Overriding Mandatory Rules and Compliance in International Arbitration - Institute Dossier XIX

No. E808E

ISBN : 978-92-842-0527-1

Economic sanctions, exchange and export control regulations adopted by countries and regional organisations are increasingly interconnected with arbitral proceedings worldwide. Their overriding mandatory nature with respect to certain territories is unquestionable. But does that make them relevant, or binding, on international arbitral tribunals sitting outside of these territories? Party submissions arguing bindingness or irrelevance, vary greatly, whether as a result of ignorance or unease, or as a deliberate attempt to mislead the tribunal. In turn, arbitral awards show no uniform position among tribunals. Scarce institutional guidance exists. Until now.

In this Institute Dossier, leading arbitrators, counsel, business decision makers, and diplomats—the very drafters of sanctions regulations—discuss their conflicting expectations of how or if mandatory rules pertaining to sanctions should be complied with.

This must-have publication is destined to enrich the database of international arbitrators, counsel, business executives, law enforcement agencies and anyone else involved in strategic decision-making.

Code ISBN : 978-92-842-0527-1
Number of pages : 211
Publishing date : 2022
Language : English
Foreword     Eduardo Silva Romero

Introduction  Georges Affaki

Chapter 1
Overriding Mandatory Rules in International Arbitration:
National Monetary Restrictions
Sir William Blair, Grace Cheng
I. Introduction
II. Lois de police
III. Effect of the Covid-19 Pandemic
IV. Party Autonomy in International Commercial Arbitration
V. Public Policy
VI. Overriding Mandatory Rules
VI.1 Definition of Overriding Mandatory Rules
VI.2 Provisions Rendering the Performance of the Contract Unlawful
VI.3 Application of these Principles to Complex Financial Products
VII. Effect of the Pandemic on Financial Contracts
VIII. National Monetary Restrictions
VIII.1 Exchange Control
VIII.2 Currency Rules within a State
VIII.3 Currency Manipulation
VIII.4 Export Control
VIII.5 Sovereign Debt Moratoria
IX. Financial Sanctions
IX.1 Unilateral and Multilateral Sanctions
IX.2 The Libyan Sanctions Litigation
X. Case Law arising from the Case of Venezuela
XI. Corrupt Payments and Breaches of AML/CFT
XII. Conclusion

Chapter 2
The Evolving Dynamics of Monetary Restrictions as International Arbitration’s Next Big Challenge?
Carolyn B. Lamm, Eckhard Hellbeck, Madina Lokova and Maximilian Clasmeier.
I. Introduction.
II. States’ Regulatory Powers under General Public International Law to Impose Monetary Restrictions.
III. Potential Investment Treaty Claims against Monetary Restrictions.
III.1. Expropriation.
III.2. The Guarantee of Fair and Equitable Treatment.
III.3. The Guarantee of Full Protection and Security.
III.4. Non-Discrimination (National Treatment and Most-Favoured-Nation Treatment).
III.5. Umbrella Clause.
III.6. The Right to Transfer Funds.
IV. Defences against Claims Resulting from Monetary Restrictions.
IV.1. Customary International Law.
IV.2. Treaty-Based Exceptions and Defences.
V. The Evolving Dynamics in International Arbitration.
V.1. The Geographic and Substantive Diversity of Monetary Restrictions.
V.2. The Interconnectedness of Markets as a Multiplier.
V.3. Conclusion.
VI. The Adaptability and Adequacy of International Arbitration.
VI.1. The Role of Systemic Developments
VI.2. The Adequacy of Decisions in International Arbitration.
VI.3. The Newest Fruit of Adaptation: Doctrine of Compliance?
VII. Conclusion. 

Chapter 3
Sovereign Debt Moratoria and Covid-19: Some Necessary Thoughts on Necessity
Ali Malek, QC, Cameron Miles.
I. Introduction.
II. Customary international law and the concept of the “Grotian Moment”.
III. The “Current” International Law on Sovereign Debt Moratoria and States of Necessity. 
IV. Covid-19 and the Evolution of Necessity. 
V. Conclusion. 

Chapter 4
Impact Of Sanctions on International Arbitration
Vladimir Khvalei. 
In lieu of foreword
I. Retention of a Legal Counsel 
II. Payment of an arbitration fee 
III. Going through a compliance procedure within an arbitration institution
IV. Formation of an arbitral tribunal free from the impact of sanctions
V. Getting a visa and other forms of access to the country of the seat
of arbitration 
VI. Organizing a hearing
VII. Retaining an expert 
VIII. Avoiding negative provisions of governing law 
IX. Avoiding the setting aside of an arbitration award
X. Enforcement of the award

Chapter 5
Overriding Mandatory Provisions and Arbitrability in International Arbitration: The Case of Multilateral and Unilateral Sanctions
Eric De Brabandere, David Holloway
I. Introduction
II. Sanctions, Overriding Mandatory Rules and Arbitrability: General Principles
III. The Arbitrability of Sanctions-Related Disputes
IV. The Specific Nature of Unilateral Sanctions
V. Concluding Remarks

Chapter 6
Overriding Mandatory Rules and Arbitration in a Changing World
Dominique Hascher
I. Overriding Mandatory Rules: A Definition
II. The Arbitrability Question
III. Should Arbitrators be Trusted?
IV. Have Arbitrators kept their Promises?
Chapter 7
Anti-corruption Compliance in International Arbitration:
The Shadow Theatre of Agent and Consultant Agreements
Laurent Cohen-Tanugi
I. Introduction
II. The Rise of Compliance and its Impact on Agent
and Consultant Agreements
III. A Conflicted Case Law
IV. The Shadow Theatre of Legacy Agreements
V. A Way Out and the Way Forward
Chapter 8
Economic Sanctions and the World Trade Organisation:
An Exception under Review
Laurence Boisson de Chazournes
I. Introduction
II. Security Exceptions in the WTO Framework
III. UN Economic Sanctions in the WTO Framework
IV. Non-UN Economic Sanctions in the WTO Framework
IV.1. Jurisdiction to Review the Invocation of Sub-paragraph (b)
of the Provisions on Security Exceptions
IV.2. The “Action” in Question must Fall under One of the
Three Sub-paragraphs of Article XXI(b)
IV.3. The Conditions of the Chapeau of Article XXI(b): “which it considers necessary for the protection of its essential security interests”
V. Concluding Remarks

Edited by

Georges Affaki

Vladimir Khvalei

Authors (as they appear in the publication)

Eduardo Silva Romero

Georges Affaki

Sir William Blair, Grace Cheng

Carolyn B. Lamm, Eckhard Hellbeck, Madina Lokova and Maximilian Clasmeier

Ali Malek, QC, Cameron Miles.

Vladimir Khvalei

Eric De Brabandere, David Holloway

Dominique Hascher

Laurent Cohen-Tanugi

Laurence Boisson de Chazournes