Christophe Bondy

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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

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 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

In 2021, the United Kingdom (UK) exited the EU’s legal regime to become an independent entity for trade purposes – given this, the year witnessed the operation of the Trade and Cooperation Agreement (TCA) which governs the relationship between the UK and the European Union (EU), the negotiation of at least two other free trade agreements (FTAs) ( the UK-Australia FTA and the UK-New Zealand FTA), an application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) along with the establishment of the Trade Remedies Authority (TRA) and the issuance of its first decisions.  The present note summarises these key developments (and more) in UK trade over the past year.
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Continue Reading UK Trade: A Summary of Developments in 2021

2021 was an eventful year for international trade law and policy in the EU, with developments in several key areas.

The EU strengthens its trade policy toolbox

In the light of the recent ongoing problems with multilateralism and the continuing rise of China, the EU focused hard on strengthening its trade enforcement toolbox in a wide variety of trade related areas. This includes the use of recent tools and proposals for new instruments:

  • The Amended Trade Enforcement Regulation entered into force on 13 February 2021. This greatly expands the EU’s capacity to adopt trade countermeasures against third countries. It can now do so even before dispute settlement proceedings at the WTO or under other international agreements have been concluded if these are blocked by the other party. This would include, for instance, situations where a trading partner appeals an adverse panel report “into the void” to the non-functioning Appellate Body at the WTO, as well as in relation to a broader range of violations. The Commission is due to undertake a review of the Trade Enforcement Regulation, to consider additional commercial policy measures in the field of trade-related aspects of intellectual property rights, by 13 February 2022.
  • The FDI Screening Regulation, which has been in force since the end of 2020, has led to a growing number of FDI mechanisms notified or updated by Member States to the European Commission throughout 2021 (see here). For the EU, which did not have a role in FDI screening prior to this, this mechanism is starting to become a game-changer. In November 2021, the Commission published its first annual report on the screening of foreign direct investments into the EU. Of the 265 cases notified to the Commission between 11 October 2020 and 30 June 2021, 80% were closed by the Commission in Phase 1, whereas 14% of cases proceeded to Phase 2, with additional information being requested from the notifying Member State (the remaining 6% were still under assessment on 30 June 2021). The Commission issued an opinion, with recommended measures, in less than 3% of the notified cases. Actual prohibitions of investments by Member States appear to be limited for the moment, although there have been such instances (like Italy’s prohibition of the proposed acquisition of control in LPE, an Italian semiconductor equipment company, by a Chinese company). Moreover, parties sometimes abandon envisaged transactions prior to a formal prohibition. The imposition of conditions appears more common.
  • On 5 May 2021, the Commission published its proposal for a new Regulation to address distortions by foreign subsidies. The Regulation introduces three new instruments that would give the Commission the power to investigate foreign subsidies granted to companies active in the EU and identify whether they are causing distortions in the EU single market. Should the Commission identify distortive foreign subsidies, it could impose redressive measures to counteract their effects (see our blog post describing the Commission’s proposal here). If adopted, which currently appears likely, it would give the Commission far-reaching new powers. The Committee on International Trade, the leading committee in charge of the file within the European Parliament, has released its draft report on the proposal on 17 December 2021, generally supporting the new instruments and suggesting additional protections against home-market monopoly advantages and known future subsidies.
  • On 8 December 2021, the Commission published a proposal for a new anti-coercion instrument. The aim of this instrument would be to deter and, if necessary, retaliate against third countries exerting economic coercion against the EU or its Member States in order to influence their political decisions and policy choices (see our blog post describing the Commission’s proposal here). This is another example of a novel instrument in the field of trade that would grant the Commission with robust powers to address trade policy issues.
  • Negotiations on a proposed new International Procurement Instrument have also progressed in 2021. This instrument would enable the EU to limit, on a case-by-case basis, access to its public procurement market by companies from third countries which restrict access to their own procurement markets by EU businesses. This would represent a significant overhaul of the EU’s current public procurement system, which is currently one of the more open ones globally.

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Continue Reading EU Trade: 2021 Takeaways, 2022 and Beyond – What to Expect

On 2 October 2020, India and South Africa submitted to the Council for Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) of the World Trade Organization (“WTO”) a proposed waiver from the implementation, application and enforcement of intellectual property (“IP”) rights under the WTO TRIPS Agreement (“COVID Waiver”) insofar as these rights relate to the prevention, containment, and treatment of COVID-19.  In essence, the COVID Waiver would allow WTO Members to forgo some protections of IP rights set out in the TRIPS Agreement in the hope that this waiver could speed up the production of affordable medical products including COVID diagnostic kits, vaccines, medicines, personal protective equipment and ventilators.

