Volunteer as Judges for the FDI Moot 2016 (Memorial Round)

Dear GoT Readers,

This is to alert you to a fantastic opportunity to judge the memorial round for the Foreign Direct Investment International Arbitration Moot 2016. I recently judged the skeleton briefs for the FDI Moot 2016 and loved the experience!

About the Moot:

The FDI Moot is an international moot on international investment law; it is the initiative of the Center for International Legal Studies (CILS)-a non-profit law research, training, and teaching institute, established and operating as a public interest society under Austrian law. Its international headquarters have been in Salzburg, Austria since 1976. Its essential purpose is to promote and disseminate knowledge among members of the international legal community.

Initiated in 2006 by CILS, five institutions came together to establish the FDI Moot as a new international moot court competition focusing on investor-State disputes. As co-founder and organiser,  CILS manages the FDI Moot. The venue for Global Finals rotates among the four other co-founders. Mr Campbell and Prof. Gibson act as co-directors.

Increasing international investment, the proliferation of international investment treaties, domestic legislation, and international investment contracts have contributed to the development of a new field of international law that defines obligations between host States and foreign investors and refers to internationalised procedures (e.g. ICSID) for resolving related disputes. These disputes involve not only vast sums, but also a panoply of rights, duties, and shifting objectives at the juncture of national and international law and policy. The FDI Moot helps future lawyers attain a practical understanding of these issues. The case and hearings offer a unique forum for academics and practitioners from around the world to discuss developments – and assess emerging talents. The FDI Moot spans approximately six months each year in two phases, written memorials for claimant and respondent and the hearing of oral argument. Regional rounds are conducted in the Asia Pacific (Seoul), South Asia (New Delhi), and Africa (Nairobi).

This year, the South Asia regional round of the moot was hosted by Kachwaha & Partners at the Indian Society of International Law in New Delhi in August which culminated in a victory for National Law School of India University, followed by NALSAR University School of Law and ex aquo National Law University Jodhpur and National Law Institute University.

The best advocates were Mehra, Parul (Final) of National Law School of India University and Sriram, Varsha (preliminary rounds) of National Law Institute University. (Full results for the South Asia Regional are available  here: http://www.fdimoot.org/KAP/2016SAResults.pdf)

4 winning teams from South Asia will join 6 from the Asia-Pacific Regional and 2 from Africa along with 48 others participating directly in the Global Finals at the University of Buenos Aires on 3-6 November 2016.

The 2016 edition of the problem involves a potpourri of international investment claims and can be accessed here.

Call for Moot Memorial Judges:

Given that close to 60 teams would be participating in the FDI moot this year, the organizers are looking for volunteers to judge the memorial round of the moot. Although the volunteer position is unpaid, this is a great learning experience for international investment law enthusiasts and a valuable experience to add to one’s résumé. My personal experience of judging the skeleton briefs was that I gained an understanding of the emerging issues in investor-state dispute jurisprudence.

Those available to judge the moot memos between 19th September & 19th October, 2016, should contact the organizers ASAP with a copy of their Curriculum Vitae:

Manuela Ines Wedam at admin@fdimoot.org; Christian Campbell at christian.campbell@cils.org

ICSID Internships-2016/17 (Deadline: 20th August, 2016)

ICSID offers unpaid internship opportunities to students enrolled in a graduate degree program who are eligible and qualified for an internship (sometimes referred to as an externship) under their University rules and Bank Group requirements. The main objective of the internships is to allow students with an interest in international investment dispute settlement and international investment law to gain a better understanding of ICSID’s work, enhance their academic and career goals and contribute to ICSID’s mission. To this end, the Centre is looking for enthusiastic and energetic candidates who can work effectively in a team-based environment.

Up to four internships are offered every four months, for a minimum period of 12 weeks and a minimum of 10 hours of work per week. The internship periods are September-December, January-April and May-August. The internships take place at the seat of the Centre in Washington, D.C.

Interns will be assigned to case management teams. Under the supervision of experienced ICSID Team Leaders and Counsel, they will assist in the administration of cases and with institutional projects. Case-related tasks may include drafting working papers, carrying out research on issues that arise in the course of a case, assisting with the drafting of correspondence, making logistical arrangements for hearings, and attending hearings with permission from the parties and the tribunal. Interns will also do research on institutional matters under the supervision of the ICSID Secretary-General and Deputy Secretaries-General. Interns are included as part of the teams while at ICSID and are invited to participate in internal training opportunities.

If you are interested in an internship opportunity at ICSID, please see the eligibility and qualification requirements[1]. Applicants are invited to send us a completed application form[2] together with their curriculum vitae to icsidinternship@worldbank.org

The deadline for applications for the September-December 2016 period is August 20, 2016. Interns selected for that term are expected to begin the internship in mid-September 2016.

1. Eligibility and qualification requirements:
https://icsid.worldbank.org/apps/ICSIDWEB/about/Pages/ICSID-Internships-2016-2017.aspx

2. Application form:
https://icsid.worldbank.org/apps/ICSIDWEB/about/Documents/Internship%20Admissions%20Application.pdf

What the India-US BIT could mean for the future of generic drugs in India.

A session on India-US Economic Relations was held in New Delhi yesterday wherein Adewale (Wally) Adeyemo, the Deputy Assistant to the US President and Deputy National Security Advisor for International Economics,  was quoted as saying,

“To be frank, we are far apart on number of issues with regard to trade and investment with India. We feel our colleagues in India have not been as ambitious (on concluding BIT) as we want them to be but we remain open.”

Given that the bilateral trade between the two countries is expected to reach US$ 500 billion in the near future (a four-fold jump from US$ 35 billion in 2015), the US is eager to seize the opportunity to trade with India, one of the fastest growing economies among the G20 countries. Negotiations over a BIT between India and the US first commenced in 2008.

