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WTO Dispute Settlement: One-Page Case Summaries

"One-Page Case Summaries" provides a succinct summary of all disputes brought to the WTO. It covers the findings of the dispute panel report for each case and the subsequent Appellate Body report in cases where WTO members appealed the original ruling.

WTO Dispute Settlement: One-Page Case Summaries 1995–2022

This publication provides handy one-page summaries of the key findings of every dispute panel report issued up to the end of 2022 and the relevant Appellate Body reports issued over this period. Each one-page summary comprises the core facts, the key findings contained in the reports and any other matters of particular significance. Two indexes list the disputes by WTO agreement and by WTO member responding to the complaint.

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Le règlement des différends dans le cadre de l’OMC : un différend, une page (1995-2020)

La présente publication contient des résumés pratiques, d’une page, des principales constatations de chaque rapport de groupe spécial publié jusqu’à la fin de 2020 et des rapports pertinents de l’Organe d’appel publiés pendant cette période.Chaque résumé d’une page comprend les faits principaux, les constatations clés contenues dans les rapports et d’autres points d’une importance particulière.Deux index énumèrent les différends par Accord de l’OMC et par Membre de l’OMC répondant à la plainte.

Solución de diferencias en la OMC: Resúmenes de una página por caso (1995-2020)

Esta publicación contiene resúmenes útiles de una página de las principales constataciones contenidas en cada uno de los informes de los Grupos Especiales publicados hasta finales de 2020, así como en los informes correspondientes del Órgano de Apelación publicados en ese período.Cada resumen de una página se compone de los hechos fundamentales, las constataciones principales que figuran en los informes y otras cuestiones especialmente importantes.La publicación incluye dos índices en los que se enumeran las diferencias en función de los Acuerdos de la OMC abordados y del Miembro de la OMC demandado.

WTO Dispute Settlement: One-Page Case Summaries 1995–2020

WTO Dispute Settlement: One-Page Case Summaries provides a succinct summary of the key findings of every dispute panel report up to the end of 2019 and, where applicable, the subsequent Appellate Body report. Each one-page summary comprises three sections: the core facts; the key findings contained in the reports; and, where relevant, other matters of particular significance. The disputes are presented in chronological order (by dispute settlement number). Two indexes at the end of the publication list the disputes by WTO agreement and by WTO member responding to the complaint.

WTO Dispute Settlement: One-Page Case Summaries 1995–2018

WTO Dispute Settlement: One-Page Case Summaries provides a succinct summary of the key findings of every dispute panel report up to the end of 2018 and, where applicable, the subsequent Appellate Body report. Each one-page summary comprises three sections: the core facts; the key findings contained in the reports; and, where relevant, other matters of particular significance. The disputes are presented in chronological order (by dispute settlement number). Two indexes at the end of the publication list the disputes by WTO agreement and by WTO member responding to the complaint.

WTO Dispute Settlement: One-Page Case Summaries, 1995-2016

WTO Dispute Settlement: One-Page Case Summaries provides a succinct summary of the key findings of every dispute panel report up to the end of 2016 and, where applicable, the subsequent Appellate Body report. Each one-page summary comprises three sections: the core facts; the key findings contained in the reports; and, where relevant, other matters of particular significance. The disputes are presented in chronological order (by dispute settlement number). Two indexes at the end of the publication list the disputes by WTO agreement and by WTO member responding to the complaint.

WTO Dispute Settlement: One-Page Case Summaries, 1995–2014

WTO Dispute Settlement: One-Page Case Summaries provides a succinct summary of the key findings of every dispute panel report up to the end of 2014 and, where applicable, the subsequent Appellate Body report. Each one-page summary comprises three sections: the core facts; the key findings contained in the reports; and, where relevant, other matters of particular significance. The disputes are presented in chronological order (by dispute settlement number). Two indexes at the end of the publication list the disputes by WTO agreement and by WTO member responding to the complaint.

WTO Dispute Settlement: One-Page Case Summaries, 1995-2012

WTO Dispute Settlement: One-Page Case Summaries provides a succinct summary of the key findings of every dispute panel report up to the end of 2011 and, where applicable, the subsequent Appellate Body report. Each one-page summary comprises three sections: the core facts; the key findings contained in the reports; and, where relevant, other matters of particular significance. The disputes are presented in chronological order (by dispute settlement number). Two indexes at the end of the publication list the disputes by WTO agreement and by WTO member responding to the complaint.

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Brief Introduction to WTO Dispute Settlement

The WTO’s mechanism for resolving international trade disputes emphasizes consensus building over unilateral action.  The rules governing the system are set forth in the Dispute Settlement Understanding (DSU).  The task of adjudicating disputes is delegated to the Dispute Settlement Body (DSB), a special assembly of the WTO’s General Council, which includes all WTO members.  The DSB appoints the seven members of the WTO’s Appellate Body . 

The multi-stage process of dispute settlement begins with a request for informal consultations between the parties.  If the consultations fail to resolve the dispute, the complaining party may request the appointment of a three-member investigative panel .  After receiving oral and written submissions from the parties, the panel issues its report and recommendations .

A party may seek appellate review of a panel report, but only with respect to issues of law and legal interpretations developed by the panel.  Appeals are heard by three of the seven members of the Appellate Body.  The Appellate Body may uphold, modify or reverse the panel’s report. 

A panel or Appellate Body report must be adopted by the DSB without amendment unless the DSB decides by a consensus of all its members to reject the report.  The respondent may request a reasonable time to comply with the recommendations of a report.  If the respondent fails to comply, the complainant may seek compensation or request authorization from the DSB to engage in retaliation . 

The DSU provides for a parallel process of binding arbitration if both parties agree to arbitrate their dispute instead of submitting it to a DSB panel.  In addition, a party subject to an adverse decision by the DSB may seek arbitration as a matter of right. 

It should be noted that many of the covered agreements annexed to the Marrakesh Agreement, such as the Anti-Dumping Agreement or the Customs Valuation Agreement, include specialized dispute settlement procedures that are only applicable to certain types of disputes .

Interview with Prof. John Jackson on WTO Dispute Settlement

In this 2012 interview, the late John H. Jackson, a former GULC faculty member, discusses the WTO's dispute settlement mechanism and the pivotal role he played in establishing it.

WTO Resources on Dispute Settlement

For more information about the dispute settlement process, consult the following resources on the WTO’s website:

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WTO Dispute Settlement at Twenty

Insiders’ Reflections on India’s Participation

• © 2016
• Abhijit Das 0 ,
• James J. Nedumpara 1

Centre for WTO Studies, Indian Institute of Foreign Trade, New Delhi, India

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Jindal Global Law School, O.P Jindal Global University, Sonepat, India

• Presents unique perspectives and commentaries of India’s WTO disputes by the key participants and insiders
• Offers rare insights into India’s litigation strategies, political economy concerns and capacity-building challenges in WTO dispute settlement
• Provides a first-hand account of India’s engagement and remarkably successful use of the WTO dispute settlement system
• Includes supplementary material: sn.pub/extras

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About this book

This book focuses on India’s participation in the WTO dispute settlement system, at a time when India has emerged as one of the most successful and prominent users of WTO dispute settlement among the developing countries. It offers a unique collection of perspectives from insiders – legal practitioners, policymakers, industry representatives and academics – on India’s participation in the system since its creation in 1995. Presenting in-depth analyses of substantive issues, the book shares rare insights into the jurisprudential significance, political economy contexts and capacity-building challenges faced by India. It closely examines India’s approach in effectively participating in the WTO’s dispute settlement mechanism including the framing of litigation strategies, developing legal and stakeholder infrastructure,  implementing  dispute settlement decisions, and the impacts of the findings of the WTO panels / Appellate Body on domestic policymaking and India’s long-term trade interests.  In addition to discussing the key “classic” jurisprudential issues, the book also explores domestic regulatory and policy issues, complemented by selected case studies. 

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• International Arbitration
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• International Dispute Resolution
• India’s WTO Disputes
• India’s Litigation Strategies
• International Trade Law

Table of contents (15 chapters)

Front matter, introduction: wto dispute settlement at twenty: insiders’ reflections on india’s participation.

• Abhijit Das, James J. Nedumpara, Shailja Singh

India’s Trade Disputes: Implications for Public Policy

• Rajeev Kher

WTO and Its Dispute Settlement Mechanism

• V. S. Seshadri

India’s Initial WTO Disputes—An Analysis in Retrospect

• Scott D. Andersen, Deepak Raju

One Too Many: Significant Contributions of India to the WTO Dispute Settlement Jurisprudence

• Abhijit Das, Jayant Raghuram

The US—Shrimp Appeal: 20 Years on

• Arthur E. Appleton

Recollections and Reflections of a Stakeholder in WTO Disputes

• Siddhartha Rajagopal

An Overview of WT/DS141: EC—Anti-dumping Duties on Imports of Cotton-Type Bed Linen from India

• Folkert Graafsma, Siddhartha Rajagopal

WTO Dispute on EC—Tariff Preferences : Systemic Implications

• Atul Kaushik

India—Additional Import Duties : Tax Reforms via WTO

• Jayant Dasgupta

Turkey’s Safeguard Measures on Cotton Yarn: Resolution by Consultations

• Mukesh Bhatnagar

India—Agricultural Products : Defending India’s First SPS Dispute

• James J. Nedumpara, Ashish Chandra, Garima Deepak

US — Carbon Steel (India) : A Major Leap in Trade Remedy Jurisprudence

• Adarsh Ramanujan, Atul Sharma, S. Seetharaman

Conclusions

• Abhijit Das, James J. Nedumpara

Erratum to: India—Agricultural Products : Defending India’s First SPS Dispute

Back matter.

“India is a trade powerhouse. Its behaviour in dispute settlement is not confined to questions it asks or challenges it faces, but sets the tone for the emerging nature of multilateral dispute settlement. It was high time someone checked in detailed manner the various disputes that India has participated in and drew some conclusions. This remarkable book is a collection of well thought case studies that will help academics and practitioners alike understand how dispute settlement at the WTO has affected and has been affected by India.” (Petros C. Mavroidis, Edwin B. Parker Professor of Law, Columbia Law School, New York, USA)

“India has brought some legendary disputes at the WTO. Cases such as US—Shrimp, Turkey—Textiles and EC—Bed Linen have helped shape the WTO dispute settlement system and its impact. It is refreshing to revisit these landmark cases and examine their contributions and significance. This book stands out as the first to bring us a comprehensive analysis of WTO disputes involving India that includes critical analysis of the participants in the cases. This book is equally useful for practitioners and scholars.” (Gregory Shaffer, Chancellor's Professor, University of California, Irvine School of Law, Irvine, USA)

Editors and Affiliations

Abhijit Das

James J. Nedumpara

About the editors

Abhijit Das is Professor and Head of Centre for WTO Studies at the Indian Institute of Foreign Trade (IIFT). He is one of the leading policy analysts in the field of international trade in India. He has worked as a Director with the Department of Commerce and UNCTAD before joining the Centre for WTO Studies, IIFT.

