« The new Japan-Australia Economic Partnership Agreement (FTA) | Blog home | 12th ANJeL Japanese Law conference: Cairns, 16 May 2014 (2) »

business learning training articles new learning business training opportunities finance learning training deposit money learning making training art loan learning training deposits make learning your training home good income learning outcome training issue medicine learning training drugs market learning money training trends self learning roof training repairing market learning training online secure skin learning training tools wedding learning training jewellery newspaper learning for training magazine geo learning training places business learning training design Car learning and training Jips production learning training business ladies learning cosmetics training sector sport learning and training fat burn vat learning insurance training price fitness learning training program furniture learning at training home which learning insurance training firms new learning devoloping training technology healthy learning training nutrition dress learning training up company learning training income insurance learning and training life dream learning training home create learning new training business individual learning loan training form cooking learning training ingredients which learning firms training is good choosing learning most training efficient business comment learning on training goods technology learning training business secret learning of training business company learning training redirects credits learning in training business guide learning for training business cheap learning insurance training tips selling learning training abroad protein learning training diets improve learning your training home security learning training importance

Indonesia recently announced that it would review its 67 bilateral investment treaties (BITs). Shortly beforehand, it had unsuccessfully challenged the jurisdiction of an ICSID arbitral tribunal in a claim for expropriation and other violations brought by the Australian subsidiary of a UK coal mining company (Planet Mining v Indonesia).

The tribunal’s decision found that consent to jurisdiction existed under the coal mining licences given by Indonesian authorities, but not under the wording of the 1992 Australia-Indonesia BIT. It found that the countries had only given a “promise to consent” rather than full advance consent to ICSID jurisdiction, meaning that Indonesia could still refuse consent subject to potential review through an inter-state arbitration procedure separately provided under the treaty. Further, as both countries remained party to the framework 1965 ICSID Convention facilitating enforcement of arbitral awards, another BIT provision for ad hoc investor-state arbitration (ISA) was also unavailable to investors.

My paper below critically assesses the arguments developed by the tribunal to reach this surprising interpretation of the Australia-Indonesia BIT. It also considers the wide-ranging implications of the tribunal’s reasoning given similar wording contained in many other treaties concluded by Australia, and (to a lesser extent) some other countries in the region such as Japan.

Fortunately for investors, some of those treaties (including the Australia-Indonesia BIT) are now complemented by ISA rights contained in bilateral or regional free trade agreements (FTAs), or may soon be. However, in light of the tribunal’s decision, Australia should clarify the scope of its other BITs, especially with countries in Eastern Europe and the Middle East.

Other nations, legal advisors and arbitrators will also need to examine treaty wording and practice more broadly, which risks adding to growing costs and delays in ISA proceedings.

Nottage, Luke R., Do Many of Australia’s Bilateral Treaties Really Not Provide Full Advance Consent to Investor-State Arbitration? Analysis of Planet Mining v Indonesia and Regional Implications (April 14, 2014). Sydney Law School Research Paper No. 14/39. Available at SSRN: http://ssrn.com/abstract=2424987

About the Blog

Japanese Law in Asia-Pacific Socio-Economic Context