Originally from:
The Practice of International Litigation - 2nd Edition - Looseleaf
The Practice of International Litigation - 2nd Edition - Electronic
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Twenty-Five Years of International Litigation
Lawrence W. Newman and Michael Burrows
After twenty-five years of writing about and practicing in the fields
of international litigation and arbitration, there are changes in these areas
that are worth commenting on. We focus here primarily on changes in
international arbitration.
In 1982, a good deal of our activities concerned claims of
American companies before the Iran-U.S. Claims Tribunal in The Hague,
which was hearing claims against Iran that arose out of the Iranian
revolution. These cases taught us, and many other American lawyers, a
good deal about international arbitration as practiced in Europe.
The Hague Tribunal consisted of nine arbitrators (or “judges,” as
many of them chose to be called later on) sitting in three chambers. In
keeping with international arbitration practice, the Tribunal was divided
equally into American-appointed arbitrators, those appointed by Iran and
three arbitrators agreed on by Iran and the United States. Two of the
original three neutral, or, more euphemistically, “European,” arbitrators in
the initial group were Scandinavian and the other French.
The cultural shock for us was that cases were expected to be
presented in a markedly different way from the way they would have been
presented in, say, a United States district court. Documentary evidence was
to be presented in written “memorials,” as was testimony of knowledgeable
witnesses. But “witnesses” were different from the way we thought of
them: a witness in the Tribunal’s view was an independent person, but not
a part of the claimant’s company hierarchy. Such high-ranking persons were
neither finally adjured by the Tribunal to tell the truth nor questioned while
seated in a special witness chair. Instead, they were obliged, in hearings, to
give their testimony in response to questions sitting next to their lawyers, in
an awkward side-by-side interrogation that had more in common with a
tête-a-tête. Moreover, the Tribunal imposed strict time limits on the
hearings, including an equal division between the claimants and respondents
– notwithstanding the fact that the claimants had the burden of proving
their cases. Instead of the two or three weeks or more that these cases –
for breaches of contract and expropriation – would have consumed in a
trial court in the United States, the Tribunal cases were to be heard, we
learned, in one, to at most four, days.
The Significance of the Iran Tribunal
The awards of the Iran-U.S. Claims Tribunal were published, and,
initially at least, given wide publicity. The fact that the proceedings were
conducted under the arbitration rules of the United Nations Commission
on International Trade Law (UNCITRAL), a set of rules designed for use in
non-institutional arbitral proceedings, but nonetheless used in the Hague
Tribunal gave recognition to those rules as legitimate alternatives to rules of
institutions such as the International Chamber of Commerce and the
American Arbitration Association.
Moreover, the notion that international claims, including claims
against states based on legal theories tantamount to expropriation, could be
resolved in arbitration was seen to be workable. Probably not coincidentally,
investment treaties, both bilateral investment treaties and the National
American Free Trade Agreement (NAFTA) were informed by the
experience of the Iran-U.S. Claims Tribunal. Today, although certain
countries, such as Venezuela and Ecuador, are withdrawing from the
agreements under which foreign investors are accorded protection for the
loss of their investments as a result of improper state action, there remain
literally thousands of bilateral investment treaties that provide protection to
investors, based not only on remedies for breaches of contract but also on
what are tantamount to tort remedies from foreign states that are often not
even parties to the contractual relationships out of which the losses arise.