James J. Nedumpara is Associate Professor and Executive Director, Centre for International Trade and Economic Laws at Jindal Global Law School. He has more than fifteen years of experience in the field of international trade and has worked with leading law firms, corporate firms and also UNCTAD before joining academia. His specialization is in trade remedy law and international trade regulation.

Bibliographic Information

Book Title : WTO Dispute Settlement at Twenty

Book Subtitle : Insiders’ Reflections on India’s Participation

Editors : Abhijit Das, James J. Nedumpara

DOI : https://doi.org/10.1007/978-981-10-0599-2

Publisher : Springer Singapore

eBook Packages : Law and Criminology , Law and Criminology (R0)

Copyright Information : Centre for WTO Studies (CWS), Indian Institute of Foreign Trade (IIFT), New Delhi 2016

Hardcover ISBN : 978-981-10-0598-5 Published: 19 April 2016

Softcover ISBN : 978-981-10-9206-0 Published: 22 April 2018

eBook ISBN : 978-981-10-0599-2 Published: 08 April 2016

Edition Number : 1

Number of Pages : XVIII, 255

Number of Illustrations : 2 b/w illustrations, 3 illustrations in colour

Topics : Dispute Resolution, Mediation, Arbitration , Private International Law, International & Foreign Law, Comparative Law , Sources and Subjects of International Law, International Organizations , International Economic Law, Trade Law

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Case Study on World Trade Organization Dispute Settlement: European Communities — Measures Affecting Meat and Meatproducts (Hormones), Complaint by the United States

Journal title, journal issn, volume title.

The World Trade Organization (WTO) is an international organization created to coordinate trading rules among nations. Made up of internationally negotiated trade agreements, the WTO has three main objectives: (1)to assist in the free operation of international trade; (2) to allow continued progress of liberalization of such trade through fair negotiations; and (3) to create a system for the impartial settlement of international trade disputes.

A key component of the World Trade Organization (WTO) is the Dispute Settlement Body (DSB). This body, as with the WTO itself, has only been in operation since January of 1995. The WTO, although relatively new, has made significant strides in improving the international trading system and resolving trade disputes. Unlike other international organizations, such as the international Monetary Fund (IMF) or World Bank, the WTO is not controlled by a board of directors, but instead is governed by its member nations. Given this type of arrangement, it is essential that the member nations abide by the signed agreements that govern the operation of the WTO and its Dispute Settlement Body. Otherwise the WTO cannot function as envisioned.

This research argues that the European Union (EU) is presently abusing the system through its actions in the dispute settlement case EC- Hormones, Complaint by the United States. Using tactics designed to delay the resolution of this dispute, the EU has increased the costs ssociated with the Dispute Settlement Body (DSB) and threatened the credibility of the WTO.

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• Stand Up for Free Enterprise

The Business Case for the WTO — and for its Dispute Settlement System

The continued success of the World Trade Organization (WTO) is critical to the U.S. business community. The global rules-based trading system the WTO embodies has benefited countries around the world — but none more than the United States. And that holds for its dispute settlement system as well.

John G. Murphy Senior Vice President, Head of International, U.S. Chamber of Commerce

October 11, 2021

While the WTO was created in 1995, it built on the foundation of the 1947 General Agreement on Tariffs and Trade (GATT). Combined, the WTO and the GATT have revolutionized global commerce. Eight successful multilateral negotiating rounds have helped increase world trade from $58 billion in 1948 to well above $25 trillion today. This 40-fold increase in real terms has brought a rising tide of commerce, job creation, and rising incomes.

It isn’t just the tariff elimination brought about under the GATT and the WTO that benefits American companies and the workers they employ. WTO rules protect U.S. firms operating abroad from unfair, discriminatory treatment. American firms rely on these rules every day of the year.

It’s become commonplace to say the WTO’s accomplishments are long in the past, but this isn’t so. The WTO’s Trade Facilitation Agreement, which entered into force in early 2017, is a cost-cutting, competition-enhancing, anti-corruption agreement of the first order. Once fully implemented, it has the potential to increase global merchandise trade by up to $1 trillion annually.

In addition, a new WTO agreement entered into force in 2016 expanding U.S. firms’ access to other countries’ government procurement markets valued at $1.7 trillion; and another eliminated duties on $1.3 trillion of information technology goods the same year. These trade pacts are delivering for American workers and companies.

An Adjudicator of Disputes

In addition to serving as a forum for negotiations, the WTO also has a critical role in dispute settlement. The WTO’s Dispute Settlement Understanding outlines procedures for panels to rule on disputes brought by its member states, and it also establishes an Appellate Body in the event panel decisions are appealed.

The United States has been a major beneficiary of WTO dispute settlement, bringing and winning more cases than any other WTO member. In fact, the United States has won or favorably settled more than 90% of the completed WTO cases it has brought, which total more than 100 of the 350 disputes on which decisions have been issued.

However, the benefits of this system go much further. The fact that the WTO’s rules are enforceable under its dispute settlement system motivates governments to adhere to the commitments they have undertaken without resort to litigation.

Underscoring bipartisan political support in the United States for the principle of binding dispute settlement, House Democrats in 2019 pressed the Trump administration to prioritize dispute settlement in the United States-Mexico-Canada Agreement (USMCA) negotiations. Specifically, they urged removal of the NAFTA-era threat of “panel blocking,” thus allowing decisions to be binding and effective. House Ways and Means Chairman Richard Neal (D-MA) memorably insisted that, of his priorities, “enforcement, enforcement, enforcement is the most important of all.” This imperative surely applies at the WTO as well.

The benefits of WTO dispute settlement for the United States aren’t just theoretical. These wins include the following examples:

(1) Dispute with the EU over Tariffs on IT Products: In 2010, WTO dispute settlement proceedings upheld the U.S. claim that the EU violated its WTO tariff commitments by imposing duties as high as 14% on flat panel computer monitors, multifunction printers, and cable, satellite, and other set-top boxes. The EU had claimed it could charge duties on the products simply because they incorporated newer technologies or additional features.

The United States successfully argued that the EU was taxing innovation in a manner that could impair continued technological development and raise prices for millions of businesses and consumers. At the time, global exports of the covered products were estimated at more than $44 billion, so the EU’s elimination of its duties to comply with the WTO ruling was significant: It meant real market access, more sales, and direct benefits for American workers. Absent the WTO decision, it’s likely the EU would still be levying the duties today.

(2) Dispute with China over Barriers to U.S. Movies: In 2009, the WTO Appellate Body upheld panel decisions that Chinese film import restrictions were inconsistent with the country’s WTO obligations. China subsequently agreed to significantly increase market access for U.S. movies to comply with the decision.

At the time, Chinese box office revenue was approximately $2.1 billion annually, much of it coming from 3D, IMAX, and similar enhanced format movies which are a rapidly growing sector of the film industry. The WTO decision played a key role in bringing about China’s compliance with its obligations, and it’s difficult to see how the United States could have achieved this objective otherwise.

The U.S. record in WTO dispute settlement with China is especially strong: As the Peterson Institute for International Economics has reported , U.S. officials had challenged Chinese practices 23 times in the WTO as of 2019 — and won 20 times, with three cases pending.

(3) Dispute with Indonesia over Barriers to U.S. Agricultural Exports: In 2016, WTO dispute settlement proceedings upheld the U.S. claim that Indonesia’s restrictions and prohibitions on U.S. apples, grapes, potatoes, beef, poultry, and other agricultural products violate commitments the country has made as a WTO member. The WTO ruled in favor of the United States on 18 out of its 18 claims, which involved a complex array of trade barriers.

Because Indonesia is the fourth most populous country in the world, the long-term benefits to U.S. agricultural producers are potentially very large. U.S. exports of the affected products had reached $115 million even with the onerous barriers in place. As in the other cases cited above, the United States had no obvious way to press for the elimination of these barriers outside WTO dispute settlement.

Reform and the Appellate Body

Despite these and many other successes, the future of the WTO dispute settlement system — and particularly its Appellate Body — is in jeopardy. U.S. administrations over the past 20 years have raised concerns about “overreach” in Appellate Body decisions, arguing that some are not clearly supported in the WTO agreements and that the slow pace of its operations saps its utility.

There’s growing agreement in the United States and elsewhere that a number of these concerns have merit and call for reform; the question is, what is the appropriate remedy? The Trump administration’s answer was to block Appellate Body appointments to the point that, by December 2019, the retirement of term-limited Appellate Body members had left it without the quorum it needs to function. At no time did the Trump administration offer concrete proposals to resolve its complaints, to the frustration of other members.

As a result, U.S. companies have been unable to secure relief from discriminatory treatment abroad or to address instances in which a trading partner has otherwise violated its WTO obligations. While governments may continue to request panels to consider violations, either party can exercise its right to appeal a panel decision, which, with the Appellate Body inoperative, dispatches the dispute to perpetual limbo. Other governments have been developing workarounds to continue to use the system for their citizens, but the United States remains shut out of this crucial element of the WTO’s binding dispute settlement process entirely. What was once an important tool in the U.S. enforcement toolbox is unavailable, and no effective substitute has been identified.

The price of allowing this impasse to linger could be high. Executives with American companies fear that other countries’ compliance with the WTO agreements will decline over time if its dispute settlement system is no longer binding. They are concerned that new trade barriers and discriminatory treatment will become more common.

The time is ripe for the United States to lead efforts to overcome this impasse. Over the past several years more countries have come to recognize the need to address the concerns the United States has raised. The United States should lead reform efforts by engaging substantively with other WTO members to address its concerns and restore a binding dispute settlement system.

The Chamber has expressed support for efforts to translate the Walker Principles (articulated by New Zealand’s Ambassador to the WTO David Walker) into a form that can address the legitimate concerns that U.S. administrations have identified. The logical next step is for the United States to detail how it might seek to operationalize these reforms in a concrete way.

The stakes are high, but the door is open for reform of WTO dispute settlement and restoration of the Appellate Body. The U.S. business community stands ready to support this important undertaking.

About the authors

John g. murphy.

John Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy and regularly represents the Chamber before Congress, the administration, foreign governments, and the World Trade Organization.

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Negotiation in Business: Apple and Samsung’s Dispute Resolution Case Study

What happened between apple and samsung makes for a great example of negotiation in business.

By PON Staff — on June 25th, 2024 / Business Negotiations

For two days in late May 2012, Apple CEO Tim Cook and Samsung CEO Gee-Sung Choi met with a judge in the U.S. District Court of Northern California in an attempt to reach a settlement in a high-profile U.S. patent case, a sobering example of negotiation in business.

Back in April 2011, Apple had filed a lawsuit accusing Samsung of copying the “look and feel” of the iPhone when the Korean company created its Galaxy line of phones.

