Concluding Remarks - Chapter 6 - Investment Arbitration in Eastern Europe: In Search of a Definition of Expropriation
Kaj Hobér is a Partner with Mannheimer Swartling Advokatbyrå in Stockholm and Professor of East European Commercial Law at Uppsala University. He has been heavily involved in the legal aspects of doing business in Eastern Europe and the former Soviet Union for the last 25 years. His arbitration experience includes representing both Eastern and Western European, American and Russian parties as well as parties from developing countries in international arbitrations. He has also been involved in numerous oil and gas arbitrations, relating primarily to Northern Africa, the Middle East and the former Soviet Union. He has acted as counsel and arbitrator (including chairmanships) in more than 300 international arbitrations, including representation of the claimant in the first ECT award, as well as involvement in many other investment arbitrations. He is Chair of the IBA sub-committee on Investment Treaty Arbitration, a member of the board of the Arbitration Institute of the Stockholm Chamber of Commerce, the International Arbitration Club (London) and a member of the ICC Institute of International Business and Law (corresponding member).
Professor Hobér is the author of Joint Ventures in the Soviet Union (1989), Enforcing Foreign Arbitral Awards Against Russian Entities (1993), Transforming East European Law (1997), Protection of Property Rights in the Baltic Sea Region: Reality or Potemkin Villages? (1999), Applicable Law and Extinctive Prescription in Interstate Arbitration (2001), The Impeachment of President Yeltsin (2003), Essays on International Arbitration (2005), and is also the general editor of the Uppsala Yearbook of East European Law, and co-editor of Arbitration in Sweden (2nd ed., 1984). He has also published numerous articles on international arbitration and East European law.
As mentioned in the introduction to this contribution, during the last 5-8 years there has been a dramatic increase in the number of investment arbitrations. The number of investment disputes involving states in Eastern Europe has also grown significantly. Almost all investment disputes deal with different forms of alleged indirect expropriation. The Sedelmayer Case stands out as a rare exception in that it is rather an example of direct expropriation.
The dramatic increase in the number of investment arbitrations has led to a situation where many new forms of alleged government takings, regulatory and otherwise, have been addressed by arbitral tribunals. The fact patterns addressed by the tribunals cover a wide spectrum. As mentioned previously, in drawing the line between legitimate government measures, regulatory or otherwise, and indirect expropriation the facts of each individual case play a decisive role. On a general level, it is probably too early to draw definitive conclusions from recent arbitral practice. It is too early to provide a rigours scholarly analysis of recent cases. This difficulty is compounded by the nature of international arbitration. For one thing, there is no system of precedents, no principle of stare decisis, in international arbitration. No arbitral tribunal is, in other words, formally bound by the decisions of other tribunals. In practice, tribunals do of course review the awards of other tribunals on similar issues, to the extent that such awards are available. They may even take such awards into account when deciding their own. It is important to emphasize, however, that they are not bound by such awards. More importantly, however, it is essential to keep in mind that the task and duty of an arbitrator is to decide the case before him – and only that case – based on the facts, evidence and arguments presented by the parties in that case. The duty of the arbitrator is not to create a coherent and reasonable system of international law, international arbitration law, or international investment law. He has been asked by the parties – and is being paid by them – to resolve a specific dispute. In most cases this means that the outcome of the dispute is very much dependent on the specific facts of the individual dispute. This is perhaps particularly true in investment arbitrations where alleged indirect expropriation is the issue. The cases discussed above are good illustrations of this. Accordingly, caution is required when trying to draw general conclusions from such cases. Moreover, there are a number of additional factors that must be taken into account when evaluating arbitral practice. One such factor is the experience and prominence of the arbitrators. Needless to say, an award rendered by arbitrators who have particular knowledge and experience from the issues resolved would typically have greater weight than an award rendered by inexperienced arbitrators. Another factor that must be taken into account is the existence of dissenting opinions. A unanimous award has greater weight than an award with one or several dissenting opinions. A third factor that must be considered in this context is the extent to which the award has been accepted by the parties and by scholars and commentators in writings on the award.
VI. Concluding Remarks