Beijing Law Review, 2011, 2, 134-144
doi:10.4236/blr.2011.23014 Published Online September 2011 (
Copyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to
Replace ICSID Arbitration
Silvia Karina Fiezzoni1,2,3
1Dalian Maritime University, Dalian, China; 2School of Law, Buenos Aires University, Buenos Aires, Argentina; 3National Institute
of High Studies, Quito, Ecuador.
Received July 25th, 2011; revised August 23rd, 2011; accepted 1st, 2011.
In the 2000s, the financial crisis in Argentina and several nationalizations carried out by governments in South America
have spawned a large number of claims before International Centre for Settlement of Investment Disputes (ICSID).
Latin Americans began to look at ICSID critically, there have been complaints about ICSIDs connections with the
World Bank; non-commercial interests, such as health or environmental protection, have not received adequate atten-
tion in the arbitration cases; a lack of transparency by arbitration panels; and the absence of an appeals process, but
only a limited annulment procedure. This situation generates impacts upon the overall due process of ICSID arbitra-
tions and Latin American hostility against ICSID, such the Boliva rian Alliance for th e Peoples of our America Peoples
Trade Treaty (ALBA-TCP) Declaration to denounce ICSID Convention and the firm intention of Union of South
American Nations (UNASUR) countries to create a regional arbitration centre to replace ICSID arbitration.
Keywords: UNAS UR , Challenge, ICSID
1. Introduction
The past two decades have seen a virtual explosion in
investor–State arbitrations before ICSID. A significant
proportion of the total ICSID caseload are against Latin
American States (39% cases of the total ICSID),1 in-
volved claims that have arisen from regulatory measures
in matters of public interest. Among Latin American
countries, Argentina alone accounts for 49 cases, Vene-
zuela 23 cases, Mexico 14 cases2 and Ecuador 14 cases
[1]. In relation to UNASUR, 9 of 12 its member coun-
tries faced 117 cases before ICSID, mostly with activities
related to natural resources.3
Nowadays, Latin American countries have begun to
look at the ICSID critically, formulating a list of com-
plaints such as: ICSID’s connection with the World Bank;
concerns by some Latin American States that hostility
toward ICSID may hamper access to World Bank credit;
non-commercial interests, such as health or environ-
mental protection, have not received adequate attention
in the arbitration cases; a lack of transparency by arbitra-
tion panels; a shadow of arbitrator bias in favor of the
investor, with different ad hoc tribunals analyzing similar
cases reaching disparate results; the absence of an ap-
peals process, but only a limited annulment procedure;
failure to take into account situations of massive eco-
nomic downturns and the cost of the litigation [2]. The
current movement in Latin American countries, thus, is
trying to delimit or/and exclude the jurisdiction of the
ICSID [3] and is declaring the necessity of the creation
of Arbitration Centre in ALBA-TCP and in UNASUR.
It will be importa nt for the People’s Republic of China to
follow as the curren t movemen t origina ted in Lat in Ameri-
can countries agains t ICSID, considering that Chinese FDI
to the region increased approximately 1,500 percent from
US$21.86 million in 2003 to US$349.55 million in 2009,
becoming the region’s third largest FDI provider.4
1Considering the following Latin American Countries: Argentina (49
cases), Bolivia (4 cases), Brazil (is not member of ICSID), Chile (3
cases), Colombia (no cases), Cuba (is not member of ICSID), Costa
Rica (5 cases), Dominican Republic (has not ratified the ICSID con-
vention), Ecuador (14 cases), El Salvador (3 cases), Guatemala(3
cases), Honduras (3 cases), Mexico (14 cases), Nicaragua (1 case), Pa-
nama (1 case), Paraguay (3 cases), Peru (10 cases), Puerto Rico (no
cases), Uruguay (1 case) and Venezuela (23 cases) [1].
2Mexico is not member of ICSID but has cases before ICSID under the
orth American Free Trade Agreement (NAFTA).
3Only Brazil, Surinam and Colombia do not have cases before ICSID.
4The leading recipients of Chinese FDI in Latin America from 2003 to
the first semester of 2010 were Brazil (41 percent), Venezuela (15
ercent), Peru (12 percent), Argentina (11 percent) and Chile (2 per-
cent). The 90 percent of China’s investment in the region has gone to
natural resource extraction. In 2010 alone, China spent $13.3 billion on
oil and gas deals in countries such as Ecuador, Argentina, and Vene-
zuela. [4].
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration135
The object of this paper is to analyze the situation of
some Latin American countries’ countermeasures against
ICSID and the UNASUR Arbitration Centre Rules pro-
posed by Ecuador.
2. The Challenges of Latin American
Countries against ICSID
Latin America began to look at the ICSID critically,
complaining about political factors such as, the ICSID’s
connection with the World Bank; concerns that the hos-
tility toward ICSID may hamper access to World Bank
credit and a shadow of arbitrator bias in favor of the in-
vestor [2]. Moreover, the ICSID tribunals consider trade
aspects, but do not integrate criteria, e.g. political, eco-
nomic and social aspects that constitute th e framework of
the cases. Thus, ICSID’s decisions and awards lack of
contextualization of disputes and hence the decisions are
detached from social, cultural, political and economic
factors [5].
In relation to the ICSID proceedings, Latin American
countries make the followings observation s :
1. The regime of the ICSID arbitrations in investment
does not work as a system, because ad-hoc tribunals
analyze similar cases reaching disparate results. More-
over, the ICSID tribunals coexist without hierarchy and
are not subject to consolidation cases nor appeals or any
other form of external control by a supervisory body that
could ensure consistency in the decision making process.
One example of the necessity of an appeal mechanism is
the case Repsol v. Petroecuador, where the Ad hoc
Committee, basing its findings on the earlier annulment
decisions, refused to annul the award on the grounds of
the tribunal’s alleged manifest excess of power, and
noted that even if: “Tribunal had erroneously applied the
laws of Ecuador, it should be recalled that, in ICSID’s
annulment system, the errors made in the application of a
law […] do not constitute […] grounds for annulment of
an award. […] the latter must not be confused with an
appeal,” which is not available pursuant to Article 53 of
the Convention.5 In relation to the lack of consistency in
the decisions, it is possible to mention CMS v. Argen-
tina6 and in LG&E v. Argentina,7 the two tribuna ls, while
reaching similar conclusions on the substantive treatment
standards, but came to a diametrically opposed result on
the question whether Argentina had been in a state of
necessity during a specific period of time relevant to the
2. Lack impartiality of the proceedings and possible
conflict of interests. The rules governing the choice and
the challenge of the arbitrator before the ICSID provoke
objections in detriment of ICSID impartiality. According
to ICSID Rules, the presiding arbitrator can be cho sen by
agreement of both parties, and where the parties cannot
agree, the Chairman of the ICSID Administrative Coun-
cil (who is also the President of the World Bank) makes
the final appointment [6]. It is important to consider the
close relationship that exists between the ICSID and the
World Bank Group, which in some cases may have an
equity share or some regulatory influence over the in-
vestor. The World Bank includes entities (the Interna-
tional Bank for Reconstruction and Development and
International Development Association –IDA–) which
have been active in providing conditioned loans to im-
pose structural adjustments on governments that directly
favor the role of foreign investors. Sometimes the World
Bank is a direct investor itself, through its International
Finance Corporation (IFC). For example the case Aguas
Argentinas, SA v. Republic of Argentina, the Interna-
tional Bank for Reconstruction and Development had
played a key role in the design of the regulatory frame-
work for public services under concession and in the
privatization process, and the IFC held a percentage of
Aguas Argentinas S.A. equity shares [7]. Thu s, it is criti-
cized that the World Bank is sometimes both judge and
party to the ICSID proceedings.
