The Rise and Resurgence of Russia Makes NATO More Relevant Than Ever

NATO
NATO

The year 1945 ushered in the dawn of the atomic age, war ravaged Western Europe was in ruin, and the Soviet Union had begun to spread its tentacles across the continent—fast forward 60 years later and Europe is again at a crossroads as the Russian Bear begins to growl once more. The charter to the North Atlantic Treaty Organization (NATO) was signed on April 4, 1949 by 12 initial member states—Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States as a response to buffer Soviet influence, protect the free trade of the Atlantic seaways, and to provide for a common unified military defense network of western democracies. Today NATO has 28 member states spanning North America and most of Western Europe.

Article 5 of the Treaty provided that the member states agreed “an armed attack against one or more of them… shall be considered an attack against them all,” and that following each attack, the allies would take “such action as it deems necessary, including the use of armed force.” The Cold War ended without a shot being fired. NATO stood guard at the gates, keeping the peace. Under that framework NATO allies have participated and provided armed air and land support in numerous conflicts during the 20th and 21st centuries including Bosnia, Kosovo, Afghanistan, Iraq, and Libya. The 9/11 Terrorist Attacks changed the game. NATO pivoted to begin to focus on preventing international terrorism. However with last year’s conflict in Crimea continuing to rage well into 2015 and pro-Russian separatists still controlling large tracks of territory in eastern Ukraine, it begs the question: has NATO’s core mission and influence effectively been rendered ineffective, or better yet—paralyzed, by an ever more aggressive Russia, the likes of which continent has not seen since the the Cold War.

The public and actual perception of NATO appears to be at a crossroads. Optically appearing as a snub, it was reported, and denied by the White House that President Obama declined to meet with new NATO Secretary General Jens Stoltenberg when he was in Washington this past week. To make matters worse, on March 25th 2015 NATO jets were scrambled to intercept four Russian military aircraft in international airspace near Baltic member states. In a series of stern warnings former U.S. National Security Advisor Zbigniew Brzezinski cautioned that the new Moscow-friendly Greek government which recently attained power in Athens could paralyze NATO’s ability to react to Russian aggression in the region by utilizing its veto power to slow a possible NATO response to potential Russian aggression in the Baltic region. Consequently Brzezinski said Poland too “could be a target” along with former Soviet states such as Moldova, Georgia and oil-rich Azerbaijan.

However the dynamic of stasis in which NATO has operated in recent years, especially concerning conflicts close to its member state’s borders (2008’s Georgia & South Ossetia conflict), has created a precedent of seeming inaction with an apparent unwillingness by NATO allies to actually involve themselves when it comes to continental matters concerning Russian involvement. The Washington Post’s David Ignatius writes  “As a conventional military alliance, it [NATO] is ill-prepared for the “hybrid warfare” Russia has waged in Ukraine, which has been closer to a paramilitary covert action to support proxy forces than to a traditional military attack.” NATO’s customary model of member states providing to the organization traditional military units may be antiquated and outmoded.

The Obama Administration’s “ ‘unified morass,’ sharing the reluctance of European leaders to escalate the crisis by providing defensive weapons to Ukraine or tightening sanctions against Russia” illustrates why NATO action could in fact be an effective tool to quell the crisis in Ukraine and buffer potential Russian aggression if only there was unity and commitment among the leadership of member states to realize the treaty’s relevancy and re-commitment to being the vanguard of western Europe.

Anthony Christina is a 2L and a Resident Student Blogger with the Journal of Law and International Affairs at the Penn State University-Dickinson School of Law.


 

Citations to articles & documents are included in the aforementioned underlined hyperlinks.