Samsung countersued Apple for not paying royalties for using its wireless transmission technology. Since then, the number of patents under dispute has skyrocketed, according to the Korea Times , as has the number of courts involved in various countries. The two companies have repeatedly accused each other of copying the appearance and functions of their smartphones and tablet devices.

The companies showed some willingness to compromise in an effort to avoid going to court: at the California court’s suggestion, they cut the number of disputed patents in half. But even as the CEOs sat down at the table for their mediation , which was urged by the court, Apple filed a motion asking the presiding judge to bar the sale of Samsung’s Galaxy Tab 10.1 on the grounds that the tablet was designed to “mirror” Apple’s second-generation iPad (see also, What are the Three Basic Types of Dispute Resolution? What to Know About Mediation, Arbitration, and Litigation ).

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Both sides had said they hoped to avoid a legal battle. Given that Samsung is one of Apple’s biggest suppliers, the companies had a strong incentive to move beyond their dispute and build on their ongoing partnership. Yet the two-day mediated talks between the CEOs in late May ended in an impasse, with both sides refusing to back down from their arguments. The suit later went to trial twice, with Apple ultimately winning more than $409 million.

Mediation Between Business Negotiators and Chances of Success

As this example of negotiation in business suggests, mediation as a dispute resolution technique between business negotiators is far less likely to succeed when the parties are grudging participants than when they are actively engaged in finding a solution. When negotiators feel they have spent significant time and energy in a case, they may feel they have invested too much to quit.

Moreover, the longer they spend fighting each other, the more contentious and uncooperative they are likely to become. The lesson? When a business dispute arises, you should always do your best to negotiate or mediate a solution before taking it to the courts.

What did you learn from this negotiation in business? Do you side with Apple or Samsung in this dispute resolution case study? Let us know what you think in the comments.

Related Posts:

• These Examples Illustrate the Importance of Negotiation in Business  – Negotiation is an important part of the business world. Here are some negotiation examples in real life drawn from the world of business and commercial transactions.
• Article: Negotiation and Nonviolent Action: Interacting in the World of Conflict
• Lessons for Business Negotiators: Negotiation Techniques from International Diplomacy  – What do diplomacy and dealmaking negotiations have in common? Merging the worlds together in order to drawn inferences about negotiation in general, this article explores what aspects of bargaining both diplomacy and business negotiation share and how the negotiation tactics employed by diplomats can be effective at the bargaining table in commercial negotiations.
• 10 Real-World Negotiation Examples  – Real-world negotiation examples—whether successes, failures, or somewhere in between—often offer useful lessons for those involved in business negotiations. Here’s an overview of what we can learn from some real-world negotiation examples.
• MESO: Make Multiple Equivalent Simultaneous Offers to Create Value in Dealmaking Table  – Knowing how to deal with difficult people is not only an essential life skill but also integral to successful negotiation. What strategies should integrative negotiators use when grappling with an uncooperative counterpart?

Originally published in 2013.

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Dispute Settlement Mechanism under WTO

This article is written by Prateek Jain. 

Table of Contents

Introduction

The World Trade Organization (WTO) is responsible for maintaining the free flow of trade between its member countries. WTO, in the form of Dispute Settlement Undertaking (DSU), provides an instrument for the settling of trade disputes between the parties. The dispute generally arises when any member country violates any provision of WTO agreement which other member countries think unreasonable. 

This dispute settlement process is the outcome of the Uruguay round (1996-1994). This mechanism provides a speedy resolution of a trade dispute. This settlement system applies to all disputes covered under the WTO agreement. The Dispute Settlement Body (DSB) is responsible for DSU to resolve a dispute between parties.

Stages in settlement of trade disputes

Stage 1: consultations (article 4 of the dsu).

Before referring any dispute to mediation or taking any other actions, both the WTO member countries shall affirm to resolve their disputes through consultation. If a WTO member requests for consultation with another Member concerning measures affecting the operations of the former member, the latter member must accept such request within a period 10 days after the date of receipt of such request and shall enter into consultation within 30 days. 

If the consultation fails to provide a satisfactory solution to the problem within 60 days after the date of receipt of the request for consultation, then the complaining party may request for construction of the panel. All such requests for consultation and construction shall be notified in writing including reasons for such requests to the Dispute Settlement Body by the complaining member.

Stage 2: Establishment of Panels (Articles 6, 8 and 11 of the DSU)

If no satisfactory solution is reached through consultation between the member countries, the complaining member may request for the establishment of panels in writing to the Dispute Settlement Body including a summary of the case and issues involved. The panel is established at the second meeting of DSB at which request appears as an agenda item of the meeting.

The function of the Panel is to aid the Dispute Settlement Body in resolving the matter in dispute. The panel assesses the entire dispute, including the facts of the case and issues involved therein and examines whether it conforms with the covered agreement between the member countries. The Panel shall provide its final report to the parties within 6 months from the date when panel procedures start.

Stage 3: Selection of panellists (Article 8 of the DSU)

After the establishment of the panel, the next step is to select panellists. The panellists are selected by the WTO Secretariat. The parties cannot oppose the selection unless they state reasons satisfactory to the Secretariat. The panel shall consist of three panellists. The parties can agree to have five panellists on board if they consider necessary within 10 days from the establishment of the panel. 

The WTO Secretariat assists the parties in the selection of panellists by creating a list of all governmental and non-governmental individuals having certain qualifications from which panellists may be chosen by the parties. 

Members may, at any reasonable time, make an addition to the list of individuals by suggesting the name of individuals who can assist the parties by providing any information related to international trade law or any of the matter as covered in the agreement because of which dispute arose in the first place. The addition to the list can be made only after the approval of the Dispute Settlement Body.

If panellists are not selected within 20 days after the date of establishment of the panel, the Director-General, in consultation with the Chairman of Dispute Settlement Body and Chairman of relevant Council or Committee appoint panellists which they consider appropriate. The chairman of the Dispute Settlement Body, then informs the members of the composition of the panel within 10 days.  

Stage 4: Procedure of Panel (Articles 10 and 12 of the DSU)

The panellists shall, within one week after the composition of the panel fix a timetable for the panel process. After this, the panel decides a deadline for written submission to be made by each party. Each party has to submit its submissions with the secretariat which shall transfer each submission to the panel and submission made by one party shall be sent to the other party as well. At the first substantive meeting of the panel, the complaining party shall be the first to present their case ahead of the responding party. 

The third parties who have notified the Dispute Settlement Body having substantial interest in the subject matter of the dispute are also asked to present their views during the same meeting. Any rebuttals between the parties shall be made at the subsequent meeting of the panel. Here, the responding party shall be the first to respond against the complaining party. The parties, before that meeting, have to submit their written rebuttals to the panel. The panel, if they consider necessary, put any questions before the parties to be answered in the duration of that meeting.

Where after the examination, a solution has been reached between the parties, the panel shall submit a written report to the Dispute Settlement Body which shall have a brief description of the case along with the solution which has been reached. Where the solution has not been found, the panel shall send a written report to the Dispute Settlement Body mentioning its findings of the case and recommendations, if any, it makes. 

The report has to be sent within six months of its examination. In case of urgency, including the case of perishable goods, the report has to be sent within three months. The maximum period during which the report has to send is nine months from the establishment of the panel. 

Stage 5: Interim report (Article 15 of the DSU)

Following the oral arguments and rebuttal that has been performed and examination has been made, the panel shall issue a draft report to the parties. The parties have to submit their comments in writing after receiving the draft report within the period set by the panel.

After the expiration of the said period for receiving the comments from the parties, the panel shall issue an interim report, including its findings in the draft report and its new findings and conclusion. Both the parties, within the time given the panel may submit its written request to revise its interim report accordingly. 

At the request made by the parties, the panel shall call for a further meeting to discuss the comments made by the parties to the dispute. If both the parties are satisfied with the solution reached, then such a revised interim report shall be the final panel report and is circulated among the members.

In case, the parties are not satisfied with the outcome of the report reached then any objections of the members shall be considered at the meeting of the Dispute Settlement Body. Such objections have to be reported at least 10 days before the meeting of the Dispute Settlement Body. 

The final report shall be adopted by the Dispute Settlement Body within 60 days from the date panel report is circulated to the members unless any party to the dispute is unsatisfied with such report and notifies its decision of appeal to Dispute Settlement Body or the Dispute Settlement Body unanimously decides not to adopt such report, as the case may be. In case of an appeal, the report shall deem to be invalid for adoption by the Dispute Settlement Body unless the Standing Appellate Body provides its Appellate Body Report. 

Stage 6: Appeal (Article 17 of the DSU)

Either of the parties unsatisfied with the ruling of the panel report can appeal to the Standing Appellate Body established by the Dispute Settlement Body. Only parties to the dispute can appeal to a panel report and not the third parties. Third parties can be allowed to be heard only in case such third party has notified in writing to the Dispute Settlement Body of its substantial interest in such dispute.

The proceeding of the Appellate Body shall not exceed 60 days from the date a party to the dispute notifies its intention of appealing to the Appellate Body to the Dispute Settlement Body. In case of delay, the maximum period granted to the Appellate Body is 90 days. The Appellate Body has to submit in writing to the Dispute Settlement Body its reasons for the delay together with the period within which the final decision is notified. 

The Appellate Body will not re-examine any shreds of evidence, issues or previous arguments but its examination shall be limited to laws covered in the panel report or legal interpretation evolved by the panellists. The Appellate Body has the power to uphold, modify or reverse the panel report and provide a conclusive report. 

Stage 7: Acceptance of report by Dispute Settlement Body (Article 30 of the DSU)

The Dispute Settlement Body has to either accept the Appellate Body report or reject it within a maximum period of 30 days after receiving such a report. The report can only be rejected unanimously.

Time framework for Dispute Settlement

The Director-General

• The Director-General of WTO in his official capacity assists both the parties in settling their disputes by providing his good offices, conciliation, and mediation. (Article 5.6 of the DSU)
• In a dispute settlement case involving a least-developed country where a settlement of the dispute through consultation is a failure, such least-developed member nation may request the Director-general to provide his good offices, conciliation, and mediation before requesting for establishment of the panel. The Director-General, when considered satisfactory, will provide his good offices, conciliation, and mediation to settle the dispute between the parties. (Article 24.2 of the DSU)
• When there are no panellists appointed by either of the parties to dispute, the Director-General, at the request of either party, in consultation with the Chairman of Dispute Settlement Body and Chairman of the relevant Council or Committee, appoints panellists as he considers appropriate. (Article 8.7 of the DSU) 

WTO Secretariat (Article 27 of the DSU)

The Secretariat has the responsibility to select panellists for the panel. It must provide a panel with all the support they need.

The Secretariat also help member countries in dispute by offering legal assistance by making an available qualified legal expert from the WTO to the members.

The Secretariat also conducts special training courses for members interested in the dispute settlement mechanism. 

The panel established in the second meeting of Dispute Settlement Body, are bodies responsible for adjudicating disputes between the parties.