In relation to the disqualification of the arbitrator the
Rule 6(2) of the ICSID arbitration Rules requires an ar-
bitrator to sign a declaration which includes a disclosure
of his/her past and professional, business and other rela-
tionships with the parties and any other circumstances
which might cause the arbitrator’s reliability for inde-
pendent judgment to be questioned by a party. The IC-
SID Rules, however, do not con tain a list no r prov ide an y
guidance, on the situations or relationships that ought to
be disclosed under Rule 6(2). The phrase “any other cir-
cumstance” is potentially very broad.
5See Repsol YPF Ecuador S.A. v. Empresa Estatal Petróleos del
Ecuador (Petroecuador) (ICSID Case No. ARB/01/10) Decision on the
Application for Annulment (J a nua ry 8, 2007), para 38.
6“The Tribunal had already decided that Argentina had breached its
international obligations under Article II(2)(a) and Article II(2)(c) o
the BIT. It also decided that in the present case there was no state o
necessity and did so in terms which, by necessary inference, excluded
also the application of Article XI. Thus, under the well-known principle
of international law recalled in Article 1 of the ILC Articles, Argentina
was responsible for the wrongful measures it had taken.[..] The Com-
mittee concludes that, whatever may have been the errors made in this
respect by the Tribunal, there is no manifest excess of powers or lack o
reasoning in the part of the Award concerning Article XI of the BIT and
state of necessity under customary international law.” See CMS Gas
Transmission Company v. Argentine Republic (ICSID Case No.
ARB/01/8). Decision of the ad hoc Committee on the Application fo
Annulment of the Argentine Republic, Sep 25, 2007, a t para 149-150.
Moreover, Article 57 of the ICSID Convention pro-
vides that a party may propose that an arbitrator be dis-
qualified on the basis “of any fact indicating a manifest
7“Between 1 December 2001 and 26 April 2003, Argentina was in a
state of necessity, for which reason it shall be exempted from the pay-
ment of compensation for damages incurred during that period”. See
LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc
v. Argentine Republic (ICSID Case No. ARB/02/1). Decision on Li-
ability, October 3, 2006, at para. 267.
Copyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration
lack of the qu alities required by paragraph 1 of Article 14.
The need to show a “manifest lack of the qualities re-
quired” is a decidedly higher threshold to satisfy when
set against the standards in other arbitral rules, such as
United Nations Commission on International Trade Law
(UNCITRAL) Rules [8]. As illustration of the difference
between ICSID and UNCITRAL Rules, can be found in
two challenges to Gabrielle Kaufmann Kohler raised by
the respondent in two separate investment treaty pro-
ceedings against Argentina. The respondent called into
question Kaufmann Kohler’s qualifications when it
learned that she served on the board of directors of the
Swiss bank UBS. The conflicts problem in Sociedad
General de Aguas de Barcelona S.A. and Interagua Ser-
vicios Integrales de Agua S.A. v. Argentine Republic
arose from UBS’s portfolio investments in shares of
claimant companies (2.38% of Vivendi and 2.1% of
Suez). Argentina pointed out that Kaufmann Kohler re-
ceived part of her compensation for her work on the
board in UBS stock, and argued on this basis that she
effectively held shares in the claimants. As a shareholder,
Kaufmann Kohler arguably stood to benefit financially
from an award against Argentina. The Tribunal was oper-
ating u nd er b oth the UN CI TRAL and the ICSID Ru le s, du e
to differen t terms of the applicable treaties.8 The two coarbi-
trators who adjudicated the challenge appear to have con-
sidered the ICSID standard for conflicts of interest to be
more permissive than that applicable under the UN-
CITRAL Rules. The arbitrators concluded that the UN-
CITRAL Rules mandate disqualification where a rea-
sonable and informed person would have justifiable
doubts as to the challenge to the arbitrator’s independ-
ence and impartiality. By contrast, th e arbitrators consid-
ered that, under the ICSID framework, the challenging
party must establish facts that make it obvious and highly
probable, not just possible, that the arbitrator’s inde-
pendent and impartial judgment would be unreliable [9].
3. Lack of transparency. ICSID has exhibited a lack of
transparency in proceedings because in the context of in-
vestor-State arbitrations, confid entiality can be perceived
as a threat to justice when the public is denied access to
information. Closed hearings, especially in arbitrations
that involve a critical public in terest, are criticized widely
as antithetical to the d emocratic process [1 0].
4. High costs of the defense in ICSID arbitration. The
defense of the State ends up being very costly, given the
necessity to contract legal representation in the United
States. It is said that every case costs the State 4 million
dollars.9 Moreover, the revenues of the suing companies
are often greater than the GNP of defendant countries.
For example, Aguas del Tunari/Bechtel reported reve-
nues three times greater than Bolivia’s GNP at the time it
filed suit against Bolivia at ICSID. Shell, which filed
charges against Nicaragua, had revenues 62 times the
GNP of that country [12].
3. ICSID & Latin American Countries’
Under the Calvo Doctrine’s influence,10 Latin Ameri-
can countries initially showed a widespread rejection of
the ICSID Convention. In the mid sixties Latin America
manifested its opposition, in bloc, to the World Bank’s
project to create an international agency specializing in
settling investment disputes [2]. Latin American coun-
tries’ rejection of the ICSID was known as the “No of
Tokyo.” This collective position was delivered at the
1964 Annual Meeting of the World Bank in Tokyo by
the Chilean delegate on behalf of all the Latin American
countries. Similar negative attitudes towards interna-
tional arbitration were reflected in Decision No. 24,
adopted in 1970 by the Commission of the Cartagena
Board of the Andean Pact. The Decision provided an out-
right prohibition against the removal from the national
jurisdictions of the member States of any dispute arising
out of foreign investments or transfer of technology. The
principles of Decision No 24 were reiterated in the Char-
ter of Economic Rights and Duties of States adopted by
the United Nations General Assembly in 1974 [14].
