Financial institutions

Energy
Infrastructure, mining and commodities
Transport
Technology and innovation
Life sciences and healthcare

A basic guide to
international arbitration

Norton Rose Fulbright

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A basic guide to international arbitration

The preferred option

Arbitration is a consensual, binding method of dispute resolution. It is an increasingly
popular means of resolving disputes, particularly in relation to international contracts.
There are many reasons for choosing arbitration but the key ones are given below.

Signatories to the New York Convention on the

Recognition and Enforcement of Foreign Arbitral Awards 1958
Greenland

Turkmenistan

Iraq

Western Sahara

North Korea

Libya

Tajikistan
Yemen
Eritrea
Ethiopia

South Sudan

Angola

Malawi

Namibia

Papua New
Guinea

Somalia

Togo
French Guiana
Equatorial Guinea
Suriname
Congo

Taiwan

Sierra Leone

Guinea-Bissau

Belize

Sudan

Chad

Gambia

Swaziland

Country status
Member
Non-member

Data source: UNCITRAL

1,250 2,500

5,000
km
NRF20634

Enforcement
Arbitration awards can be easier to enforce internationally
than the judgments of national courts. The United Nations
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards 1958 known as the New York Convention
has been ratified by 154 countries. This means that, in
principle, an arbitration award can be enforced in any of
those countries. By contrast, court judgments are generally
only enforceable in countries where there are reciprocal
enforcement arrangements in place.
So, for example, whilst an English court judgment can
be enforced easily in any EU state through the Brussels

Regulation on the Recognition and Enforcement of

Judgments, it can be difficult to enforce an English court
judgment in many other countries. By contrast, an English
arbitration award can be enforced in 154 countries.
Where the assets of the potential defendant are in a country
where a national court judgment cannot be enforced,
arbitration is the obvious choice.
See page 09 on enforcement.
See www.uncitral.org for the text of the New York Convention
and a list of signatories.

Norton Rose Fulbright February 2015 03

A basic guide to international arbitration

Neutrality and confidentiality

Parties to international contracts often want to avoid using
the home courts of one of the parties in order to ensure
neutrality. In addition, arbitration avoids problems with
unfamiliar or unpredictable local court procedures.
Court proceedings are usually public, whereas the parties
can agree to keep arbitration proceedings confidential. In
this way, the parties can protect commercial practices, trade
secrets, industrial processes and knowledge of the dispute
itself. In some countries, however, confidentiality may be
lost if arbitration proceedings end up in court for example,
if the arbitration award is appealed.
If confidentiality is important then it is sensible to include
a confidentiality provision in the arbitration agreement.
See page 06 on drafting confidentiality clauses.

Finality
The parties can, subject to the applicable procedural law,
agree that an arbitration award is final and binding, and
cannot be appealed to a court. In many jurisdictions, awards
(particularly those in domestic arbitration) will not be set
aside on the ground of errors of fact or will only be set aside
in very exceptional circumstances. Whilst most jurisdictions
permit the parties to agree not to appeal to the courts on a
point of law, in many jurisdictions the right to appeal on
grounds of serious procedural irregularity is mandatory and
cannot be excluded, even by agreement. The ability to restrict
appeals on points of law means that arbitration proceedings
can be concluded more quickly than court proceedings.

Choice
In arbitration, the parties have considerable choice over the
way in which their dispute is conducted. They can choose in
which country, city and, even, in which building they wish
to hold their arbitration (although, unlike court proceedings,
they will have to pay for the venue).
The parties are also free to select the arbitrators themselves.
This can be helpful where the dispute is of a technical
nature, since they can ensure that the arbitrators have
particular technical skills or expertise. (Bear in mind,
however, that, unlike judges, arbitrators must be paid by the
parties.) It is important to agree to the appointment of an odd
number of arbitrators (either a sole arbitrator or a panel of
three): if two, or four, arbitrators are selected, the panel may
be unable to reach a decision due to deadlock.
04 Norton Rose Fulbright February 2015

The language(s) in which the arbitration is conducted can

also be specified by the parties.

