Investment Arbitration in the Energy Sector

Author(s):  
Elena Cima

This chapter studies the role of investment arbitration in the energy sector, which has received increasing attention over the last decade. International energy investment accounts for a significant percentage of all global investments and makes up the largest portfolio of international arbitrations in the world today. Energy-related disputes can take many forms. They may occur between two states, two private parties, or a private party and a state—in which case they may relate either to an investment by a foreign company in a state or to a commercial contract between a foreign company and a state. The chapter considers only one type of energy-related dispute, namely investment disputes between a foreign investor and a state. It particularly focuses on arbitration, which represents ‘the most widely used form of dispute settlement between foreign investors and host States’.

Author(s):  
Gus Van Harten

Governments are rightly discussing reform of investment treaties, and of the powerful system of ‘investor–state dispute settlement’ (ISDS) upon which they rest. It is therefore important to be clear about the crux of the problem. ISDS treaties are flawed fundamentally because they firmly institute wealth-based inequality under international law. That is, they use cross-border ownership of assets, mostly by multinationals and billionaires, as the gateway to extraordinary protections, while denying equivalent safeguards to those who lack the wealth required to qualify as foreign investors. The treaties thus have the main effect of safeguarding an awe-inspiring set of rights and privileges for the ultra-wealthy at the expense of countries and their populations. This book shows how ISDS came to explode in a global context of extreme concentration of wealth and of widespread poverty. The history of early ISDS treaties is highlighted to show their ties to decolonization and, sometimes, extreme violence and authoritarianism. Focusing on early ISDS lawsuits and rulings reveals how a small group of lawyers and arbitrators worked to create the legal foundations for massive growth of ISDS since 2000. ISDS-based protections are examined in detail to demonstrate how they give exceptional advantages to the wealthy. Examples are offered of how the protections have been used to reconfigure state decision making and shift sovereign minds in favour of foreign investors. Finally, the ongoing efforts of governments to reform ISDS are surveyed, with a call to go further or, even better, to withdraw from the treaties.


2021 ◽  
Vol 4 (2) ◽  
pp. 774-795
Author(s):  
I Gusti Putu Anom Kresna Wardana ◽  
Tsaltsa Syah Putri ◽  
Tunggal Bayu Laksono

Every country in the world has sovereignty, especially over the security of its country, one of the things that can threaten the security of the country is the entry of foreigners whose activities are not according to the permits given to them, one of which is the misuse of residence permits by foreign investors in Indonesia. This study aims to explain in detail about the misuse of residence permits by a foreign investor in Indonesia and further discusses the legal supervision carried out by Immigration in dealing with irregularities committed by foreigners. This study uses a descriptive type with empirical normative research methods, where in finding data sourced from secondary data, namely through interviews, and secondary data obtained by conducting literature reviews such as laws and other regulations. At this writing it was found that the perpetrators took actions that were not in accordance with the purpose of giving a residence permit and did not carry out proper procedures to obtain a new Limited Stay Permit. From this research, it can be concluded that the supervision of foreigners must be tightened, one of which is the effective and efficient implementation of the Foreigner Supervision Team which is formed on the basis of synergy between related Ministries/Institutions in Indonesia.


2019 ◽  
Vol 1 (2) ◽  
pp. 620
Author(s):  
I Gede Putra Wijaya ◽  
Christine S.T. Kansil

Foreign investors who want to invest in Indonesia must obey the existing rules, namely the Investment Law No. 25 of 2007. The investment law stipulates that if foreign investors want to do business in Indonesia, the foreign investor must establish a company in the form of a legal entity, namely a limited liability company. Requirements for foreign companies can be said as legal entities that must go through the stages of establishing a company until the company ratified by the Ministry of Law and Human Rights. If a foreign company is not a legal entity, the foreign company is not legal and cannot be considered a legal subject in carrying out business activities in Indonesia. Regarding the liability of the foreign company that is to be borne by the private party not by the shareholders because the foreign company is not a legal entity. It is better if foreign investors want to carry out business activities in Indonesia that the business must be in the form of a legal entity in accordance with the investment law’s order to comply with the applicable rules and foreign investors can carry out their business activities properly.