In the 1960s and 1970s, many Latin American coun-
tries (especially Argentina, Brazil and Mex ico) borrowed
to support development projects and programs in their
countries. Latin American debt quadrupled from USD 75
billion in external debt in the mid 1970s to USD 315 bi-
llion by the early 1980s. When trade imbalances and an
advancing world recession raising United States and
European interest rates, many of the region’s countries
could no longer pay their foreign debt and the situation
finally imploded in the 1980 s. Coupled with a world eco-
nomic recession, brought on in large part by the petro-
leum crisis of the 1980s, foreign credits to the region
came to a halt and lend ing institu tio ns b egan to formulate
new rules and policies for loan programs for Latin Ame-
rican countries. Many loan s became conditional upon th e
9Reason invoked by Bolivia to den ounce ICSID [11].
10Argentinean jurist, Carlos Calvo, formulated a doctrine that prevented
foreigners from claiming more rights and privileges than those afforde
to national citizens and the foreign governments should not violate the
laws of sovereign states in an attempt to enforce its citizen’s private
claims. Carlos Calvo published his doctrine as part of a six-volume
treatise entitled Le droit international theorique et pratiquebetween
1868 and 1896 [13].
8Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi
Universal S.A v. Argentine Republic (ICSID Case No. ARB/03/19) and
Suez, Sociedad General de Aguas de Barcelona S.A. and Interagua
Servicios Integrales de Agua S.A. v. Argentine Republic (ICSID Case
o. ARB/03/17), were subject to ICSID arbitration, while the case o
AWG Group Limited v. The Argentine Republic had to proceed unde
the UNCITRAL Arbitration Rules [9].
opyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration137
borrowing country’s adoption of privatization programs
and signing treaties and conventions that would guaran-
tee protection to foreign investors in those countries, as
well as assuring the use of neutral forums for dispute re-
solution arising from the new investor-State relation-
ships, like ICSID. Many countries, jolted by the crisis,
were ready to accept the new conditions set by these in-
stitutions and agreed to adopt economic plans that were
designed to attract FDI and guide them out of their in-
debtedness [10]. Thus, in the 1980s these countries
started to change their position, the first Latin American
countries to join the Con vention w ere Ecu ador, Hondur as,
and El Salvador. In the 1990s the rest of the Latin Ameri-
can countries, with the exceptions of Mexico,11 Cuba,
Brazil, Puerto Rico and Dominican Republic (which has
not ratified ICSID yet) [16], joined the ICSID Conven-
tion and entered into several Bilateral Investment Trea-
ties (BITs ) wi th other nations.
In the 2000s, the financial crisis in Argentina and se-
veral expropriations and nationalizations carried out by
governments in South America have spawned a large
number of claims before ICSID, brought primarily by
U.S. and European investors.
In 2007 ALBA-TCP (which is a Latin American or-
ganization established as an alternative to the proposed
Free Trade Area of the Americas)12 during its 5th Annual
Summit, the proposal of Bolivian President Evo Morales
to withdraw ICSID Convention was approved by Vene-
zuela, Nicaragua and Bolivia. In relation to ICSID,
ALBA stated: “States of the ALBA-TCP agree to with-
draw and report jointly to the ICSID Convention guaran-
teeing the sovereign right of countries to regu late foreign
investment in its territory.” [18]
On May 2, 2007 Bolivia formally notified the ICSID
Secretariat of the denunciation of the ICSID Convention
[16] and on December 4, 2007 Ecuador sought to limit
the ICSID jurisdiction in disputes arising from natural
resources investments, including oil, gas, mineral and
others by resorting to Article 25(4) of the ICSID Con-
vention [ 19 ] .
After Bolivia announced its withdrawal from ICSID,
the President of Venezuela Hugo Chávez similarly an-
nounced that the country would also be withdrawing
from the ICSID Convention [10]. In spite of the fact that
on 12 February 2008, the Venezuelan National Assembly
recommended that the Executive withdraw from the IC-
SID Convention [20], the Venezuelan government has
not yet to notify ICSID of its withdrawal.
On April 14, 2008 Nicaragua’s Attorney General rei-
terated that it was considering denouncing the ICSID
Convention, citing Argentina’s recent experience and in-
dicating that Nicaragua would not sign investment agree-
ments which provide for ICSID as the competent tribunal
going forward [20].
On July 2, 2009 the Ecuadorian President Correa by
Executive Decree 1823 announced the withdrawal from
ICSID, referring the aforementioned Article 422 of Ec-
uadorian Constitution [21] and on July 6 2009 ICSID
received Ecuador’s notification of denunciation, which
was effective on January 7, 2010 [16].
In 2009 during the 7th ALBA-TCP Summit, it was
proposed the creation of a regional arbitration centre to
replace ICSID, instructing a dispute resolution group to
work on this issue and develop concrete alternative pro-
posals in the near term [2]. So far, however, this arbitra-
tion centre has not been created. Together with ALBA’s
proposal, similar initiative is being developed in Latin
America, such as the proposal of Ecuador for the creation
of the Arbitration Centre within UNASUR.
4. Analysis of Some Latin America
Countries’ Countermeasures against
ICSID Arbitrations
11Mexico is the only country in Latin America that retains an unaltered
Calvo Doctrine in it Constitution Art. 27 and has not joined ICSID nor
MIGA. Mexico presents an interesting contrast as the state has had to
defend against, and is currently involved in, a number of ICSID dis-
utes where foreign investors have triggered arbitral proceedings unde
the NAFTA. Except for its obligations under NAFTA and other treaty
commitments, however, Mexico’s Investment Law is considered to be
among the more restrictive. This law does not provide for Mexico’s
consent to submit disputes to arbitration. Furthermore, the law is gener-
ally restrictive and provides that a number of “economic activities and
enterprises…shall be limited to” maximum amounts of foreign owner-
ship. Another group of activities require special approval of the foreign
investment commission if the foreign investor is to own more than 49%
Moreover, the registration procedure is burdensome, there are limits on
the foreign ownership of property, and there are various sanctions that
can be imposed on foreign investors who breach the provisions of the
law [15].
12Its name in Spanish is
lianza Bolivariana para los Pueblos de
uestra América Tratado de Comercio de los Pueblos. Its current
members are Antigua and Barbuda, Bolivia, Cuba, Commonwealth o
Dominica, Ecuador, Honduras, Nicaragua, Saint Vincent and the
Grenadines, and Venezuela. Haiti and Uruguay are currently observer
states [17].
