U.S. Supreme Court
reviews U.S.-UK investment treaty’s arbitration clause which allows either
party to submit a dispute to a competent tribunal of the Contracting Party
under certain conditions; issue is whether a court or the arbitrator has
primary responsibility for interpreting and applying the local litigation
requirement to an underlying controversy
In
the early 1990s, BG Group PLC (BG), a British company, made a major investment
in Argentina’s natural gas industry. On December 11, 1990, the United Kingdom
and Argentina signed the Bilateral Investment Treaty (BIT). The purpose of the
treaty was to promote foreign investment in the Argentine market to reduce
inflation and public debt in Argentina.
Later,
in the midst of an economic crisis, Argentina enacted an emergency law that
required investors to collect tariff revenues in Argentinian pesos at a rate of
one peso per dollar. Due to the weak international peso-to-dollar exchange
rate, these changes made it difficult for BG to see a return on its investment.
Simultaneously, Argentina adopted legislation that stayed all lawsuits arising
from the emergency measures. BG sought recourse under the BIT between the
United Kingdom and Argentina. The Treaty required that BG first attempt to
resolve its dispute before a “competent tribunal” in Argentina for at least
eighteen months. Instead, BG bypassed the Argentinian courts and submitted its
dispute directly to an arbitral tribunal. The arbitral panel, seated in
Washington, D.C., held that Argentina’s changes to its judicial system excused
the eighteen-month precondition to arbitration and awarded BG over US $185
million in damages. Argentina petitioned the district court to vacate the award
under the Federal Arbitration Act by arguing that the arbitral panel exceeded
its powers. The court denied the petition. The U.S. Court of Appeals, District
of Columbia Circuit reversed and held that the determination of whether BG
could submit its dispute directly to arbitration must be made by a court, not
the arbitral tribunal.
The
District of Columbia District Court upheld the arbitration award, stating that
the tribunal could decide its own jurisdiction. Accordingly, the court denied
Argentina’s motion to vacate the award and granted BG’s motion to recognize and
enforce the award. The Court overturned the district court decision and found
that the tribunal did not have jurisdiction because the parties did not meet
the preconditions for Article 8(2). BG filed a petition for a writ of
certiorari with the United States Supreme Court, which granted the petition on
June 10, 2013.
The
key issue here is whether the arbitrators or the courts should determine
whether a precondition for arbitration has been satisfied. In answering the
question, the court treats the document before it as if it were an ordinary
contract between private parties. Were that so, the court concludes, the matter
would be for the arbitrators. However, the court then asks whether the fact
that the document in question is a treaty makes a critical difference. The
court concluded that it does not.
“Where
ordinary contracts are at issue, it is up to the parties to determine whether a
particular matter is primarily for arbitrators or for courts to decide.
Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct. 1347,
4 L.Ed.2d 1409 (1960) (‘Arbitration is a matter of contract and a party cannot
be required to submit to arbitration any dispute which he has not agreed so to
submit’). If the contract is silent on the matter of who primarily is to decide
threshold questions about arbitration, courts determine the parties’ intent
with the help of presumptions.”
“On
the one hand, courts presume that the parties intend courts, not arbitrators,
to decide what we have called disputes about ‘arbitrability.’ These include
questions such as ‘whether the parties are bound by a given arbitration
clause,’ or ‘whether an arbitration clause in a concededly binding contract
applies to a particular type of controversy.’ Howsam v. Dean Witter Reynolds,
Inc., 537 U.S. 79, 84, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002); accord, Granite
Rock Co. v. Teamsters, 561 U.S. 287, 299-300, 130 S.Ct. 2847, 177 L.Ed.2d 567
(2010) (disputes over ‘formation of the parties’ arbitration agreement’ *1207
and ‘its enforceability or applicability to the dispute’ at issue are ‘matters
... the court must resolve’ (internal quotation marks omitted)). See First
Options, supra, at 941, 943-947, 115 S.Ct. 1920 (court should decide whether an
arbitration clause applied to a party who ‘had not personally signed’ the
document containing it); AT & T Technologies, Inc. v. Communications
Workers, 475 U.S. 643, 651, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (court should
decide whether a particular labor-management layoff dispute fell within the
arbitration clause of a collective-bargaining contract); John Wiley & Sons,
Inc. v. Livingston, 376 U.S. 543, 546-548, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964)
(court should decide whether an arbitration provision survived a corporate
merger). See generally AT & T Technologies, supra, at 649, 106 S.Ct. 1415
(‘Unless the parties clearly and unmistakably provide otherwise, the question
of whether the parties agreed to arbitrate is to be decided by the court, not
the arbitrator’).”