The proposed COVID Waiver has divided the WTO Membership.  While a majority of WTO Members have expressed support for the COVID Waiver, some developed countries (such as the EU, Korea, Japan, Australia and Singapore) have expressed reservations as to whether the COVID Waiver is necessary and whether it would actually help achieve the aim that it is intended to serve.…

Continue Reading Tensions Between Consensus and Voting in WTO Decision-Making – Part II: The Proposed Waiver on TRIPS and COVID-19

There exists a deep-seated practice and tradition of resorting to consensus as the favoured means of decision-making at the World Trade Organization (WTO).  This practice was carried over from the time of its predecessor, the General Agreement on Tariffs and Trade (GATT).  This marked preference for decision-making by consensus over voting has been enshrined in Article IX:1 of the Marrakesh Agreement Establishing the WTO (Marrakesh Agreement) which provides that: “[t]he WTO shall continue the practice of decision-making by consensus followed under GATT 1947”.

However, Article IX:1 of the Marrakesh Agreement also states that: “[e]xcept as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting”.

Thus, while the Marrakesh Agreement formally recognizes consensus as the preferred means of decision-making, it also clearly recognizes the validity of taking decisions by voting as a subsidiary means when consensus is unattainable on any given matter.

As an added twist to decision-making at the WTO, Article IX:1 of the Marrakesh Agreement also establishes that: “[d]ecisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast”.  In other words, majority voting was intended to be the default means of decision-making for the Ministerial Conference (MC) and the General Council (GC).

Nevertheless, in practice, voting at the WTO never takes place.  Instead, WTO Members have strictly adhered to consensus since the WTO’s inception.

In this three-part series, we intend to explore how the WTO Membership’s traditional aversion to voting as a means of decision-making is coming under fire and putting a strain on the proper functioning of the WTO.

Each part will in turn discuss the following three instances where significant pressure is currently building up on consensus as the exclusive means of decision-making at the WTO: (i) the appointment of Appellate Body (AB) members; (ii) the proposed decision to waive certain provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) with regard to combatting COVID-19; and (iii) the outcomes of negotiations on e-commerce, investment facilitation, micro, small and medium-sized enterprises (MSMEs) and the domestic regulation of services conducted as “joint statement initiatives” (JSIs).

This first instalment of our three-part series will focus on the appointment of AB members.…

Continue Reading Tensions Between Consensus and Voting in WTO Decision-Making – Part I: Appointing Appellate Body Members

The European Commission’s recently released proposal for a Carbon Border Adjustment Mechanism (CBAM) forms a critical part of the European Union’s Fit for 55 Package, discussed in a previous blog.  The proposed EU CBAM will require importers of certain products into the EU to pay for the tons of carbon emissions embedded in those products in the form of CBAM certificates, the price of which would be tied to the price of emissions allowances under the EU Emissions Trading System (ETS).  The CBAM is expected to be phased in gradually from 2023 in the form of detailed emissions reporting requirements, transitioning to full implementation by 2026.  Although the EU CBAM has yet to be approved and details of the mechanism remain to be fleshed out via implementing acts, companies would benefit by evaluating their potential exposure now, not just to the EU CBAM but also to the measures that may be implemented in response by other countries, including the United States.
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Continue Reading The EU CBAM: What the Proposed Regulation Covers, What Happens Next, and What Companies Should be Thinking About Now

Recent events at the World Trade Organization (WTO) illustrate how decision-making activities of its Dispute Settlement Body (DSB) can easily be derailed, notably by political frictions spilling over into its meetings.  However, the rarity of instances in which the DSB found itself paralysed underlines the extent to which the WTO has developed coping mechanisms which should enable it to keep such frictions at bay and thus minimize disruptions to its continued functioning.

The penultimate DSB meeting, scheduled for March 26, 2021 was suspended due to the lack of consensus required for the adoption of its agenda.  Rules applicable to DSB meetings require that its proposed agenda be adopted by consensus before a meeting can take place.  The proposed agenda circulated ahead of the March 26, 2021 DSB meeting included a request by Venezuela for the establishment of a dispute settlement panel in respect of U.S. measures.

The United States objected to the inclusion of what it perceived to be an illegitimate panel request, on the grounds that representatives of the Nicolás Maduro regime do not speak on behalf of the Venezuelan people, and that this was a misuse of the WTO aimed at challenging U.S. sanctions that sought to restore human rights and democracy to Venezuela.  As a result of the U.S. objection, the agenda could not be adopted and the DSB meeting could not take place.  All remaining items for consideration at that DSB meeting could not move forward as long as that DSB meeting remained suspended.  These included a request for the establishment of a dispute settlement panel by Australia regarding measures adopted by China in relation to barley from Australia.…

Continue Reading A Bumpy Road Ahead? How International Standoffs Periodically Hold the WTO Dispute Settlement System Hostage