4.1. Plurinational State of Bolivia (Bolivia)’s
On May 1, 2006, one of the first measures taken by Pre-
sident Evo Morales was to issue the Decree 28701 [22]
which nationalized the entire hydrocarbon industry.13
The following day, President Morales militarized the oil
& gas field to ensure the enforcement of the Decree [23].
Exactly a year later, Bolivia formally notified the ICSID
Secretariat about the denunciation of the Washington
Convention, being the first contracting State that de-
nounced it (in accordance with Article 71 of the ICSID
13It is necessary to consider theEvo Morales’s rise to the presidency o
Bolivais widely seen as having been buttressed by the massive protests
in Cochabamba in reaction to the privatization programmsof the IMF
and World Bank. [10].
Copyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration
Convention, the d e nunciation took effect on November 3,
The World Bank website mentions that Bolivia ex-
pressed the following arguments against ICSID: “1.
Their decisions are final i.e. there is no appeal. 2. It is not
neutral. Of 232 cases, 230 have been in favour of firms
against the state. 3. The ICSID interference contradicts
the Bolivian Constitution (Article 135) and the Constitu-
tional Tribunal has already declared it incompetent. 4.
Only demands of firms are presented at the body. 5.
Their methodology is unclear and arbitrary. 6. It doesn’t
accept audiences with external petitions. It meets behind
closed doors. 7. The defense of the State ends up being
very costly, given the necessity to contract lawyers in the
United States. It is said that every case costs the State 4
million dollars.” [11] Furthermore, Bolivia announced
the renegotiation and revision of its BITs [24].
After the process of nationalization, Bolivia faced de-
mands from transnational corporations before interna-
tional arbitrations without an executive branch to pre-
serve and defend the interests of the country. It was in
this context, from June 5, 2008 to February 9, 2009, the
Bolivian Government established a new Ministry, re-
sponsible for the legal defense of the State (Ministerio
Sin Cartera Responsable de la Defensa Legal de las Re-
cuperaciones Estatales) by Presidential Decree N 29589
In 2009 Bolivia approved by referendum a new Con-
stitution that includes the famous “Calvo Clause,” pro-
viding in Article 366 that the foreign investment in par-
ticular for activities in the oil and gas industry are subject
to the laws of Bolivia and forbids them to recourse the
foreign tribunals or jurisdiction. These con stitutiona l pro-
visions do not apply retroactively, nor to any dispute a-
rising out of treaties ratified before the change of the
Constitution [26].
At that moment, the Constituent Assembly noted the
necessity for the creation of the Attorney General Office
that preserves and protects the State’s interests. Thus, the
Government of Evo Morales established the Ministry of
State’s Legal Defense (regulated by Supreme Decree No.
29894) [27] and is implemented the Office of Attorney
General [28].
The implications of Bolivia’s denunciation of the IC-
SID Convention remain unclear for foreign investors
because the Convention’s provisions on denunciation are
the source of contradictory interpretations in connection
with the denunciation of the it and with the termination
of BITs, as to whether the denouncing State remains
bound by the Convention only in relation to disputes ini-
tiated before the denunciation (called “theory of offer to
consent), or also in relation to future disputes as long as
the State’s consent to ICSID arbitration continue s to exist
in that country’s BITs (called “theory of consent”). This
latter reading effectively means that for a State to prevent
future ICSID claims, it must not only withdraw the IC-
SID Convention but also separately terminate all of its
BITs that contain an ICSID arbitration option. Moreover,
under this interpretation, exposure to ICSID proceedings
will persist as long as the terminated BITs retain their
force due to the “survival clauses”, e.g. up to 20 years
after the termination.
In relation with this issue, the case Pan American En-
ergy LLC v. Plurinational State of Bolivia will resolve
these contradictory interpretations because this arbitra-
tion was registered by ICSID on 12 April 2010.14 Until
August 20, 2011 the Arbitration Tribunal has not yet
been constituted in this case. It will be important to fol-
low it to know the position of ICSID in relation with the
provisions on denunciation.
4.2. Republic of Ecuador’s Countermeasures
After assuming office in 2007, President Correa announ-
ced his decision to halt talks about free trade agreement
with the United States. On October 2007 his administra-
tion imposed a new tax on many foreign oil companies
operating in Ecuador [23]. Probably, to avoid a wave of
new claims related to oil & gas. On December 4, 2007
Ecuador sought to escape ICSID jurisd iction by reso rting
to Article 25 (4) of the ICSID Convention, providing for
the exclusion of “[…] differences arising on matters
concerning the treatment of an investment, resulting from
economic activities concerning the use of natural re-
sources such as oil, gas, minerals or other […].” [19]
In order to understand the effect of the notification of
the Article 25(4), it is necessa ry to undertake an analysis
on the issue of consent similar to the one performed with
Bolivia’s denunciation of ICSID Convention. Under the
“theory of offer to consent” Ecuador would no longer be
bound to appear befo re ICSID in cases that have not been
filed prior to the notification of the formal exclusion,
even if the investments were made before the exclusion,
and under the cov erage of a BIT that is still in force.
In 2008 Ecuador adopted a new Constitution in which
Article 422 expressly prohibits the Ecuadorian State en-
tering into internation al agreemen ts und er which Ecuador
would have to cede jurisdiction to international arbitral
tribunals in contractual or commercial controversies be-
tween the State and individuals or corporations. It is,
however, important to note that Article 422 forbids only
the signature of new international treaties and it does not
restrict other agreements from including an arbitration
14See Pan American Energy LLC v. Plurinational State of Bolivia (IC-
SID Case No. ARB/10/8) [1].
opyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration139
clause. Moreover, in an effort to promote Latin America
as a s i t e f o r i n ter n a t i o n al a r b i t r ati on s, Article 422 does not
prohibit Ecuador from entering into international arbitration
treaties requiring disputes between Ecuador and citizens of
Latin America to be submitted to arbitration, as long as
those disputes are submitted to regional arbitral bodies
within the Latin American continent [29].
In the same year, Ecuador terminated eight BITs which
were deemed to be unsuccessful in stimulating new in-
vestments and in October 2009, President Rafael Correa
proposed to the National Congress that Ecuador should
withdraw from additional BITs dating from the 1990s.
These include Ecuador’s BITs with six conventional ca-
pital exporters in Europe and North America (U.S., U.K.,
Germany, France, the Netherlands, and Canada) as well
as China [30].
On July 2, 2009 Ecuadorian President Correa by Ex-
ecutive Decree 1823 announced the withdrawal from IC-
SID referring to the aforementioned Article 422 of the Ec-
uadorian Constitution [21] and on July 6, 2009, ICSID
received Ecuador’s denunciation of the Convention (on
January 7, 2010 the denunciation was effective). It is
important to consider that in 2010, based on the Ecua-
dorian Constitution, Article 422, the Ecuadorian Consti-
tutional Court declared the unconstitutionality of some
BITs and decided to continue with the denunciation pro-
ceedings, including the China-Ecuador BIT [31].
