Dr Mariel Dimsey is an international arbitration lawyer based in Hong Kong. As a panellist in the session “An Asian Perspective on Enforcement of ISDS Awards – Trends and Developments” at the Inter-Pacific Bar Association (IPBA) conference, she takes India Business Law Journal on a deep dive into the topic.
India Business Law Journal: What interested you to participate in this panel?
Dimsey: I chose this topic together with Kyongwha Chung (of counsel at Covington & Burling, Seoul, South Korea), with whom I am co-chair of the investment arbitration sub-committee of DRAC (dispute resolution and arbitration committee of the IPBA). There are multiple issues going on in different parts of the world with attitudes towards enforcement [of investment awards].
Currently, intra-EU (European Union) awards are facing issues, the effect of which is making its way to Asia because, of course, the debtors and creditors are trying to look for assets in different jurisdictions.
For example, there’s been a few cases against the kingdom of Spain where the awards have been refused enforcements in the EU and they have come to Australia and been able to enforce the award there.
And so we thought that this would be interesting to delve into in Asia.
IBLJ: Why are the enforcements being refused?
Dimsey: Under the EU, since the Treaty of Lisbon, there’s been a few case law decisions that have clarified the position [that] essentially [say that] you can’t enforce between EU states an award for the payment of damages because that is no longer the competence of private arbitral tribunals. It is the competence of the European Commission.
If you try to enforce [an award] in an EU court, they will essentially declare it to be an illegal state aid.
Because of this, if they [creditors] can find assets outside the EU, what the creditors are now doing is looking elsewhere and going to the courts at the seat of those assets. Now, you’ve got this jurisprudence that’s entirely inconsistent because outside the EU, EU law doesn’t apply and the courts in the other countries are saying, “well that’s interesting, but under our understanding of it, we’re able to enforce this”.
IBLJ: You mentioned that they’re looking for assets in other parts of the world. What parts of Asia are they interested in?
Dimsey: That depends on the respondent state. This is actually one of the other issues with the enforcement topic that we [her and Kyongwha Chung] are interested in. What is actually state property? Can states still invoke defences like sovereign immunity?
In some parts of Asia, you’ve also got royal families and kingdoms. So, you’ve got to look at the nuance there between crown property and state property. And if you’re trying to involve immunity against enforcements, which type of property does it apply to?
IBLJ: What kind of changes have you seen through the years with regards to ISDS award enforcement in Asia?
Dimsey: I should start by prefacing everything. There’s not a huge number of awards that have been enforced in Asia. They’re coming now and a lot of them are coming out of the EU because of the inability to enforce there [in the EU]. I know that Singaporean courts have had a few of these post award cases. Also, some 15 years ago, there was a very well-publicised attempt to enforce against a country in Asia for the assets there. Most states will not enforce assets against their own sovereign, but it took them to places like New York and it made them look for assets that were not the usual assets you look for. There was real estate [found] in different parts of the world that they also looked at. This had multiple notable developments.
IBLJ: Are international trade wars also affecting this?
Dimsey: I think the trade wars are a nuance of the overall landscape that we’re operating in. I think there will be disputes, [including] ISDS disputes coming out of the trade, the tariffs and the trade tensions and everything like that. I haven’t seen anything yet that would indicate that will directly impact enforcement.
IBLJ: What are your overall thoughts about enforcement of awards in the current world?
Dimsey: This is a personal view. I feel like there’s this manifestation of the ability to be non-compliant these days. There are various things happening that are supporting that and making people feel empowered, [which] will be reflected in one way or another. I’m not quite sure how willing states and others are to pay large awards, just voluntarily, without a fight.
For me, it’s more about the general atmosphere that I feel like the world is testing right now. How far can you go with describing the rules that everyone’s played by for so long?
