Guide to Investment Court System

To know if you have a dispute falling under the relevant agreement, you should look at the provisions of that agreement on the scope of disputes covered.

In general, a dispute arises when an investor of one of the Contracting Party (Home State) alleges a breach of the agreement by the other Contracting Party (Host State) affecting an investment of the investor in the Host State which causes loss or damage.

 

Relevant provisions to find the scope of disputes covered by EU agreements

• EU-Canada CETA – Article 8.18
• EU-Singapore IPA – Article 3.1
• EU-Vietnam IPA – Article 3.27
• EU-Chile AFA Investment – Article 10.24

 

If you have a dispute, try to resolve it through amicable solutions and if not possible, submit a request for consultations.

In case of an alleged breach, the dispute should be as far as possible settled amicably through alternative dispute resolution mechanisms.

Alternative dispute resolution mechanisms provide the possibility to find a settlement agreement without incurring the costs of proceedings before a tribunal. The EU agreements always encourage settlement of disputes through amicable solutions, including through the following means

• Mediation
• Negotiations

Although these solutions are available even after the claim has been submitted, it is most advantageous to pursue them, as far as possible, before the submission of a request for consultations. Each disputing party shall abide by and comply with any mutually agreed solution.

 

Relevant provisions to find information on alternative dispute resolution mechanisms under EU agreements

• EU-Canada CETA – Articles 8.19 and 8.20
• EU-Singapore IPA – Articles 3.2 and 3.4
• EU-Vietnam IPA – Articles 3.29 and 3.31
• EU-Chile AFA Investment – Articles 10.25 and 10.26

If a dispute cannot be resolved through amicable means, a party may seek consultations by a written request delivered to the other party identifying the measure at issue and the provisions that it considers the actions of the Host State breach.

 

The request for consultations is essential as it is a mandatory step before initiating proceedings. It is also the starting point of the time limit to submit a claim (see below).

The request must contain specific information and must be submitted within a timeframe specified in the relevant agreement.

The time limitation in particular takes into consideration the situation where a claimant would seek redress before the domestic courts first, before resorting to the Investment Court System under the relevant agreement.

 

Relevant provisions to find information on the requirements to submit a request for consultations under EU agreements

• EU-Canada CETA – Article 8.19
• EU-Singapore IPA – Article 3.3
• EU-Vietnam IPA – Article 3.30
• EU-Chile AFA Investment – Article 10.26

If you already intend to initiate proceedings, you must send a notice of intent to the respondent(s) before the consultations phase ends.

Each relevant agreement provides that if the dispute cannot be settled within a specific amount of time since the submission of the request for consultations, an investor may deliver a notice of intent to the respondent(s) which shall specify in writing your intention to submit the claim to dispute settlement with the relevant information.

 

This notice of intent is important as in the event that the dispute is against the EU and its Member States, it will trigger the procedure to determine the correct respondent.

In case you have not been informed of the EU’s determination, the respondent will be the EU where the measures identified in the notice are exclusively measure of the EU, whilst the respondent will be a Member State where the measures identified in the notice are exclusively measure of that Member State.

 

Relevant provisions under EU agreements to find information on the requirements to send a notice of intent where the dispute is against the EU and its Member States

• EU-Canada CETA – Article 8.21
• EU-Singapore IPA – Article 3.5
• EU-Vietnam IPA – Article 3.32
• EU-Chile AFA Investment – Article 10.27

If the dispute cannot be settled through consultations, you may submit your claim to the Tribunal.

If the parties fail to resolve the dispute through consultations, a claim may be submitted to the Tribunal.

 

The claim has to be submitted within a specific timeframe, starting from the submission of the request for consultations.

The submission of a claim must include certain elements, such as the rules under which the dispute is submitted. 

Subject to specific exceptions, if an investor decides to initiative proceedings under the Investment Court System of the applicable agreement, it must withdraw or discontinue any existing proceedings before a tribunal or court under domestic or international law with respect to a measure alleged to constitute a breach referred to in the claim. It must also waive its rights to initiate any claim or proceeding before a tribunal or court under domestic or international law with respect to a measure alleged to constitute a breach referred to in the claim.