The legal framework

International arbitration is subject to a number of layers of
regulation and in this respect is more complex in structure
than national court litigation. What follows is a summary of
the different laws and rules that make up this framework.

The law governing the contract

The substantive law of the contract between the parties
is the law governing the contract. Regardless of where
the arbitration takes place, the arbitrators will apply the
substantive law of the contract when deciding the issues
in dispute under the contract.

The law governing the arbitration agreement

It must be remembered that the arbitration clause within the
main contract is a contract in its own right, collateral to the
main contract. It is, in effect, a contract within a contract and
is severable from the main contract.
If the arbitration agreement is contained within the main
contract, the law of the main contract will usually govern
the arbitration agreement (if no other law is chosen by the
parties to govern the arbitration agreement and generally
none is). However, if an arbitration agreement is entered
into after the main contractual dispute has arisen (because
the main contract contains no arbitration clause), it will
not necessarily follow that the arbitration agreement will
be governed by the same law as the main agreement (if no
separate choice of law is made in the arbitration agreement).
Although it is by far the most usual case that the arbitration
agreement is governed by the same law as the main contract,
it is possible to provide for the law of the arbitration
agreement to be a different governing law from that of the
main contract. Institutional rules such as the ICC Rules
do not deal with the governing law of the arbitration
agreement. Their standard clauses do not include a choice
of law clause for the arbitration agreement itself but they
do stress the desirability of stipulating the governing law of
the main contract.

A basic guide to international arbitration

The law governing the arbitration agreement covers

substantive matters relating to the agreement to arbitrate, as,
for example, the interpretation and validity of the agreement
to arbitrate. The issue of whether a particular dispute falls
within the terms of an arbitration clause will be governed by
the law governing the arbitration agreement.
It will also be relevant to issues relating to the recognition
and enforcement of the award. For example, under article 5
of the New York Convention, recognition and enforcement of
an award may be refused if the arbitration agreement is not
valid under the law to which the parties have subjected it.

The procedural law

The law of the place of recognition and

enforcement of the award
The law of the place of recognition and enforcement of any
potential award should also be considered. Is the country a
signatory to the New York Convention? What is that countrys
national courts reputation in relation to ease of enforcement
of arbitration awards? There can be substantial differences in
the approach of local courts to the enforcement of a foreign
arbitration award. It is important to obtain local advice at the
outset (preferably when drafting the dispute resolution clause)
on the prospects of enforcing an award in a particular jurisdiction.
See page 03 on enforcement and the New York Convention.

The nature and scope of the law of the seat of the arbitration
determines the procedure for the arbitration. Clients will
often require that the place at which any arbitration is to
take place is a place that is neutral to all parties. It is vitally
important to ensure that, when selecting a seat for the
arbitration, the requirements and scope of the laws of that
place of arbitration are understood. Different countries
can import different requirements into their own law and,
to be effective, an award will have to comply with all the
mandatory requirements imposed by the law of the seat of
the arbitration.

The procedural rules of the arbitration

The procedural law acts in concert with the institutional

or ad hoc rules (if any) under which the arbitration is to
be conducted. The procedural law and the rules govern
the conduct of the arbitration; by adopting certain rules,
the parties may find that they have contracted into or opted
out of various of the default non-mandatory provisions of the
procederal law.

An arbitration is ad hoc when it is not administered by an

arbitration institution. In theory, it is possible for the parties
to write their own rules but this is rarely, if ever, done in
practice. Instead, the parties use the procedural rules that
either they have chosen or on which the arbitrator(s) has
decided. Alternatively, the arbitration may be governed solely
by the procedural law of the arbitration.

