (ed), International Investment Law and Comparative Public Law (Oxford University Press 2010), Chapter 21.

4
It would have been interesting, for instance, to have the benefit of the perspective of the authors, having acted as counsel for investors and States, on the crucial questions of arbitrator selection and appointments, including i) the relevance of possible issue conflicts and double-hatting at the appointment stage; ii) the relative merits of the ICSID and UNCITRAL approaches to the constitution of the tribunal (with the presiding arbitrator being selected, by default, by the parties in the ICSID framework and by the co-arbitrators in the UNCITRAL framework); and iii) the roles played by different institutions in assisting with the process of the constitution of the tribunal. Moreover, on some questions, recent arbitral decisions might be more fully reflected. For instance, while the book rightly emphasizes the interpretation given to the concept of ‘special political or institutional sensitivity’ of the IBA Rules in the seminal NAFTA cases, the case law developed on that same question over the past decade might deserve more detailed discussion.