Tax Gross-Up Claims in Investment Treaty Arbitration by Nhu-Hoang Tran Thang

RECENTLY, INVESTORS HAVE CLAIMED “TAX GROSSED-UP DAMAGES”, or a  damage amount that takes into account the eventual taxation of the award by the defending State. Unfortunately, arbitral tribunals facing this issue have not yet seized the opportunity to express their views on the appropriateness of such claims in investment treaty arbitration[2]. The paucity of authority in both international doctrine and jurisprudence is not surprising. Not only are claims for tax gross-up in contemplation of future taxation recent, but the topic also calls for overlapping considerations of international law (where the legal basis for compensation of investors is to be found), national law of the host State (according to which tax consequences need to be assessed), complex economic calculations (which are sometimes beyond law practitioners’ and arbitrators’ full comprehension), as well as political considerations inherent to any mixed arbitration involving a sovereign State. This article attempts to identify the underlying arguments for such claims and draw the attention of practitioners and arbitrators to an issue that they are likely to face more frequently in the future.

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The enforcement of foreign arbitral awards in Brazil before and after the ratification of the New York convention by Leonardo Daldegan Lima

The enforcement of foreign arbitral awards in Brazil has always been a very controversial theme in the Brazilian legal system, given the conservatism of its courts. Since the colonial period, considering the Brazilian economic evolution and the consequent increase of international trade transactions, the legal unreliableness of the parties when trying to enforce foreign arbitral awards in Brazil demonstrated the need for modernization of its arbitral proceedings. Anxiously expected, this modernization gave its first step when the Brazilian Arbitration Law was enacted, strengthening the principle of party autonomy in the contracts. In 2002, finally attending the aspirations of the international trade community, Brazil ratified the New York Convention, which brought many changes regarding the enforcement of foreign arbitral awards in the country. This paper aims to expound some features concerning the enforcement of foreign arbitral awards in Brazil, before and after the ratification of the above-mentioned Convention by the South-American country. It also presents some important changes made in the Brazilian domestic arbitral proceedings in order to adapt the enforcement of foreign arbitral awards in Brazil to the international standards.

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THE ARBITRATOR – AS A NEUTRAL THIRD PARTY by Caroline Verbruggen

Much has been written upon arbitrators’ independence and impartiality[2].  The capacity of an arbitrator to act as a neutral party, rendering a decision which is based solely on the merits of the case, can be considered to be essential to arbitration.  At the same time, it raises many practical difficulties.  These difficulties are exacerbated in the current context of a rising number of challenges to arbitrators, which is the result, we believe, both of a broad trend towards the moralization of commerce generally, and at the same time of a more aggressive attitude of parties and counsel in international arbitration.

This article will begin with an introduction on the very notions of neutrality, impartiality and independence of the arbitrator(s), and their translation in a number of modern arbitration laws and arbitration rules (I).  The focus will then be on the practical questions called upon by this colloquium, i.e. what an arbitrator must do or must not do in connection with his obligation to be neutral and independent (II).  In a last chapter, some recent case-law will be specifically discussed (III).  We will then very briefly draw some conclusions (IV).

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Croatian Law On Arbitration And Unicitral Model Law On International Commercial Arbitration by Elma Beganovic

Elma Beganovic

CROATIAN LAW ON ARBITRATION AND UNICITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION

Introduction: Free-Market Democracy and International Arbitration Law

In 1991, after a short-war against Serbia, Croatia emerged as an independent nation.[1] Its political leadership and people were eager to leave the communist past behind and integrate themselves into Western Europe.  To establish itself as a free market democracy, Croatia had to completely reform its legal system, including its law on international commercial arbitration.  International commercial arbitration is particularly important because of Croatia’s lucrative Adriatic Coast; the prospect of economic development along Croatia’s coast quickly proved attractive to foreign investors and international companies.[2] Recognizing its potential as a tourist Mecca, the Croatian government realized that an established and stable legal system would reduce the perceived risk of investing in the country and attract foreign trade and investment.[3] Subsequently, Croatia adopted a single statute that embodied its national arbitration law in 2001.[4]

This paper via a comparison with UNICITRAL Model Law illustrates that while Croatia has implemented a sophisticated arbitration act, its eagerness to implement arbitration law may have compromised the act’s clarity and some basic rights of parties.  Reform of Croatia’s 2001 Act is desirable to clarify the jurisdiction of arbitral tribunal; to explain the role of national courts in assisting arbitrations conducted abroad; to allow for service of process to addressees; and to protect against unauthorized arbitration agreements by agents.

This text will: first, discuss the judicial development of international commercial arbitration in Croatia; second, explain the scope of the Croatian law on arbitration; third, analyze Croatia’s definition of arbitration agreement; fourth, examine the ability of an arbitral tribunal to rule on its own jurisdiction; fifth, consider the role of Croatian courts in arbitrations taking place abroad; sixth, scrutinize the Croatian service of process in arbitration; and finally, explore maritime disputes under Croatian Law on Arbitration.

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The Instant Cost Order by Niuscha Bassiri for YIAG

The “Instant Cost Order” is the practical implementation of a means to address the much discussed issue of (the lack of) cost efficiency in international arbitration. It also tackles the question of how pro-active tribunals should be in order to control party-driven arbitral proceedings.

The majority of the costs incurred in an arbitral proceeding does usually have its base in the legal and other costs of the parties. The arbitration costs, i.e., arbitrators’ fees, administrative charges of arbitral institutions, and hearing facilities will add to the total cost of an arbitration proceeding. In order to control the development of costs, it appears that parties require the tribunal’s guidance in relation to legal and other costs, which will necessarily impact the arbitration costs.

Counsel are faced with the problem that although they might wish to keep the costs on a reasonable level they have to do the outmost for their clients to present their case. This is often translated in over-sized submissions, numerous applications for purely strategic reasons, and voluminous production of documents requests.

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