“On
the other hand, courts presume that the parties intend arbitrators, not courts,
to decide disputes about the meaning and application of particular procedural preconditions
for the use of arbitration. See Howsam, supra, at 86, 123 S.Ct. 588 (courts
assume parties ‘normally expect a forum-based decisionmaker to decide
forum-specific procedural gateway matters.’ These procedural matters include
claims of ‘waiver, delay, or a like defense to arbitrability.’ Moses H. Cone
Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 25, 103 S.Ct. 927, 74
L.Ed.2d 765 (1983). And they include the satisfaction of ‘prerequisites such as
time limits, notice, laches, estoppel, and other conditions precedent to an
obligation to arbitrate.’ Howsam, supra, at 85, 123 S.Ct. 588 (quoting the
Revised Uniform Arbitration Act of 2000 § 6, Comment 2, 7 U.L.A. 13
(Supp.2002). See also § 6(c) (‘An arbitrator shall decide whether a condition
precedent to arbitrability has been fulfilled’); § 6, Comment 2 (explaining
that this rule reflects ‘the holdings of the vast majority of state courts’ and
collecting cases).”
However,
the provision before the court concerns the structure and text of the provision
and makes it clear that it is a procedural condition precedent to arbitration.
It states that a dispute “shall be submitted to international arbitration” if
“one of the Parties so requests,” as long as “a period of eighteen months has
elapsed” since the dispute was submitted to a local tribunal and the tribunal
“has not given its final decision.” Art. 8(2). The language in Article 8 does
not give substantive weight to the local court’s determinations on the matters
at issue between the parties. To the contrary, Article 8 provides that only the
“arbitration decision shall be final and binding on both Parties.” Art. 8(4).
The litigation provision is consequently purely procedural—a claims-processing
rule that governs when the arbitration may begin, but not whether it may occur
or what its substantive outcome will be on the issues in dispute.
Moreover,
the court finds no support in Article 8 or elsewhere in the Treaty that might
overcome the ordinary assumption. It nowhere demonstrates a contrary intent as
to the delegation of decisional authority between judges and arbitrators. Thus,
were the document an ordinary contract, it would call for arbitrators primarily
to interpret and apply the local litigation provision.
The
court ultimately asks whether the fact that the document before it is a treaty
makes a critical difference to its analysis. The Solicitor General argues that
the local litigation provision may be “a condition on the State’s consent to
enter into an arbitration agreement.” Brief for United States as Amicus Curiae
25. He further adds that courts should “review de novo the arbitral tribunal’s
resolution of objections based on an investor’s non-compliance” with such a
condition. Ibid. Finally, he recommends that the court remand this case to the
Court of Appeals to determine whether the court-exhaustion provision is such a
condition. Id., at 31-33.
Despite
his efforts, the court did not accept the Solicitor General’s view as applied
to the treaty in question. “As a general matter, a treaty is a contract, though
between nations. Its interpretation normally is, like a contract’s
interpretation, a matter of determining the parties’ intent. Air France v.
Saks, 470 U.S. 392, 399, 105 S.Ct. 1338, 84 L.Ed.2d 289 (1985) (courts must
give ‘the specific words of the treaty a meaning consistent with the shared
expectations of the contracting parties’); Sullivan v. Kidd, 254 U.S. 433, 439,
41 S.Ct. 158, 65 L.Ed. 344 (1921) (‘[T]reaties are to be interpreted upon the
principles which govern the interpretation of contracts in writing between
individuals, and are to be executed in the utmost good faith, with a view to
making effective the purposes of the high contracting parties’); Wright v.
