Wednesday, October 25, 2017
The Fall Meeting of the American Bar Association Section of International Law is continuing in Miami with a number of substantive panels. One panel was on international arbitration and litigation as mechanisms to protect investments in Latin America.
The panel moderator was Ricardo Henrique Safini Gama (Veirano Advogados, Brazil). Panelists included: William D. Wood (Norton Rose Fulbright, Houston), who spoke on U.S. litigation arising out of corruption scandals in Latin America; Nicole Duclos (Covington & Burling, New York), who discussed issues relating to corruption in international commercial arbitration and the interaction of criminal investigations with international commercial arbitration proceedings; Barry Appleton (Managing Partner at Appleton & Associates International, Toronto and Washington, D.C.), who spoke about investment treaty arbitration as another route to combat corruption; and Rachel Giesber Clingman (Vice Presidentl for Petroleum and Minerals Americas at BHP Billiton), who described the role of in-house counsel in avoiding and reporting corruption.
Some points from the presentation:
- Corruption is pernicious and stifles development.
- Remember that a foreign state will not have immunity under the Foreign Sovereign Immunities Act (FSIA) when a suit is based on commercial activities in the United States (such as trading U.S. securities) or when property is taken in violation of international law (28 U.S.C. sec. 1605). When basing a suit on securities or investor agreements, look for contractual consent to U.S. jurisdiction.
- Of the 87 companies whose 2016 public filings disclosed that they were the subject of ongoing and unresolved investigations under the Foreign Corrupt Practice Act, 26 companies are in Latin America.
- Arbitrators will always be concerned about allegations of corruption in an arbitration proceeding because they want their arbitral decisions to be enforceable, and an allegation of corruption may derail enforcement.
- If a country raises corruption on the part of the claimant as an issue in an investment-state arbitration, the tribunal will usually dismiss the proceeding. But if the claimant raises corruption on the part of the government, the tribunal will investigate that claim.