Composition of the panel:

The panel generally consists of three panellists but can be a maximum of five, if the parties consider it necessary. (Article 8.5 of the DSU)

The Panel shall consist of well-qualified governmental and non-governmental individuals, including the persons who have served a panel or presented a case to a panel. The panellists shall be from amongst the persons who have served as a representative of a member or a contracting party to GATT, 1947 or as a representative to the Council or Committee of any covered agreement or its predecessor agreement, or in the Secretariat, taught or published on international trade law or policy, or served as a senior trade policy official of a member.

The parties at dispute can select any individual having the above-mentioned qualifications from the list created by the Secretariat to the panel to resolve their dispute. (Article 8.1 of the DSU)  

Dispute Settlement Body (DSB)

Dispute settlement Body is a body established for resolving the disputes between the conflicting parties by overseeing the entire dispute settlement mechanism. The General Council of WTO, which carry out the functions of the Ministerial Conference, renders its obligations under the Dispute Settlement Understanding through Dispute Settlement Body. (Article 4.3 of the WTO agreement)

Composition (Article 4.3 of the WTO agreement)

The Dispute Settlement Body consists of a Chairman and representatives of all WTO members (usually government representatives). [1] The Chairman is usually a leader of the permanent mission of one of the member countries of WTO. The Chairman is elected with the consent of all WTO members. [2]

Functions 9 (Article 2 of the DSU)

• The main function of the Dispute Settlement Body is to administer the rules and procedures which are provided in the Dispute Settlement Understanding.
• It has the authority to establish a panel for adjudication of the dispute between the parties in the meeting of Dispute Settlement Body unless it is decided in that meeting not to establish a panel.
• It has to adopt the panel or Appellate Body reports to make these reports binding on both the parties to the dispute.
• The parties must comply with the rulings and recommendations of the Dispute Settlement Body. The Dispute Settlement Body will scrutinize the application of adopted recommendations and rulings by the parties. If the parties do not comply with these recommendations and ruling within a prescribed period then measures in the form of compensation and termination of concessions will be adopted by the Dispute Settlement Body. (Article 21.6 and 22.1 of the DSU)

Time-frame for the decision of Dispute Settlement Body (Article 20 of the DSU)

Where no appeal is preferred by the parties.

The Dispute Settlement Body has to render its decision within nine months (i.e., the period starting from the date of establishment of panel till the adoption of the panel or appellate body report by the Dispute Settlement Body). If there is a delay on the part of the panel or Appellate Body in providing its report, then additional period granted will be added to nine months.

Where an appeal is preferred by the parties

Where the panel report or the Appellate body report is appealed by the parties, then the Dispute Settlement Body has to give its decision within 12 months and if there is any delay in providing the reports, then such an additional period granted will be added to 12 months.

Standing Appellate Body (Article 17 of the DSU)

The Dispute Settlement Body shall be responsible for the establishment of the Appellate Body. Where the parties are not satisfied with the decision of the panel report, then either of the parties may appeal to the Appellate Body who shall prove his award in the form of Appellate Body report which shall ultimately be adopted by the Dispute Settlement Body.

The Appellate body consists of seven persons. But only three of them shall serve in one case. These three people shall be selected based on rotation. The appointed person shall be in service for four years and can be re-appointed once. Therefore, a member can serve for a maximum of eight years. The persons comprising the Appellate body shall be persons of a recognized authority having expertise in the field of law, international trade and subject matter of the agreement in dispute. The person shall not be part of any governmental service. They shall be made themselves available till the end of the dispute. 

Arbitration (Article 25 of the DSU)

The parties to a dispute can refer a dispute to arbitration as an alternative means for the settlement of their dispute. Referring a dispute to arbitration shall be made with the mutual consent of both the parties. Third parties can be a party to a dispute only after the mutual consent of the parties in arbitration. The arbitral awards are binding on both the parties and are not appealable. The arbitral award shall be notified to the Dispute Settlement Body and the Council or Committee.

• https://www.wto.org/english/docs_e/legal_e/04-wto.pdf
• https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c3s1p1_e.htm
• https://www.wto.org/english/tratop_e/dispu_e/dsu_e.htm
• A.K. Kaul, Guide to the WTO and GATT: Economics, Law and Politics, Kluwer Law International, 2006.
• Dr S.R. Myneni, Allahabad Law Agency, 3 rd edition, reprint 2018.
• International Trade, Advocate Shweta Nimwal, Singhal Law Publication, edition 2020.

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Legal Victory for the Philippines against China: A Case Study

The conflict over the South China Sea is not just one of military might and political clout, but also one of legal strategies. The Philippines especially has sought to counter Chinese moves with a turn to international adjudication, and with significant success.

On 12 July 2016, the Arbitral Tribunal in the South China Sea Arbitration (The Republic of the Philippines v. The People’s Republic of China) issued a unanimous award largely favourable to the Philippines. China has rejected the ruling, but it may nonetheless be a stepping-stone on the way to a peaceful resolution of the conflict.

Background of the Case

">UN Convention on the Law of the Sea (UNCLOS) – the basis put forward by the Philippines – was limited and excluded sea boundary delimitations and the determination of historic titles. Since then, China has continuously refused either to accept or to participate in the arbitral proceedings initiated by the Philippines. The tribunal, however, did not see this as an obstacle: on 29 October 2015, it delivered its first award finding that it had jurisdiction, and, on 12 July 2016, its award deciding on the merits of the dispute.

The 12 July 2016 Award

">Spratly Islands , that are claimed by both China and the Philippines or any other coastal state in the region. Similarly, the tribunal did not delimit any maritime boundaries between the Philippines and China in the South China Sea.

The “Nine-Dash Line” and the Alleged Chinese Historic Rights

">exclusive economic zone (EEZ) or the continental shelf (CS) of the Philippines. In the view of the tribunal, UNCLOS establishes a comprehensive maritime zones regime and allocates rights in these areas to the coastal state and other states: in the areas of the EEZ and the CS, the coastal state enjoys exclusive sovereign rights to the exploitation of living and non-living natural resources. Concerning the rights of other states in these areas, the tribunal found that UNCLOS does not permit the preservation of historic rights of any state within the EEZ or the CS of another state. Therefore, after the entry into force of UNCLOS, the historic rights that might have existed for China within the “nine-dash line” in areas that would otherwise include the pre-existing historic rights no longer exist as they are not compatible with UNCLOS. Accordingly, the tribunal concluded that China’s claims were contrary to UNCLOS and exceeded the geographic limits imposed by it.   the EEZ or the CS of the Philippines were superseded by the maritime zones regime created by UNCLOS. That means the pre-existing historic rights no longer exist as they are not compatible with UNCLOS. Accordingly, the tribunal concluded that China’s claims were contrary to UNCLOS and exceeded the geographic limits imposed by it.

The Status of Maritime Features

">Scarborough Shoal as a rock, and among those features in the Spratly Islands, it found Mischief Reef, Subi Reef and Second Thomas Shoal to be LTEs, and Johnson Reef, Cuarteron Reef and Fiery Cross Reef to be mere rocks. However, contrary to the Philippines’ position, the tribunal concluded that Gaven Reef (North) and McKennan Reef are rocks that are not capable of generating an EEZ or a CS.

The tribunal assessed the status of these features taking into consideration their natural condition, prior to human modifications. In this respect, the Tribunal emphasised that China’s construction of installations and significant reclamation work as well as its maintenance of military or governmental personnel or civilians cannot enhance a feature’s status from rock or a LTE to a fully entitled island capable of generating an EEZ and a CS.   the Tribunal emphasised that China’s construction of installations and significant reclamation work as well as its maintenance of military or governmental personnel or civilians cannot enhance a feature’s status from rock or a LTE to a fully entitled island capable of generating an EEZ and a CS.

Chinese Activities in the South China Sea

The tribunal also ruled on the legality of activities of Chinese officials and Chinese vessels in the areas of the South China Sea located within the Philippines’ EEZ and CS. It concluded that China breached the provisions of UNCLOS, in particular by (a) temporarily prohibiting fishing in areas of the South China Sea falling within the Philippines’ EEZ, (b) failing to prevent Chinese vessels from fishing in the Philippines’ EEZ at Mischief Reef and Second Thomas Shoal and (c) preventing Filipino fishermen from engaging in traditional fishing at Scarborough Shoal. Regarding China’s construction of artificial islands, installations and structures at Mischief Reef – a LTE which is part of the Philippines’ EEZ and CS – without the authorisation of the Philippines, the tribunal also found China to have violated UNCLOS.

In addition, with respect to the protection and preservation of the marine environment in the South China Sea, the tribunal found that China breached UNCLOS since it failed to prevent fishermen from Chinese flagged vessels from harvesting (a) endangered species on a significant scale and (b) in such a manner as to destroy the coral reef ecosystem. Furthermore, the tribunal held that China’s land reclamation and construction of artificial islands, installations and structures in the Spratly Islands caused severe, irreparable harm to the coral reef ecosystem.

The Aftermath of the Tribunal’s decision

">ASEAN members issued a joint communiqué reaffirming the need to avoid actions that might escalate tensions in the South China Sea and to seek the peaceful resolution of disputes in accordance with international law, including UNCLOS.

The tribunal’s ruling is certainly a legal victory for the Philippines over China as the judges agreed unanimously on almost all the questions submitted by the Philippines, including a declaration from the tribunal that China is obliged to comply with UNCLOS and that the award is legally binding on China. The tribunal’s ruling is certainly a legal victory for the Philippines over China as the judges agreed unanimously on almost all the questions submitted by the Philippines, including a declaration from the tribunal that China is obliged to comply with UNCLOS and that the award is legally binding on China.   There is no enforcement mechanism as such under UNCLOS in the event that China fails to comply with the tribunal’s decision, but the Philippines could either resort to diplomatic ways (bilateral or multilateral negotiations within the framework of international organisations) or have recourse to further arbitration under UNCLOS. Moreover, other states and non-state actors could take further actions (i.e. economic sanctions) to put pressure on Beijing to shift its behaviour. But, beyond China’s non-compliance attitude, the award has a value for the states bordering the South China Sea and the rest of the international community for two reasons: (a) the tribunal’s ruling clarified the respective rights and obligations of both China and the Philippines in the South China Sea, thereby facilitating their further relations, and (b) the Tribunal’s findings might have an impact on policy considerations and decision-making of other states as it clarified important legal issues in UNCLOS.

To sum up, it is too early to tell to what extent the tribunal’s decision will actually play a role at both regional and international levels. Nonetheless, what we do know is that, at the moment, things are moderately quiet in the South China Sea comparing to two years ago. Whether this situation could be linked to the tribunal’s ruling is open for discussion. In the meanwhile, it is hard to believe, for instance, that countries such as Japan with Okinotorishima or the United States with Johnson’s Island will withdraw their claims over features that they assert to be fully entitled islands and not mere rocks. In addition, Vietnam continues its land reclamation and construction of two large hangars on Spratly Island in response to China’s construction of military facilities in the Spratlys. Thus, while the tribunal’s intention appeared to be that of making a path forward to solve the problem between China and the Philippines, the long-term effects of its award are still to be seen in the incoming years.