2020 ◽  
Vol 21 (6) ◽  
pp. 809-846
Author(s):  
Jean-Michel Marcoux

Abstract International investment arbitration has been criticized for its general reluctance to consider human rights concerns related to foreign investors’ activities. By contrast, arbitration tribunals have relied on transnational public policy to prevent a claimant whose investment is tainted with illegality from obtaining redress. This article explores how human rights norms could be conceptualized as part of transnational public policy to impose obligations on foreign investors. It proceeds in three steps. First, it addresses the role of transnational public policy in investment arbitration. Second, the article identifies the material sources considered by tribunals to delimit the content of the doctrine. Third, it focuses on three norms – the protection of fundamental human rights, a corporate responsibility to respect human rights and the right of Indigenous Peoples to be consulted – for which tribunals have found an international consensus and that could be conceptualized as norms of transnational public policy.


2019 ◽  
Vol 25 (84) ◽  
pp. 36-52
Author(s):  
Martin Karas

Abstract The recent debate over the Investor-State Dispute Settlement (ISDS) regimes of international arbitration has resulted in concerted efforts aimed mainly at protecting the rights of states to regulate, improving transparency of proceedings and eliminating inconsistency in decision making of the tribunals. While the existing scholarly work frequently addresses issues of the relationship between the existing investment regimes and good governance in general, increased attention is rarely paid to the effects that investment arbitration has on democratic practice. The article applies an “action-based” approach to democracy, in order to analyse the role that the ISDS regimes play in exacerbating conflicts between the local populations, foreign investors and governments. The analysis leads to a conclusion that the ISDS regimes create incentives for the governments and foreign investors to disregard sound democratic practice. The article represents an attempt to move the discussion about the ISDS regimes away from the question of legitimacy of the regimes to the question of the impacts that the regimes have in practice.


Acta Comitas ◽  
2020 ◽  
Vol 5 (1) ◽  
pp. 26
Author(s):  
Ni Putu Mirayanthi Utami

Indonesia is one of the ASEAN members who agreed to implement the ACIA which focuses on investment, as the result of the implementation of the AEC. With the expectation of increasing foreign investment activities between ASEAN member countries and becoming one of the investment destinations in the world. It is proven that Indonesia still the choice of foreign investors. In order to support interests of foreign investors in conducting their business, so the role of the Notary public in investment activities needed through written proof. This study aims to analyse and provide an understanding of the role of the Notary in supporting investment in Indonesia when the AEC is implemented. This research using normative juridical methods. The study results show that the role of the Notary through direct investment is authorized to make authentic deeds based on Company Law. Furthermore, the authority of the Notary is regulated in Notary Law and Notary Law Amandement such as: providing legal counselling, services and legalizing public documents that will be used in Indonesia or needed for investment abroad. The implication of AEC it would be awared by the Notary. Therefore as a profession in a field of law, the have a to provide a social services by mastering in English and knowledge able in investment of law accordance with hierarchy of legislation and increasing competence following Notary Law and Notary Law Amandement, Notary Ethics Code, and Bylaws I.N.I. so that they can compete professionally. Indonesia merupakan salah satu anggota ASEAN yang menyetujui direalisasikannya ACIA yang berfokus pada investasi, sebagai implikasi diberlakukannya MEA. Dengan harapan dapat meningkatkan kegiatan investasi asing antara negara-negara anggota ASEAN dan menjadi salah satu tujuan investasi di dunia. Terbukti Indonesia masih menjadi pilihan investor asing. Guna menunjang kepentingan investor dalam menjalankan usahanya, maka peranan Notaris dalam kegiatan investasi sangat dibutuhkan melalui pembuktian tertulis. Studi ini bertujuan untuk menganalisa dan memberikan pemahaman peranan Notaris dalam mendukung investasi di Indonesia saat MEA diberlakukan. Penelitian menggunakan metode yuridis normatif. Hasil studi menunjukkan bahwa peran Notaris melalui investasi langsung yaitu berwenang membuat akta otentik yang dilandasi dengan Undang-Undang Perseroan Terbatas. Selain itu, kewenangan Notaris diatur dalam Undang-Undang Jabatan Notaris dan Undang-Undang Jabatan Notaris Perubahan seperti: memberikan penyuluhan hukum, pelayanan dan melegalisasi dokumen publik yang akan digunakan di Indonesia atau diperlukan untuk investasi di luar negeri. Implikasi diberlakukannya MEA juga harus disadari oleh Notaris. Maka sebagai profesi hukum dalam memberikan pelayanan kepada masyarakat haruslah berbekal penguasaan Bahasa Inggris, penguasaan mengenai hukum investasi sesuai dengan hirarki perundang-undangan dan peningkatan kompetensi sesuai dengan Undang-Undang Jabatan Notaris dan Undang-Undang Jabatan Notaris Perubahan, Kode Etik Notaris, dan Anggaran Rumah Tangga I.N.I sehingga mampu bersaing secara profesionalitas.


