PDRC President Edmundo L. Tan signed a Memorandum of Agreement (MOA) with the University of Makati (UMak) School of Law, represented by Dr. Elyxzur C. Ramos, Vice President for Academic Affairs, on November 29, 2017 at the UMak campus in Makati City.
The signing ceremony coincided with UMak’s annual Industry Partners Recognition Day. Makati Mayor Mar-len Abigail Binay-Campos, ViceMayor Monique Lagdameo, and other Makati City officials were present to witness the awarding of Certificates of Recognition to UMak’s industr y partners for their contribution in realizing UMak’s and Makati City’s mandate in promoting educational excellence and student employability.
The MOA between PDRC and UMak formalizes their partnership in the establishment of an ADR Center in UMak and the conduct of training and information dissemination campaigns on alternative dispute resolution (ADR).
Under the agreement, UMak, through its School of Law, shall provide adequate facilities for training and orientation seminars conducted jointly with PDRC, refer to PDRC any dispute for settlement through ADR, and serve as venue for any ADR case referred to PDRC. In turn, PDRC shall collaborate with UMak, through SLAW, on the setting up of an ADR Center, conduct training and information dissemination jointly with the UMak ADR Center, and allow participants from UMak to attend the training and seminars free of charge.
PDRC Secretary General Roberto Dio and UMak SLAW Secretary Angel Velero witnessed the MOA signing.
The need to harmonize the arbitration laws of ASEAN countries
PART TWO
Note: In Part 1, the author discussed the need to harmonize the arbitration laws of ASEAN countrues based on the UNCITRAL Model Law and recommends the adoption of a uniform standard of public policy. In this concluding part, he recommends the harmonization of the concept of arbitrability and the creation of an ASEAN Center for the Settlement of Investment Disputes.
The vexing question: What is arbitrability?
The term “arbitrability” has a precise and limited meaning, i.e., whether specific classes of disputes are barred from arbitration because of national legislation or judicial authority. Courts often refer to public policy as the basis of the bar.
What law applies to arbitrability is indeed a vexing question.
Because of the public interest involved, States understandably want to apply their own national laws to the issue of arbitrability. The New York Convention recognizes this concern when it directs courts to apply the national law in determining the arbitrability of a dispute. The same reference to the national law is found in the UNCITRAL Model Law.
However, an international arbitral tribunal does not form part of the judicial system of any country and, therefore, does not have a national law to rely on. The tribunal, therefore, has to choose among the various national laws before it to be able to determine arbitrability. Arbitrability can be as divergent and multifarious as there are national laws involved.
Recommendation: Harmonize the concept of arbitrability
In line with the proposal for ASEAN to harmonize the region’s commercial laws and international commercial arbitration laws, it is further proposed that the notion of arbitrability be harmonized, at least insofar as it applies to the arbitration of investment disputes.
By a convention or multilaterla treaty, the ASEAN countries may provide that all disputes arising from or related to foreign investments are arbitrable, notwithstanding any provision to the contrary in the national statutes and judicial precedents of the States involved.
The idea is to delocalize the arbitrability of investment disputes. A center for the settlement of investment disputes for ASEAN
Many countries in the world have become disillusioned with the International Center for the Settlement of Investment Disputes (ICSID).
Indonesia is not extending expired bilateral invetment treaties (BITs) and is not entering into new ones. It seems inclined to withdraw from the ICSID for various reasons, one of which is that the cost of ICSID arbitration is so immense, amounting to millions of U.S. dollars. One author has said:
“ICSID is in general far too expensive, reserving arbitration for the biggest and richest. The average administrative cost for arbitration in the ICSID is 4 million per party and the arbitration takes on average 3.6 years. This would limit ‘mom and pop’ investors from effectively using ICSID. Furthermore, the range and distribution of costs vary largely depending on the case, some costing significantly more. The combination of these facts, and in the context of geopolitical considerations, suggests that only the biggest investors in the economy are in control of critical industries . . . “
Several Latin countries have withdrawn from the ICSID. Bolivia, Ecuador and Venezuela have withdrawn from ICSID. Argentina is about ready to withdraw. Canada, Cuba, México and Dominican Republic have not ratified the ICSID Convention. The Caribbean states that remain outside the ICSID jurisdiction are Antigua, Barbuda, Belize, Dominica, and Suriname. Brazil has not approved (and not even signed) the ICSID Convention.
The criticism against ICSID arbitration may be summed up as follows:
- ICSID’s umbilical cord with the World Bank raises concerns by some countries that hostility toward ICSID may hamper access to World Bank credit;
- The hardship to developing countries in resorting to ICSID arbitration due to extremely expensive foreign law firms;
- A shadow of arbitrator bias in favor of investors, with different ad hoc tribunals analyzing similar cases and reaching disparate results;
- The absence of an appeals process; annulment procedure is only on limited grounds.
The ASEAN Center for the Settlement of Investments Disputes
It is proposed that, as an essential component of the ASEAN integration, a regional center for the resolution of investment disputes among the ASEAN countries be established as an alternative to ICSID. Such a regional center may be patterned after the ICSID but with institutional changes, as may be appropriate, to address the objections to and the perceived institutional faults of ICSID.
The Center may be called the “ASEAN Center for Resolution of Investment Disputes.” As proposed, the Center shall have jurisdiction over any legal dispute arising directly out of an investment, between an ASEAN member State (or any constituent subdivision or agency of such member State designated to the Centre by that State) and a national of another ASEAN member State, which the parties to the dispute consent in writing to submit to the Center.
The Center will have a Panel of Arbitrators and a Panel of Mediators appointed by the member countries. Each member country, for example, may appoint 10 arbitrators to each Panel. It is proposed that a comprehensive appeals facility competent to review all awards rendered by a panel of arbitrators be established as an integral component of the Center. This appeals facility may be called the Appellate Panel. Each member country, for example, may appoint 10 arbitrators to the Appellate Panel.
It is proposed that a Technical Working Group be formed to draft the framework of the Center and all the relevant details for the consideration of the ASEAN at the ministerial level.