Australian Resources & Energy Law Journal Quiz
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Questions and Answers

Which country has had the most claims brought against it in investor-state disputes?

  • United Kingdom
  • United States
  • Spain
  • Argentina (correct)
  • Australian investors have been claimants in more than 10% of known global investor-state arbitrations.

    False (B)

    What is the name of the United Nations commission that introduced rules to promote transparency in investor-state arbitrations?

    United Nations Commission on International Trade Law (UNCITRAL)

    The United States is the most frequent ______ in investor-state disputes.

    <p>claimant</p> Signup and view all the answers

    Match the following countries with the number of claims brought against them:

    <p>Argentina = 62 Spain = 52 Venezuela = 51</p> Signup and view all the answers

    How many formal claims has Australia been on the receiving end of?

    <p>2 (A)</p> Signup and view all the answers

    Investor-State dispute settlement (ISDS) regimes are rarely used in Europe and the Americas.

    <p>False (B)</p> Signup and view all the answers

    What industry often give rise to global investor-state arbitrations?

    <p>mining</p> Signup and view all the answers

    What is the timeframe for which the Australia-India BIT remains in force for investments made before its termination?

    <p>15 years (C)</p> Signup and view all the answers

    India's new model bilateral investment treaty has completely removed ISDS provisions.

    <p>False (B)</p> Signup and view all the answers

    Who authored the report published by the Department of Foreign Affairs and Trade in 2018 regarding economic engagement with India?

    <p>Peter Varghese</p> Signup and view all the answers

    The Tethyan Copper Company Limited initiated a dispute against ______ in relation to the denial of a mining lease.

    <p>Pakistan</p> Signup and view all the answers

    What is a key point highlighted in the 2018 report by Peter Varghese regarding Australia's economic engagement with India?

    <p>India wants to increase inward foreign investment, while decreasing investor protections (D)</p> Signup and view all the answers

    Match the following entities with their respective actions:

    <p>Australia = Negotiating a Comprehensive Economic Agreement with India India = Terminated the Australia-India BIT Tethyan Copper Company = Initiated a dispute against Pakistan Peter Varghese = Authored a report on economic engagement with India</p> Signup and view all the answers

    The Australian government's focus has shifted away from the Indo-Pacific region.

    <p>False (B)</p> Signup and view all the answers

    What does ISDS stand for?

    <p>Investor-State Dispute Settlement</p> Signup and view all the answers

    What type of agreement did Kingsgate initiate arbitration under against Thailand?

    <p>The Australia-Thailand Free Trade Agreement (C)</p> Signup and view all the answers

    The claim by Emerge and Tantalum against Egypt has reached a merits hearing.

    <p>False (B)</p> Signup and view all the answers

    The claim Kingsgate brought against Thailand has proceeded to a ______ hearing.

    <p>merits</p> Signup and view all the answers

    Which of the following is NOT a specific state act that Kingsgate alleges forms the basis of their claim against Thailand?

    <p>An order of the Prime Minister of Thailand to cease all diamond mining operations. (B)</p> Signup and view all the answers

    There are currently fewer than five other Australian outbound investors that have launched claims in reliance on ISDS provisions.

    <p>False (B)</p> Signup and view all the answers

    Match the companies with the country they are bringing claims against:

    <p>Kingsgate = Thailand Emerge and Tantalum = Egypt</p> Signup and view all the answers

    The Emergency Arbitrator ordered Mongolia to release Munshi from detention.

    <p>False (B)</p> Signup and view all the answers

    Munshi submitted an “Application for the Appointment of an Emergency Arbitrator” under the rules of the ______ Chamber of Commerce.

    <p>Stockholm</p> Signup and view all the answers

    Which of the following was NOT a condition for granting interim relief considered by the Emergency Arbitrator?

    <p>Sufficiency (C)</p> Signup and view all the answers

    What has the disparity between the Australian government's defence spending and the costs order against Phillip Morris led to?

    <p>Widespread criticism and anti-ISDS sentiment. (A)</p> Signup and view all the answers

    Australia is likely to completely reject ISDS regimes in the future.

