The settlement of foreign investment disputes: distilling some of the considerations for Jamaican arbitration practitioners

• Author: Christopher P Malcolm
• Position: LLB (UWI), LLM (Banking and Finance) (Lond), MClArb, Lecturer, Faculty of Law, Unversity of the West Indies, Mona, Consultant Attorney-at-Law, Cowan Dunkley-Cowan
• Pages: 25-61

THE SETTLEMENT OF FOREIGN

INVESTMENT DISPUTES: DISTILLING

SOME OF THE CONSIDERATIONS FOR

JAMAICAN ARBITRATION

PRACTITIONERS

CHRISTOPHER P MALCOLM

INTRODUCTION

The armoury of dispute settlement practitioners should include a clear

understanding of theoretical and practical realities, which touch and concern

the environment within which they practice. Insofar as foreign invesrment

disputes are concerned, practitioners should demonstrate a clear understanding

of the realities of international trade and investment. Those realities impact

the socio-historical, economic and political dynamics of

(a) foreign investments,

(b) globalisation and international standardisation,

(c) bilateral, regional and multilateral arrangements, and

(d) options for dispute settlement.

Arbitration is the preferred mechanism for settlement of international

commercial disputes.1 It is a dynamic dispute settlement mechanism, which

avoids precise definitions. Arbitration is

(a) an alternative to litigation in national courts,

(b) a private mechanism for dispute resolution,

(c) selected and controlled by the parties, and

(d) a final and binding determination of parties' rights and obligations.2

LLB (UWI), LLM (Banking and Finance) (Lond), MClArb, Lecturer, Faculty of Law, Unversity of

the West Indies, Mona, Consultant Attorney-at-Law, Cowan Dunkley-Cowan, Email:

c.

p.

makolm@qmuLac.uk.

1 JDM Lew, LA Mistelis and S M Kroll, Comparative International Commercial Arbitration (Kluwer

Law International The Hague 2003) Chapter 28.

2 Ibid, Chapter 1.

It is consensual. Within permissible limits, parties are entitled to determine

the subject of their agreement to arbitrate, the rules that will govern the

arbitration, the panel and the forum which they will accept.3

Arbitration can either be domestic or international. The term international

indicates that the proceedings transcend national boundaries. Such arbitrations

(a) usually have no connection with the state, other than the fact that

they are held in its territory, and

(b) the parties are usually corporations or state entities, rather than private

individuals.4

Although this article is concerned with settlement of commercial disputes,

it is worth emphasising that arbitration is recognised and relied upon for

settlement of non-commercial international disputes.5

International commercial arbitration6 does not exist in a vacuum. It is

subject to and reliant on the existence of an enabling legislative and regulatory

environment. Although the word 'international' suggests the existence of an

all embracing trans-national or supra-national arbitration regime, no such

arbitration regime exists. Notwithstanding its widespread acceptance, for

example, the New York Convention (NYC) reserves power to national courts,

where recognition and enforcement is sought. In a real sense, international

commercial arbitration relies on the realities of domestic arbitration regimes.7

The current environment for international commerce, in general and

foreign investment in particular, represents the realities of globalisation and

international standardisation. Even from a cursory glance, one notices

3 E Gerasimtchuk 'Multi-party Arbitration'http://www.uni-kiel.de/eastlaw... Seminararbeit.doc (last

visited November 2003).

4 A Redfern and M Hunter, Law and

Practice

of International Commercial Arbitration (3rd edn Sweet

& Maxwell London 1999) Chapterl-18 - 1-26.

5 United Nations (UN) Charter, Chapter VII; Declaration of the Principles of International Law

concerning Friendly Relations and Co-operation between States, October 24, 1970 (GA Res 2625

(xxv));

Manila Declaration on the Peaceful Settlement of International Disputes, November 15,

1982 (GA Res 37/10).

6 UNCITRAL Model Law on International Commercial Arbitration, 1985, (UN doc A/40/17, Annex

I),

Article 1 (3) delimits the scope of "international" arbitration.

7 H M Holtzmann, 'A Task for the 21st Century: Creating a New International Court for Resolving

Disputes on the Enforceability of Arbitral Awards' in J Uff and E Jones (eds) International and ICC

Arbitrations:

Conference Papers

and

Source

Materials (Centre for Construction Law & Management,

Kings College, London, 1990) 110.

(a)

an

increasing desire

to

develop

and

maintain

an

internationally

accepted regulatory framework and standards

for a

global market,8

(b)

an

increase

in the

prevalence

and

significance

of

bilateral, regional

and multilateral trade

and

investments arrangements,9

and

(c)

a

growing tendency

to

rely

on

extra-judicial dispute settlement

mechanisms, such

as

arbitration and diplomacy.10

The development and maintenance of internationally accepted regulations

and standards are critical to international trade of goods and

services.11

It

is

an

evolving process

which impacts

every

aspect of domestic economic

life.

Domestic

trade and investment service and quality standards,

for

example, often betray

significant reliance

on

internationally accepted standards

and

practices.

In

Jamaica,

the

Bureau

of

Standards

has

committed

to the

promotion

of

International Organisation for Standardisation (ISO) 9000 standards.12

ISO

9000 standards

may be

commendable. However, they were

not

developed

with

any critical input from nor do they represent any overriding consideration

for

Jamaican entrepreneurs.13 Notwithstanding their inherent limitations,

Jamaican entrepreneurs are best advised

to

accept and confotm

to

ISO 9000

standards

and

other international standards,

as

they attempt

to

compete

in

the global market.14

Several attempts have been made to standardise the practice of international

commerce and arbitration. Those attempts have included efforts through

the

International Institute

for the

Unification

of

Private Law (UNIDROIT)

and

the United Nations Commission

for

International Trade Law (UNCITRAL).

The several attempts have failed

to

bring about

a

standardised regime

for

either international commerce

or

arbitration.15 Notwithstanding the absence

8 Marrahesh Agreement Establishing the World Trade Organisation (WTO Agreement), Article ii (1)

in World Trade Organisation The Legal

Texts:

The Results of

the

Uruguay Round of Multilateral Trade

Negotiations (Cambridge University Press: Cambridge 1999) 3.

9 Jamaica signed

her

first

BIT

with

the UK, in

1987. Between

1987 and

1993,

a

further three BITS

were signed with Switzerland (1990), Netherlands (1991),

and

Germany (1992). Between

1993

and 2003

she

signed

a

further J

1

BITS, Three

of

those were sighed

in 1999.

10 North American Free Trade Agreement (NAFTA), 1992, Chapter 20

11 P

Paulwell,

'For our

Healths Safety

and

Economic Prosperity

(n 9)

(address

by the

Honourable

Minister

of

Commerce, Science

&

Technology

to

Regional Workshop

and

Symposium

on

Standardization. Jamaica Conference Centre, April

5,

2003) m (last visited

November 2003).

12 International Organisation

for

Intemarional Standardisation > (last visited

November 2003).

ISO

9000 standards

are

primarily concerned with management quality

13

ISO

began operations

on

February 23,1947.

It is

driven

by the

developed world.

14

P

Paulwell,

'For our

Health, Safety

and

Economic Prosperity'

(n 11).

15

Parker School

of

Foreign

and

Comparative

Law,

International Commercial Arbitration

and the

Courts (Transnational Juris Publications,

Inc

Dobbs Ferry,

New

York

1990) 89. In the

words

of

the authors,

the

various national systems

of law

continue

to

show differences that affect arbitral

adjudication.'