Henkel, 190 U.S. 40, 57, 23 S.Ct. 781, 47 L.Ed. 948 (1903) (‘Treaties must
receive a fair interpretation, according to the intention of the contracting
parties’). And where, as here, a federal court is asked to interpret that
intent pursuant to a motion to vacate or confirm an award made in the United
States under the Federal Arbitration Act, it should apply the presumptions
supplied by United States law. See New York Convention, Art. V(1)(e) (award may
be ‘set aside or suspended by a competent authority of the country in which, or
under the law of which, that award was made’). […]”
The
court found that parties often submit important matters to arbitration and the
word consent could be attached to a highly procedural precondition to
arbitration, such as a waiting period, which the parties are unlikely to have
intended that courts apply without saying so. While the court leaves the matter
open for future argument, the court does not see why the presence of the term
“consent” in a treaty warrants abandoning, or increasing the complexity of, our
ordinary intent-determining framework. Howsam, 537 U.S., at 83-85, 123 S.Ct.
588; First Options, 514 U.S., at 942-945, 115 S.Ct. 1920; John Wiley, 376 U.S.,
at 546-549, 555-559, 84 S.Ct. 909.
Although
a treaty may contain evidence that shows the parties had intent contrary to
ordinary presumptions related to arbitration, the treaty before the court does
not demonstrate any such contrary intention. The court concedes that the local
litigation requirement appears in Paragraph (1) of Article 8, while the Article
does not mention arbitration until the subsequent paragraph, Paragraph (2).
Moreover, a requirement that a party exhaust its remedies in a country’s local
courts before seeking arbitration may seem particularly important to a country
offering protection to foreign investors. Likewise, the placing of an important
matter prior to any mention of arbitration suggests intent by Argentina, the
United Kingdom, or both, to have courts rather than arbitrators apply the
litigation requirement.
The
text and structure of the litigation requirement set forth in Article 8 make
clear that it is a procedural condition precedent to arbitration—a step that a
party must undertake before giving notice of arbitration. The Treaty nowhere
specifies that the provision is to operate as a substantive condition on the formation
of the arbitration contract, or that it is a matter of such high importance
that it is to be determined by courts.
“[…]
International arbitrators are likely more familiar than judges with the
expectations of foreign investors and recipient nations regarding the operation
of the provision. Howsam, supra, at 85, 123 S.Ct. 588. And the Treaty itself
authorizes the use of international arbitration associations, the rules of
which provide that arbitrators shall have the authority to interpret provisions
of this kind. Art. 8(3) (providing that the parties may refer a dispute to the
International Centre for the Settlement of Investment Disputes (ICSID) or to
arbitrators appointed pursuant to the arbitration rules of the United Nations
Commission on International Trade Law (UNCITRAL)); accord, UNCITRAL Arbitration
Rules, Art. 23(1) (rev. 2010 ed.) (‘[A]rbitral tribunal shall have the power to
rule on its own jurisdiction’); ICSID Convention, Regulations and Rules, Art.
41(1) (2006 ed.) (‘Tribunal shall be the judge of its own competence’). Cf.
Howsam, supra, at 85, 123 S.Ct. 588 (giving weight to the parties’
incorporation of the National Association of Securities Dealers’ Code of
Arbitration into their contract, which provided for similar arbitral authority,
as evidence that they intended arbitrators to ‘interpret and apply the NASD
time limit rule’).”
The
result is that the court’s presumption applies and it is not overcome. The
interpretation and application of the local litigation provision is primarily
for the arbitrators to decide. The court concluded that it cannot review the
decision de novo. Rather, it must do so with considerable deference.
The
Court then turns to analyze the dissent opinion, and states:
“The
dissent interprets Article 8’s local litigation provision differently. In its
view, *1211 the provision sets forth not a condition precedent to arbitration
in an already-binding arbitration contract (normally a matter for arbitrators
to interpret), but a substantive condition on Argentina’s consent to
arbitration and thus on the contract’s formation in the first place (normally
something for courts to interpret). It reads the whole of Article 8 as a
‘unilateral standing offer’ to arbitrate that Argentina and the United Kingdom
each extends to investors of the other country. Post, at 1219-1220 (opinion of
ROBERTS, C. J.). And it says that the local litigation requirement is one of
the essential “`terms in which the offer was made.’” Post, at 1218 (quoting
Eliason v. Henshaw, 4 Wheat. 225, 228, 4 L.Ed. 556 (1819); emphasis deleted).”
“While
it is possible to read the provision in this way, doing so is not consistent
with our case law interpreting similar provisions appearing in ordinary
arbitration contracts. [...] Consequently, interpreting the provision in such a
manner would require us to treat treaties as warranting a different kind of
analysis. […] That is a matter of some concern in a world where foreign
investment and related arbitration treaties increasingly matter.”