The Ethics Conundrum in International Commercial Arbitration

By: Spencer McDuff

“International arbitration dwells in an ethical no-man’s land; where ethical regulation should be, there is only an abyss.”[1]

Ironically enough, the present ethical “abyss” in which international commercial arbitration lingers in, is in fact a product of what makes the process of arbitration so appealing to international commercial parties in the first place. The inherent flexibility associated with International Commercial Arbitration was designed to provide parties with an alternative means of dispute resolution that would avoid the uncertainties of local practices associated with litigation in national courts. The appeal of engaging in international arbitration to avoid national court uncertainties is sustained in great part by the fact that traditionally, arbitration provides a relatively efficient (in terms of time and money) means of obtaining a binding decision from a theoretically unbiased expert in the relevant field.

Additionally, a number of other aspects that help make international arbitration an attractive means of dispute resolution include: the confidentiality of the arbitral process, party freedom in arbitrator selection and design of the arbitration itself, and the relative general enforceability of arbitral awards and arbitral agreements in foreign jurisdictions.[2]

While these and other benefits of international arbitration add to its popularity as a dispute settlement mechanism, there is now the realization that these benefits cannot be achieved without some cost. A cost that has until fairly recently, gone unnoticed. For it is within this substitution of the rigid resolution process in national courts for the more flexible international arbitration option, that the problem and cost of international arbitration is materializing. With the aim of avoiding uncertainty in a national court proceeding, parties that alternatively elect international arbitration as a means of dispute resolution turn around only to find themselves in a battle that is now, for the most part, without ethics regulation.

Today, one great cost of international arbitration exists in the form of mounting ethical concerns pertaining to the conduct of those involved in international arbitration (most notably the arbitrators) and the affect those ethical concerns are having on the legitimacy and fairness of the international arbitral process. Ethical concerns are now of great importance in international arbitration because of the rapidly increasing number of international arbitrators and arbitral proceedings taking place among international commercial parties.[3]

In an attempt to take advantage of the other apparent benefits of international arbitration mentioned, one is faced with another trade-off. While seeking to gain the freedom associated with party determination of the arbitral process, arbitrator selection and confidentiality, one must consider the ethical situation posed in the international arena relevant to these advantages. For example, while parties are free to choose their arbitrators, there is often times no “supranational authority to oversee attorney [and arbitrator] conduct” in the international setting.[4] Also, “local bar associations rarely, if ever, extend their” domestic ethical codes to the international scene.[5] To compound the problem, “arbitral tribunals have no legitimate power to sanction attorneys,” or often times, party appointed arbitrators.[6]

One effect of an absent supranational ethics authority or standard, means that those involved in international arbitration might “rely primarily on their own personal, nationally derived assumptions about what constitutes proper conduct” in an arbitration proceeding.[7] These assumptions derived at a national level “often clash with the rules that apply to participants from other jurisdictions or with prevailing practices in international arbitration proceedings.”[8] With this interplay between and against different domestic ethics standards and the lack of a supranational authority, arbitral participants are “potentially subject to different rules that affect the conduct of arbitral proceedings, [which can result in] an unfair playing field at multiple levels” within the arbitral process.[9]

It is “against this backdrop, [that] a number of leading arbitrators and practitioners have described the current situation as a potential crisis that can threaten the legitimacy of international arbitration and [which] is in need of immediate redress.”[10]

“International arbitration does not have the majestic buildings, the black robes, bailiffs and marshals that promote a sense of legitimacy and ensure compliance with national court decisions.”[11] There is no written supranational code or standard of ethics for international arbitrators to follow or be subject to like there are in many national bar associations. Instead, international arbitration has, in the past, been left to the ethical convictions of its participants by way of self-regulation.

However, self-regulation as a means to curtail ethical dilemmas in International Arbitration is becoming increasingly less effective because of “the international communities’ inability to think beyond its present situation, to future generations and future developments in an ever-more globalized legal world.”[12]

Unfortunately, for as long as there is this lack of common understanding among international arbitrators from different cultures as to what it means to be ethical and a decrease in the ability of the international arbitration community to self-regulate, international arbitration is destined to remain in the “abyss” of the “ethical no-man’s land.”[13]

Spencer McDuff is a 3L at the Pennsylvania State University-The Dickinson School of Law, an LLM student at the Radboud School of Law, and a Resident Student Blogger for the Journal of Law and International Affairs.


