Legal Translation Services,
International Arbitration and
Gateway Issues

Certified Document Translations for International Arbitration

Certified legal translation and legal interpreting services are vital for international arbitration in Asia and other parts of the world. The US Supreme Court is currently considering whether to grant certiorari in BG Group Plc. V. Republic of Argentina, a case that addresses various so-called ‘gateway issues’ and, in particular, the peculiarities that arise when gateway matters meet international investment arbitration.

In the BG Group case, the DC Circuit court determined that the arbitral tribunal exceeded its authority by exercising jurisdiction notwithstanding BG Group’s failure to seek relief in Argentine courts for 18 months before submitting a claim to arbitration, as required under the applicable investment treaty. The court followed typical US practice in using the term ‘arbitrability’ to “denote every condition or requirement that must be met in order for an arbitration to go forward”, rather than adopting the more limited use of the term common in most of the rest of the world to denote only those matters that are “legally incapable of being arbitrated.”

In reaching this decision, the court posed two questions:

  1. 1. Did the contracting parties (Argentina and the United Kingdom) intend that an investor should be able submit a claim to arbitration without having fulfilled the treaty requirement that an investor seek relief in Argentine courts for an antecedent period of time? This question required a Spanish into English translation and English to Spanish translation of the terms of the agreement in order to understand intent.
  2. 2. Did the contracting parties intend that question to be answered by a court or by an arbitrator?

It is this second question that clearly highlights an idiosyncrasy of US arbitral practice: if the parties agreed to submit the arbitrability question itself to the arbitrators, then their decision on that point is entitled to special deference from a reviewing court. In this respect the US approach gives more deference to arbitrators than most other jurisdictions. Needless to say, a problem with this approach is that courts tend to find it difficult to identify evidence of the intent of the contracting parties vis-à-vis the arbitrability question given that neither of the parties negotiated the treaty with US arbitral law in mind.

In a sense, the DC Circuit’s approach to the arbitrability issue foreshadowed its decision. Much of the decision, including the part about allocating authority regarding arbitrability, might be understood as trying to grapple with what the parties intended with respect to the condition precedent. Questions of procedural arbitrability – including questions of ripeness – are usually treated as matters of admissibility, with an arbitral tribunal determining the effect of nonexistent or ineffective recourse to other remedies. Attempting to distinguish these cases explains the court’s emphasis on the treaty’s requirement that redress initially be sought in court rather than in mediation or conciliation. Further evidence of party intent might have been found had the court considered more fully the follow-on question: could Argentina have impeded or made difficult access to its courts and thus thwarted the constitution of the investment tribunal?

The certiorari petition to the US Supreme Court emphasizes prior US case law that whether or not a party has complied with a multi-stage arbitration process is a question for arbitrators to decide and emphasizes the Circuit split caused by the B.G. Group decision. The opposition to certiorari focuses primarily on whether or not Argentina had ever consented to arbitrator given the failure to comply with the 18-month local court requirement. If there was never a valid arbitral agreement, much of which comes down to the interpretations of the foreign language translation of the agreements and negotiations, then there are simply no questions for an arbitral tribunal to decide because there is no valid arbitral tribunal.

The case challenges most of the presumptions that have surrounded the investor-state dispute settlement process. The DC Circuit’s approach would seem to be inconsistent with the very purpose of the treaty – to accord substantive protections to an investor and permit it to vindicate those rights in a neutral forum – because it gives the host government the authority to impede access to the tribunal. In addition, that neutral tribunal would seem the appropriate body to determine whether the preconditions of access to it were fulfilled or otherwise excused.

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