“[…]
[T]he local litigation provision on its face concerns arbitration’s timing, not
the Treaty’s effective date; or whom its arbitration clause binds; or whether
that arbitration clause covers a certain kind of dispute. Cf. Granite Rock, 561
U.S., at 296-303, 130 S.Ct. 2847 (ratification date); First Options, 514 U.S.,
at 941, 943-947, 115 S.Ct. 1920 (parties); AT & T Technologies, 475 U.S.,
at 651, 106 S.Ct. 1415 (kind of dispute). The dissent points out that Article
8(2)(a) ‘does not simply require the parties to wait for 18 months before
proceeding to arbitration,’ but instructs them to do something—to ‘submit their
claims for adjudication.’ Post, at 1219. That is correct. But the something
they must do has no direct impact on the resolution of their dispute, for as we
previously pointed out, Article 8 provides that only the decision of the
arbitrators (who need not give weight to the local court’s decision) will be
‘final and binding.’ Art. 8(4). The provision, at base, is a claims-processing
rule. And the dissent’s efforts to imbue it with greater significance fall
short.”
“[…]
[T]he bulk of international authority supports our view that the provision
functions as a purely procedural precondition to arbitrate. See 1 G. Born,
International Commercial Arbitration 842 (2009) (‘A substantial body of
arbitral authority from investor-state disputes concludes that compliance with
procedural mechanisms in an arbitration agreement (or bilateral investment
treaty) is not ordinarily a jurisdictional prerequisite’); Brief for Professors
and Practitioners of Arbitration Law as Amici Curiae 12-16 (to assume the
parties intended de novo review of the provision by a court ‘is likely *1212 to
set United States courts on a collision course with the international regime
embodied in thousands of [bilateral investment treaties]’). See also Schreuer,
Consent to Arbitration, supra, at 846-848 (‘clauses of this kind ... creat[e] a
considerable burden to the party seeking arbitration with little chance of
advancing the settlement of the dispute,’ and ‘the most likely effect of a
clause of this kind is delay and additional cost’).”
Although
the Court agrees with the dissent that a sovereign’s consent to arbitration is
important and that the sovereigns can condition their consents to arbitrate by
writing various terms into their bilateral investment treaties, it does not
agree that that is the issue here. “The question is whether the parties
intended to give courts or arbitrators primary authority to interpret and apply
a threshold provision in an arbitration contract—when the contract is silent as
to the delegation of authority. We have already explained why we believe that
where, as here, the provision resembles a claims-processing requirement and is
not a requirement that affects the arbitration contract’s validity or scope, we
presume that the parties (even if they are sovereigns) intended to give that
authority to the arbitrators.”
The
Court accepts Argentina’s argument that is entitled to a court review of the
arbitrators’ decision to excuse BG Group’s noncompliance with the litigation
requirement, and to take jurisdiction over the dispute. However, it does not
agree with Argentina that the arbitrators “exceeded their powers” in concluding
their jurisdiction.
“The
arbitration panel made three relevant determinations:
(1)
‘As a matter of treaty interpretation,’ the local litigation provision ‘cannot
be construed as an absolute impediment to arbitration,’ App. to Pet. for Cert.
165a;
(2)
Argentina enacted laws that ‘hindered’ ‘recourse to the domestic judiciary’ by
those ‘whose rights were allegedly affected by the emergency measures,’ id., at
165a-166a; that sought ‘to prevent any judicial interference with the emergency
legislation,’ id., at 169a; and that ‘excluded from the renegotiation process’
for public service contracts ‘any licensee seeking judicial redress,’ ibid.;
(3)
under these circumstances, it would be ‘absurd and unreasonable’ to read
Article 8 as requiring an investor to bring its grievance to a domestic court
before arbitrating. Id., at 166a.”
“The
first determination lies well within the arbitrators’ interpretive authority.
Construing the local litigation provision as an ‘absolute’ requirement would
mean Argentina could avoid arbitration by, say, passing a law that closed down
its court system indefinitely or that prohibited investors from using its
courts. Such an interpretation runs contrary to a basic objective of the
investment treaty. Nor does Argentina argue for an absolute interpretation.”
“As
to the second determination, Argentina does not argue that the facts set forth
by the arbitrators are incorrect. Thus, we accept them as valid.”
