View this email in your browser 哥伦比亚大学国际直接投资展望中文版都可以在我们的网站查看:  https://ccsi.columbia.edu/content/columbia-fdi-perspectives. Columbia FDI Perspectives Perspectives on topical foreign direct investment issues Editor-in-Chief: Karl P. Sauvant ([log in to unmask]) Managing Editor: Riccardo Loschi ([log in to unmask]) The Columbia FDI Perspectives are a forum for public debate. The views expressed by the authors do not reflect the opinions of CCSI or our partners and supporters. No. 327   March 21, 2022 A managed dispute-resolution insurance scheme for countries in investor-state arbitration: Ensuring early legal representation of respondents by Ucheora Onwuamaegbu*   It is impractical for most governments to maintain a standing team of expert legal representatives focused on international arbitration proceedings with foreign investors, especially when such cases are a rarity for most countries.[1] Consequently, at the onset of many international arbitration proceedings, governments often lose valuable time while decisions are made on whether and how to quickly procure and finance the services of qualified external counsel.[2]   This initial period coincides with the time during which many important procedural deadlines occur, such as those relating to the constitution of the arbitral tribunal.[3] Indeed, within the first 60-90 days of a proceeding, respondents are under significant pressure to meet case deadlines, while contending with procurement and funding issues surrounding the selection and appointment of external counsels and facing an opponent whose team has undergone months or more of preparation.   This uneven start of arbitration proceedings can be harmful to investors and countries alike. It creates an imbalance that may persist throughout the proceedings, sometimes resulting in outcomes that undermine the legitimacy of the investor-state dispute settlement (ISDS) system.   This problem can be addressed through a new form of insurance cover. It would vary in scope according to the needs of client governments and could be based on time or specific proceedings-related milestones. It could, for example, specify a payout of a particular sum or provide for legal representation financing for the first six months, or until tribunals are constituted. Actuaries and other insurance professionals would devise formulae for calculating the pricing of the insurance cover considering, inter alia, the level of exposure to risk of the insured country and how likely it is to use the insurance. Real market forces would determine the cost of the insurance coverage. As a result, the prospect of impossibly high premium assessments would help mitigate any possibility of governments becoming emboldened by the availability of legal representation to engage in activities contrary to their stated pro-foreign investment policies. The insurance would, thus, not be a license for host countries to act irresponsibly toward foreign investors.   The payout under an insurance cover would facilitate prompt access to expert legal representation, especially in the early stages of arbitrations. At its most basic, the insurance would simply provide ready funds for governments to pay for services they procure from the open market as and when the covered event occurs.   For still greater efficiency, the insurance could, under a scheme administered by a stand-alone entity or as part of an existing body, enable the prompt recommendation of qualified counsel to governments. In this scenario, the scheme’s administrator would promptly assign cases to pre-qualified legal representatives in a regularly updated pool, which could include law firms and individual experts. The pool could also include service providers under the various initiatives offering pro-bono or low-cost legal assistance to governments involved in investor-state arbitration, such as the Advisory Centre on International Investment Law currently being considered by UNCITRAL.    Early—and almost “automatic”—activation of the scheme would be essential. This could be achieved by stipulating, in the instrument of consent to arbitration or in the applicable procedural rules, a requirement for early notification of the existence of the dispute to the scheme’s administrator. However, governments could decide not to rely on the insurance—they would always retain discretion to accept, reject or discontinue their engagement of any assigned counsel.   If an established organization, such as ICSID, UNCITRAL or UNCTAD, were to administer the scheme, it could, where applicable, devote a minimal percentage of member countries’ dues to its administration. Administration by an independent entity could be funded from dues of participating governments and/or the insurance companies that offer coverage. Countries that are unable to easily afford the insurance premium could seek support from their investment treaty partners, for example, as part of the “technical” and other support that have become a regular feature in trade and investment treaties.   