On April 28, 2023, the Secretariats of the International Centre for Settlement of Investment Disputes (ICSID) and the United Nations Commission on International Trade Law (UNCITRAL) published the final draft of the Code of Conduct for Arbitrators in International Investment Disputes (the Code of Conduct). The draft concludes nearly six years of heated debates concerning two primary issues: disclosure obligations for arbitrators sitting on investment treaty tribunals; and “double-hatting,” (i.e., where a lawyer sits as arbitrator while at the same time acting as counsel in other investment treaty matters).

The ICSID and UNCITRAL Secretariats developed the Code of Conduct jointly, with substantive efforts led by Working Group III—UNCITRAL’s task force mandated to consider possible reforms to investor-State dispute settlement (ISDS). A separate Code of Conduct for Judges in International Investment Dispute Resolution was also published for judges who would sit on the prospective Multilateral Investment Court proposed by the European Commission.

On March 27-31, 2023, Working Group III finalized its revisions to the Code of Conduct during its forty-fifth session at the United Nations Headquarters in New York City, with representatives of more than ninety-five State delegations and fifty international organizations in attendance. The primary objective of the Code of Conduct is to provide principles and provisions that clarify the duties of international arbitrators—including impartiality, independence, and the conduct of proceedings with integrity, fairness, efficiency, and civility.

The final drafts of both the Code of Conduct for Arbitrators and the Code of Conduct for Judges will now be presented to UNCITRAL for formal adoption during its fifty-sixth annual session in Vienna on July 3-21, 2023.

Continue Reading A New Code of Conduct for Arbitrators May Soon Be Available to Parties in Investor-State Disputes—But No Ban on Double-Hatting

Introduction

On April 12, 2023, the High Court of Australia (High Court) rendered a unanimous judgment affirming that a foreign state was not immune from proceedings seeking recognition and enforcement of an International Centre for Settlement of Investment Disputes (ICSID) arbitral award.  This landmark decision provides welcome guidance on the interaction between Australia’s sovereign immunity regime and its international arbitration legislation implementing the ICSID Convention.

Infrastructure Services Luxembourg S.à.r.l. and Energia Termosolar B.V. v. Kingdom of Spain (ICSID Case No. ARB/13/31)

Kingdom of Spain v. Infrastructure Services Luxembourg S.à.r.l. & Anor [2023] HCA 11

Continue Reading <em>A Ray of Sunshine for Solar Energy Investors: High Court of Australia Rejects Spain’s Sovereign Immunity Plea Against Recognition and Enforcement of ICSID Arbitral Award</em>

The United Kingdom’s (U.K.) accession to the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP) might have been a bumpy ride, but it will soon come to fruition.  While all eyes are on the trade implications of the CPTPP, another component of the CPTPP that is getting comparatively little attention – the CPTPP treaty provisions on investment – may turn out to have a much greater impact for the United Kingdom.

Continue Reading Coming to a Country Near You: The U.K. Announces Imminent Accession to the CPTPP – Including Its Investment Chapter

On 1 March 2023, the EU’s General Court delivered its judgment in Case T‑540/20, Jushi Egypt for Fiberglass Industry v Commission, ruling that the EU’s anti-subsidy Regulation does not preclude the countervailing of subsidies that are granted by a foreign state to companies in a third country, which can be attributed to the government of the country of origin or export of the products concerned. The Court’s ruling confirmed the Commission’s interpretation in Implementing Regulation (EU) 2020/870, which imposed a definitive countervailing duty on imports of continuous filament glass fibre products (‘GFR’) originating in Egypt.

Continue Reading EU Court recognizes transnational subsidies are countervailable

On February 21, 2023, the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP) formally entered into force for Chile, after undergoing an intense, four-year legislative process.  The CPTPP covers the full range of modern trade agreements, including market access for goods and services, public procurement disciplines, temporary entry, and investment protection, among others.  Despite the CPTPP’s entry into force, the future of investor-State dispute settlement (ISDS) in Chile remains a point of controversy.