 

[1] Catherine A. Rogers, Fit and Function in Legal Ethics: Developing a Code of Conduct for International Arbitration, 23 Mich. J. Int’l L. 341 (2001-2002). Available at: http://www.transnational-dispute-management.com/article.asp?key=1651

[2] Id.

[3] Cárdenas, Emilio; Rivkin, David W., A Growing Challenge for Ethics in International Arbitration, Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner, 191 (2005).

[4] Id. Rogers at notes 261-264.

[5] Ivo G. Caytas, Transnational Legal Practice: Conflicts in Professional Responsibility. New York: Commonwelth Press (1992).

[6] Catherine A. Rogers, Context and Institutional Structure in Attorney Regulation: Constructing and Enforcement Regime for International Arbitration, 39 Stan. J. Int’l L. (2003).

[7] Catherine A. Rogers, Ethics in International Arbitration, 3 (2012).

[8] Id.

[9] Id.

[10] Charles N. Brower & Stephan W. Schill, Regulating Council Conduct Before International Arbitral Tribunals in Making Transnational Law Work in a Global Economy: Essays in Honor of Detleve Vagts, (2010); Id at 4.

[11] Michael Richard Dimino, Sr., Counter-Majoritarian Power and Judges’ Political Speech, 58 Fla. L. Rev. 53, 63 (2006).

[12] Id.

[13] Rogers, supra note 1 at 342.

Is UKIP Here to Stay?

By: Hilary Flack

The United Kingdom Independence Party, more commonly known as UKIP, is a minority party in the United Kingdom. Despite being known as a radical right-wing party, UKIP has experienced increased support in recent years. The party is currently led by Nigel Farage, a former Tory who left the Conservative Party in the early 1990s due, in large part, to his dislike of the restrictions EU membership placed on the UK.[1] UKIP’s political positions haven’t changed much since its formation in 1993. The party remains staunchly anti-Europe and right-wing.

UKIP is easily one of the farthest right political parties in the UK. It is therefore surprising that UKIPs membership and share of the vote has risen in recent years. Since 2002, UKIP membership has grown from 2,000 people to almost 50,000. In the 1997 general election, UKIP received only 105,722 votes, representing 0.3% of the overall vote. In the 2010 general election, UKIP received 919,546 votes, representing 3.1% of the overall vote. Though UKIP did not take any seats in the 2010 election, they received the 4th largest share of the vote, only behind the well-established Conservative, Labour and Liberal Democrat Parties.[2]

As the 2015 election approaches, analysts are predicting that UKIP’s support will continue to grow. Professor Bogdanor of Kings College London, who specializes in British politics and constitutional issues, informed the BBC in a recent interview that he does not expect UKIP to fade away any time soon. Professor Bogdanor believes the growing popularity of UKIP “reflects changes in British Society” as the party is “more working class” than the other major parties.[3] As Europe’s economy continues to decline, it is not hard to see why more British citizens are attracted to a party that advocates severing economic ties to the EU.

The 2015 general election is scheduled to be held on May 7th. Though many commentators are predicting that no real change will occur in terms of party control, polling data suggests that UKIP will gain an even larger share of the vote than in the 2010 election.[4] Recently, voters dissatisfied with their parties have shifted increasingly towards smaller parties, instead of between the larger parties in the UK. While it may be unsurprising that some defecting from the Conservative party have joined UKIP, it is also true that UKIP has gained support from former Labour, and even Green party members.[5] The 18-24 year old voting block, termed ‘Generation Y’, has experienced a significant shift towards UKIP. Traditionally, this voting block is firmly held by the Labour party. However, Labour is slowly losing its majority to minority parties. It is highly significant that some Generation Y voters are leaving Labour not to join another liberal party, but instead to join UKIP. This indicates that UKIP’s conservative and nationalistic positions are appealing not only to their traditional base of older middle class voters, but across the board.

