The Application Of The New York Convention To Investment Arbitration

The Application Of The New York Convention To Investment Arbitration

In this commentary, Tatsuya Nakamura, a Professor of Law at Kokushikan University, Tokyo, Japan, and a General Manager of the Arbitration Department, Japan Commercial Arbitration Association, writes that the number of international investment agreement-based arbitration cases has grown enormously. This commentary is prepared based on his report made in an annual conference of the Japan Association of the Law of Arbitration and Alternative Dispute Resolution held in Nagoya, Japan, on July 12, 2008. He writes:

“Since an investor-State dispute based on an international investment agreement (IIA) was first referred to the arbitration of the World Bank's International Centre for Settlement of Investment Disputes (ICSID) in 1987, the number of IIA-based arbitration cases has grown enormously and the cumulative number of cases had risen to at least 290 by the end of 2007.

“For the settlement of the investment dispute with a host state, an investor can usually choose its preferable arbitration forum among those designated in the dispute resolution clause of the IIA. . . .  Statistically, about 60% of the total number of IIA-based arbitration cases were filed with the ICSID arbitration while about 30% of them were referred to the ad hoc arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).

“The ICSID was established by the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). Pursuant to Article 53(1) of the ICSID Convention, the award pursuant to the ICSID Convention is not subject to any appeal or any other remedy except those provided for in the ICSID Convention and thus the arbitration under the ICSID Convention is a-national and not subject to a national law of the place of arbitration.

“In other words, it is entirely self-contained and delocalized.”

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