CETA’s Investment Chapter by Kriton Dionysiou

Author:Kriton Dionysiou
Language: eng
Format: epub
ISBN: 9783030669928
Publisher: Springer International Publishing

4.4 Multiple Proceedings and Conflicting Awards

4.4.1 Conflicting Awards

Another source of legal uncertainty is the phenomenon of multiple proceedings and conflicting awards. This phenomenon clearly undermines the predictability requirement of the Rule of Law, as individual disputes are open to all kinds of competing, and often conflicting, interpretations by different tribunals. This section looks at the phenomenon of conflicting awards. As illustrated in the second chapter, the Lauder/CME and SGS cases constitute blatant examples how tribunals can reach different decision even though the facts of the cases and the identities of the disputing parties remain essentially the same. Inconsistent awards are particularly challenging in a system that has very limited ways to rectify errors given the narrowness of review by the current annulment procedures.

CETA purports to override the implicit prohibition on appeals in investment arbitration by allowing a substantial review of error of law and fact. This mechanism was largely inspired by the WTO Appellate mechanism, which has been applauded for bringing more legal certainty.120 In such circumstances, an appellate mechanism would normally provide a way through which it would be possible to correct legal errors and, subsequently, provide legal certainty.121 In addition to rectifying errors, an appeal mechanism would sustain finality.

The appellate mechanism in CETA is empowered to modify or reverse first instance arbitral awards, as opposed to simply annulling an award in whole or in part.122 Further, the scope of remedial power is much expanded, allowing the appeal tribunal to intervene on issues of merit. In particular, an appeal tribunal constituted under CETA will have the power to modify or reverse an award based on (a) errors in the application or interpretation of applicable law (b) manifest errors in the appreciation of the facts, including the appreciation of relevant domestic law (c) the grounds set out in Article 52 (1) (a) through (e) of the ICSID Convention, in so far as they are not covered by paragraphs (a) and (b).123

Furthermore, CETA’s appellate mechanism allows for errors to be corrected without the disputing parties to have to resubmit the dispute to another tribunal following a successful appeal. On the contrary, the appellate mechanism in CETA shall apply its own findings to the facts of the dispute and render a final decision. The appellate mechanism would make sure more control is being exercised over a decision of the tribunal and would improve its decision-making.124 Awards that are inconsistent would be removed, hence, creating a coherent body of law.125

At this stage, it is not possible to know for sure to what extent the appellate mechanism in CETA will deal with the phenomenon of conflicting. Yet, the very existence of a standing tribunal and an appellate mechanism in CETA will provide ‘personal and institutional continuity’,126 which is generally considered to be beneficial for more consistency. As CETA states, a group of the same adjudicators will decide disputes and will remain in the roster for a fixed period of time.127 Both the institutional continuity and the appellate mechanism also have the potential to better guarantee legal certainty through a quasi stare decisis.

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