It is clear that UKIP will not be forming a government in the UK any time soon. However, UKIP’s growing popularity may serve to disrupt the hold the three largest parties have on the voters in the UK. UKIP’s numbers and popularity are still increasing, reflecting both the UK electorate’s dissatisfaction with the EU and the slow decline of the two party system in the UK.  Though the question of its overall success in coming elections remains to be seen, it does seem that UKIP is here to stay.

Hilary Flack is a 3L at The Pennsylvania State University–The Dickinson School of Law, and a Senior Editor on the Journal of Law and International Affairs.


 

[1]  http://www.bbc.com/news/uk-politics-20543513

 

[2]  http://www.theguardian.com/news/datablog/2015/mar/04/election-2015-support-for-ukip-among-gen-y-voters-doubles-in-a-year

 

[3] http://www.bbc.com/news/uk-politics-31066643

 

[4] http://www.theguardian.com/politics/2015/jan/01/ukip-snp-greens-labour-conservatives-2015-general-election

 

[5] http://www.theguardian.com/news/datablog/2015/mar/04/election-2015-support-for-ukip-among-gen-y-voters-doubles-in-a-year

What the BG Group v. Argentina Decision Means for Developing Countries

Today, Bilateral Investment Treaties (BITs) have grown to become an indispensable part of the international investment regime.[1] As of 2013, there were 2816 BITs in existence in the world,[2] compared to 1010 BITs in July of 1996.[3] Typically, BITs are between investors in developed countries, or sometimes the developed countries themselves, and developing countries that act as host countries when accepting these investments.[4] The rapid success of BITs has not come without controversy. The recent controversy surrounding BITs embodies the issue of whether the investment protection provisions of the BITs put the sovereignty of host countries at risk. This issue gained momentum after the United States Supreme Court’s 2014 decision in BG Group PLC v. Republic of Argentina.[5]

The Rise of BITs

The era of the Hull rule, an international law principle that called for prompt, adequate, and effective reimburse of expropriated property,[6] officially ended when the first BIT was signed between West Germany and Pakistan in 1959.[7] Considering that the Hull rule was not popular amongst developing countries, and developing countries had successfully protested against it,[8] the goal of the BITs was to protect the foreign direct investments that developed countries made in developing countries. It can be speculated that these developed countries realized that as developing countries continued to protest old foreign investment standards such as the Hull rule and subsequent principles derived from the rule,[9] they would be left without protection from expropriating developing countries.

BG Group v. Argentina

Consequently, almost fifty years after the first BIT was signed,[10] the U.S. Supreme Court’s decision in BG Group seems to have more than fulfilled developed countries’ goals of protecting their foreign investments when they first created BITs. That is because BITs operate as contracts, and arbitral tribunals like the International Centre for the Settlement of Disputes (ICSID), are tasked with interpreting BITs and imposing sanctions on breaching parties.[11] Also, as we have seen in BG Group, it is clear that BITs favor developed countries more than the Hull rule ever did because unlike the Hull rule, a BIT operates as a contract, and a BIT can abolish any protection that host countries could reserve for themselves when they sign a BIT. Especially since although the ICSID and other arbitral tribunals allow host countries to set protective provisions such as having disputes that arise under BITs settled by local litigation before going to arbitration, in the BG Group decision, the Supreme Court ignored the importance of such protectionist provisions.[12]

In BG Group, Argentina had attempted to protect itself by including an eighteen-month local litigation clause in its treaty with the United Kingdom (UK) that had to be exhausted before its dispute with the UK investors went to arbitration. However, the arbitrators determined that the eighteen-month provision was a stalling technique, and that it was unacceptable.[13] By the Supreme Court of the United States upholding the arbitrators’ decisions on the local litigation clause, the Supreme Court is saying that arbitrators can review BITs to determine what provisions of the BITs are acceptable.[14] The fact that arbitrators have been given this power should be a red flag to host countries. This is especially true because nowadays, BITs are like contracts in that if parties breach the agreements set in their BITs, they expose themselves to proceedings before arbitrators who have the ability to sanction them. However, in a case like BG Group where arbitrators allow a party to go against the very text of a BIT that the party signed because the arbitrators find the text to be unacceptable, the purpose of the BIT gets undermined. That is because a Bilateral Investment Treaty is a treaty in which two contracting parties set their[15] terms of an agreement. Also, because BITs always involve states, the U.S. Supreme Court’s decision in BG Group implies that arbitrators could deny a state from the lawful protectionist provisions it sets for itself in a treaty.