Continue Reading The CPTPP Enters into Force for Chile – but Mind the Fine Print

Canadian, Mexican and United States investors considering bringing a claim under the North American Free Trade Agreement (NAFTA) against a NAFTA State Party should be aware that the three-year window for notifying their claim will soon come to an end.  They must therefore take quick action to notify their claim by the end of March 2023 to be in a position to submit their request for arbitration before July 1, 2023, the final deadline for the submission of legacy NAFTA investment claims.

The NAFTA was terminated on July 1, 2020, with the entry into force on that same date of the United States-Mexico-Canada Agreement (USMCA). The USMCA Parties recognized the importance of a smooth transition from the NAFTA to the USMCA, particularly with regard to investors who had invested on the understanding that NAFTA’s Chapter Eleven (Investment) protections would be in place.  Annex 14-C of the USMCA therefore maintains NAFTA provisions on the protection and promotion of legacy investments for a period of three years post entry into force of the new agreement.  These provisions are consistent with the practice of Canada, the United States, and Mexico to provide a sunset period for investment protection under their bilateral investment agreements. 

Continue Reading The Window for Putting a USMCA State Party on Notice of a NAFTA Legacy Investment Claim Closes at the End of March

On 14 December 2022, the Council of the EU (“Council”) and the European Parliament (“Parliament”) adopted Regulation (EU) 2022/2560 of the European Parliament and of the Council on foreign subsidies distorting the internal market (the “Foreign Subsidies Regulation” or “FSR”), which was published in the EU’s Official Journal on 23 December 2022. The FSR gives the European Commission (“Commission”) substantial new powers to investigate “financial contributions” granted by non-EU governments to companies operating in the EU and, where necessary, take measures to redress their distortive effects. Specifically, the Commission will be able to conduct such investigations through three new tools: two notification-based tools to investigate concentrations and bids in public procurements above certain thresholds and a general tool to investigate all other market situations and lower-value mergers and public procurement procedures.

Continue Reading The EU’s Foreign Subsidies Regulation Gets Adopted

On November 18, 2022, the Department of Commerce (“the Department”) published a notice of advanced proposed rulemaking seeking public comments with respect to its methodology in determining the existence of a particular market situation (“PMS”) that distorts the cost of production in the ordinary course of trade in the context of its antidumping duty (“AD”) proceedings.  This PMS provision was added to Section 773(e) of the Tariff Act of 1930, as amended, through the Trade Preferences Extension Act in 2015.  As a result of several adverse court decisions since the passage of this amendment, the Department intends to reconsider its approach to determining the existence of a PMS, and to issue a new regulation to identify the types of information that should be considered when determining whether a PMS distorting the cost of production exists.  Comments are due no later than December 18, 2022. 

Continue Reading The Department of Commerce Seeks Comment on Its “Particular Market Situation” Practice

Last week, the U.S. Department of Commerce (“DOC”) concluded that the Russian Federation will be considered a non-market economy (“NME”) for future antidumping duty (“AD”) proceedings.  This decision reversed the DOC’s 2002 conclusion that Russia was a market economy country, a conclusion that had been reaffirmed by the DOC as recently as 2021.  This decision could have significant consequences for companies importing products from Russia subject to AD orders as, generally speaking, the use of the NME methodology results in higher AD margins.  As a result, companies involved in certain industries, particularly in the steel, fertilizer and chemical sectors, could feel an impact from this decision after it begins to take effect.

Continue Reading U.S. Commerce Department Concludes Russia Is a Non-Market Economy for Antidumping Proceedings

The United States, the European Union, and the United Kingdom are increasingly using trade policy tools as a means to promote certain sustainability goals related to human rights and the environment.  For instance, Steptoe covered in a previous post the trade restrictions proposed at the end of 2021 aimed at illegally deforested products.  More recently, amidst increasing concerns regarding forced labor in certain regions, the EU has proposed legislation which would ban making available within the EU, and exporting from the EU, products made with forced labor – resembling, to some extent, the forced labor ban that is in place in the US. Meanwhile, the UK has adopted a more piecemeal and geographically targeted approach through the adaptation of existing legislation focused on export controls and the prevention of modern slavery.

Continue Reading Measures Banning Products Made with Forced Labor: US, EU and UK Approach