2020 ◽  
Vol 2 (1) ◽  
Author(s):  
Farahdiba Rahma Bachtiar

Indonesia’s objection to the United States (US) over a clove ban in 2010 was one of the most difficult trade dispute cases that Indonesia has ever submitted. The dispute between both countries in the clove cigarettes negotiations was actually completed in 2014 after the two countries agreed on mutual understanding (MoU) related to cigarettes. Indonesia's victory over the Dispute Settlement Body (DSB) by the World Trade Organization (WTO) shows the enforcement of international law in intervening in a country's domestic policies.Although it took great deal of time, Indonesia's victory over US becomes a lesson learned. This victory proves the role of the WTO in resolving trade dispute cases and refutes the notion of a superpower in particular the US being immune to the international law. US domestic trade policies that impose a ban on clove cigarettes have deviated from WTO rules and have harmed Indonesia as a producer


Author(s):  
Nathalie Bernasconi ◽  
Martin Dietrich Brauch ◽  
Howard Mann

This chapter discusses the role of civil society in international investment arbitration. Much of the civil society focus on international arbitration has been on the investor–state dispute settlement (ISDS) process included in many international investment agreements. However, the historical role of commercial arbitration as the progenitor of investment treaty arbitration and the procedural and structural links between ISDS and commercial arbitration are important for the discussions on civil society engagement. Civil society recognized early on the problems of using a commercial arbitration model for investment arbitration, which involves public law matters, and concluded that this created a misappropriation of a tool that up to that time had only been used for private commercial purposes or very well-defined state-to-state purposes. The crossing of these purposes and actors to create public law arbitration between investors and states is what created this sense of misappropriation and led to a spotlight being shone on the regime by civil society. The chapter then looks back at the beginnings of civil society engagement with international arbitration through the experience with investment treaties, including the advancement of transparency and the ability to submit amicus curiae briefs.


Author(s):  
Parra Antonio R

This chapter examines activities of the Centre from the start of 2011 to the end of June 2015. Almost 50 percent more cases were registered at ICSID in that period compared to the previous five years. The chapter provides some statistics on the cases of this period. As in the decade before, it shows, most the cases were brought to ICSID on the basis of the dispute settlement provisions of investment treaties, mostly bilateral investment treaties (BITs) (in over 60 percent of the cases). A large proportion of the cases (more than ten percent) came to ICSID under the Energy Charter Treaty (ECT). Cases submitted to the Centre pursuant to the dispute resolution clauses of investment contracts made up for a smaller share of the total. A handful (5 percent) of the cases were initiated under dispute settlement provisions of an investment law of the host State. The chapter then looks at institutional developments of ICSID during the period and considers new challenges that ICSID might meet in the future.


Author(s):  
Gus Van Harten

In this chapter, foreign investor protections are introduced as a symbol and guarantor of global inequality. Backed by the most powerful adjudicative mechanism in international law, these protections benefit 255,000 people whose combined wealth exceeds that of 80 per cent of the world’s adult population, about four billion people. They lead one to ask if the one hundred companies responsible for most industrial greenhouse gas emissions, for example, are so vulnerable or helpful to others as to deserve extraordinary international protection. Commonplace arguments in favour of investor–state dispute settlement (ISDS) are surveyed and criticized. The promotional role of the ISDS industry of arbitrators, lawyers, and experts, for which ISDS has generated to billions in fees, is also highlighted, focusing on arbitrators whose pro-investor interpretations laid a foundation for the explosion of ISDS.


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