International arbitration is a private method of dispute resolution whereby parties agree to have their disputes heard by an independent and impartial arbitral tribunal, which will render a binding “award.” When one of the parties involved is a government or State-entity, the parties’ agreement to resort to international arbitration is usually found either within an investor-State contract or in a Bilateral or Multilateral Investment Treaty (a “BIT” or “MIT”). These treaties are international agreements between two or more States which grant rights to the citizens of the other State(s), including the provision of a directly enforceable dispute resolution mechanism. International arbitration involving governmental parties is typically used by commercial parties who have invested in a foreign State, and are claiming against that State for alleged unfair treatment toward them or their investment.
Law firms with major governmental or “sovereign” international arbitration practices are generally able to advise clients on all aspects of international arbitration involving State parties. This will often entail arbitration under the auspices of the International Centre for Settlement of Investment Disputes (ICSID), the most commonly used arbitral institution for the resolution of investor-State disputes. However, governmental arbitration could take place under another arbitral institution such as the International Chamber of Commerce (ICC) or the Stockholm Chamber of Commerce (SCC), or through ad hoc arbitration where no arbitral institution and/or procedural rules are adopted.
Clients can expect international arbitration lawyers specializing in governmental arbitration to advise them on every step of the dispute resolution process, including the drafting of arbitration clauses, pre-action issues, alternative dispute resolution methods (e.g., mediation), commencement and conduct of proceedings (e.g., document production, pleadings, witness statements, hearings), and the enforcement of arbitral awards. When searching for suitable arbitration lawyers in this field, prospective clients should look for strong experience and expertise in governmental arbitration, as well as in the relevant region or industry sector.
Paul Friedland, Head of International Arbitration Practice Group