The use of mediation for investment disputes

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About TDM

Focussing on recent developments in the area of Investment arbitration and Dispute Management, regulation, treaties, judicial and arbitral cases, voluntary guidelines, tax and contracting.

TDM is supported by CEPMLP / Dundee, the International Bar Association and other law firms, international organizations and companies.

Editor-in-Chief

Editor-in-Chief is Thomas Wälde, Professor of International Energy Law (and former Executive Director) of the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP) at the University of Dundee, the internationally leading graduate school in oil, gas and energy law and policy. Professor Wälde is the former principal UN adviser on oil, gas, energy and investment law.

Noah Rubins, Jones Day, Washington, D.C.

1. While mediation is naturally possible in some investment disputes, in my experience such possibility may become extremely remote by the time an arbitration claim is ready for filing. Primarily, the investor has often lost confidence in the government's willingness to recognize the basis for the dispute and negotiate in good faith. There is little doubt that many investors would prefer a non-litigated solution to their dispute (witnessed by the 50%-or-so rate of settlement of ICSID cases before decisions on the merits are rendered). However, I think that large disputes not resolved by unmediated negotiation are unlikely to be resolved by adding a mediator to the mix.

2. A point more central to the present discussion is that mediation behind closed doors may not significantly alter the widespread - and legitimate - concern that investment disputes are being resolved in secret without appropriate concern for issues of public import. It seems to me that NGOs and other public interest entities would prefer a legal proceeding that is open to the public to a non-legal, purely economic/political mediation that is secret.

3. I don't believe that most claimants in investment disputes would object to public viewing of hearings, and even (perhaps) public access to submissions. I have a feeling that some governments would more strongly oppose such transparency, but I have no basis for that impression, and welcome input from those who represent governments in investment disputes.

4. As to amicus briefs, I agree with previous postings, that discretionary acceptance of such submissions would have a beneficial effect on the investment arbitration system. There is some sign that the Article 1128 procedure in NAFTA, which allows non-disputing member states to submit briefs as of right, is being abused. But some non-party filings could in fact be very useful in improving the arbitrators' ability to consider all relevant issues, and to improve the image of investment arbitration as a useful and fair mode of investor-state dispute settlement.

Noah D. Rubins, Esq.
Jones Day
51 Louisiana Ave., NW
Washington, DC 20001