Since 2009 Ecuador has lead a movement to create a re-
gional arbitration forum under the auspices of UNASUR to
deal w it h inv estm e nt di sp utes [32].
4.3. Bolivarian Republic of Venezuela
(Venezuela)’s Countermeasures
On August 18, 1993 Venezuela signed the ICSID Con-
vention and it entered into force on 1 June 1995 [16].
When President Chávez took office in February 1998,
he promised a major reform of the National Constitution
and the installation of a new economic system. In 1999, a
new Constitution was passed by the National Constitu ent
Assembly. The Chávez’s administration gradually imple-
mented major legal reforms, including the enactment of a
new Hydrocarbons Law in 2001, through the implemen-
tation of the programs Plena Soberanía Petrolera (Full
Petroleum Sovereignty) [33] and Siembra Petrolera
(Planting Petroleum) [34]. These programs involved the
renegotiation of the oil contracts with private investors
and a consequent dramatic increase of the country’s
share in the profits. Some investor s resisted the mandated
change from a private to a mixed corporate form, with a
majority stake in the hands of the State [23].
After Bolivia announced its withdrawal from ICSID,
the President of Venezuela Hugo Chávez similarly an-
nounced that the country would also be withdrawing
from the ICSID Convention [10]. In spite of the fact that
on 12 February 2008, the Venezuelan National Assembly
recommended that the Executive withdraw from the IC-
SID Convention [20]. the Venezuelan government has
not yet notified ICSID of its withdrawal. Moreover, in
the same year Venezuela took some antiarbitration
measures, directly targeted at potential claims that could
arise out of the expropriations and natio nalizations.
Venezuela denounced its BIT with Netherlands on
April 30th, 2008 [35] and on October 17, 2008, the Su-
preme Tribunal by the Decision No 1541 [36], resolved
that Article 22 of the Law for the Promotion and Protec-
tion of Investment did not contain a unilateral general
declaration of consent to ICSID jurisdiction. This Deci-
sion was delivered by the Venezuelan Supreme Tribunal,
which is the only co urt whose decisions set binding judi-
cial precedent (erga omnes effects). An interesting aspect
about this Decision is that it was rend ered after a petition
for the interpretation of Article 258 of the National Con-
stitution,15 filed by representative of Venezuela’s Attor-
ney General Office. The object of the Attorney General’s
petition was to limit the constitutional reach of the Law
Concerning the Promotion and Protection of Investment
(LPPI) Article 22. Thereby excluding any consent of the
State to arbitration on the basis of a unilateral consent
contained in the Article 22 of the LPPI, that states: “Any
dispute arising between an international investor whose
country of origin has in effect an agreement for promo-
tion and protection of investments with Venezuela or any
disputes to which the provisions of the Articles of Asso-
ciation of the Multilateral Investment Guarantee Agency
(MIGA) or the Convention on the Settlement of Invest-
ment Disputes between States and Nationals of Other
States (ICSID) shall be submitted to in ternational arbitra-
tion under the terms provided for in the respective treaty
or agreement, should it so provide, without prejudice to
the possibility of using the systems of litigatio n provided
for in the Venezuelan laws in force, when applicable.”
On June 10 2010, coinciding with the Supreme Tribu-
nal’s Decision No 1541, the ICSID Tribunal in Mobil
Corporation and others v Bolivarian Republic of Vene-
zuela issued its Decision on jurisdiction, stating that the
domestic legislation did not, by itself, represent a general
consent to arbitration. It did, however, have jurisdiction
over certain of Mobil's claims as a result of the BIT.16
5. UNASUR Arbitration Centre. Analysis of
the Ecuador’s Proposal
On 23 May 2008, the “Constitutive Tr eaty of UNASUR”
15Venezuela’s National Constitution Article 258: “[…] The law shall
encourage arbitration, conciliation, mediation and any alternative
means of conflict resolution.”
Copyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration
[37] was signed by Argentina, Bolivia, Brazil, Chile, Co-
lombia, Ecuador, Guyana, Paraguay, Peru, Suriname,
Uruguay and Venezuela. On March 11, 2011 this treaty
entered into force [38]. The fact that UNASUR has now
come into formal existence is a significant development
and it is the first regional institution for some time that
represents all South American countries [39].
In June 2009 many Latin American countries were
dissatisfied with ICSID. At the thirty ninth Session of the
General Assembly of the Organization of American Sta-
tes, Ecuador’s Foreign Minister, Fander Falconí, pro-
posed that UNASUR create an Arbitration Centre [2].
During the V Summit of Judicial Powers of UNASUR,
from 23 to 25 June 2010 the Presidents and Representa-
tives of the Judiciary Branch of the Republics of Bolivia,
Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay,
Peru, Uruguay and Venezuela, with Cuba as guest coun-
try, recommended the inclusion in the Agenda of the VI
Summit of Judicial Powers of UNASUR the proposal to
study the creation of the Consultative Council of Justice
of UNASUR and the International Centre for Concilia-
tion, Mediation and Arbitration for the region [40].
In December 2010 in Guyana, the Foreign Ministers of
the UNASUR member countries unanimously decided
that Ecuador chair the working group of the “Dispute
Settlement System.” In this context, Ecuador submitted a
proposal for the creation of this system, which had been
researched and will be discus sed during 90 days fro m the
first meeting.
The Ecuado rian proposal to cr eate a system of alte rna-
tive dispute resolution is contained in three documents: 1.
Creation of an Arbitration Centre, 2. A Code of Conduct
for Arbitrators and Mediators of UNASUR and 3. Coun-
seling Centre of Investment Disputes.17
In relation to the Arbitration Centre, it specifies that it
shall be independent and be constituted by Centre Board
(integrated by representatives of member States) and the
General Director. The Chair of the Centre Board shall be
exercised by the country holding the Presidency Pro-
Tempore of UNASUR.
The Operating Rules of UNASUR Arbitration Centre,
allows settlement of disputes between States and between
a State and investor as are referred to it by virtue of any
contractual provision or provision in an international
instrument (Article 2). The jurisdictio n of the Centre pre-
cluding disputes concerning health, education, taxation,
energy, the environment and others, unless expressly
stated otherwise in the relevant treaty or contract. In no
circumstances an arbitral tribunal will have jurisdiction
to resolve disputes concerning the internal laws of a
UNASUR member State. This preclusion also extends to
the economic effects of a general norm. Although the ju-
risdiction of UNASUR Centre is not only confined to
investment, this stipulation considerably reduces some
matters that are connected with investment and com-
The States can require, as a precondition for the arbi-
tration, the exhaustion of domestic judicial and adminis-
trative remedies. In circumstances where a claim arises in
relation to an administrative act of a State, it will always
be necessary to exhaust domestic remedies (Articles 3).