    <p>False (B)</p> Signup and view all the answers

    What is a strong defence available to States that can cancel claims from foreign investors?

    <p>jurisdictional defence</p> Signup and view all the answers

    As more disputes are awarded in favor of Australian outbound investors, it is likely that this mechanism will become more popular with other Australian outbound investors, encouraged by the possibility of protection and significant ______.

    <p>reward</p> Signup and view all the answers

    Match the terms to their corresponding descriptions related to investor-state dispute settlement (ISDS):

    <p>ISDS = Dispute resolution between investors and states Jurisdictional defense = A legal strategy to invalidate a claim against a State Arbitral award = The outcome of an arbitration process Outbound investors = Investors investing in foreign countries</p> Signup and view all the answers

    What is one reason why Australia might accept some exposure to claims from foreign investors?

    <p>To achieve increased flows of foreign direct investment and greater economic self-reliance (D)</p> Signup and view all the answers

    Claims against Australia have not influenced the exclusions it has incorporated into subsequent investment agreements.

    <p>False (B)</p> Signup and view all the answers

    What does Australia need to be prepared to do to achieve a greater objective, like all trade and investment agreements?

    <p>compromise</p> Signup and view all the answers

    Which arbitration rules are associated with the Stockholm Chamber of Commerce?

    <p>Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (A)</p> Signup and view all the answers

    What does 'A-HKFTA' stand for?

    <p>Australia-Hong Kong Free Trade Agreement</p> Signup and view all the answers

    Which agreement contains the investment rules linked to A-HKFTA?

    <p>The Investment Agreement between Australia and the Government of Hong Kong (B)</p> Signup and view all the answers

    What does BIT stand for?

    <p>bilateral investment treaty</p> Signup and view all the answers

    India unilaterally _____ the Australia-India BIT on 23 March 2017, although it remains in force for investments made prior to termination for 15 years from the date of _____.

    <p>terminated; termination</p> Signup and view all the answers

    What has influenced Australia's use of ISDS provisions and what case exemplifies this?

    <p>Government response to inbound foreign investment arbitrations. This is exemplified by the 2011 Phillip Morris proceedings.</p> Signup and view all the answers

    What was the first claim on record by an Australian investor?

    <p>Misima Mines against the Independent State of Papua New Guinea in 1996</p> Signup and view all the answers

    In what year was the first successful claim by an Australian investor brought against a foreign state?

    <p>White Industries against India in 2010 (A)</p> Signup and view all the answers

    What did the Tribunal issue its award based on in the Phillip Morris arbitration?

    <p>The restructure of Philip Morris was for the principle purpose of gaining protection under the HKA BIT</p> Signup and view all the answers

    Flashcards

    Investor-State Dispute Settlement (ISDS)

    A system where investors can sue governments if they believe their investments have been unfairly treated.

    Investment Treaties

    Agreements between countries that protect investments made by investors from one country in another.

    Australian Investors as Claimants

    The number of cases where Australian investors initiated disputes against foreign governments.

    Australia as a Respondent

    The number of cases where foreign investors initiated disputes against Australia.

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    Arbitration

    A type of dispute resolution mechanism where disagreements are settled by a neutral third party.

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    UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration

    The rules governing transparency in investor-state arbitration cases, promoting openness and accountability.

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    Australia's ISDS Record

    Australia's history of including ISDS provisions in its international agreements.

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    Increase in ISDS Cases with Australian Involvement

    The growing number of ISDS cases involving Australian investors over the past decade.

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    Bilateral Investment Treaty (BIT)

    An agreement between two countries that outlines the rights and protections for investors from one country investing in the other.

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    International Investor-State Dispute Settlement (ISDS)

    A dispute resolution mechanism used in international investment treaties that allows an investor to sue a foreign government for violations of the agreement.

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    Australia's Indo-Pacific Re-focus

    Australia's focus on strengthening economic and political ties with countries in the Indo-Pacific region.

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    Australia-India Comprehensive Economic Cooperation Agreement (CECA)

    The Comprehensive Economic Cooperation Agreement (CECA) is a trade agreement between India and Australia aimed at enhancing trade and investment between both countries.