As always, ‘protection of intellectual property rights’ remains a thorny issue. As Adeyomo notes,

“I do think there are issues where we can find ways to work together. For example digital issues, with regard to IPR this is the place both have interest in trying to find solutions. Finding places to work together will help us in finding solution to more contentious issues like IPR,”

Earlier this year, India had faced public condemnation over allegations that the Indian government had given secret assurance to the US that India would not be granting compulsory licences on US patented drugs. Shortly thereafter, the US released its Special 301 report which placed India on the Priority Watch List (list of countries which have “serious intellectual property rights deficiencies”).

Adeyomo’s statement is indicative of yet another instance of the US trying to pressure the Indian government to tighten IP protection in the country, this time through the BIT route.

Intellectual property is covered as an ‘investment’ under BITs and any State measure which adversely affects the investor’s IP can trigger investment arbitration against the host-state under the investor-state dispute settlement (ISDS) mechanism in BITs. It is not uncommon for investors such as US companies to challenge a host-state’s IP laws on the ground that their intellectual property (or investment) is not adequately protected in the host-state. This was in fact the legal basis for Philip Morris’ claim against Australia in an ISDS proceeding, where Philip Morris, a US tobacco company, had challenged Australia’s plain packaging laws for cigarettes. While the investment arbitral tribunal in Philip Morris declined jurisdiction to hear the matter, such investor claims, if successful, can compel States to withdraw regulatory measures (including measures addressing public health concerns).

India, on its part, has been more proactive in its attempt to avert future ISDS claims; in December 2015, the Indian government unveiled a revised version of the model India BIT, which aims at preserving the host State’s right to regulate. However, the revised model BIT sways the pendulum too heavily in favour of the host State. As investment law expert, Dr. Prabhash Ranjan notes, the model India BIT excludes wholly the issuance of compulsory licences and revocation of IPR from being challenged under the ISDS.

Given that intellectual property is integral to any trade negotiation between India and the US, it is a no-brainer that the US would not agree to the IP protection clauses in the model India BIT in its current form. Both sides, would have to meet each other half-way to conclude the India-US BIT.

If India gives in to the US demand to strengthen the IPR regime in the country, it could make it even more difficult for India to grant compulsory licences and would adversely affect the Indian generic drugs industry.

A Case for International Investment Courts

One of the criticisms of the international investment arbitration system is that it is far from being the neutral adjudicatory forum that it was envisaged to be. Critics find that the arbitral awards in investor-state disputes are often skewed in favour of the investors, with the effect that host nations are often directed by the arbitration panels to pay millions in damages to the investors. Typically, investor-state disputes under the Investor State Dispute Settlement (ISDS) clauses in free trade agreements are brought for adjudication before private arbitrators instead of being adjudicated before the national courts like other disputes. This has led to a system of “privatization of justice” wherein sovereign states are made amenable to private arbitrators, with no provision of appeal against the arbitrators’ decisions.

While the investment arbitration system evolved to protect the rights of investors by adjudicating investor-state disputes in a seemingly neutral manner, it is witnessed that the ISDS mechanism is adversely impacting the sovereignty of host nations. This is because investors can initiate arbitration to challenge the domestic laws of host states where the investors feel that their investment is not adequately protected. In most cases, the arbitrators render an award favouring the investors, and host nations are called upon to pay millions in damages to the investors; as most nations cannot afford the exorbitant amount of damages payable by them to the investors, they are often compelled to amend their regulatory laws to suit the investors. ISDS proceedings entail legal expenses in millions of dollars and the financial liability may itself suffice to bring the host nation to the negotiating table.

Critics fear that the ISDS mechanism has evolved as a tool for investors to badger host nations into amending their laws to favour the investors. Foreign investors have been known to use the ISDS mechanism to change the host State’s IP laws.

Investment treaties generally define ‘investment’ to include ‘intellectual property’. If investors feel that their IP is not adequately protected in a host nation, they often initiate arbitration proceedings claiming ‘expropriation’ of their IP.

In 2010, Philip Morris sued Uruguay for $25m dollars over its anti-tobacco laws which require that 80% of the cigarette packaging should bear warning signs about the hazards of cigarette smoking. Philip Morris brought the arbitration case under the Switzerland-Uruguay BIT (Philip Morris being headquartered in Switzerland) and claimed that Uruguay expropriated its IP because the company has effectively no space to advertise its trademark on the cigarette packaging. The case is awaiting a ruling on merits by the arbitral tribunal.

Potential investor-state disputes can also deter countries from enacting public-health legislation. When the Canadian Parliament wanted to introduce plain packaging rules in 1994, tobacco company, R.J. Reynolds, wrote to the Canadian government threatening to bring an investor claim for illegal appropriation of its trademark. Canada eventually succumbed and the plain packaging law never saw the light of the day.

The independence of arbitrators has become a contentious issue in investment arbitrations- since arbitration under the ISDS clause can be initiated only by the investor, arbitrators have an incentive to rule in favour of the investors who later hire those arbitrators as lawyers in other investment arbitrations involving the investors.

A likely model for ISDS can be the replacement of the investment arbitration system with an Investment Court System (ICS), as is currently being proposed by the European Union in the Transatlantic Trade and Investment Partnership (TTIP) Agreement with the United States. The ICS seeks to ensure the impartiality of adjudicators by establishing a permanent tribunal comprising Tribunal members who “shall refrain from acting as counsel or as party-appointed expert or witness in any pending or new investment dispute“. Additionally, the ICS would also include an Appeal Tribunal. If the ICS is adopted into the TTIP, other developed and developing nations are expected to follow suit to preclude the “privatization of justice” under the current investment arbitration regime and to protect their domestic laws.

(Written by Devika Agarwal)