The requirement to exhaust the administrative and do-
mestic judicial remedies could force the injured party to
wait years until applying to the UNASUR Centre. It
would be necessary to state a reasonable limit of time for
the conclusion of the domestic proceedings to give cer-
tainty and security to the parties and ensure the success
of this Arbitration Centre.
The parties shall endeavour to resolve any dispute by
consultations that are considered to be concluded within
6 months from the date of filing the request, unless the
parties agree to continue with them. They are not man-
datory so the parties cannot implement them by mutual
agreement and go directly to the stage of mediation (Ar-
ticle 4). It will be important at this stage to consider the
success of the WTO’s consultant to resolve disputes be-
tween States. A majority of disputes in the WTO have
not proceeded beyond consultations (until 1 January
2010 there have been 402 complaints and only 126 panel
reports in the WTO). Thus, it is recommended that this
stage would be mandatory for disputes between States
but not for State and investor disputes because in the
latter case, the parties are not equal in negotiating with-
out the intervention of a third person such as mediator or
The mediation is closed when the parties sign a settle-
ment agreement, by decision of the mediator if in his/ her
opinion considered unlikely that the continuation of me-
diation to settle the dispute or by written decision of any
party at any time after attending the first meeting with
the mediator and before signing any settlement agree-
ment (Article 5).
16“Finally, the Tribunal notes that Mobil Corporation has only raised
claims on the basis of Article 22 of the Investment Law and not on the
basis of the BIT. In § 140 above, the Tribunal has concluded that Arti-
cle 22 of the Investment Law does not provi d e a b a s is fo r jurisdiction in
the present case. As a consequence, the Tribunal has no jurisdiction
over the claims of Mobil Corporation, which will thus not be a Party to
the continuation of these proceedings.” Mobil Corporation and others v.
Bolivarian Republic of Venezuela (ICSID Case No. ARB/07/27) Deci-
sion on Jurisdiction (June 10, 2010), at para 207.
17In May 2011 this documentation has been obtained from the UN-
ASUR’s member of the working group for the negotiation of this pro-
In the case of a dispute between an investor and a State,
the investor shall notify the State before initiating the
arbitration process. The State of the investor may initiate
opyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration141
a process of mediation between the investor and the State
party to the disputes. The parties by mutual agreement
may dispense with the mediation process initiated by the
State (Article 6).
The Tribunal shall be composed of three arbitrators,
unless the parties decide that another odd number would
be appropriate. Each party shall appoint one arbitrator
and both parties shall designate by common agreement
the president and his/her substitute of th e Tribunal within
30 days. If the parties have not selected an arbitrator or
there is no agreement on the selection of the president of
the tribunal, Directorate General of the Centre shall de-
signate him/her by lot (Article 9).
Any party may challenge any arbitrator during the e-
lection of the arbitrators if any circumstances giving rise
to justifiable doubt abou t their impartiality, ind ependence
and compliance with th e Code of Conduct. W ithin 5 days
of the challenge, the disputing parties may agree to ac-
cept the challenge. In that case the challenged arbitrator
shall resign. If there is no agreement between the parties
to accept the challenge, the Directorate General of the
Centre shall decide the recusal within 5 days (Article 10).
During the proceedings, when any party considers that
an arbitrator does not meet the requirements of the Code
of Conduct and for that reason should be replaced, that
party shall notify the other party within 15 days from the
date on which the party took cognizance of the violation
of the Code of Conduct by the arbitrator. If the arbitrator
replaced is not the president of the tribunal, the parties
can reach an agreement to replace him/her and shall elect
a replacement following the procedure of Article 9. If the
parties fail to reach agreement, they shall request that the
matter be raised to the President, whose decision shall be
If the president does not meet the requirements of the
Code of Conduct and there is no agreement between the
parties, either party may request that the matter shall be
decided by one member of the list of arbitrators, chosen
by lot. If this arbitrator decides that the president of the
arbitral tribunal does not meet the requirements of the
Code of Conduct, the arbitrator shall choose a new
president of the tribunal arbitral by lot (Article 12). In
relation to the requirements of independent ju dgment and
the disqualification of the arbitrator, the Ecuador pro-
posal responds to the observations made to ICSID and
significantly improves the regulation in this issues, that is
similar to International Chamber of Commerce and S-
tockholm Chamber of Commerce Arbitration (SCC)
Rules but with a particular characteristic as the selection
by lot.
The exclusivity of this Arbitration Centre is estab-
lished by Article 19. It states that when parties decide to
submit a dispute before UNASUR Arbitration Centre,
they renounce the use of another alternative forum for
disputes related to the same matter (i.e. when referring to
the same parties on the same facts or the same measures).
This is to avoid the “shopping claims” that happen now-
adays but it will be difficult to do because the investor
can sue a State but cannot force its shareholders, who
using the BITs, contract and legislation can sue in an-
other forum.
In order to avoid inconsistent decisions and awards,
the arbitral tribunal shall consolidate two or more pro-
ceedings in which discussions of the common question of
fact or law on the same measure or decisions. The parties
may submit to the tribunal their arguments for the con-
solidation of claims (Article 22). It would be necessary to
consider the NAFTA Rules to permit a tribunal feasibi-
lity evaluation on a case by case basis.
In relation to the transparency of the proceedings, any
arbitration shall be public (this includes documents, re-
cords, evidence, hearings and awards) except for those
relating to defense and security of States and the special
cases which the parties determine by mutual agreement.
(Articles 23 and 26). In this issue, the proposed regula-
tion is consistent with the current requirements of more
transparency in these kinds of proceedings such has been
adopted by NAFTA Rules, but it is necessary to specify
that the party also has the right to request confidentiality
of certain documents such as business secrets.
For amicus curiae, unless the parties agree otherwise,
following the conformation of the tribunal, it can receive
unsolicited letters from individuals or legal entities es-
tablished in the territories of the parties when delivered
within 10 days from the date of the tribunal constitution.
The amicus curiae need to be concise and directly ad-
dressing issues relevant to matter of fact and law submit-
ted to the tribunal Arbitration's consideration (Article 35 ).
The time limit to receive amicus curiae is very short; it
should be modified until the submission of the allega-
In relation to the award, it shall be decided within a
period of 240 days from the date of the constitution of
the tribunal, extendable up to 120 days with the agree-
ment of the parties (Article 41). Moreover, the awards
shall be published and have precedential value (Articles
21 and 26). The consistency and coherence of jurispru-
dence create predictability and enhance the legitimacy of
the investment arbitration’s system. ICSID lacks this fea-
The awards rendered under the UNASUR Arbitration
Tribunal can be attacked by rectification , revision, an nul-
ment and appellation. The application for annulment may
be based on the following grounds:
1. The arbitral tribunal was not properly constituted.
2. It manifestly exceeded its powers.
Copyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration
3. A tribunal member was corrupt.
4. There was a serious departure from a fundamental
rule of procedure.
