Due to general ignorance of the existence of the agreement (in particular, the OIC did not make the text available on its website until 2009)1)Walid Ben Hamida, “A Fabulous Discovery: The Arbitration Offer under the Organization of Islamic Cooperation Agreement Related to Investment” (2013) 30 Journal of International Arbitration 637, 639. the first known OIC investment arbitration was only in 2011 by Saudi businessman Hesham Al-Warraq against Indonesia (“Al-Warraq”). Insider. Amusingly, Dr. Kane revealed that, ignoring the existence of the OIC Investment Agreement in 2011, he himself had submitted a proposal for the adoption of a multilateral investment agreement among OIC Member States. [16] IA investigation: “While another lawsuit is being filed against Libya under the OIC Investment Agreement, the government is going to court to try to block the arbitration activated by the PCA under the Treaty” of 13. January 2019; see also IA Investigation: “An Update on Investors` Requests for Arbitration under the Investment Treaty of the Organization of Islamic Cooperation” of 15 August 2018; see also Hamid Gharavi, “Cocorico! The French approach to the OIC Treaty gives rise to shouts”, dated February 21, 2020. As part of the International Investment Law and Policy Lecture Series, the Columbia Center on Sustainable Investment received Dr. Mouhamadou Kane, Project Manager and Director of the Investment Dispute Settlement Body of the Organization of Islamic Cooperation (“OIC”), on November 14, 2019. During the program, Mr. Kane explained the text of a draft investment protocol for the OIC Investment Dispute Settlement Body, which is not yet publicly available. He expects the protocol to be adopted by the Foreign Ministers of the OIC Member States in March 2020. Once adopted, the Protocol will provide an institutional mechanism for the settlement of investor-state disputes (“ISDS”) between OIC Member States.
The OIC`s efforts to reform the ad hoc arbitration mechanism under the OIC Investment Agreement are aimed, inter alia, at restricting investors` access to arbitration and addressing concerns about procedural transparency and arbitrator accountability. This blog post provides general information on the OIC Investment Agreement, explains the structure of the proposed investment dispute settlement body and shares the authors` views on the future of ISDS within the OIC. In a decision of 23. In March 2021, the Paris Court of Appeal (the Court) annulled a partial arbitral award on the formation of the arbitral tribunal in an investment dispute brought against Libya by a construction company registered in the United Arab Emirates (DS Construction FZCO) under the Agreement on the Promotion, Protection and Guarantee of Investments among the Member States of the Organization of Islamic Cooperation (OIC Investment Agreement). It is not known whether the OIC Investment Agreement gave rise to an investor`s claim before 2011. Although several investment cases have since been brought under its authority and the respondent States have appointed arbitrators in some of them, it appears that in known cases where the respondent Member State has not appointed an arbitrator, the OIC Secretary-General has refrained from doing so in his place. Several investors have successfully followed the path taken here by DS Construction and have convinced the PCA to play such a role under UNCITRAL rules by importing provisions from one of the defendant countries of other investment agreements through the most-favoured-nation clause of the OIC Investment Agreement. The OIC Investment Agreement was signed in 1981 and is said to have been ratified by 29 OIC Member States (the Member States). The Agreement provides a legal framework for the promotion and protection of investments made by investors from Member States in the territory of other Member States.
However, the OIC has never established its own body to handle disputes over OIC investment treaties, and most Member States are parties to other investment protection instruments (e.B. BIT, ICSID Conventions). The ISDS mechanism proposed by the OIC represents an important step in the modern reform of ISDS and reflects some recent developments in this area (see, for example. B, investment agreements concluded by the European Union, which provide for a two-stage mechanism composed of members appointed by the Parties). However, the mechanism significantly restricts access to OIC investment arbitration and is likely to discourage investors from invoking the OIC Investment Agreement. On the one hand, exhausting local remedies and going through the process of amicable settlement between states can be an excessively long exercise for most investors. On the other hand, requiring an investor to make a denial of justice claim could lead to an insurmountable gateway to most claims. The Court accepted DS Construction`s interpretation of Article 8 of the OIC Investment Agreement as a most-favoured-nation clause and agreed that, in principle, a most-favoured-nation clause may be used in certain cases to import a dispute settlement mechanism from another investment agreement. Article 1, paragraph 5, of the OIC Investment Agreement defines an investment as follows: According to Article 14 of the OIC Investment Agreement, “the investor shall not receive treatment inferior to that accorded by the host State to its domestic investors or others with regard to compensation for damage to the material assets of investments resulting from hostilities of an international nature committed by an international body; or due to civil unrest. (a) any subsequent agreement between the parties on the interpretation of the contract or the application of its provisions; [14] IA investigation: “While another lawsuit is being filed against Libya under the OIC Investment Agreement, the government is going to court to try to block the arbitration eligible for the PCA under the contract” of January 13, 2019. [9] IA Investigation: “Four previously confidential claims under the OIC Investment Agreement are discovered as controversy over the use of the contract in arbitration continues,” dated May 16, 2019. It will be interesting to see whether and to what extent Member States will confirm the current draft protocol and whether the final version will clarify the regime to which arbitration proceedings will be subject after the establishment of the dispute settlement body.
Looking ahead to today, however, it is unlikely that future OIC investment requests will overcome the obstacles of the proposed dispute settlement mechanism. [4] This was a strange choice, as a bilateral investment agreement between Saudi Arabia and Indonesia was also in force. The OIC Investment Agreement, adopted in 1981 and in force since 1988, is a so-called international investment agreement of the older generation. The treaty, signed by 36 OIC Member States and ratified by 29, provides for several classic investment protection measures, such as the prohibition of illegal expropriation, protection and security, and most-favoured-nation treatment. It also includes an ad hoc investor-state arbitration provision (Article 17) that will apply “until a dispute settlement body under the agreement is established”. (a) If, at the end of their conciliation proceedings, both parties to the dispute do not reach an agreement, or if the arbitrator is unable to submit his report within the prescribed time limit, or if both parties do not accept the solutions proposed therein, either party shall have the right to apply to the arbitral tribunal for a final decision on the dispute. (b) any subsequent practice in the application of the contract establishing the agreement of the parties to its interpretation; The OIC Investment Agreement allows an investor to submit an investment application either before national courts (Article 16 of the Agreement) or through ad hoc arbitration, the procedure of which is provided for in Article 17. .