 

Relevant provisions to find information on the requirements to submit a claim and the specific timeframes under EU agreements

• EU-Canada CETA – Articles 8.22 and 8.23
• EU-Singapore IPA – Articles 3.6 and 3.7
• EU-Vietnam IPA – Articles 3.33, 3.34 and 3.35
• EU-Chile AFA Investment – Articles 10.28 and 10.29

Once your claim has been received and processed, the First Instance Tribunal will assess the case and render a provisional award.

The Investment Court System includes a two-tier mechanism with a First Instance Tribunal that will hear the case and render its award according to the applicable law.

As explained, the Investment Court System departs from the “ad hoc” nature of arbitration proceedings, where the disputing parties select their respective party-appointed arbitrators.

The President of the Tribunal will appoint the Judges composing the division of the Tribunal hearing the case. The three Members of the Tribunal (unless a sole Judge is agreed) will be selected from the list of Members that have been appointed by the Contracting Parties. One shall be a national of a Member State of the EU, one a national of the other Contracting Party, and one national of a third country who will chair the division of the Tribunal that will hear the case.

The First Instance Tribunal will be able to hear preliminary objections as well as requests for interim measures.

 

The award rendered by the First Instance Tribunal is provisional, meaning that it is not binding (and enforceable) if an appeal is launched. However, if a specific time period has elapsed since the provisional award was rendered and neither disputing party has appealed the award, the provisional award shall become final and enforceable.

 

Relevant provisions in EU agreements to find information on the constitution of the Tribunal and the conduct of the proceedings

• EU-Canada CETA – Articles 8.27, 8.31, 8.32, 8.33, 8.34
• EU-Singapore IPA – Articles 3.9, 3.13, 3.14, 3.15, 3.18
• EU-Vietnam IPA – Articles 3.38, 3.42, 3.44, 3.45, 3.47, 3.53
• EU-Chile AFA Investment – Articles 10.33, 10.37, 10.38, 10.41, 10.42, 10.44, 10.53

The provisional award may be appealed before the Appellate Tribunal, which will render a final award.

 

If a disputing party considers that the award rendered by the First Instance Tribunal contains errors, it may be appealed. The Appellate Tribunal will review the award and will render the final award within a short timeframe.

The Investment Court System includes a two-tier mechanism with a permanent appeal body. The Judges of the Appellate Tribunal hearing the case will be selected from the list of Members appointed by the Contracting Parties upon the entry into force of the agreement.

The President of the Appeal Tribunal shall appoint the Members composing the division of the Appellate Tribunal hearing the appeal. The Appellate Tribunal will hear cases in divisions consisting of three Members: one shall be a national of a Member State of the EU, one a national of the other Contracting Party, and one national of a third country who will chair the division of the Tribunal that will hear the case.

If the Appellate Tribunal dismisses the appeal, the provisional award shall become final.

If the appeal is well founded, the Appellate Tribunal shall modify or reverse the legal findings and conclusion in the provisional award in whole or in part. The Appellate Tribunal may render a final decision itself or decide to refer the matter back to the First Instance Tribunal.

The final decision of the Appellate Tribunal or the award of the First Instance Tribunal hearing back the matter, will be final and binding.

Relevant provisions in EU agreements to find information on the appeal proceeding and the final award

• EU-Canada CETA – Articles 8.28, 8.39
• EU-Singapore IPA – Articles 3.18, 3.19
• EU-Vietnam IPA – Articles 3.54, 3.55
• EU-Chile AFA Investment – Articles 10.54, 10.55

If an investor has a final award in its favour, it may start enforcement proceedings in front of domestic courts.

Once a final award has been rendered, it becomes enforceable.

Final awards are binding between the disputing parties and not be subject to appeal, review, set aside, annulment or any other remedy.

If an investor has a final and binding award in its favour, it may start enforcement proceedings in front of domestic courts. Execution of the award shall be governed by the laws concerning the execution of judgments or awards in force where execution is sought.

Relevant provisions in EU agreements to find information on enforcement of final awards rendered under the Investment Court System

• EU-Canada CETA – Articles 8.41
• EU-Singapore IPA – Articles 3.22
• EU-Vietnam IPA – Articles 3.57
• EU-Chile AFA Investment – Articles 10.56