THE AUTHORS:
Dr. Tatevik S. Karapetyan, Independent Arbitrator
Meline Nurijanyan, Co-founder of Resolve Academy
The intricate tapestry of international trade is interwoven with diverse cultural, political, and economic landscapes, presenting a myriad of challenges and opportunities for businesses and stakeholders worldwide. Amidst this complex backdrop, the International Chamber of Commerce (ICC) stands as a beacon of arbitration, striving to resolve disputes and foster cooperation among nations. In the realm of Eastern European countries, the ICC’s arbitration cases shed light on the region’s evolving economic dynamics and legal frameworks.
Founded in 1919 with a vision to promote global commerce and peace, the ICC initially grappled with limitations that excluded stakeholders from nations adhering to different economic ideologies. However, recognizing the imperative for inclusive dialogue, the ICC established the East/West Committee in 1964, marking a pivotal moment in its commitment to facilitating international trade across ideological boundaries.
Central and Eastern Europe (CEE) emerged as a focal point for the ICC’s arbitration cases, embodying the region’s transition from centrally planned economies to market-oriented systems. Comprising countries like Bulgaria, Czech Republic, Hungary, Poland, and Romania, CEE underwent profound transformations, redefining its economic landscape and forging new pathways for global engagement.
Delving into ICC arbitration cases within Eastern European countries unveils a spectrum of disputes and resolutions reflective of the region’s diverse industries and economic aspirations. For instance, ICC Case No. 21710/MHM, involving Bulgaria and Russia in the energy sector, underscores the complexities of cross-border transactions by highlighting the procedural intricacies involved in international arbitration. One noteworthy aspect is the tribunal’s handling of bifurcation and the conditional nature of claims. The case illustrates how arbitration must account for multiple potential outcomes and how primary and secondary claims are strategically positioned. This decision exemplifies the need for careful procedural planning and clarity in cross-border disputes, where legal and factual uncertainties must be meticulously managed to ensure a fair and efficient resolution. The tribunal’s approach to bifurcation and its impact on the finality of the arbitration emphasize the sophisticated navigation required in international commercial disputes.
Similarly, ICC Case No. 16382/GZ, featuring Austria and Bulgaria’s Privatization Agency, highlights the intricacies of privatization efforts and foreign investment in emerging markets. It underscores the complexities of cross-border transactions by highlighting the challenges of enforcing contractual obligations across different legal jurisdictions. One noteworthy aspect of this decision is how the tribunal dealt with conflicting laws and regulations from the parties’ respective countries. The case demonstrates the intricate balance required to respect the diverse legal principles while striving for a fair resolution. It emphasizes the importance of thorough contract drafting, including clear dispute resolution clauses, to mitigate the risks associated with cross-border transactions and to ensure that obligations are enforceable despite jurisdictional differences. This decision serves as a critical reminder of the need for meticulous legal and procedural planning in international commerce.
One particularly notable case, Zeevi Holdings v. Bulgaria, Case No. UNC 39/DK, exemplifies the intersection of investor-state relations and industry-specific challenges. One noteworthy aspect is the aviation industry’s inherent regulatory and operational challenges, which complicate international investments. This case highlights how arbitration institutions play a crucial role in navigating these complexities, ensuring that the interests of investors are protected while respecting the sovereignty and regulatory frameworks of the host state.
Beyond the legal intricacies, ICC arbitration cases in Eastern European countries signify a broader narrative of resilience, innovation, and collaboration. As these nations navigate the complexities of global trade, arbitration emerges as a cornerstone for dispute resolution and fostering trust among diverse stakeholders. Here, another famous case, Ceskoslovenska Obchodni Banka A.S. (CSOB) v. Czech Republic (ICC Case No. 15019/JHN/GZ) highlights the complexities inherent to cross-border transactions, particularly in the context of post-communist Eastern European countries transitioning to market economies. This arbitration underscores several noteworthy aspects. The case involved issues with legal and regulatory changes during the privatization and restructuring of state-owned enterprises in the Czech Republic. Navigating these evolving frameworks is complex and often leads to disputes requiring arbitration for resolution. The arbitration dealt with the state’s role in commercial transactions, especially concerning state guarantees and obligations towards foreign investors. This highlights the unique challenges of disputes where government actions directly impact commercial agreements. The case was significant because it tested the application and interpretation of BITs between two closely related countries, the Czech Republic and Slovakia, which were part of a single state (Czechoslovakia) before its peaceful dissolution in 1993. The legal intricacies and historical context added layers of complexity to the arbitration process. The dissolution of Czechoslovakia led to the creation of the Czech Republic and Slovakia, each inheriting BITs that were negotiated by the former Czechoslovakia. As new sovereign entities, they had to navigate the interpretation and application of these inherited treaties in their bilateral relations.
This case serves as a critical examination of BITs’ role in international investment and arbitration. It underscores the importance of these treaties in ensuring investor protection and the complexities involved in their interpretation, especially in post-separation states like the Czech Republic and Slovakia. The outcome of such cases not only affects the immediate parties involved but also contributes to the broader understanding and development of international investment law. The above-mentioned cases collectively demonstrate the ICC’s pivotal role in fostering resilience, innovation, and collaboration in Eastern Europe. As these nations continue to integrate into the global economy, ICC arbitration remains a cornerstone for dispute resolution, building trust among diverse stakeholders. The ICC’s commitment to arbitration not only aids in resolving disputes but also contributes to the broader understanding and development of international investment law.
In conclusion, the study of ICC arbitration cases in Eastern Europe reveals a rich tapestry of legal dynamics and cross-cultural engagement. As nations navigate an increasingly interconnected world, the ICC’s dedication to arbitration serves as a catalyst for progress, ensuring that international commerce thrives and that the principles of fair and equitable treatment, protection from expropriation, and legal certainty are upheld. Through its efforts, the ICC continues to foster an environment where global trade can flourish, benefiting businesses and stakeholders worldwide.
ABOUT THE AUTHORS:
Dr. Tatevik S. Karapetyan, PhD, is the co-Founder and Director of Resolve Academy and currently serving as the Deputy Chair of the Arbitration and ADR Commission of ICC Armenia. She also holds the position of independent arbitrator at the Arbitration Court of Arbitration LLC. Tatevik Karapetyan’s affiliation with the Chartered Institute of Arbitrators (CiARB) serves as a testament to her commitment to upholding the highest standards of ethics and professionalism in her practice. Her experience, encompasses a diverse array of institutional and ad hoc arbitrations spanning ICC, ICSID, LCIA, Swiss Rules, and UNCITRAL regulations. Across civil law jurisdictions, she has navigated through complex disputes, earning the respect of colleagues. With a keen focus on diverse industries including Banking and Finance, International Intellectual Property, International Trade Law, and International Sports Law, her expertise resonates across a spectrum of legal disciplines.
Meline Nurijanyan is the Secretary General and Deputy Chair of Arbitration Court of Arbitration LLC. In addition to her role in arbitration, she is the co-Founder of Resolve Academy, an institution dedicated to fostering excellence in dispute resolution through education and training. Her commitment to promoting alternative dispute resolution methods underscores her dedication to advancing the field and ensuring fair and efficient outcomes for all parties involved. Meline’s passion for the arbitration field extends beyond her professional roles. Since 2022, she has been a member of the Arbitration and Alternative Dispute Resolution Commission at ICC Armenia, contributing her insights and knowledge to furthering the goals of the organization.
The views and opinions expressed in articles posted on Daily Jus are those of the authors and do not reflect the official policy or position of Daily Jus, Jus Connect or Jus Mundi.
