Remarks by Ralph G. Steinhardt

By Steinhardt, Ralph G. | Proceedings of the Annual Meeting-American Society of International Law, Annual 2012 | Go to article overview
Save to active project

Remarks by Ralph G. Steinhardt


Steinhardt, Ralph G., Proceedings of the Annual Meeting-American Society of International Law


A good poker player probably understands the Chevron-Ecuador dispute better than a lawyer, but--undeterred--let me summarize five nested legal issues that lurk in this case. My essential observation is that the proliferation of forums in the case, while reflecting the adversaries' procedural and strategic choices, has profound substantive consequences and reflects the institutional and doctrinal fragmentation of contemporary international law. That kind of incoherence is acceptable only if the proposed cures turn out to be worse than the underlying disease.

BIT ARBITRATION

The pending arbitration under the U.S.-Ecuador Bilateral Investment Treaty (the BIT) (1) illustrates multiple layers in the "paradigm of complexity":

(1) The tension between investor protection and other obligations of states. I am skeptical about transforming BIT panels into collateral, conceivably final appeals tribunals from court systems around the world. Under the banner of investor protection, that potentially undermines other substantive obligations of states, including those being litigated in domestic courts under international standards governing, e.g., human rights, environmental protection, corporate governance, and corrupt payments. There are also independence-of-the-judiciary concerns if the executive branch of a state appearing in the arbitration is obliged by the panel to derail the local proceedings and judgments of the judiciary.

(2) The tension between simultaneous arbitral proceedings and judicial proceedings. The Ecuadorians' efforts to have a U.S. court stay the BIT arbitration failed in March 2011. (2) Given the strong policy in favor of arbitration and the absence of express authorization for domestic courts to stay arbitrations under the New York Convention, there is no authoritative answer to the question of whether, prior to any judgments or awards in a case, courts may stay arbitrations and arbitral panels may stay the enforcement of judgments or by extension any judicial proceeding. This is potentially the stuff of chaos.

(3) The merits of the jurisdictional holding on third-party rights. The principle of the ICJ's Monetary Gold decision is that "although a tribunal may have jurisdiction over a dispute it must not or should not exercise that jurisdiction if the very subject matter of the decision would determine the rights and obligations of a State which is not a party to the proceedings." (3) Perhaps this rule does not protect private parties. Perhaps the dispute between Chevron and Ecuador on the meaning and scope of their settlement agreement does not implicate the interests of the Ecuadorian plaintiffs. But arbitrations cannot protect the interests of non-investor litigants who are not parties to the arbitration. That is problematic at a minimum because the due process rationales behind Monetary Gold are compelling. The limited review of arbitral judgments at the enforcement stage means that such holdings are difficult to correct even if they're erroneous.

ENFORCING THE ECUADORIAN JUDGMENT IN DOMESTIC COURTS

The Ecuadorian plaintiffs have not sought to enforce their judgment anywhere. Chevron attempted to block such action, and the district court in New York globally enjoined the enforcement of the judgment. On January 26, 2012, the Second Circuit reversed, (4) concluding that challenges to the validity of foreign judgments under New York's Uniform Foreign Country Money-Judgments Recognition Act (5) can occur only defensively.

If and when enforcement is sought in a U.S. court, we will confront the reality that there are no federal standards governing recognition and enforcement of foreign judgments. In addition, because there is no rule of non-inquiry in transnational enforcement proceedings, a U.S. court may decline to enforce a judgment obtained by fraud or tainted by prejudice in the court that rendered the judgment. But developing the record for such a determination is notoriously difficult, especially if the fraud claims were already advanced in the country from which the judgment originates.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Remarks by Ralph G. Steinhardt
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?