Typically, the procedural law covers questions relating,

for example, to the arbitral tribunal itself, such as its
appointment and any revocation of its authority, its powers
and duties and remedies for any breach of duty. It also
determines the availability of interim and procedural
remedies. The form and validity of the award and grounds
for challenges to the award where challenge is made at the
place of arbitration will also be determined by the procedural
law. In some instances, the law of the seat of the arbitration
can also stipulate that a particular type of dispute cannot
be settled by arbitration under local law. In some states, if
the proper law of the contract has not been chosen by the
parties, it is normally determined by the conflict of law rules
of the procedural law: this enables the tribunal to work out
which national law to apply to interpret the procedural laws
applying to the contract usually the law of the place where
the arbitration is taking place.

See pages 08 for a discussion of the relative merits of

institutional and ad hoc arbitrations.

The parties can (within the constraints of the procedural

law) choose their own rules to govern the procedure. There
are essentially two options here: institutional rules or ad hoc
procedures.
Institutional rules are chosen when the arbitration is
administered by an arbitration institution. The rules of the
major institutions are well known and their application is
reasonably predictable.

The powers of the tribunal

The authority of the tribunal (or panel of arbitrators) comes
from the contractual arbitration agreement between the
parties. The powers of the tribunal are set out in the relevant
procedural law and procedural rules. The limits of the
arbitrators powers will therefore differ, depending on the
procedural law and rules chosen.

The powers of the court

The powers of the court to hear applications relating
to an arbitration will be determined by the procedural
Norton Rose Fulbright February 2015 05

A basic guide to international arbitration

law of the arbitration, the procedural rules chosen (if

any) and the arbitration agreement. All three of these will
affect whether a particular court can hear an appeal of an
arbitration award, consider the jurisdiction of the arbitral
tribunal or provide interim relief (such as freezing orders)
in support of the arbitration.

Drafting arbitration clauses

No one arbitration clause will be suitable for all agreements.
The benefit of arbitration is that it can be tailored to meet the
needs of the parties.
That said, the key to drafting a successful arbitration clause
is simplicity. This principle applies in the most complex
of situations, including multiparty disputes and resolving
disputes arising out of a group of related but separate contracts.
A skilfully engineered, straightforward clause will enable the
parties to avoid further conflict once a dispute has arisen.
Before agreeing on an arbitration clause, it is important to
consider the issues set out below.

Location of assets
Identify where the other partys assets are located now
and where they are likely to be located after any award
is obtained. If they are located in the country where the
award will be obtained, can the local courts be relied upon
to enforce the award? If the assets are located outside the
jurisdiction in which the award will be obtained, seek
advice on the recognition and enforcement of arbitration
awards against assets in that country, both in theory and in
practice. An arbitration award is of no value unless it can be
effectively enforced.

Type of arbitration
Decide whether the arbitration should be institutional and
administered according to the rules of the institution (and if
so which institution) or ad hoc with no formal administration
agency, where the parties create their own rules and procedures.

Choice of seat
Before choosing a particular seat, consider the extent
to which the local courts will support the arbitration
proceedings (by, for example, providing interim relief
such as injunctions or conservatory measures).

Model clauses
Most arbitration institutions provide recommended model
arbitration clauses. These make a good starting point when
drafting arbitration clauses. Variations to a model clause
can lead to undesirable results if not carefully drafted. The
meaning of a poorly drafted arbitration clause can be the
subject of separate proceedings, leading to increased costs
and delay. In the worst case, the clause may be found to be
ineffective. It is also important to consider how an arbitration
clause will be viewed by the state in which the award will be
enforced. A poorly drafted clause can lead to problems with
enforcement.

Mandatory

There are seven basic elements that must be included in

your clause.

Protection

Referral of the existing or future dispute to arbitration

Draft the clause in broad terms to ensure that all disputes,
tortious or contractual, are referred to arbitration.
Wording such as all disputes and claims arising out of
or in connection with this Agreement will be referred to
arbitration is recommended. When drafting a clause for a
group of contracts, include a reference to the arbitration
clause in the main contract.

If one of the parties to the agreement is a State, consider

whether the ICSID Convention can apply and whether there
is scope for investment treaty protection (through bilateral or
multilateral investment treaties).