Accordingly, as we have seen in the BG Group case, developing countries need to acknowledge that arbitrators reign supreme in the interpretation of BITs when they decide to sign these BITs. Also, BG Group has shown us that sovereign states act as commercial entities when they sign BITs, and that in acting as commercial entities, sovereign states give up some of their state sovereignty. For example, in 1989, while attempting to attract foreign investors, Argentina signed fifty BITs that required them to denationalize their natural resources.[16] However, when their economic situation began to suffer because of the promises they had made in signing these BITs, and they could no longer afford to keep their promises because they claimed to be under a state of national emergency, the arbitral tribunal refused to hear their claims of national emergency, and determined that Argentina was still bound by the promises they made to their foreign investors.[17] An arbitrator being able to make such a determination is not only problematic because it ignores the well-established concept of international law that, states are not bound to follow certain agreements when they are under national emergency, but also because under many arbitral tribunals including the ICSID, seeking an annulment is the only way for parties to escape an arbitral award.[18] This is significant because an annulment cannot be granted simply because of an arbitrator’s mistake in law. Accordingly, the arbitrators failing to consider the international law on national emergency when deciding on Argentina’s national emergency claim has no bearing on an annulment, therefore, the arbitrator’s award still stands.[19]

Advice to Developing Countries

In light of these recent developments, developing countries need to be extremely careful when they sign BITs because there is no guarantee that they will get exactly what they agreed to in the treaty itself. Accordingly, developing countries that are signatories to BITs must start to ask themselves whether these BITs are worth the possible infringement on their state sovereignty. This is especially important because once host countries decide to sign BITs, they are automatically bound to arbitration because the very nature of a BIT is to have arbitration as the final dispute resolution mechanism. This is true because, while the ICSID and other arbitral tribunals allow host countries to include provisions in their BITs that any dispute arising under the BITs must be sent to their local courts prior to arbitration, BG Group has shown us that even with such provisions, arbitrators still rule supreme. While the BG Group case involved finances, in light of the current concerns of developing countries’ abilities to control their own natural resources, the worst may be yet to come in a situation where an arbitrator can make a decision on a developing country’s rights to its own natural resources.

Accordingly, it is best that developing countries begin to take steps to assure that they retain the exclusive control of their natural resources. These steps should be similar to what we saw in 2008 when the first South American Power Council meeting was held in Venezuela.[20] This Council consisted of Latin American countries that decided to come together to create their own convention for resolving conflicts that arose under their BITs in order to preserve their state sovereignty. Developing countries coming together to create such regional dispute resolution mechanisms is important because, similar to how they were able to abolish the Hull rule by coming together and protesting against it, developing countries should join forces in making the BITs more suitable for their state sovereignties.

In conclusion, instead of competing against one another and signing BITs for instant gratification, to effect the changes that they want to see in regards to BITs, developing countries must come together to make BITs more favorable to their interests. In coming together, they assure that their fates will not rest in the hands of arbitrators who do not have their best interests at heart.

Joyce Fondong is a 2L at the Pennsylvania State University-Dickinson School of Law and a Resident Student Blogger for the Journal of Law and International Affairs.


 

[1]  Gary B. Born, International Arbitration: Law and Practice, 415 (2012).

[2]  International Investment Agreement Navigator, United Nations UNCTAD (2013), investmentpolicyhub.unctad.org/ IIA (stating that 2114 BITs were in force as of 2013).

[3]  Andrew T. Guzman, Why LCDs Sign Treaties That Hurt Them: Explaining the Popularity of Bilateral Investment Treaties, 38 Va. J. Int’l L. 639, 640 (1998).

