Survey of 1995 Developments in International Law in Connecticut
| Pages | 68 |
| Publication year | 2021 |
70 CBJ 68. Survey of 1995 Developments in International Law In Connecticut
Except for the rare practitioner who may be dealing with arbitration between a private party and a foreign government, there has not been much change in Connecticut international law over the past year. There are encouraging signs, however, of the courts' increasing familiarity with already existing international law. As lawyers and the courts gain experience in the international law area, ambiguities will be resolved, permitting the practitioner to give legal advice With more confidence.
Part I of this article describes the new Connecticut statute on enforcement of awards of the International Centre for the Settlement of Investment Disputes ("ICSID") and the Permanent Court of Arbitration ("PCA"). Part 11 reports briefly on the new UNIDROIT Principles of International Commercial Contracts. Part III is a discussion of recent decisions in the Connecticut courts. (fn1,2)
An Act Concerning Enforcement of Certain International Awards (fn3), which was enacted in Connecticut effective October 1, 1995, codifies existing law that arbitral awards from two international bodies created by treaty, the PCA (fn4) and ICSID, (fn5) are immediately enforceable in Connecticut without appeal. The Act codifies for Connecticut the implementation of United States treaty
obligations (fn6) of nationwide application, which should be, but so far are not, codified in the United States Code.
Unlike regular arbitration awards, by treaty these awards are not subject to review or appeal under domestic legislation (fn7) because at least one country is a party to the proceedings. (fn8) PCA and ICSID awards must be enforced as if they were final judgments of a domestic court. The ICSID Convention, for example, provides in Article 41 (1) that "The Tribunal shall be the judge of its own competence," in Article 52 for an appeal within ICSID of the Tribunal's decision and in Article 53(l) that "The award ... shall not be subject to any appeal or to any other remedy except those provided for in this Convention." It is the law, however unsettling American lawyers and courts may find it, that state and federal courts may not even review the arbitral tribunal's finding of jurisdiction without violating the treaty. (fn9)
ICSID awards must be certified by the Secretary- General of ICSID before they can be enforced, (fn10) whereas PCA awards do not need to be certified. Interim awards from either body do not have to be certified to be enforced.
ICSID and the PCA are attractive for a for disputes between a country and a private party. Aside from the extreme lack of congestion in both institutions, the PCA now offers updated Rules, which draw inspiration from the 1976 UNCITRAL Arbitration Rules (fn11)-the standard by which modern arbitration rules are judged and the model from which some of them are closely copied-as well as the UNCITRAL Model Law on International Commercial Arbitration (fn12) and the 1988 International Chamber
of Commerce ("ICC") Rules of Arbitration. (fn13) The PCXs 1962 Rules of Arbitration and Conciliation for Settlement of International Disputes between Two Parties of which only one is a State ("1962 Rules") (fn14) were beginning to show their age and limitations in the early 1990s. For example, they did not automatically allow for the appointing authority to appoint arbitrators if the parties defaulted in making appointments. (fn15)
Recognizing these developments, in 1993 the PCA promulgated new "Optional Rules for Arbitrating Disputes between Two Parties of which only one is a State" ("1993 Rules"), (fn16) which are intended to supersede the 1962 Rules. There is also a new recommended arbitration clause for contracts, (fn17) which, quite unlike the earlier version, contains essentially the same elements as the UNCITRAL recommended clause (albeit arranged and worded differently), plus an optional waiver of sovereign immunity from execution.
Most of the provisions of the 1993 Rules are directly copied from the UNCITRAL Arbitration Rules. In general, they will be unsurprising to lawyers familiar with the UNCITRAL and ICC rules or the American Arbitration Association's International Arbitration Rules, (fn18) but some points should be noted. Following
a European trend, Article 1, Paragraph 2 of the 1993 Rules provides that an agreement to arbitrate constitutes a waiver of immunity only from jurisdiction unless there is also (as in the optional clause just mentioned) an explicit waiver of immunity from execution. From the American lawyer's point of view, the essential purpose of the arbitration clause is defeated if the non-state party receives an arbitration award upon which it cannot obtain execution, so it is important to insist on making the waiver of immunity from execution explicit. However, if there is a possibility of execution in the United States, consideration should be given to expanding the PCXs recommended waiver clause. (fn19)
Unless otherwise agreed, Article 19, Paragraph 3 permits the respondent to introduce counterclaims only if they arise out of the same contract. If not, a separate arbitration must be started.
Article 21, Paragraph 2 (fn20) codifies the Kompetenzkompetenz rule: (fn21)
The arbitral tribunal shall have the power to determine the existence or the validity of the contract of which an arbitration clause forms a part. For the purposes of this article, an arbitration clause which forms part of a contract and which provides for arbitration under these Rules shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipsojure the invalidity of the arbitration clause.
Article 31, Paragraph 2 (fn22) of the 1993 Rules provides that all decisions must be made by a majority of the arbitrators. This is the usual rule, but perhaps not the best when there are party appointed arbitrators, because it forces the chairman to side with
one of the party-appointed arbitrators to form a majority, rather than making what he considers a neutral decision.
Article 32, Paragraph 3 follows the UNCITRAL Arbitration RuleS23 in requiring the tribunal to state the reasons upon which the award is based, unless the parties have agreed that no reasons are to be given. Although this is not the standard for domestic arbitration in the United States, it is normal for international arbitration. (fn24)
Late in 1994, the International Institute for the Unification of Private Law in Rome ("UNIDROIT") issued its long awaited Principles of International Commercial Contracts ("Principles 11). (fn25) This volume of about 275 pages is intended to be a "restatement-like" product containing the general rules that apply to international commercial contracts.
Although the members of the working group acted as individuals and not as representatives of their governments, the United States viewpoint was ably represented by Professor E. Allan Farnsworth of Columbia University Law School, who served as chairman of the Editorial Committee and is a member of the UNIDROIT Governing Council.
The Principles state a general principle of contract law in "black letter" form, as a sentence or short paragraph. Each general principle is explained by a page or two of commentary There is no scholarly apparatus, such as references to the laws of various countries and the reasons for the drafters' choices between them, although the comments occasionally refer to provisions of
the CISG Convention. (fn26) In general, the Principles provide an excellent restatement of major portions of the lex mercatoria: the internationally accepted principles governing international commercial contracts. There is considerable common ground in this area and most of the Principles would be at least a reasonable approximation of the law of a great many countries.
Choice of governing law is sometimes a difficult issue when international contracts are drafted, because each party may be unfamiliar with and therefore distrustful of the other's national law. One purpose of the...
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