October 06 2021

Scope Of Arbitration Agreement

(343) Paushok v Mongolia, point 1. 678 (“The respondent brings seven counterclaims: … (4) The applicants have breached their obligations under their licensing agreements to obtain gold effectively and efficiently, resulting in tax losses, job losses of Mongolian nationals and other benefits for Mongolia; (5) The applicants have failed to meet their environmental obligations towards Mongolia; (6) The applicants owe damages for the smuggling of gold […]`). It is indisputable that the respondent expressed its agreement to arbitration proceedings in the ILO and that the applicant accepted Romania`s offer of conciliation. However, unlike the applicant, the respondent considers that this consent implied acceptance of the reconciliation of the counter-claims. Whether this is the case must first be determined on the basis of the dispute settlement clause contained in the ILO. The investor`s agreement on the ILO arbitration clause may exist with respect to counter-claims only if such counter-claims are located in the agreement of the host State as expressed in the ILO.232 (2) If the dispute cannot be settled by one of the parties to the dispute within six months from the date of written notification, it shall be submitted to arbitration at the request of one of the parties to the dispute. In A v B [2015] EWHC 1944 (Comm), a challenge to an arbitral award on grounds of jurisdiction under section 67 of the Arbitration Act 1996, it was argued before Teare J that a clause providing for arbitration proceedings must be interpreted as a mere statement of intent and has no legally binding effect. Teare J hesitated to interpret a contractual clause as no longer ambitious and considered that it constituted an arbitration clause, although the wording was inconsistent and an addition was needed to give it commercial meaning. It is clear that all these problems relate to the interpretation and performance of concession contracts and the rights and obligations of the parties. In other words, nationalisation, by prematurely terminating the performance of the Treaty, has an impact on that provision and concerns the rights and obligations arising therefrom.

It therefore falls under the arbitration clause, so that the dispute arising from this nationalization appears to be an arbitral case.72 It seems reasonable that an arbitration agreement specifically limiting the jurisdiction of a court to claims based on alleged breaches of the ILO prevents that court from maintaining separate rights based on national law. In other words, a narrow jurisdiction clause in Article 10 appears to prevail over a broad applicable law clause in Article 11.153. This does not mean, however, that the General Court is precluded from examining national law. . . .