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    Tethyan Copper Company Limited

    An Australian company that sued Pakistan for violating an investment treaty after being denied a mining lease.

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    Tethyan Copper v. Pakistan

    The Tethyan Copper Company Limited successfully argued that Pakistan violated provisions in the Australia-Pakistan BIT, leading to a successful investor-state dispute.

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    Australia-Pakistan BIT

    An Australian company's successful use of the Australia-Pakistan BIT to challenge a violation by the Pakistani government.

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    Notice of Arbitration

    A formal request for arbitration, usually filed by an investor against a government, under an investment treaty.

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    Expropriation

    Legal process involving the taking of property by a government without fair compensation, which can be a basis for an ISDS claim.

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    Kingsgate v Thailand

    A case where a government's action is challenged as violating the terms of an investment treaty.

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    Jurisdictional Challenge

    A legal process where a court decides if it has the jurisdiction to hear a case.

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    Merits Hearing

    A legal proceeding where the merits of the case are examined to determine if a party is liable for damages.

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    Significant Award

    An amount of money awarded to a party who has suffered a financial loss.

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    What is the Energy Charter Treaty (ECT)?

    An international treaty that protects foreign investors, allowing them to seek compensation if a host country breaches the treaty.

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    What was Gobi Coal?

    A company established by Munshi in 2004 to explore coal mining activities in Mongolia.

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    What is a loan default?

    A loan agreement where the borrower fails to make payments as agreed upon.

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    What is an arbitration center?

    An independent and neutral body that resolves disputes between parties in accordance with agreed-upon rules.

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    What is an ECT Claim?

    A claim filed by an investor against a host country alleging a violation of the ECT.

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    What are interim measures?

    A legal process where a court or tribunal issues an order to prevent immediate harm or to preserve the status quo.

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    What is irreparable harm?

    A type of harm that is difficult or impossible to fix later, like loss of a significant opportunity or damage to reputation.

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    What is urgency?

    The requirement that an action is urgently needed to prevent serious harm or injustice.

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    What is proportionality?

    The principle that the benefits of granting an order outweigh the costs or burdens involved.

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    What is access to counsel?

    The right to have access to legal counsel to represent one's interests in a legal matter.

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    Jurisdictional Defense

    A legal defense strategy employed by a country facing an investor-state dispute. It involves challenging the jurisdiction of the arbitral tribunal to hear the case, arguing that the investor does not meet the criteria for bringing a claim.

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    Compromise in Trade Agreements

    A situation where a country has to compromise on certain aspects of its policies or agreements to achieve a larger goal.

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    Investment Protection

    The practice of using legal mechanisms to protect investments made by investors from one country into another.

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    UNCITRAL Rules on Transparency

    The use of a specific set of rules designed to ensure transparency and accountability in investor-state arbitration cases, fostering trust and fairness.

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    Australia's ISDS Approach

    The overall strategy of Australia in engaging with ISDS regimes, which involves assessing each case individually and potentially incorporating protective measures into its investment treaties.

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    SCC Arbitration Rules

    The Stockholm Chamber of Commerce (SCC) is a well-known institution offering arbitration rules for resolving disputes between investors and states.

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    Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA)

    A comprehensive economic partnership agreement between Indonesia and Australia, signed in 2019, which encompasses investment protection and dispute resolution mechanisms.

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    ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)

    The agreement establishes the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), which promotes trade and investment between member countries. The agreement contains provisions on investor protection and dispute resolution.

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    Free Trade Agreement between Australia and Hong Kong

    This agreement between Australia and Hong Kong, signed in 2019, covers trade and investment. It includes a separate Investment Agreement that protects investments and outlines dispute resolution mechanisms.

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    Free Trade Agreement between Australia and Peru

    The Free Trade Agreement between Australia and Peru, signed in 2018, promotes trade between countries and includes provisions on investment protection and dispute settlement.

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    Misima Mines v Independent State of Papua New Guinea

    This case involved Misima Mines, a company that claimed the Papua New Guinea government breached its investment agreement. It highlights a typical investor-state dispute where an investor claims harm due to government actions.