[4]  Andreas F. Lowenfeld, International Economic Law, 554 (2008).

[5]  BG Group PLC v. Republic of Arg., 134 S. Ct. 1198, 1213 (2014).

[6] Guzman, supra, at 645.

[7] Salacuse, supra note 40, at 655; see generally Kenneth J. Vandevelde, The BIT Program: A Fifteen-Year Appraisal, in the Development and Expansion of Bilateral Investment Treaties, 86 Am. Soc’y Int’l L. Proc. 532, 533 (1992); also see Guzman, supra, at 653.

[8] Guzman, supra, 649 (stating that in their desires to express their views against the Hull rule, and the “appropriate compensation” standard, developing countries participated in United Nations General Assemblies where they voiced their discontent.)

[9]  Charter of Economic Rights and Duties of States, United Nations General Assembly (December 1974), http://www.un-documents.net/a29r3281.htm. (calling for the promotion of economic development of developing nations, and development of ways to expand international trade).

[10]  Lowenfeld, supra, at 554.

[11] Id. at 537-538.

[12]  BG Group PLC v. Republic of Arg., 134 U.S. 1198, 1203-1222 (2014).

[13]  BG Group, supra, at 1205

[14] Id.

[15] Emphasis added.

[16]  Mary H. Mourra, Latin American Investment Treaty Arbitration, 10-53 (2008).

[17]  Mourra, supra, at 53.

[18]  ICSID Convention, Regulations and Rules, International Centre for Settlement of Investment Disputes, article 52 (April 2006), https://icsid.worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-final.pdf.

[19]  Born, supra, at 424.

[20]  Mourra, supra, at 98.

 

La Apertura – U.S. Initiates Diplomatic Relations with Cuba After 53 Years

(AP Photo, File) In this Jan. 3, 1961 file photo, Cubans crowd outside the U.S. embassy in hopes of getting visas after President Fidel Castro ordered the U.S. embassy to reduce its staff to 12 officials within 48 hours, in Havana, Cuba. The U.S. broke relations with Cuba on this day, and closed its embassy.
(AP Photo, File) In this Jan. 3, 1961 file photo, Cubans crowd outside the U.S. embassy in hopes of getting visas after President Fidel Castro ordered the U.S. embassy to reduce its staff to 12 officials within 48 hours, in Havana, Cuba. The U.S. broke relations with Cuba on this day, and closed its embassy.

Cuban cigars, baseball players seeking asylum, chrome plated cars in pastels, and those thirteen days of October 1962 which almost pitted the world to the brink of nuclear war. For the past fifty-three years these are the things most Americans have associated with the Communist dictatorship of Cuba—the isolated island situated just ninety miles from Miami. On December 17, 2014 President Obama acting without Congress reversed course and began the process of shifting America’s fifty year attempt in the Caribbean of trying to exert pressure on the Castro regime to change its policies.

Cuba has always enjoyed a special legal relationship with the United States compared to other Communist regimes (probably as a result of its proximity). While formal diplomatic relations were cut in 1961 by President Eisenhower and a trade embargo issued, the United States has continued to maintain its ‘Diplomatic Mission’ in Havana and has operated its naval base at Guantanamo.

Comparatively, the United States continued to maintain diplomatic relations with the USSR throughout the Cold War and established formal relations with China in 1979 and Vietnam in 1995.

While travel to Cuba by Americans was never banned outright—as there were loopholes (it had to fall into twelve categories). Last December’s historic lifting of regulations will not only make tourism to Cuba more accessible, but begin the politically contentious lawmaking process of relaxing sanctions in the name of diplomacy and free trade against the backdrop of nation whose regime continues to have abysmal human rights violations.

Anthony Christina is a 2L and a Resident Student Blogger with the Journal of Law and International Affairs at the Penn State University-Dickinson School of Law


 

Citations to articles & documents are included in the aforementioned underlined hyperlinks.