Sovereign Contracts - Chapter 11 - Arbitration Clauses for International Contracts - 2nd Edition
Paul Friedland is a Partner at White & Case LLP and Chair of the firm's International Arbitration Practice Group. Mr. Friedland was Chair of the Task Force that developed the recent "IBA Guidelines for Drafting International Arbitration Clauses." Mr. Friedland is Chair of the Law Committee and a Member of the Board of Directors of the AAA and a Court Member of the LCIA.
Originally from Arbitration Clauses for International Contracts - Second Edition
Chapter 11 - Preview Page
This Chapter presents drafting suggestions for contracts with sovereigns. Section 1 presents clauses that address ICSID jurisdictional issues. Section 2 presents clauses that provide for alternatives to ICSID: the ICSID Additional Facility, the UNCITRAL Rules, and the Permanent Court of Arbitration. Section 3 suggests sovereign immunity waiver clauses in relation to the enforcement of arbitral awards.
(1) ICSID Arbitration Clauses
ICSID is the principal forum for investor/State arbitration. While most ICSID cases today are based upon arbitration provisions in investment treaties, some continue – as was almost exclusively the situation in ICSID’s early days – to be based on ICSID arbitration clauses in contracts.
ICSID is attractive for private investors because: (i) ICSID’s affiliation with the World Bank promotes voluntary recognition and enforcement of ICSID arbitral awards; (ii) an ICSID award is binding and enforceable as if it were a final court judgment in each of the State parties to the ICSID Convention, and recognition and enforcement procedures under the New York Convention are not necessary; (iii) ICSID arbitration is a neutral, specialized dispute resolution system for investment disputes; (iv) ICSID is an exclusive forum, and there is no right to appeal an ICSID award;291 and (v) ICSID arbitrators’ fees are relatively inexpensive, set (as of 2006) at US$ 3,000 per day, although parties frequently agree on higher fees.