5. The award did not state the reasons upon which it
was based .
The application for annulment shall be decided by
Tribunal Arbitration Ad-doc and maximum period for
resolving is 60 days from the date of its conformation
(Article 42).
An appeal can be submitted against the award through
the review of questions of law an d an Appellate Tribunal
shall decide preferably by consensus. Eight arbitrators
would constitute the pool for the appeal tribunal, which
would be comprised of three arbitrators for any given
case. The appeals would have to be decided within 60
days from the Appellate Tribunal’s constitution (Article
44). The enforcement regime envisaged by the centre
demands parties to comply immediately with an award,
or in the event this is not possible, within a time frame
agreed by the parties. Such time limit can be exten ded to
180 days in the event of justifiable circumstances, such
as civil or economic emergencies (Article 46).
The only basis for denying recognition and enforce-
ment of the award would be when, in accordance with
the host State’s Constitution or its law, the subject of the
dispute is not arbitral or is contrary to public policy (Ar-
ticle 47). In the event that the award is not honored, the
matter shall be returned to the original arbitral tribunal
that heard the dispute. Subject to certain criteria, in the
investor-State disputes where the respondent State does
not comply (wholly or partially) with the award, the
home State may temporarily suspend concessions and
obligations owed to the host State, in the sector that is
relevant to the dispute. Such suspension would have to
be proportional to the degree of non-compliance (Article
In relation to the Counseling Centre, it will provide
legal guidance, technical assistance, research, specialized
studies and legal representation in terms of investment
disputes (Article 2). In the event of a conflict of interest,
when the antagonistic parties are among countries that
are part of UNASUR and the Centre, the Centre is disal-
lowed to provide its services (Article 3).
Both the Arbitration Centre and the Counseling Centre
will have an initial stage of use only for countries th at are
part of UNA SUR for a per iod of 3 years. A second stag e,
from the start of the third year of the centre’s existence,
may use its services in Central America and the Carib-
bean and in the final stage, from the sixth year onwards;
it will be open to any country wishing to use it. The Ar-
bitration Centre and the Counseling Centre will have
different stages of implementation. This gradual process
of implementation will facilitate steady development of
the Arbitration and the Counseling Centre.
With regards to the Code of Conduct for Arbitrators
and Mediators of UNASUR member States in Article 3,
like UNCITRAL Rules and SCC Rules, provides that an
arbitrator shall disclose during all the proceedings any
“interest, relation or issue that may affect the indepen-
dence or impartiality or that might reasonably create an
impression of dishonest or unfair behavior in the pro-
cess.” It is necessary to consider that the independence
and impartiality, are very closely related terms, and often
used as synonyms, however the concepts are different
and should be distinguished. The independence is an ob-
jective question and impartiality is subjective. Most
would agree that independence is the absence of actual
identifiable relationships with a party to proceedings. As
it is an objective test there is no need to prove the effect
of any relationship on the arbitrator, merely its existence.
In contrast impartiality is concerned with whether an
arbitrator is actually favoring one of the parties. The test
for impartiality examines the likelihood of an arbitrator
actually having a state of mind or prejudgment that fa-
vors one side in the dispute [41]. Thus, the disquisition
realized in Code of Conduct for Arbitrators and Media-
tors of UNASUR mentioning independence and imparti-
ality (in its Article 3 and 5 (1)) is very important when
the parties decide to challenge the arbitrator. Furthermore,
it states that former arbitrators shall not affect the subse-
quent tribunal decisions nor publicly comment on cases
similar to those that they already decided (Article 6).
6. Conclusions
ICSID arbitration has lacked the guarantee of due pro-
cess because of its impartial and not transparent pro-
ceedings, failure to address the broader needs of society
as well as generally inconsistent decisions and awards,
the lack of hierarchy of investment tribunals and no sys-
tem of precedent or appeals.
Thus, some of Latin American Countries are changing
their position on ICSID and are considering reviving
some aspects of the Calvo Doctrine. The most critical
examples of recent hostility are found in the cases of the
ALBA declaration, the denunciation of ICSID Conven-
tion by Bolivia and Ecua dor, Venezuela’s anti-arbitration
measures and the proposal to study the creation of an
Arbitration Centre in the UNASUR. Additional examples
are Argentina’s experience with investment arbitration as
the most sued country in ICSID, the fact that Brazil (the
most successful country in Latin America attracting
flows of FDI) is not a signatory of the IC SID Convention
nor has it ratified any of the BITs executed during the
1990s, that Mexico still seems reluctant to enter the IC-
SID system notwithstanding its being part of NAFTA.
All these situations suggest that the willingness to create
opyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration143
a regional Arbitration Centre within UNASUR will be a
firm and slow process, facing a lot of internal and external
political obstacles.
On the matter of Ecuador’s proposal to constitute the
UNASUR Arbitration Centre, it would need to be recon-
sidered in regard to some critical points, i.e. the limita-
tion of the Arbitration Centre’s jurisdiction and state a
reasonable limit of time for the requirement to exhaust
domestic judicial remedies and consider the NAFTA
Rules in relation to the consolidation claims. However, it
is important to note that this proposal improves the trans-
parency and consistency of decisions by the establishment
of an appeal mechanism with a system of precedent. It
included all the observations made to the ICSID pro-
ceedings by Latin American countries. Furthermore, the
influence of the WTO’s dispute settlement system re-
garding the consultation stage, appellation proceedings
and the award compliance (the WTO’s compliance levels
appear to be fairly high [42]) are all remarkable.
Despite the observations concerning UNASUR Arbi-
tration Centre mentioned above, if Ecuador’s proposal is
adopted by Latin American countries, it could jeopardize
the future of ICSID.
[1] International Center for Settlement of Investment Dis-
putes, “Search ICSID Cases,” 2011.
[2] K. F. Gómez, “Latin America and ICSID: David versus
Goliath?” Research Paper, University of Zaragoza,
Zaragoza, 2010.
[3] M. H. Mourra, Concluding Note, In: M. H. Mourra, Ed.,
Latin American Investment Treaty Arbitration. The Con-
troversies and Conflicts, Kluwer Law International BV,
1st Edition, The Netherlands, 2008, p. 196.
[4] U.S.-China Economic & Security Review Commission,
“Backgrounder: China in Latin America,” Research Re-
port, 2011, pp. 9-10.
[5] S. Rodriguez-Jimenez, “El CIADI Frente a la Argentina,
México, Ecuador y Bolivia. Una actualización,” Research
Paper, Instituto de Investigaciones Jurídicas de la UNAM,
México, p. 244.
