The Use of Diplomatic Channels to Combat State Interference and Guerrilla Tactics in International Arbitrations
Published 7 April 2014
Introduction
Disputing parties have been known to use guerrilla tactics in arbitration since time immemorial. Arbitrations involving states or state entities are of particular interest as they potentially provide 'an inherent inequality in the balance of power of the disputing parties'. It has to be pointed out that in such cases it is not necessarily the disputing state parties resorting to guerrilla tactics. However, since the diplomatic channels examined here would usually be directed against guerrilla methods used by states or state entities, this chapter will focus on states employing guerrilla tactics either: (i) by severe and wilful violations of the applicable substantive law (e.g., by expropriating an investor - without any existing or even alleged legitimate purpose - through military means, thereby causing physical harm); or (ii) by delaying and obstructing the arbitral proceedings by grossly unfair and unethical methods.
For the sake of brevity, states resorting to such methods will be referred to in this chapter as 'guerrilla states'. Indeed, when acting as a sovereign, a state has prerogatives - in particular, the police power - which a private party does not enjoy. A state can, for example, change the 'rules of the game' by using its legislative or executive power. It does not have to engage in forgery as regular private parties would but has the possibility to create and even authenticate official documents (even if the contents defy logic, common sense or justice).
If these powers are deployed inappropriately, they result in an abuse of process. Most notably, authoritarian states used to unscrupulously employing arbitrary methods in their domestic affairs might not be able to resist using the same methods with respect to foreign investors or in commercial arbitrations with foreign private parties. Therefore, influencing these states - to act or refrain from acting a certain way - through diplomatic channels deserves an even more thorough analysis than can be provided in this chapter. If the use of diplomatic channels makes it clear to the guerrilla state that it is being watched and that its behaviour might be detrimental to its other national interests, it would be inexcusable not to consider it.
This article is a slightly updated version of the authors' chapter 4.02 (The Use of Diplomatic Channels) as published in Günther J. Horvath/Stephan Wilske (eds.), Guerrilla Tactics in International Arbitration, pp. 298-311. Kluwer Law International, ISBN 9789041140029, http://www.kluwerlaw.com/Catalogue/titleinfo.htm?wbc_purpose=b?ProdID=9041140026 - (re)published with kind permission.