We are in the beginning process of selecting arbitrators for our NAFTA proceedings. Under NAFTA articles the parties can choose their own arbitrators. Under Article 3 of the UNCITRAL Arbitration Rules, arbitration proceedings are initiated when the claimant gives the respondent a notice of arbitration. Which has already been submitted to the Government of Canada. This notice can include a proposal for the appointment of an arbitrator, a “notification of the appointment of an arbitrator,” and a statement of claim. An arbitrator can be appointed at any time from the delivery of the notification of arbitration, which was also done by us last week. A proposal for selection of arbitrators was submitted by the Government of Canada we agreed with all of the deal points instead of one. However it is a major one it’s the issue of the newly appointed Secretary General of the International Centre for Settlement of Investment Disputes (ICSID) Meg Kinnear.
Appointment by the Secretary-General
Article 1124 of the NAFTA establishes a system by which the Secretary-General of the ICSID may appoint one or more of the arbitrators for a dispute, on application by one or more of the parties to the dispute. This system exists to prevent an intransigent party from holding the process hostage to its refusal to appoint an arbitrator. Such provisions exist in the ICSID Rules and UNCITRAL Arbitration Rules as well.
Here is something else I need to be on the look out for accordingly, in any NAFTA Chapter 11 arbitration that does not come under the tent of the ICSID Convention, there remains, as in any other international arbitration, the risk that a domestic court, exercising its power to register a NAFTA award, might purport to vacate or refuse to enforce the award. The key procedural advantages that ICSID Convention arbitration has namely, nonappealability pursuant to Article 54, under which any ICSID Convention award is tantamount to a final, nonappealable money judgment in each ICSID Contracting State. From an investor’s perspective, it prevents (or at least should prevent) the host state from nullifying an adverse award through action in its own courts. NAFTA also explicitly grants parties the freedom to select their arbitral locale. Absent such a choice, pursuant to both the ICSID Additional Facility Rules and the UNCITRAL Rules,18 the choice is left to the arbitrators, the only restriction being that the arbitration must take place “in the territory of a Party.” Also NAFTA’s does not expressly require that arbitration take place in a “neutral” forum unconnected with either of the parties. So jurisdiction becomes important as well. So these issues need to be addressed as we move forward to arbitration. Check back later for an update.