INTERVIEW: “HOW WAS THE PERMANENT COURT OF ARBITRATION INVOLVED?” BY PROF. KOHEN

South China Sea: Elementary Data

3.5 million km²

Brunei, China, Indonesia, Malaysia, the Philippines, Taiwan, Vietnam.

Petroleum, natural gas and fisheries products.

Each year, USD 5.3 trillion of trade passes through the South China Sea; US trade accounts for USD 1.2 trillion of this total.

The South China Sea contains over 250 small islands, atolls, cays, shoals, reefs and sandbars, most of which have no indigenous people, many of which are naturally under water at high tide, and some of which are permanently submerged.

Source: b y Galvin and  whybe.ch .

The Disputed Islands

The Spratly Islands are a disputed group of 14 islands, islets and cays and more than 100 reefs, sometimes grouped in submerged old atolls. The archipelago lies off the coasts of the Philippines, Malaysia and southern Vietnam. The islands have no indigenous inhabitants, but offer rich fishing grounds and may contain significant oil and natural gas reserves. Some of the islands have civilian settlements, but of the approximately 45 islands, cays, reefs and shoals that are occupied, all contain structures that are occupied by military forces from Malaysia, Taiwan, China, the Philippines and Vietnam. Additionally, Brunei has claimed an exclusive economic zone (EEZ).

The  Paracel Islands  are a group of islands, reefs, banks and other maritime features. They are controlled (and occupied) by China, and also claimed by Taiwan and Vietnam. The archipelago is surrounded by productive fishing grounds and a seabed with potential, but as yet unexplored, oil and gas reserves.

Scarborough Shoal  is a disputed territory claimed by China, Taiwan and the Philippines. Since the 2012 Scarborough Shoal standoff, access to the shoal has been restricted by China. Scarborough Shoal forms a triangle-shaped chain of reefs and rocks with a perimeter of 46 km. It covers an area, including an inner lagoon, of 150 km 2 . The shoal’s highest point, South Rock, measures 1.8 m above water during high tide.

The  Pratas Islands  are an atoll in the north of the South China Sea consisting of three islets about 340 km southeast of Hong Kong. Excluding their associated EEZ and territorial waters, the islets comprise about 240 ha, including 64 ha of lagoon area. China claims the islands, but Taiwan controls them and has declared them a national park. The main island of the group, Pratas Island, is the largest of the South China Sea islands.

Macclesfield Bank  is an elongated sunken atoll of underwater reefs and shoals. It lies east of the Paracel Islands, southwest of the Pratas Islands and north of the Spratly Islands. Its length exceeds 130 km southwest-northeast, with a maximal width of more than 70 km. With an ocean area of 6,448 km 2  within the outer rim of the reef, although completely submerged without any emergent cays or islets, it is one of the largest atolls of the world. Macclesfield Bank is claimed, in whole or in part, by China and Taiwan.

• Multiplying Hotbeds of Tension I
• Antagonisms in the South China Sea: The Regional Perspective 1
• A Sea at the Heart of Chinese National Interest 2
• The US Pivot Strategy: A Change of Paradigm in the South China Sea? 3
• China and the United States: The Evolution of a Relationship 4
• Legal Victory for the Philippines against China: A Case Study 5
• Arms Race in the South China Sea: What Threshold? 6
• Uncertainty in the South China Sea in the Wake of Trump’s Inauguration: The Risk of Escalating Rhetoric O

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“International arbitration in investment disputes” case study of Egypt

Review of Economics and Political Science

ISSN : 2631-3561

Article publication date: 12 February 2020

Issue publication date: 11 December 2023

This theme will be addressed through main points: Special Nature of Investment Disputes and its methods of peaceful settlement. International legal framework governing Arbitration in investment disputes: A. Multilateral legal framework. B. Bilateral legal framework/Investment promotion and protection agreementsTypes of arbitration in investment disputes. The Egyptian experience in investment disputes arbitration. The National legal framework. Egypt on the map of investment disputes in the world. A case study. Conclusion: Results related to the legal framework regulating investment disputes in Egypt. Results related to The arbitration cases against Egypt.

Design/methodology/approach

The researcher investigates the subject of international arbitration in investment disputes in the framework of voluntary theory, which is based on the premise that the satisfaction of people who are addressing the international legal norm is the basis of the same rule. In other words, the basis of international law is based on the satisfaction of the State and other international legal persons Both, and then express or implied consent.

Despite the availability of domestic and regional arbitration mechanisms in Egypt represented by a large number of cases.

Research limitations/implications

The theme for the study primarily on Egypt and the international arbitration of investment disputes, through theoretical and practical study of disputes arbitration which Egypt is a party defendant in which to focus on what was issued in which the provisions of the International Center for Settlement of Investment Disputes, in an attempt to find out the reasons for the verdicts image released it, where it came mostly against Egypt, and whether these judgments against them in investment disputes due to reasons related to the legal framework of the arbitration process, or for reasons of bodies of arbitration issued by those provisions, or to the defense, which represents the Egyptian party, or to the circumstances Economic and political (which represents the investment climate).

Originality/value

The proposed solutions to improve the conditions and factors surrounding the arbitration disputes that Egypt is waging against foreign investors, whether they are initially alleged or accused of drafting agreements and contracts, through amending the relevant legislation and laws, selecting arbitration bodies and defense bodies.

• Foreign direct investment
• International arbitration
• Investment disputes

Farag, S.A. (2023), "“International arbitration in investment disputes” case study of Egypt", Review of Economics and Political Science , Vol. 8 No. 6, pp. 427-447. https://doi.org/10.1108/REPS-11-2018-0027

Emerald Publishing Limited

Copyright © 2020, Sabah Ahmd Farag.

Published in Review of Economics and Political Science . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

Introduction

The study deals with the Egyptian experience in the field of international arbitration in investment disputes as part of a broader regional and international framework which is increasingly being used for international arbitration as a mechanism for settling disputes between the investor and the host country by answering the following main questions: Is the legal framework governing the settlement of investment disputes at various levels a major reason for the increasing number of investment claims filed against Egypt before the International Center for Settlement of Investment Disputes (ICSID) of the World Bank? Does this framework require amendments that would reduce the number of such claims or investors resorting to arbitration as a mechanism? Are there other reasons related to the nature of these actions and the economic activities that fall within them, and the Egyptian side's dealings with those cases in terms of defenses filed and other actions?

Special Nature of Investment Disputes and its methods of peaceful settlement.

multilateral legal framework; and

bilateral legal framework/Investment promotion and protection agreements.

Types of arbitration in investment disputes.

the national legal framework;

Egypt on the map of investment disputes in the world; and

a case study.

results related to the legal framework regulating investment disputes in Egypt; and

results related to the arbitration cases against Egypt.

The research approach

The researcher uses the two approaches, first, legal approach , which was based mainly on regulating international relations within a formal framework. This approach was aimed at re-shaping and regulating international relations according to legal standards and standards. It also means studying and analyzing international treaties and conventions, the subject of international legislation and the topic of international responsibility. Second, Descriptive research , which aimed at casting light on current issues or problems through a process of data collection that enables them to describe the situation more completely than was possible without employing this method, Descriptive studies are closely associated with observational studies, but also Case studies and surveys can also be specified as popular data collection methods used with descriptive studies

Special nature of investment disputes and its methods of peaceful settlement

Investment Disputes (Investor-State disputes) can be defined as the kind of dispute which arises between the two parties of the investment contract, the country hosting the investment and the foreign investor (a national of another state) as a result of a violations made by one of the parties concerning the rights of the other party or breach of the obligations stipulated in the investment contract, for example, prematurely terminating the contract, or making any unilateral action by one of the parties, mainly the state such as expropriation, seizure, confiscation and nationalization, leading to serious damages to the other party. These actions require compensating the harmed party for the damages and loss it incurred on the investor due to those violations. Investment contracts establish some sort of legal relationship between the contracting parties. Some believe that the international character characterizes this relationship, since one of its elements is foreign. The legal relationship is defined as the one that exists between one subject and another, determined by a rule of law ( Salacuse, 2007 ).

The difficulty and sharpness of the problems raised by investment contracts result from inequality in the legal positions of the parties to these contracts, and the nature of Disputing Parties. These contracts are concluded between two unequal parties: the host country on the one hand, the state, and a national of another state on the other hand, the foreign investor. The state, as a subject of public internal law, enjoys sovereign authorities not enjoyed by the private foreign subject contracting with it, generally considered as subject of private law ( El Hadad, 1996 ).

The object of Investor-State disputes is often related to the sovereignty of the state in terms of the existence of the investment project on its territory, and in terms of the law applicable to the dispute. So the question which arises here is how a sovereign state would be subject to law other than its law on its territory while it has the supreme authority in legislating and enacting of laws and regulations in all matters in relation to everything on its territory ( Kassem, 2015 ).

Investor-State disputes arise between two subjects which differ in their legal status and hence create a plenty of problems, for example the applicable law in case these disputes arise. Moreover, these disputes arise from investments contracts which include clauses with special nature, for example, the stabilization clauses, sacredness of contracts and incorporation of the domestic law in the investment contracts and marginalization of the domestic laws. The inclusion of these clauses in the investment contracts curb or force states to abandon a part of their sovereignty to attract the foreign investor due to the scarcity of resources in these states.

There are variety of instruments for peaceful settlement as well as disputes related to investment, including negotiation, commissions of inquiry, mediation, conciliation and good offices and arbitration.

The methods of peaceful settlement of disputes fall into three categories: diplomatic, adjudicative, and institutional methods. Diplomatic methods involve attempts to settle disputes either by the parties themselves or with the help of other entities. Adjudicative methods involve the settlement of disputes by tribunals, either judicial or arbitral. Institutional methods involve the resort to either the United Nations or regional organizations for settlement of disputes ( Hamza, 2017 ).

Diplomatic methods of dispute settlement.

Negotiation..

Negotiation is a method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument and dispute, but International practice of direct negotiation, although vast, has not always been conducive to clearly concluding results, and does not seem to allow for generalizations. Boczek defined Negotiation “[…] is a diplomatic procedure whereby representatives of states engage in discussing matters […] between them […] to clarify and reconcile their divergent positions and resolve the dispute” ( Boczek, 2005b ).

Mediation is clearly a political method of settlement. In mediation a third-party, acceptable to both parties to the dispute, effects communication between the parties and participates actively in the process of negotiation by offering proposals for settlement[ 1 ].Unlike an arbitrator, a mediator has no legal power to force acceptance of his or her decision but relies on persuasion to reach an agreement. Also called conciliation.

Conciliation.