Incorporation of rules governing the arbitration

The parties may select rules in order to regulate the conduct
of the arbitration. They may be the rules of an institution,
such as the ICC, or ad hoc rules, such as the UNCITRAL rules.

See page 09 on investment treaties.

See page 08 for more information on UNCITRAL.

06 Norton Rose Fulbright February 2015

A basic guide to international arbitration

Reference to the place of arbitration

The place of arbitration, which is often referred to as the
seat of arbitration, is important for three reasons: firstly, it
determines the place where the award is made or published
(and hence whether the award will be treated as an award of
a party state for the purposes of the New York Convention);
secondly, the arbitration will be subject to the procedural
law, including the arbitration laws, of the jurisdiction
in which the place is located; thirdly, the courts of that
jurisdiction will have a supervisory or supportive function
in connection with the arbitration itself (and the parties can
ascertain in advance to what extent the courts will issue
interim relief or entertain appeals).
Reference to the place of hearing
The parties may wish to agree that hearings be held at a
place other than the place or seat of arbitration. However,
they should first check to ensure that this is permissible
under the law of the place of arbitration.
The choice of language
The parties should agree on the language of the arbitration,
as this will be the language of the pleadings and the hearings.
The preferred number of arbitrators
Three arbitrators should generally be appointed in anything
but a simple, low value case. Qualifications, such as industry
experience, may be stipulated.

right to appeal in any circumstances (including procedural

irregularity), but this is not recommended as it leaves the
parties with no redress in the event of an abuse of process.
Service of process provision
Although the strict rules on court service do not apply,
the inclusion of a service provision (specifying on whom
and where documents should be served) makes service of
proceedings straightforward.
Waiver of sovereign immunity
If contracting with a state or stateowned body, it is important
to include a waiver of sovereign immunity clause to enable
any award to be enforced.
Stepped clauses
Stepped clauses allow for different methods of dispute
resolution at different stages of the dispute. These clauses
can be helpful in some situations, as they require the parties
to attempt to resolve their differences at an early stage before
formal proceedings have begun. In other situations, they can
simply lead to delay. Care should be taken to ensure that they
are enforceable within the particular jurisdiction.

Reference to the substantive law of the agreement

or contract
This is the law that will govern the merits of the dispute.

Interim measures
The ability to apply to the arbitral tribunal or national courts
for interim relief depends on the chosen procedural law
and the powers given to the arbitrators under any agreed
rules governing the arbitration and the arbitration clause
itself. It is important to consider this issue when drafting the
arbitration clause and, if necessary, to extend the powers of
the arbitrators.

Optional

Drafting confidentiality clauses

It can at times be useful even essential to include some

or all the following elements.
Multiple related contracts
Where there are interrelated contracts, it would be sensible
for the parties to consider whether disputes arising under the
different contracts should be consolidated into one hearing,
heard concurrently or resolved by the same tribunal. This is
not a straightforward matter, and it is wise to seek detailed
advice on a case by case basis.
Third parties cannot be joined to arbitration proceedings
without their consent. If this is likely to be an important
issue, then litigation should be considered instead.
Excluding rights to appeal
Parties can exclude (as far as is permissible by the laws of the
relevant state) the right to appeal on a point of law, in order
to ensure any award is final and binding at the end of the
arbitration. In some jurisdictions it is possible to exclude the

In some jurisdictions confidentiality of the proceedings and

the award is implied during the arbitration and protected in
any related court proceedings. However, in many jurisdictions
this is not the case. If confidentiality is important to the
parties then a confidentiality provision, such as the clause
below, should be added to the arbitration agreement.
General confidentiality clause
The Arbitral Tribunal shall maintain the confidentiality of
the arbitration and conduct the arbitration in an impartial,
practical and expeditious manner, giving each party
sufficient opportunity to present its case.
Unless the parties expressly agree in writing to the contrary,
the parties undertake to keep confidential all awards and
orders in their arbitration as well as all materials in the
arbitral proceedings created for the purpose of the arbitration
and all other documents produced by another party in the
arbitral proceedings not otherwise in the public domain,
save to the extent that disclosure is required of a party by a
Norton Rose Fulbright February 2015 07

A basic guide to international arbitration

legal duty, to protect or pursue a legal right or to enforce or

challenge an award in legal proceedings before a state court
or other judicial authority.

