International Investment Law Notes - V (An Introduction to Dispute Resolution Mechanisms in International Investment Law)

Arbitration – In India, arbitration is governed by the Arbitration & Conciliation Act, 1996. Either the parties or the State can appoint the arbitrator. The decision of the arbitrator is binding. It has all the powers of the civil court.

The parties to a dispute refer the dispute to arbitration by one or more persons by inserting an Arbitration Clause in any Investment treaty or agreement, and agree to be bound by the arbitration decision.

Mediation – Under mediation, there is a forum where there is a mediator who hears both the parties and takes into account the concern of both the parties. The decision is taken with the consent of both the parties.

Conciliation – Under conciliation, there is a conciliator who makes sure that the agreement between the parties does not rupture or fall out completely. The existing agreement is made to function. The conciliator tries to make sure that the agreement does not breakdown. His job is to facilitate the communication between both the parties.

Negotiation – Negotiation is a primary stage of dispute resolution before an agreement comes into picture. It is a process where the parties place there sides in front of each other and negotiate so as to enter into an agreement or a deal.

All these means of settlement of disputes came up after the colonial era came to an end. These means of dispute settlement still exist though in very different forms. Some of the important International Dispute Settlement bodies and laws are:

1. ICSID (1966) – The main concern of this body is peaceful settlement of investment related disputes. This body wanted to go for extra-judicial settlements.

2. UNCITRAL – 1966

3. UNCITRAL Model Law on International Commercial Arbitration – 1985

Role of NGOs/Public Groups – NGOs places the concern of the people at large at the law-making forum. They took the law to Social Engineering (Roscoe Pound). NGOs also help the government to understand the special needs of the people.

BIPPA/BIA - Bilateral Investment Promotion and Protection Agreement/ Bilateral Investment Agreement

BIA – In such agreements, the DSU of WTO is the dispute settlement body. In some cases, arbitration is also referred to. Only state is a party to such agreements.

BIPPA – In such agreements, arbitration is the primary form of dispute resolution. The state is usually not a part of such agreements.

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