[6] S. D. Franck, “Development and Outcomes of Investment
Treaty Arbitration,” Harvard International Law Journal,
Vol. 50, No. 2, 2009, pp. 443-444.
[7] S. P. Kumar, “Rethinking the Linkages between Foreign
Direct I nvestment and De velopment: A Th ird World Per-
spective,” NALSAR Student Law Review (E-Journal), Vol.
31, 2009, p. 38.
[8] A. Sheppard, “Arbitrator Independence in ICSID Arbi-
tration,” In: C. Binder, U. Kriebaum, A. Reinisch and S.
Wittich, Eds., International Investment Law for the 21st
Century, Oxford University Press, New York, 2009, p.
132. doi:10.1093/acprof:oso/9780199571345.003.0010
[9] N. Rubins and B. Lauterburg, “Independence, Impartiality
and Duty of Disclosure in Investment Arbitration,” In: C.
Knahr, C. Koller, W. Rechberger and A. Reinisch, Eds.,
Investment and Commercial Arbitration-Similarities and
Divergences, Eleven International Publishing, The Neth-
erlands, 2010, p. 172.
[10] M. H. Mourra, “The Conflicts and Controversies in Latin
American Treaty-Based Disputes,” In: M. H. Mourra, Ed.,
Latin American Investment Treaty Arbitration, Kluwer
Law International BV, 1st Edition, The Netherlands, 2008.
[11] World Bank Group, “Bolivia leaves the ICSID,”
[12] “CIADI/Telecom Italia: ¡hands off Bolivia!” pp. 16-17.
[13] D. S. Bernal, “International Arbitration in Latin Ame-
rica,” Comparative Commercial Law, 2009, pp. 5-6.
[14] G. Biggs, “The Latin American Treatment of Interna-
tional Arbitration and Foreign Investments and the Chile-
U.S. Free Trade Agreement,” ICSID Review. Foreign In-
vestment Law Journal, Vol. 19, No. 1, 2004, p. 68.
[15] T. J. Pate, “The Past, Present and Future of the Arbitral
Clause in Foreign Investment Legislation: In Pursuit of
The Ba lance,” Research Paper, pp. 73-74.
[16] International Center for Settlement of Investment Gis-
putes, “List of Contracting States and Other Signatories
of the Convention,” 5 May 2011.
[17] Bolivarian Alliance for the Peoples of our American Peo-
ples’ Trade Treaty.
[18] Decision of Bolivarian Alliance for the Peoples of our
American Peoples’ Trade Treaty about International Cen-
ter for Settlement of Investment Disputes, 2 May 2007.
[19] “Ecuador’s Notification under Article 25(4) of the ICSID
Convention,” 23 November 2007.
Copyright © 2011 SciRes. BLR
The Challenge of UNASUR Member Countries to Replace ICSID Arbitration
[20] S. Noury and C. Richard, International Arbitration in
Latin America: Overview and Recent Developments. In-
ternational Arbitration 2008. A practical insight to cross-
border International Arbitration work: Chapter 38,” Glo-
bal Legal Group, 2008.
[21] “Executive Decree 1823/2009,” Article 1.
[22] “Supreme Decree No. 28701,” Articles 1, 2, 5, 6 and 7.
[23] I. Vincentelli, “The Uncertain Future of ICSID in Latin
America,” Independent Research Paper, University of
Miami School of Law, 2008.
[24] Bolivian Movement for the Sovereignty and the Soli-
darity Integration of the Peoples: Against NAFTA and the
FTAA, “Bolivia inicia campaña internacional contra el
CIADI: renegociará 24 tratados de protección a las in-
versiones,” May 2007.
[25] Presidential Decree No. 29589, Articles 1 and 2, June 5,
[26] A. van Aaken, “International Investment Law and Ra-
tionalist Contract Theory,” Dissertation in NYU School
of Law: IILJ International Legal Theory Colloquium
Spring 2009 Virtues, Vices, Human Behavior and Demo-
cracy in International Law, 2009, p. 24.
[27] Supreme Decree N. 29894 – DOE, Articles 13 and 42.
[28] Attorney General's Office. Plurinational State of Bolivia,
“Objetivos Institucionales,” 2011.
[29] C. Coronel-Jones, “The future of international arbitration
in Ecuador: the boomerang effect,” 22 July 2010.
[30] G. Van Harten, “Five Justifications for Investment Trea-
ties: A Critical Discussion,” Trade, Law & Development
Vol. 2, No. 1, 2010, p. 4.
[31] Constitutional Court, Case No. 0004-10-TI, Decision No.
027-10-DTI-CC, 29 July 2010, p. 26.
32] F. C. Diaz, “Ecuador prepares for life after ICSID, while
debate continues over effect of its exit from the Centre,”
28 August 2009.
[33] Venezuela’s Government, Ministry of Popular Power for
Energy and Petroleum, “Plena Soberanía Petrolera. Una
política popular, nacional y revolucionaria,” Speeches
Series 2, 20 Octubre 2005.
[34] Venezuela’s Government, Ministry of Popular Power for
Energy and Petroleum, “Plan Siembra Petrolera
2005-2030,” pp. 4-6.
[35] R. R. Quijada, “The "Survival Clause" in the Netherland
Venezuelan BIT: A Salvation Gateway for Foreign In-
vestment in the oil Sector or a Curse for the Venezuelan
Government?” Research Paper of University of Dundee,
p. 5, CAR-12_29_26223666_0-2.pdf.
[36] Supreme Court, Case No. 08-0763, Decision 1541, 17
Oc- tober, 2008, para. 124.
[37] “Union of South American Nations Treaty,” Articles 1
and 3.
[38] The Universe, “Cancilleres Sudamericanos Pusieron
en Vigencia Tratado de la UNASUR,” 11 March 2011.
[39] C. Leathley, “What will the recent entry into force of the
UNASUR Treaty mean for investment arbitration in
South America?” Network for Justice in Global Invest-
ment, April 2011.
[40] Ministry of Justice Human Rights and Religious Affairs
of Ecuador. “Declaración Final de Cumbre de
Poderes Judiciales de UNASUR,” 25 June 2010.
[41] C. Kee, “Judicial Approaches to Arbitrator Independence
and Impartiality in International Commercial Arbitration,”
In: C. Knahr, C. Koller, W. Rechberger and A. Reinisch,
EdS., Investment and Commercial Arbitration-Similarities
and Divergences, Eleven International Publishing, The
Netherlands, 2010, pp. 183-184.
[42] A.T. Guzman, “International Tribunals: A rational choice
analysis,” University of Pennsylvania Law Review, Vol.
157, No. 171, 2008, p. 197.
opyright © 2011 SciRes. BLR