Ad hoc arbitration

Adapted from the rules of the Arbitration Institute of the

Stockholm Chamber of Commerce and of the London Court
of International Arbitration.

Ad hoc, or unadministered, arbitration can be flexible,

relatively cheap and fast if the parties cooperate. It works
best when conducted in a jurisdiction with a recognised
arbitration law.

Institutional arbitration

When parties are not able to cooperate, the assistance of

an institution to move the arbitration forward can be very
helpful. However, since ad hoc arbitration is cheaper (there
are no institutional fees to pay), it can be a popular choice.

There are a number of benefits to conducting arbitration

under the auspices of one of the major institutions.
Firstly, the arbitration institution will supervise the
conduct of the arbitration. It will assist in the appointment
of arbitrators and will give practical guidance on how to
interpret its procedural rules. Some institutions (notably the
ICC) will review the arbitration award and recommend any
changes to the tribunal. This adds another layer of protection
against errors in the arbitration award of particular
importance when the ability to appeal an award has been
curtailed through the arbitration clause, the procedural rules
or procedural law.
Secondly, the institution can act as an appointing authority.
Arbitration clauses can provide that the institution is
responsible for appointing the chair arbitrator after the
parties have each nominated one arbitrator on a three person
panel or that the institution appoint the entire panel of one
or three arbitrators. The institution can also appoint an
arbitrator if one party fails to nominate an arbitrator. In this
respect, arbitration institutions can act as a form of quality
control, appointing arbitrators with appropriate experience
and a proven track record.
A third benefit in using institutional arbitration is that it
can make the recognition of an award more straightforward,
since the procedures adopted by the institution will be well
known and less open to challenge.
Arbitration institutions charge a fee for the administration
of the arbitration and this can make administered
arbitrations more expensive. However, the predictability
of institutional rules and the assistance of the institution in
administering the arbitration can lead to fewer procedural
difficulties, which may reduce time and costs. It is important
to consider the way in which the institutions fees are
structured, as the proportion of fees required at an early
stage in the arbitration varies.

08 Norton Rose Fulbright February 2015

It is possible to have an ad hoc arbitration with an institution

designated as the appointing authority. This can solve one of
the difficulties associated with ad hoc arbitration namely,
constituting the tribunal itself. In such circumstances, parties
can also choose, once the tribunal has been constituted, to
have the arbitration administered by the institution as well.

UNCITRAL

UNCITRAL is the United Nations Commission on International

Trade Law. It exists to make the rules of international
business simpler, clearer and more contemporary; it was
established in 1966. The UN General Assembly elects 60
member states to form the Commission for a term of six
years apiece. Their goal is commercial law reform, allowing
international trade to flow smoothly and disputes to be
settled in good order.
UNCITRAL rules
UNCITRAL does not act as an arbitration institution or
administer arbitrations, but it has created a set of procedural
rules: the UNCITRAL Arbitration Rules. These rules are
widely used in ad hoc (or unadministered) arbitrations.
UNCITRAL model law
The UNCITRAL rules should be distinguished from the
UNCITRAL model law. This is a recommended pattern or
template for lawmakers in national governments to consider
adopting as part of their domestic legislation on arbitration.
Many national arbitration laws are based on the UNCITRAL
model law.

IBA

The International Bar Association (IBA) provides rules on

taking evidence in international commercial arbitrations
that are commonly used. The IBA also provides guidelines
on conflicts of interest in international arbitration which
are used to deal with conflict issues relating to arbitral
appointments. The IBA also produced guidelines governing
party representation in international arbitration. These rules
are widely available on the Internet.