Conciliation is a process of settling a dispute by referring it to a specially constituted organ whose task is to elucidate the facts and suggest proposals for a settlement to the parties concerned, Boczek defined conciliation as:

[…] a diplomatic method of third-party peaceful settlement […], whereby a dispute is referred by the parties, with their consent, to a permanent or ad hoc commission, […] whose task is impartially to examine the dispute and to prepare a report with the suggestion of a concrete proposal. ( Boczek, 2005a )

Adjudicative methods of dispute settlement.

Adjudicative methods of dispute settlement consist of two types of procedures, arbitration and judicial settlement[ 2 ].

Arbitration.

Arbitration is a process used by agreement of the parties to resolve disputes. In arbitration, disputes are resolved, with binding effect, by a person or persons acting in a judicial manner in private, rather than by a national court of law that would have jurisdiction but for the agreement of the parties to exclude it. The decision of the arbitral tribunal is usually called an award.

The submission of a dispute to an unbiased third person designated by the parties to the controversy, who agree in advance to comply with the award a decision to be issued after a hearing at which both parties have an opportunity to be heard.

Arbitration is a well-established and widely used means to end disputes. It is one of several kinds of Alternative Dispute Resolution, which provide parties to a controversy with a choice other than litigation. Unlike litigation, arbitration takes place out of court: the two sides select an impartial third party, known as an arbitrator; agree in advance to comply with the arbitrator's award, and then participate in a hearing at which both sides can present evidence and testimony. The arbitrator's decision is usually final, and courts rarely reexamine it[ 3 ].

Judicial settlement.

Judicial settlement is a settlement of dispute between States by an international tribunal in accordance with the rules of International Law. The international character of the tribunal is in both its organization and its jurisdiction.

International tribunals include permanent tribunals, such as the International Court of Justice (ICJ), the international Tribunal for the law of the Sea (ITLOS), the European court of Justice, the European Court of Human Rights and the Inter-American Court of Human rights, and include ad hoc tribunals, such as the United Nations tribunal in Libya. The ICJ is the most important international tribunal, because of its both prestige and jurisdiction. It is the principal judicial organ of the United Nations[ 4 ].

Advantages and disadvantages of arbitration as methods of peaceful settlement[ 5 ].

Advantages..

Disputes which are taken to arbitration can be resolved faster than Judicial settlement methods like state court, in federal court or International Court.

Arbitrations take quite a bit less time than a lawsuit in district court, they will end up being less expensive than a case that goes to trial.

Specialized decision-makers: judges will often know very little about certain types of cases. This will often make it difficult for the attorney to effectively present the case.

Arbitration will provide more privacy to the parties than litigation. The arbitration dispute itself and the terms of any award frequently remain confidential.

A great benefit of arbitration is that the parties can select their arbitrators, both under the party appointed system and the list system.

Arbitration is a flexible process which permits parties to organize procedures, and schedule hearings and deadlines to meet their objectives and convenience.

Institutional methods of dispute settlement.

Institutional methods of dispute settlement involve the resort to international organizations for settlement of international disputes. These methods have come into existence with the creation of the international organizations. The most eminent organizations, which provide mechanisms for settling dispute between their member States, are the United Nations and the regional organizations, such as the European Union, the Organization of American States, the Arab league and the African Union.

International legal framework governing arbitration in investment disputes

It is therefore not possible to study international arbitration as a mechanism for the settlement of disputes in theory and their application to the Egyptian reality independently of the legal framework governing this mechanism, We found that it is a multi-level framework and can be divided the external legal framework of the arbitration mechanism, which in turn includes two levels, one multilateral, including the international, regional and bilateral levels, we will focus on international multilateral legal framework and bilateral investment agreements.

Multilateral legal framework.

In this section, the focus will be on three agreements that formed the international framework for arbitration as a mechanism and are related in one way or another to the investment disputes against Egypt in different international bodies.

First : Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 New York Convention:The most important milestone in the development of international commercial arbitration was the 1958 New York Convention. It was adopted by the United Nations Conference on International Commercial Arbitration convened by the Economic and Social Council of the United Nations[ 6 ].

The New York Convention applies “to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal”, and the awards may be issued by special arbitrators or by permanent arbitral bodies.

The Convention consists of 16 articles. The main objective of this Convention is as follows: First, to provide common legislative standards on the recognition of arbitration agreements. Second, Recognition and enforcement of foreign arbitral awards. Third: To ensure that there is no distinction between domestic and foreign arbitral awards by not imposing any more stringent conditions than on the recognition of local arbitral awards. These conditions also include the imposition of any fees or charges[ 7 ].

Egypt acceded to the Convention on 9 May 1959 and entered into force on 7 June 1959[ 8 ].

Second , UNCITRAL Rules and Recommendations of the United Nations Conference on International Commercial Arbitration, held in New York from 20 May to 10 June 1958 and subsequent United Nations Commission on Trade Law work adopted.

The UNCITRAL Rules means the United Nations Commission on International Trade Law arbitration rules adopted by General Assembly resolution 31/12/1976.

When it created UNCITRAL in 1966, the General Assembly of the United Nations recognized that “divergencies arising from the laws of different States in matters relating to international trade constitute one of the obstacles to the development of world trade” and expressed the view that, through the Commission, the United Nations could play “a more active role toward reducing or removing legal obstacles to the flow of international trade”[ 9 ].

UNCITRAL Rules have been drafted and drafted in their current form following extensive consultations with arbitral institutions and international commercial arbitration centers. A series of amendments and revisions have been made to these rules since they have been adopted to date. The aim of these amendments is as reflected in the resolution, Of UNCITRAL 2010 stated that the widespread application of these rules, which had been previously adopted under different circumstances, encompassed a wide range of disputes, required a revision of those rules to bring them in line with current international trade practices and to cope with changes that had occurred over three decades to enhance the efficiency of arbitration procedures in those rules ( United Nations, 1994 ).

The revision of those rules in a manner acceptable to the world's nations in all their legal, social and economic systems can contribute greatly to the establishment of harmonious economic relations, as well as the strengthening of the rule of law and the establishment of a harmonized legal framework for the settlement of international trade disputes fairly and efficiently ( United Nations, 2011 ).

Third : Washington Convention for the Settlement of Investment Disputes between States and Citizens of Other States 1965:

This agreement came within the framework of the World Bank's attempt to establish rules regulating arbitration procedures in the light of the difficulties it faced in arbitration as a mechanism for settling disputes. A multilateral agreement was drafted in accordance with the provisions of its articles settling disputes arising between foreign investors and their host countries ( United Nations Commission on International Trade Law, 2013 ). On March 18, 1965 in Washington and entered into force on October 14, 1966. It was signed by more than 160 countries[ 10 ].

The Convention consists of 75 articles divided into ten sections. In its Preamble, the Convention emphasizes the importance of international investment in economic development and the potential for disputes related to this investment between its host countries and investors. This requires the provision of means of conciliation and international arbitration.

Bilateral legal framework/investment promotion and protection agreements.

The Bilateral agreements are a result of the tendency of the countries exporting investments to protect their investments, especially in the newly independent developing countries, which refused to protect them.

The investment agreements signed between Egypt and the rest of the world explicitly stipulate the definition of investment as the material aspect that is protected under the agreement through the investment process carried out by the investor using this investment.

These agreements are expressly defined by those who apply to them or those who benefit from the benefits they include, namely, the foreign investor.

These agreements specify the scope of the application of the Convention and the geographical scope of the application of the Convention.

These agreements also provide for a specific period. This framework shall represent the period of time in which the Convention shall enter into force and the entry into force of the signed Convention shall come into force after certain procedures have been fulfilled and the expiry of the period as provided for in that Convention.

All these bilateral agreements clearly define the mechanisms for settling disputes that may arise from disputes between the parties to the Convention or between the signatory State and investors who hold the nationality of the other signatory State. These agreements provide for friendly means of settlement of such disputes, usually in conciliation, mediation and arbitration, while some of these agreements provide for the principle of amicable settlement of the dispute without limitation.

Types of arbitration in investment disputes

In international business, a party contemplating concluding an arbitration agreement in a contract for the resolution of disputes or differences may be faced with a choice of the various types of arbitrations which can be conducted under either self-administered ad hoc or institutional rules or procedures.

Institutional arbitration

An institutional arbitration is one in which a specialized institution intervenes and takes on the role of administering the arbitration process. Each institution has its own set of rules which provide a framework for the arbitration, and its own form of administration to assist in the process.

Advantages of institutional arbitration.

the availability of pre-established rules and procedures which ensure the arbitration proceedings begin in a timely manner;

administrative assistance from the institution, which will provide a secretariat or court of arbitration;

a list of qualified arbitrators to choose from;

assistance in encouraging reluctant parties to proceed with arbitration; and

an established format with a proven record.

Some of the most important arbitration institutions[ 12 ]

International Chamber of Commerce (ICC) – Paris.

Swiss Chambers’ Arbitration Institution (SCAI) – Geneva.

London Court of International Arbitration (LCIA) – London.

Arbitration Institute of the Stockholm Chamber of Commerce.

Stockholm – Singapore International Arbitration Centre (SIAC) – Singapore.

International Centre for Settlement of Investment Disputes (ICSID) – Washington.

D.C. – Court of Arbitration for Sport (CAS) – Lausanne.

Ad hoc arbitration

An ad hoc arbitration is one which is not administered by an institution such as the ICC, LCIA, DIAC or DIFC. The parties will therefore have to determine all aspects of the arbitration themselves – for example, the number of arbitrators, appointing those arbitrators, the applicable law and the procedure for conducting the arbitration.

Provided the parties approach the arbitration with cooperation, ad hoc proceedings have the potential to be more flexible, faster and cheaper than institutional proceedings. The absence of administrative fees alone provides an excellent incentive to use the ad hoc procedure[ 13 ].

The arbitration agreement, whether reached before or after a dispute has arisen, may simply state that “disputes between parties will be arbitrated”. It is infinitely preferable at least to specify the place or “seat” of the arbitration as well since this will have a significant impact on several vital issues such as the procedural laws governing the arbitration and the enforceability of the award. If the parties cannot agree on the detail all unresolved problems and questions relating to the implementation of the arbitration – for example, how the tribunal will be appointed or how the proceedings will be conducted – will be determined by the “seat” or location of the arbitration. However, this approach will only work if the seat of the arbitration has an established arbitration law.

Ad hoc proceedings need not be kept entirely separate from institutional arbitration. Often, appointing a qualified arbitrator can lead to the parties agreeing to designate an institutional provider as the appointing authority. Additionally, the parties may decide to engage an institutional provider to administer the arbitration at any time.

Ad hoc arbitration – advantages[ 14 ]

ad hoc arbitration is less expensive than institutional arbitration;

no administration fees;

total flexibility and adaptability (tailor made);

control of the process, Parties and arbitrators are, in principle, in control of the proceeding;

in ad hoc arbitrations, the parties will have to agree the scale of remuneration; and

with the arbitral panel and agree fees directly with the arbitral tribunal.