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    Russell Resources International & Ors v Democratic Republic of Congo

    This case involved Russell Resources International and others claiming that the Democratic Republic of Congo violated its investment agreement. It illustrates an example of investor-state disputes, highlighting the potential for investors to seek compensation for perceived breaches of investment agreements.

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    Churchill Mining PLC and Planet Mining Pty Ltd v Republic of Indonesia

    This case concerned Churchill Mining and Planet Mining, who filed a claim against Indonesia for breach of investment agreement. It showcases a prominent instance of investor-state dispute resolution involving Australia, reflecting the growing prominence of ISDS mechanisms in international business.

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    Study Notes

    Australian Resources & Energy Law Journal, Volume 39, Number 1, August 2020

    • The journal is published by AMPLA Ltd.
    • Dr Alexandra S. Wawryk is the editor.
    • Volumes 1997-2002 were previously titled Australian Mining and Petroleum Law Journal.
    • Volumes prior to 1997 are cited as the AMPLA Bulletin.
    • Copyright for all articles is held by AMPLA Limited.
    • Contact information for AMPLA is included.
    • The journal's views and opinions are not necessarily those of the publishers, editorial staff, or board.
    • No responsibility is assumed for any opinion or information expressed or contained within the journal.

    Foreign Investors' Increasing Awareness of Investor-State Arbitration

    • Investor-State dispute settlement (ISDS) is frequently used in Europe and the Americas.
    • Argentina, Spain, and Venezuela have received the most ISDS claims.
    • The US is the most frequent claimant in ISDS cases.
    • There are over 1,000 known treaty-based ISDS cases globally.
    • Transparency in ISDS procedures is limited.
    • Australia has been involved in approximately 16 investor-state arbitrations as a claimant, and in two as a respondent.
    • Claims against Australia increased in recent decades.
    • Early Australian claims in the 1990s and early 2000s were discontinued.
    • Subsequently, there have been thirteen claims by Australian investors against other states for investment treaty breaches.
    • These breaches included expropriation, lack of effective claim assertion mechanisms, violation of fair and equitable treatment, etc.

    Political Background

    • Australia's approach to ISDS provisions is influenced by its response to inbound foreign investment arbitrations.
    • The Phillip Morris case (2011), arising from Australia's plain packaging tobacco legislation, was a significant development, prompting a shift in how Australia views ISDS regimes.
    • Australia has adopted a "case by case" assessment approach to ISDS provisions.

    Cases Brought by Australian Investors

    • Misima Mines Pty Ltd v Independent State of Papua New Guinea: Discontinued in 2001.
    • Russell Resources International Limited v Democratic Republic of Congo: Discontinued for lack of payment of required advances.
    • Churchill Mining and Planet Mining v Republic of Indonesia: Challenged/discontinued due to fraud, forged documents and lack of jurisdiction. Costs and other fees were considerable.
    • Lighthouse Corporation v Timor-Leste: Failed jurisdictional challenges due to lack of consent to ICSID arbitration and whether the Lighthouse entities qualified as foreign investors.
    • White Industries Australia Limited v The Republic of India: Successful case; significant award. This was the first ISDS claim with an award against a state.
    • Tethyan Copper Company Limited v Islamic Republic of Pakistan: Successful cases and substantial awards were made in dispute against Pakistan.
    • Munshi v Mongolia: Successful case using emergency arbitration. This case demonstrated the importance of emergency arbitration in seeking urgent interim relief.

    Cases Brought Against Australia

    • Phillip Morris v Australia: Challenges the introduction of tobacco plain packaging legislation (TPP). Jurisdictional issues were raised, and the outcome was that the case was inadmissible.
    • APR Energy & Ors v Australia: Dispute related to wind turbines and registration of interests. Australia argued lack of jurisdiction.
    • NuCoal v Australia: Dispute concerning the cancellation of mining licenses. Jurisdictional challenge.
    • Mineralogy v Australia: Related to a mining lease agreement. Ongoing dispute.

    Conclusion

    • Mixed experiences with ISDS claims show wins and defeats for Australian parties.
    • Jurisdictional challenges are prevalent.
    • Some ISDS cases led to substantial awards for Australian investors, and others were not successful for a variety of reasons.

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