Growing Global Businesses BIT by BIT

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High above the bustling city streets, and in the summit of the offices of K&L Gates, professionals from North and South Carolina convened for an afternoon CLE Session hosted by the Charlotte International Arbitration Society.  The theme for the afternoon? Encouraging global businesses via Bilateral Investment Treaties.

The afternoon began with an introduction and welcome from retired North Carolina Superior Court Judge Chase Saunders.  As part of that introduction, Judge Saunders discussed an upcoming report that would analyze how the courts of North Carolina, in particular the business courts, could optimize their infrastructure to facilitate international arbitration cases that may arise within North Carolina.  Judge Saunders detailed that the report will address matters such as enforcement of awards, and operation of foreign counsel on behalf of their clients in these cases.  He advised that said report should be ready during the first half of 2018.

Ms. Catharine Arrowood, a partner at Parker Poe Adams & Bernstein LLP, relieved Judge Saunders of the floor, and provided a substantive and practical overview of the Investor State Dispute Resolution (ISDS) regime. By beginning her presentation with an informative summary of the differences between Investment and Commercial Arbitration, Ms. Arrowood allowed all in attendance to begin the session with an equal understanding of the key foundational topics. Building upon that understanding, Ms. Arrowood’s presentation proceeded into the intricacies of what an ICSID (International Centre for Settlement of Investment Disputes) is, and exactly what support services it provides. The importance of this education is only increasing, as by the end of 2016, over 3,300 BITs had been executed – many of which contained provisions sending disputes to ICSID.

The second half of Ms. Arrowood’s presentation delved into BITs, and why exactly they may be of significant importance to clients. One particular factor that should not be overlooked applies to clients who have invested in a country, either through constructing a power plant or a hotel. Through these types of investments, they may be entitled to protection under a BIT even if they have no direct agreement with the host country itself. While the investment protections vary amongst BITs, a generally expected right and protection is consent from the host state to allow a dispute to be arbitrated, and to permit the enforcement of any resulting award from that arbitration. When exploring the potential options clients may have, it is crucial to research the multilateral treaties as well, as these may contain clauses similar to those provided in BITs.

Following Ms. Arrowood’s incredibly informative and beneficial presentation, Mr. Christopher Campbell, an associate at Willoughby & Hoefer, P.A. in Columbia, SC, moderated a panel discussion anchored in ISDS and its practical application in the Carolinas.  The panel members included: Ms. Andrea Carska-Sheppard of Work Place Options LLC, Ms. Sara Burns of King & Spalding LLP, and Mr. Kip Dillihay a CIAS Board member and business consultant, with additional commentary from Ms. Arrowood.  Throughout the engaging session, the panel addressed several main points:

  • Key Differences Between ISDS and Commercial Arbitration.
  • The Future of ISDS in the US and Abroad.
    1. Common Critiques
    2. Unbridled Power
  • What does a BIT mean to the average practitioner?
  • Regional Arbitral Institutions and ISDS

In response to a question from the moderator, panelists  Carska-Sheppard and Mr. Dillihay opined that as competition between arbitral institutions increased so too would the proliferation of ISDS services offered by regional organizations.  Recent examples of these offerings were SIAC and CIETAC.  The panel agreed that due to the prestige, high value of these cases, and offering familiar channels for dispute resolution to local users, this evolution was a logical step in the development of ISDS world-wide.

The panelist and audience comments even suggested that international commercial arbitration and investor-state rules may be in the near future for Charlotte, given the high concentration of financial institutions headquartered and centered in the city.

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