“The
third determination is more controversial. Argentina argues that neither the
180-day suspension of courts’ issuances of final judgments nor its refusal to
allow litigants (and those in arbitration) to *1213 use its contract
renegotiation process, taken separately or together, warrants suspending or
waiving the local litigation requirement. We would not necessarily characterize
these actions as rendering a domestic court-exhaustion requirement “absurd and
unreasonable,’ but at the same time we cannot say that the arbitrators’
conclusions are barred by the Treaty. The arbitrators did not “`stra[y] from
interpretation and application of the agreement’” or otherwise “`effectively
“dispens[e]”’” their “`own brand of ... justice.’” Stolt-Nielsen S.A. v. Animal
Feeds Int’l Corp., 559 U.S. 662, 671, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010)
(providing that it is only when an arbitrator engages in such activity that
“`his decision may be unenforceable’” (quoting Major League Baseball Players
Assn. v. Garvey, 532 U.S. 504, 509, 121 S.Ct. 1724, 149 L.Ed.2d 740 (2001) (per
curiam))).”
The
U.S. Supreme Court concludes that the arbitrators’ jurisdictional
determinations are lawful and reverse the Court of Appeals judgment.
In
its concurring opinion Justice SOTOMAYOR states:
“The
Court’s dictum on this point is not only unnecessary; it may also be incorrect.
It is far from clear that a treaty’s express use of the term “consent” to
describe a precondition to arbitration should not be conclusive in the
analysis. We have held, for instance, that “a gateway dispute about whether the
parties are bound by a given arbitration clause raises a `question of
arbitrability’ for a court to decide.” Howsam v. Dean Witter Reynolds, Inc.,
537 U.S. 79, 84, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002). And a party plainly
cannot be bound by an arbitration clause to which it does not consent. See
Granite Rock Co. v. Teamsters, 561 U.S. 287, 299, 130 S.Ct. 2847, 177 L.Ed.2d
567 (2010) (“Arbitration is strictly `a matter of consent’” (quoting Volt
Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior
Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989))).”
“Consent
is especially salient in the context of a bilateral investment treaty, where
the treaty is not an already agreed-upon arbitration provision between known
parties, but rather a nation state’s standing offer to arbitrate with an
amorphous class of private investors. In this setting, a *1214 nation-state
might reasonably wish to condition its consent to arbitrate with a previously
unspecified investor counterparty on the investor’s compliance with a
requirement that might be deemed ‘purely procedural’ in the ordinary commercial
context, ante, at 1207-1208. Moreover, as THE CHIEF JUSTICE notes, ‘[i]t is no
trifling matter’ for a sovereign nation to ‘subject itself to international
arbitration’ proceedings, so we should ‘not presume that any country ... takes
that step lightly. […]”
“[…]
[A] dispute as to consent is ‘the starkest form of the question whether the
parties have agreed to arbitrate.” […] And we ordinarily presume that parties
intend for courts to decide such questions because otherwise arbitrators might
‘force unwilling parties to arbitrate a matter they reasonably would have
thought a judge ... would decide.’ First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938, 945, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995).”
“Accordingly,
if the local litigation requirement at issue here were labeled a condition on
the treaty parties’ ‘consent’ to arbitrate, that would in my view change the
analysis as to whether the parties intended the requirement to be interpreted
by a court or an arbitrator. As it is, however, all parties agree that the
local litigation requirement is not so denominated. See Agreement for the
Promotion and Protection of Investments, Art. 8(2), Dec. 11, 1990, 1765
U.N.T.S. 38. Nor is there compelling reason to suppose the parties silently
intended to make it a condition on their consent to arbitrate, given that a
local court’s decision is of no legal significance under the treaty, ante, at
1207-1208, and given that the entire purpose of bilateral investment agreements
is to ‘reliev[e] investors of any concern that the courts of host countries
will be unable or unwilling to provide justice in a dispute between a foreigner
and their own government,’ Brief for Professors and Practitioners of
Arbitration Law as Amici Curiae 6. Moreover, Argentina’s conduct confirms that
the local litigation requirement is not a condition on consent, for rather than
objecting to arbitration on the ground that there was no binding arbitration
agreement to begin with, Argentina actively participated in the constitution of
the arbitral panel and in the proceedings that followed. See Eastern Airlines,
Inc. v. Floyd, 499 U.S. 530, 546, 111 S.Ct. 1489, 113 L.Ed.2d 569 (1991)
(treaty interpretation can be informed by parties’ postenactment conduct).”