The Egyptian experience in investment disputes arbitration

The existence of a regulated legal framework for investment in any State contributes to the creation of the necessary environment for the foreign investor through national laws, which ensure that the return is adequate for its investments and guarantees foreign capital protection against sources and other damages that may be caused to it at any time.

It also guarantees neutrality and objectivity in the consideration of disputes that may arise between Egypt and foreign investors as a result of investing these funds.

The national legal framework

Through its experience at the international and regional levels, Egypt has sought to benefit from this experience by changing in its legislative frameworks and laws to allow the foreign investor the opportunity to resort to international arbitration to present the dispute that may arise between it and the host country. This gives investors some reassurance in view of their fears of national litigation systems, as well as the length of the proceedings.

In this regard, two main points are emphasized:

First, the laws governing investment.

Which Egypt has adopted in succession since the signing of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the location of arbitration within these laws and the guarantees it provides to investors in exchange for Egypt's obligations as a host country for investment toward these investors.

Between 1953 and Egypt's signing of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which it signed on March 9, 1959, the laws governing investment are:

Law No. 55 of 1952 on the system of free zones on 2/12/1952.

Law 156 of 1953 on the investment of foreign capital in economic development projects on 2/4/1953 and amended by Law No. 475 of 1954.

These laws did not include any articles on arbitration as a mechanism for the settlement of disputes arising within them.

Even after Egypt signed the agreement, Law No. 2108 of 1960 on the investment of foreign capital was issued without any of its articles referring to the settlement of any disputes that may arise under this law, whether between the State and the investor or between investors. In 1971.

Law No. 65 of 1971 concerning the investment of money, Arab and free zones is a real beginning for Egypt to include arbitration as a mechanism for settling investment disputes between it and investors and the beginning of its commitment and then its commitment to accept international arbitration as a mechanism. This is evident in the articles of Law No. 2, 38, 39 and 40 and 41[ 15 ].

Such as Law No. 43 of 1974 issuing the Arab and Foreign Investment and Free Zones Law, the first investment laws approved by Egypt, and expressly provided for the presentation of investment disputes to the International Center for the Settlement of Investment Disputes. Article 8 of the law stipulates that “This law shall be in the manner agreed upon with the investor or within the framework of the agreements in force between the Arab Republic of Egypt and the Investor State or within the framework of the Agreement on the Settlement of Investment Disputes between the State and the nationals of other countries to which Egypt has acceded under Law No. 90 1971 NH, which lays down the conditions.

Law No. 230 of 1989 on Investment and its amendments represents the affirmation of Egypt's continued commitment to international arbitration as a mechanism for settling investment disputes between investors. Article 55 of the law states that “To implement the provisions of this law in the manner agreed upon with investors and may be agreed between the parties concerned to settle these disputes under the agreements in force between the Arab Republic of Egypt and the State of the investor or within the framework of the Convention on the Settlement of Investment Disputes between States and citizens Other countries that acceded to the Arab Republic of Egypt Law No. 90 of 1971 […][ 16 ].

In spite of the termination of this law, Law No. 8 of 1997 on the issuance of the Investment Guarantees and Incentives Law also represents a continuation of Egypt's commitment to international arbitration as a mechanism for resolving investment disputes. Article 7 of the law stipulates that “investment disputes related to the implementation of the provisions of this law In the manner agreed upon with the investor. It may also be agreed between the parties concerned to settle these disputes within the framework of the agreements in force between the Arab Republic of Egypt and the Investor State or within the framework of the Convention for the Settlement of Disputes arising out of Investments between States and between States' In accordance with the provisions of the Arbitration Law in Commercial Articles promulgated by Law No. 27 of 1994, as well as the settlement of disputes referred to by arbitration before the Cairo Center Regional Center for International Commercial Arbitration”.

The Law of Guarantees and Incentives No. 8 of 1997 was amended by Law No. 17 of 2015. One of the most important amendments was the amendment of Article 7 on the use of international arbitration, as well as the regulation of reconciliation with investors.

Although the amendments to the Law on Investment Guarantees and Incentives No. 8 of 1997 have not been passed for a long time, they were canceled on 1/6/2017 and replaced by the new Investment Law No. 72 of 2017 and its executive regulations. Investment and gradually addressed over four chapters, where the fifth section at the beginning of the settlement of any dispute between the investor and any one or more governmental bodies relating to capital or the interpretation of the provisions of this law or its application amicably without delay through negotiations between the parties to the conflict, Without prejudice to the right to litigation.

Second: Egyptian arbitration law.

The Egyptian Arbitration Law promulgated by Law No. 27 of 1994 is an integrated development of Egypt's commitment to arbitration as a dispute resolution mechanism related to contracts of an economic nature, including investment. The law consists of 58 articles divided into seven sections.

The most prominent features of this law:

The law expressly defines in its article two what is commercial arbitration, which lists the forms of commercial disputes, where the origin of which is the existence of legal relationship of an economic character and the market of many examples and not limited to these disputes, including investment, exploration, extraction and land reclamation. This law also calls the term arbitration The parties to the conflict will voluntarily.

The Egyptian Arbitration Law included arbitration subject to the law of the parties where the parties are free to choose the law governing the arbitration agreement even if there is no link between the agreed law and the law governing the legal relationship in dispute. applied to the conflict ( Al-Qalloubi, 2005 ).

The Egyptian legal framework is consistent with the New York Convention of 1958 on the availability of the two pillars of consent and writing. Writing is then a cornerstone of the arbitration agreement ( Al-Qalloubi, 2005 , p. 65).

The law defines four criteria on the basis of which international arbitration is considered.

This Agreement shall be in writing or otherwise void.

It is not permissible to agree on arbitration except for the natural or juridical person who has the right to dispose of his rights.

The arbitration clause shall be regarded as an independent agreement from the other conditions of the contract. The invalidity, dissolution or termination of the contract shall not result in any effect on the arbitration clause it contains if that condition is in itself correct.

The law provides for a full chapter dealing with the arbitral tribunal where it gives the parties to the dispute the right to form their members from one arbitrator or more, provided that the number is fixed. This section deals with the conditions of selecting the arbitrators and their nationalities and controls in case of disagreement between the parties to the dispute of arbitrators.

The law expressly provides for the role of the judiciary and distinguishes between the first two cases in matters referred by the law to the Egyptian judiciary and the jurisdiction of the court that is originally competent to hear the dispute. The second is that when the dispute is international, whether the arbitration is inside or outside Egypt, the court gives the court many powers during the various stages of arbitration, whether from the beginning of the dispute and presented to arbitration or during the course of the proceedings or even after the issuance of the judgment and implementation.

The law affirms in the various articles the will of the parties and their dispute, beginning with the agreement to resort to arbitration before or after the outbreak of the dispute through their agreement on the selection of the arbitral tribunal as well as the agreement on the arbitral proceedings and the applicable law), as well as the place of arbitration both inside and outside Egypt. Consent shall extend to the choice of the language of arbitration.

The law recognizes that the arbitration provisions issued in accordance with this law cannot be appealed against any of the methods of appeal stipulated in the Civil and Commercial Procedures Law. However, it is permissible to file an action for nullification of the ruling in certain cases defined by the law.

Although the law has set out a full chapter (Chapter VII) on the validity of the decisions of the arbitrators issued and implemented, and stressed that these provisions are enforceable, but they set conditions for the issuance of order to implement the provision.

Egypt on the map of investment disputes in the world

In this section, we will focuses on the Egypt investment disputes before the International Center for Settlement of Investment Disputes (ICSID) by locating Egypt on the map of investment disputes in the world.

The cases before the International Center for the Settlement of Investment Disputes (ICSID) are focused on the fact that it is one of the first specialized bodies in the examination of disputes arising from investments.

The map of arbitration disputes until the end of 2015 indicates a continuing trend toward the filing of claims for investment disputes by investors toward countries or vice versa ( Figure 1 ).

As evidenced by the graph, there are increasing cases registered before the Center on investment disputes, either arbitration or other services provided by the Center of mediation or conciliation or other services, where the cases rose from one case in 1972 to a maximum in 2012 to reach 50 cases in general Although it fell to 40 during 2013 and to 38 cases in 2014, but it remains high reflecting the continued trend toward resorting to the Center for Settlement of Investment Disputes or to obtain mediation and conciliation services and other services related to the settlement of investment disputes, In 2015 to 52.

As for the geographical distribution of the countries against which the arbitration claims are filed, we find that the Middle East region includes North African countries against which there are fewer cases compared to other regions of the world, where the countries of South America and the countries of East and Central Asia in the top with 25 per cent each, (Africa) by 16 per cent and is ranked third in the Middle East by 10 per cent of the total cases filed before the Center.

Egypt still holds the largest share of the number of arbitration cases filed against it before the International Center for Settlement of Investment Disputes (ICSID), whether or not a final judgment is pending, as the number of cases against Egypt is still more than three or three times the second largest Arab or African Country Followed immediately.

Egypt, according to the 2012 UNCTAD report, is among the top ten countries in the world with arbitration cases ranked seventh in the world with 27 cases and third in a study conducted by a number of specialists and researchers at Quir Aspiration.

The following chart shows the total number of claims filed until the end of 2015 compared to 2015 only, and the location of Egypt compared to other countries ( Figure 2 ).

Egypt, according to the International Center for Settlement of Investment Disputes (ICSID), is among the first four countries to be sued by the International Center for Settlement of Investment Disputes (ICSID) between 2011 and 2013.

Egypt remains the same, according to the data of the various international institutions within the top ten countries in the world in terms of the number of investment disputes filed with the Center, and that its ranking varies from year to year. Egypt continues to hold the largest share of the total number of lawsuits against countries in the Middle East and North Africa.

According to the data, by the end of 2017, Egypt had filed 30 arbitration cases against 22 cases in which judgments had been issued or had been settled while 8 of them were still under arbitration. Most of these cases were filed after the revolution of 25 January 2011, Just.

Arbitration cases brought against Egypt before the ICSID can be divided between cases in which a judgment has been handed down and others still under arbitration.

A statement of the arbitral proceedings brought against Egypt before the International Center for the Settlement of Investment Disputes (ICSID) in which it was ruled ( Table I ).

The cases listed in this table are divided between cases in which a judgment was issued in favor of Egypt, and other cases in which a judgment was issued in favor of the investor and some of these cases are discussed in detail.

The cases in the table also include the cases in which the arbitration has been suspended after informing the Center of the settlement of the dispute between the parties through negotiations between them. Accordingly, the arbitral tribunal has issued a decision to discontinue the proceedings and some of the cases resolved by negotiation will be dealt with in detail at the end of this section.

A statement of the proceedings against Egypt before the International Center for the Settlement of Investment Disputes and is still under arbitration ( Table II ).