A basic guide to international arbitration

Enforcement
One advantage of arbitration over other forms of dispute
resolution is the ease with which awards can be enforced in
other states. The New York Convention is the primary tool for
enforcement and has been ratified by (to date) 154 countries.
The wide acceptance of the New York Convention across the
worlds industrialised countries is recognised as one of the
greatest achievements of public international law.

The New York Convention

The New York Convention is the United Nations Convention

on Recognition and Enforcement of Foreign Arbitral Awards,
New York, 1958.
See www.uncitral.org for the full text.
The New York Convention deals with the recognition and
enforcement of foreign arbitration awards. (Foreign for
these purposes means an award made in a state other than
that where the recognition and enforcement is sought.) It
has been signed and ratified by most industrial states and
provides the mechanism by which international arbitration
awards are enforced around the world.
See www.uncitral.org for a list of signatories.
Thanks to the New York Convention, arbitration awards can
be enforced where it would be impossible to enforce a similar
judgment from a national court.
By signing up to the New York Convention, a contracting
state agrees that it will recognise an agreement in writing
between parties who have undertaken to submit to
arbitration all or any differences which have arisen in respect
of a defined legal relationship, whether contractual or not.
A contracting state also affirms that it will recognise
arbitration awards as binding, and that it will enforce them
in accordance with the procedural rules of the territory
where the award is to be enforced. It also agrees that it will
not impose substantially more onerous conditions or higher
fees or charges on the recognition and enforcement of foreign
awards than are imposed on the recognition or enforcement
of domestic awards.

Refusal to enforce

There are a limited number of circumstances in which a court

in the relevant state may refuse to enforce an arbitration award.
The agreement is not valid under the law to which the
parties have subjected it, or the law of the country where
the award was made.

The party against whom the award was made was not
given proper notice of the proceedings.
The award deals with a difference which does not fall
within the terms of the submission to arbitration.
The arbitration procedure was not in accordance with the
agreement, or was not in accordance with the laws
of the country in which the arbitration took place.
The award has not yet become binding on the parties, or it
has been set aside or suspended by a competent authority
of the country in which the award was made.
In addition, recognition and enforcement may be refused
if the competent authority in the country of enforcement
finds that the subject matter of the dispute is not capable
of settlement under the arbitration laws of that country;
or finds that the recognition or enforcement of the award
is contrary to the public policy of that country.
Public policy is one of the most common grounds for
enforcement of an arbitral award to be refused. Although
most industrialised countries are signatories to the New York
Convention, the way that it is applied varies from jurisdiction
to jurisdiction.

Investment treaties
Bilateral

Bilateral investment treaties (BITs) are reciprocal agreements

made between two nation states which give certain
protections and benefits to investments made by citizens and
companies of the other country. The rights and obligations
arising under a BIT may be invoked by a qualifying investor
from one of the two countries to which the BIT relates
directly against the other nation state. Many BITs provide
that the rights they give can be enforced under ICSID the
governments thereby provide advance consent to submit
investment disputes to ICSID. This is not the case for all BITs;
some go to ICC or other arbitration institutions.
Since the late 1980s BITs have come to be universally
accepted instruments for the promotion and legal protection
of foreign investments; this is reflected in the rapid growth in
their number. There are now more than 3000 BITs.
Rights
The rights a BIT will provide to an investor will vary
depending on the terms of the relevant BIT. There is no
standard form of BIT; the terms of each BIT are a matter of
negotiation and agreement between the contracting States.
Norton Rose Fulbright February 2015 09