Undoubtedly, early and proper representation of each side in investment arbitration proceedings will help ensure that the proceedings are more efficient and result in better quality outcomes, including awards that are less susceptible to successful challenge. The idea of “dispute resolution insurance in ISDS” would thus be beneficial to countries and investors alike.[4]   * Ucheora Onwuamaegbu ([log in to unmask]) is an international arbitrator and international arbitration practitioner, ArentFox Schiff LLP, Washington, D.C. The author takes sole responsibility for any errors that may be found to exist. The author wishes to thank Jose Alvarez, Stephen Schwebel and an anonymous peer reviewer for their helpful peer reviews, and Lee Caplan, Alejandro Escobar, Timothy Feighery, John Gaffney, and Ruth Teitelbaum for their useful comments. [1] Over three quarters of the countries in UNCTAD’s investment-treaty-disputes database have either never been involved in any case or have faced only ten or fewer cases. [2] ICSID Secretariat’s records indicate that governments are taking at least three-to-four months after ICSID’s registration of an arbitration request to appoint external counsel. Yet, governments would have known about the disputes for months, due to the cooling-off period required in most instruments of consent, and the time ICSID takes to review the request before registration. [3] See, e.g., ICSID, UNCITRAL and the SCC Rules, which provide for strict deadlines for the constitution of tribunals, the initial procedural session and certain jurisdictional objections. [4] While this proposal focuses on ISDS, the same mechanism could also apply to other types of cases involving a country as respondent. The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Ucheora Onwuamaegbu, ‘A managed dispute-resolution insurance scheme for countries in investor-state arbitration: Ensuring early legal representation of respondents,’ Columbia FDI Perspectives, March 21, 2022. Reprinted with permission from the Columbia Center on Sustainable Investment (http://ccsi.columbia.edu).” A copy should kindly be sent to the Columbia Center on Sustainable Investment at [log in to unmask]. For further information, including information regarding submission to the Perspectives, please contact: Columbia Center on Sustainable Investment, Riccardo Loschi, [log in to unmask]; Luca Jobbagy, [log in to unmask].   Most recent Columbia FDI Perspectives    No. 326, Meg Kinnear, “The launch of a new generation of the ICSID Rules,” Columbia FDI Perspectives, March 7, 2022 No. 325, James Otto, “How FDI in the mining sector can assist communities to achieve sustainable development,” Columbia FDI Perspectives, February 21, 2022 No. 324, Charlie Garnjana-Goonchorn, “An Advisory Centre on International Investment Law: Is perfect the enemy of good?,” Columbia FDI Perspectives, February 7, 2022 All previous FDI Perspectives are available at https://ccsi.columbia.edu/content/columbia-fdi-perspectives. Other relevant CCSI news and announcements CCSI is hiring a Policy Researcher on the Energy Transition and Carbon Accounting. The position will collaborate with the Director and Research Staff at CCSI to execute the Center’s applied research agenda on the energy transition, specifically work that will make a significant and sustainable difference in the quantification of greenhouse gas emissions through the Coalition on Materials Emissions Transparency (COMET) Framework. For further details, and to apply by March 26, please see here. Applications will be reviewed on a rolling basis. CCSI is hiring a Program Associate. Reporting to the Director of CCSI, the Program Associate will support a wide range of research, operational, and administrative responsibilities. This position is ideal for graduating students. Please see here for more details and to apply. Applications will be reviewed on a rolling basis. 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The training provides an interdisciplinary approach to addressing the challenges and opportunities of agricultural investments. The program is designed to equip participants with the necessary knowledge and skills to address some of the key challenges posed by international investments in agriculture, and to encourage a rich dialogue about practices from around the globe. Applications will be considered on a rolling basis until March 31, 2022. For more information, and to apply, visit our website. Karl P. Sauvant, Ph.D. Resident Senior Fellow Columbia Center on Sustainable Investment Columbia Law School - Earth Institute Ph: (212) 854-0689 Fax: (212) 854-7946 Copyright © 2022 Columbia Center on Sustainable Investment (CCSI), All rights reserved. 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