A case study

Waguih Elie George Siag and Clorinda Vecchi VS the Arab republic of Egypt (ICSID Case No. ARB/05/15).

Summary of facts about case study:

This case involves an investment dispute between (Claimants), Waguih Elie George Siag and Clorinda Vecchi, and) Respondent), the Arab Republic of Egypt (“Egypt”)[ 17 ], they filed with the International Centre for Settlement of Investment Disputes a Request for Arbitration directed against Egypt On 26 May 2005[ 18 ].

According to the Request, in 1989 the Egyptian Ministry of Tourism sold a parcel of property on the Gulf of Aqaba to a company called Siag Touristic Investments and Hotels Management Company (“Siag Touristic”), which is owned principally by the Claimants. Siag Touristic is an Egyptian joint stock company. The purpose of the sale was to permit Siag Touristic to develop a tourist resort on the property. Development commenced on the property. However, in 1996 the property was confiscated by the Egyptian Government. Although the Claimants obtained relief from the Egyptian courts, this was ignored by the Egyptian Government[ 19 ].

The Claimant (Siag – Clorinda) according to the request seeks a declaration that the Respondent (Egypt) has violated the BIT, international law and Egyptian law, compensation for all damages suffered, costs and an award of compound interest.

Article 25(1) of the ICSID Convention and decide on the jurisdiction of the Centre :

Under Rule 41 of the ICSID Arbitration Rules the Tribunal is required to decide the Respondent’s objection that the present dispute “is not within the jurisdiction of the Centre or, for other reasons, is not within the competence of the Tribunal”. The Claimants contend that the Tribunal’s jurisdiction is established under two instruments referred to at the outset of this Decision: (a) the BIT and (b) the ICSID Convention.

Egypt’s objection to jurisdiction of tribunal based on three reasons.

Siag’s nationality..

Egypt argued that Siag remained an Egyptian national and accordingly failed the negative nationality requirement of Article 25(2)(a) of the ICSID Convention. The Tribunal was therefore without jurisdiction[ 20 ].

Egypt noted that the Tribunal had found in its Decision on Jurisdiction that, pursuant to Article 10(3) of the Egyptian nationality law, Siag had been required to state his intention to retain his Egyptian nationality within one year of gaining permission from Egypt to obtain Lebanese nationality. As Siag did not state such an intention within the relevant time, the Tribunal held that he had lost his Egyptian nationality.

Egypt filed its Counter-Memorial on the merits on October 12, 2007 expert opinion of Professor Smit which accompanied it, also addressed Egypt’s Lebanese nationality objection. Egypt submitted that Professor Smit’s opinion made it clear that Siag had never properly shed his Egyptian nationality when he “supposedly took on Lebanese nationality[ 21 ].

Siag was born in Egypt on March 12, 1962 to Egyptian parents. He was, therefore, an Egyptian national from birth, On March 5, 1990 the Egyptian Minister of Interior issued his Decree No. 1353 of 1990 acknowledging Siag’s prior acquisition of Lebanese nationality and granting him permission to maintain his Egyptian nationality, but he lost his Egyptian nationality because do not notify the Egyptian Interior Ministry within the period of one year of the desire to retain Egyptian nationality Siag acquired Italian nationality on May 3, 1993 on the basis of his marriage to an Italian citizen.

Siag’s bankruptcy.

Egypt filed a notification and application concerning objection to the center subject matter jurisdiction, Egypt discovered that Waguih Siag had been declared bankrupt on 16 January 1999 as a result of a debt of 23,545.16 Egyptian Pounds.

Egypt contended that, under Egyptian bankruptcy law Siag, from the date he became bankrupt in 1999, could no longer validly agree to arbitrate any dispute relating to any asset forming part of the bankruptcy estate. Egypt argued that at the time the Request for Arbitration was lodged in 2005 Siag therefore lacked the capacity to arbitrate the dispute. Siag also lacked capacity to maintain the present arbitration[ 22 ].

After long discussions, the Tribunal finds that Egypt has not demonstrated that Siag was bankrupt at times relevant to the jurisdiction of the Tribunal under the ICSID Convention.

Existence of an “investment”.

On the subject of its objections to jurisdiction, Egypt submitted that although the term investment has a broad definition it is not without limitations and should be determined on a case-by-case basis, also the purpose of the ICSID Convention is to afford a higher level of protection to foreign investors.

At the date, Egypt and Italy concluded the BIT on 2 March 1989, and at the date of entering into the sale contract on 4 January 1989 the Claimants were Egyptian nationals. The two companies, Siag Touristic and Siag Taba were established under Egyptian laws. From their inception, the economic activities of the Claimants were devoid of any foreign element.

Word of tribunal about jurisdiction.

finds and declares that at all relevant times Siag was not an Egyptian national;

finds and declares that Egypt’s objection to jurisdiction based on Siag’s alleged Egyptian nationality and all of its related contentions about his alleged disqualifying dual nationality fail and are hereby dismissed;

finds and declares that Egypt’s objection to jurisdiction concerning Siag’s alleged fraud or other misconduct in relation to his acquisition of Lebanese nationality fails and is hereby dismissed; and

finds and declares that Egypt’s objection to jurisdiction based on Siag’s alleged bankruptcy fails and is hereby dismissed.

Applicable law.

Second step after discussing the parties, the Tribunal decided that the applicable law is the bilateral agreement between Egypt and Italy

The claimant's requests.

The Tribunal finds that the evidence clearly establishes that Egypt has unlawfully expropriated Claimants’ investment, in breach of Article 5(1)(ii) of the BIT; that Egypt failed to provide full protection to Claimants’ investment, in breach of Article 4(1) of the BIT; that Egypt failed to ensure the fair and equitable treatment of Claimants’ investment, in breach of Article 2(2) of the BIT; and that Egypt allowed Claimants’ investment to be subjected to unreasonable measures, in breach of Article 2(2) of the BIT[ 23 ].

Main point in the word of tribunal[ 24 ]:

All of Egypt’s defenses on the merits have been dismissed.

Egypt was responsible for greatly increasing the costs of these proceedings.

Claimants should be compensated for their reasonable legal fees and related expenses in respect of both the original jurisdictional phase and subsequent phases.

The Tribunal agrees that “it is not unusual for claimants to spend more on costs than respondents given, among other things, the burden of proof.

Tribunal has also noted that Egypt has made a number of unsuccessful jurisdictional objections, some of which were filed late in the course of proceedings and which represented in modified form issues which had already been decided by the Tribunal.

Egypt is liable to Claimants for unlawfully expropriating Claimants’ investment, consisting of the Property and the Project, in breach of Article 5(1)(ii) of the BIT.

Egypt is liable to Claimants for failing to provide full protection to Claimants’ investment, consisting of the Property and the Project, in breach of Article 4(1) of the BIT.

Egypt is liable to Claimants for failing to ensure the fair and equitable treatment of Claimants’ investment, consisting of the Property and the Project, in breach of Article 2(2) of the BIT.

Egypt is liable to Claimants for allowing Claimants’ investment, consisting of the Property and the Project, to be subjected to unreasonable measures, in breach of Article 2(2) of the BIT.

The Claimants are entitled to recover from Egypt the total sum of USD 74,550,794.75 in compensation for its actions in breach of the BIT.

Results related to the legal framework regulating investment disputes in Egypt

Multiplicity of advantages provided by different legal frameworks governing the arbitration process, which benefit Egypt as other countries of the world and provide the reassurance that the investor needs to make his decision to invest.

The arbitration rules adopted over the years from 1958 until now at different levels internationally and regionally are an advantage that cannot be ignored in an attempt to avoid the settlement of international disputes in the fields of investment in accordance with the national laws of the States parties to these disputes.

The basis in the various frameworks governing the arbitral mechanism and the previous reference to its recognition of the right of the parties to the dispute to agree and freely decide what they want with respect to arbitral proceedings followed in the course of arbitral proceedings, the selection of arbitrators and agreement on applicable law and other matters relating to the subject matter of arbitration, any other procedure shall be used only if such agreement is not possible. All these rights are subject to the rights of the parties to the dispute to submit their claims, defenses and rights to payment after the jurisdiction of the arbitral tribunal.

The various legal frameworks emphasize the necessity of arbitral decisions, and therefore the refusal to recognize or not to implement such decisions. The only way to challenge these decisions is to cancel the award at the request of the party against whom the decision is made. Represent evidence that the competent court may rely on to issue a judgment on the annulment of the award.

Results related to the arbitration cases against Egypt

The arbitration cases that were filed with the Center in economic terms related to sectors of vital importance in the Egyptian economy, for example tourism sector, which received the largest number of cases filed, agricultural sector and the activities of infrastructure and construction received.

Investors’ decision to arbitration in these cases led to the cessation of vital projects whose completion was supposed to contribute to the national economy. Many of them were associated with large projects in terms of investment volume or the nature of the targeted projects (new or existing infrastructure or large industrial projects, Tourism activities have been associated with huge projects for the development of hotels, land and resorts in a sector that plays a vital role as a source of national income in Egypt.

Investment Law No. 72 of 2017, limited to the settlement of investment disputes on the three committees formed in accordance with the provisions of the law, as well as resort to the judiciary and delete the reference to the use of the arbitration mechanism with a compromise on the friendly methods and negotiations between the parties only, although this reflects the attempt of those who Investment Management Reducing investors' recourse to international arbitration as a mechanism for settling investment disputes. The text of the Investment Law on the investor's right to resort to international arbitration means accepting Egypt to international specialized agencies to arbitrate as a mechanism without the need for prior agreement with investors. However, investment officials have overlooked a very important point that the amendment of the Investment Law as the most important part of the legislative framework governing investment in Egypt is bilateral agreements to ensure and protect mutual investments. Which Egypt signed more than 100 agreements with its counterparts from other countries, in which Egypt guarantees investors belonging to these countries the right to resort to international arbitration in investment disputes, and with the fact that these agreements are the support of more than 70 per cent of the cases before the International Center for Settlement of Investment Disputes, which means that it does not stand when amending the investment law and delete the arbitration clauses as a mechanism for settling disputes with investors, and I require a broader view of the legislative framework governing investment as different as we discussed in Chapter I, International and regional bilateral and multilateral agreements, as well as the internal framework of investment law, arbitration law, commercial law and other laws relating to investor transactions within Egypt, which requires a greater effort and a broader vision to achieve the desired change.

The investment guarantees and protection agreements signed between Egypt and a large number of countries in the world have placed successive Egyptian governments with a large number of obligations that would give the investor a lot of rights in return for less obligations. In this regard, the rights of Egyptian investors in the countries signed with these agreements, and because Egypt is a country mainly seeking to attract foreign investment, it currently needs more to legalize and put an officer to ensure that these rights are in place and not abused by investors.

Total number of ICSID cases registered, by calendar year

A statement of the arbitral proceedings brought against Egypt before the International Center for the Settlement of Investment Disputes (ICSID) in which it was ruled