In
his dissenting opinion Chief Justice ROBERTS, with whom Justice KENNEDY joins,
states:
“When
there is no express agreement between the host country and an investor, they
must form an agreement in another way, before an obligation to arbitrate arises.
The Treaty by itself cannot constitute an agreement to arbitrate with an
investor. How could it? No investor is a party to that Treaty. Something else
must happen to create an agreement where there was none before. Article 8(2)(a)
makes clear what that something is: An investor must submit his dispute to the
courts of the host country. After 18 months, or an unsatisfactory decision, the
investor may then request arbitration.”
“Submitting
the dispute to the courts is thus a condition to the formation of an agreement,
not simply a matter of performing an existing agreement. Article 8(2)(a)
constitutes in effect a unilateral offer to arbitrate, which an investor may
accept by complying with its terms. To be sure, the local litigation
requirement might not be absolute. In particular, an investor might argue that
it was an implicit aspect of the unilateral offer that he be afforded a
reasonable opportunity to submit his dispute to the local courts. Even then,
however, the question would remain whether the investor has managed to form an
arbitration agreement with the host country pursuant to Article 8(2)(a). That
question under Article 8(2)(a) is—like the same question under Article
8(2)(b)—for a court, not an arbitrator, to decide. […]”
“The
majority acknowledges—but fails to heed—”the first principle that underscores
all of our arbitration decisions: Arbitration is strictly `a matter of
consent.’” Granite Rock Co. v. Teamsters, 561 U.S. 287, 299, 130 S.Ct. 2847,
177 L.Ed.2d 567 (2010) (quoting Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248,
103 L.Ed.2d 488 (1989)); see ante, at 1206-1207. We have accordingly held that
arbitration ‘is a way to resolve those disputes—but only those disputes—that
the parties have agreed to submit to arbitration.’ First Options of Chicago,
Inc., supra, at 943, 115 S.Ct. 1920. The same ‘first principle’ underlies
arbitration pursuant to bilateral investment treaties. See C. Dugan, D.
Wallace, N. Rubins, & B. Sabahi, Investor-State Arbitration 219 (2008)
(Dugan); J. Salacuse, The Law of Investment Treaties 385 (2010); K. Vandevelde,
Bilateral Investment Treaties: History, Policy, and Interpretation 433 (2010).
So only if Argentina agreed with BG Group to have an arbitrator resolve their
dispute did the arbitrator in this case have any authority over the parties.”
“The
nature of the obligations a sovereign incurs in agreeing to arbitrate with a
private party confirms that the local litigation requirement is a condition on
a signatory country’s consent to arbitrate, and not merely a condition on
performance of a pre-existing arbitration agreement. There are good reasons for
any sovereign to condition its consent to arbitrate disputes on investors’
first litigating their claims in the country’s own courts for a specified
period. It is no trifling matter for a sovereign nation to subject itself to
suit by private parties; we do not presume that any country—including our
own—takes that step lightly. Cf. United States v. Bormes, 568 U.S. ___, ___,
133 S.Ct. 12, 16, 184 L.Ed.2d 317 (2012) (Congress must ‘unequivocally
express[]’ its intent to waive the sovereign immunity of the United *1220
States (quoting United States v. Nordic Village, Inc., 503 U.S. 30, 33, 112
S.Ct. 1011, 117 L.Ed.2d 181 (1992); internal quotation marks omitted)). But
even where a sovereign nation has subjected itself to suit in its own courts,
it is quite another thing for it to subject itself to international
arbitration. Indeed, ‘[g]ranting a private party the right to bring an action
against a sovereign state in an international tribunal regarding an investment
dispute is a revolutionary innovation’ whose ‘uniqueness and power should not
be over-looked.’ Salacuse 137. That is so because of both the procedure and
substance of investor-state arbitration.”
Citation: BG Group PLC v.
Republic of Argentina, 134 S.Ct. 1198 (U.S. Supreme Court 2014).
*** Richard Kranitz (Wisconsin) is an experienced attorney and business consultant in the areas of corporate, securities and tax planning for corporations, partnerships, joint ventures, limited liability companies, multi-unit enterprises, and a variety of different non-profit entities. In addition, he has counseled their owners and executives in compensation planning, estate plans, and asset protection. Attorney profile at: https://solomonlawguild.com/richard-a-kranitz-esq