A basic guide to international arbitration

Typically, however, a BIT might confer upon investors the

rights outlined below.
Dispute resolution
This is perhaps the most useful element of any BIT for
investors. The provisions typically provide that any breach
of the BIT will entitle the investor to commence arbitration
proceedings against the relevant State. Investors are
therefore able to enforce their claims directly against the host
State in a neutral forum, thus avoiding the need for their
own government to take action and avoiding having to claim
against the host State in the courts of the host State.
Protection from expropriation/nationalisation
Each State agrees that it will not expropriate or nationalise
(or take any step having an equivalent effect) any asset or
investment belonging to nationals from the other State.
The common exception to this prohibition is where the
expropriation or nationalisation takes place for a public
purpose, is nondiscriminatory and is subject to prompt and
adequate compensation.
Most Favoured Nation and national treatment
Each State agrees that it will treat investments made by
investors from the other State in a manner that is at least as
favourable as the manner in which it treats investments made
either by investors from other States or by its own citizens.
Repatriation of investment and earnings
Each State permits the unrestricted transfer of investments
and returns made by nationals of the other State. These
transfers are to be effected without delay and in the currency
in which the investment was originally made (or in any other
convertible currency agreed by the investor).
Observe contractual obligations
Each State agrees that it will observe any obligation that it
has entered into with investors from the other State. This
type of provision will therefore give treaty protection to any
obligations undertaken in a contract between the investor
and the State, such as a concession contract or licence for
a project.
Definition of investor
Who amounts to an investor and what amounts to an
investment will vary from BIT to BIT. This is because there
is no universally accepted notion of an investment to which
BITs apply. A BIT will normally define what amounts to an
investment.
Most BITs are quite broad in this respect, and so it is possible
that various types of activity could amount to investments for
BIT purposes, depending on the facts in each case and the
wording of the BIT. This could well extend beyond perhaps
the most obvious types of activity, such as the acquisition of
10 Norton Rose Fulbright February 2015

all or some of the shares in a company in the host State, the

setting up of a new local subsidiary in the host State, or the
construction or financing of a project in the host State which
benefits the host State.
The question of who amounts to a protected investor
is usually more difficult, especially in the context of a
multinational organisation. This is because, in the context
of a group of companies based in multiple jurisdictions, the
immediate or ultimate investor may be the parent company
or some other group entity. This has to be considered on a
case by case basis.
Central register
There is no central register indicating which States have
entered into BITs with which others, or, of the BITs entered
into, which are in force. Neither is there any obligation
on States to notify any international body, for instance
the United Nations, of its BITs. Ultimately, it is a matter of
checking with both States whether they regard a BIT as
having been entered into; and whether it has been brought
into force by any necessary ratifying legislation.
The United Nations Conference on Trade and Development
(UNCTAD) contains a search engine on its website which
is stated to set out the current status of BITs between all
countries. Although its accuracy cannot be confirmed, it
represents a starting point for any enquiry.

Multilateral

Similar protection is available under a growing number of

multilateral investment treaties (MITs); more and more MITs
which focus primarily on trade now contain provisions on
investment.
Energy Charter Treaty
One of the most effective MITs is the Energy Charter Treaty,
which came into force in April 1998. Developed on the basis
of the European Energy Charter principles, it establishes a
legal framework in order to promote long-term cooperation
in the energy eld. To date, 46 countries have ratied the
ECT and a further four countries are signatories to it. The
ECT imposes a common set of obligations on contracting
states, seeking to reduce the risks of investment and trade
in the energy sector, so encouraging investment and
stabilising energy supplies. The ECT can be invoked against
the contracting States by individuals or companies of other
contracting States and the resulting disputes are settled
through one of the mechanisms provided for in the treaty, the
choice of mechanism (generally) remaining with the investor.
For more information about the Energy Charter Treaty,
including a copy of the treaty text and a list of Members and
Observers, see www.encharter.org.

A basic guide to international arbitration

Contact
If you would like further information please contact:
Brett C. Govett
Partner, Dallas
Norton Rose Fulbright US LLP
Tel +1 214 855 8118
brett.govett@nortonrosefulbright.com
James Rogers
Partner, Hong Kong
Norton Rose Fulbright Hong Kong
Tel +852 3405 2323
james.rogers@nortonrosefulbright.com
Shea R. Haass
Senior Associate, Dallas
Norton Rose Fulbright US LLP
Tel +1 214 855 8114
shea.haass@nortonrosefulbright.com

Norton Rose Fulbright February 2015 11

Law around the world

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