Tuesday, June 18, 2013

Bringing Problem-Solving Negotiation Strategies to Investor-State Arbitration in Peru

 
by Daniel Holman ’14 and Mark Johnson ‘14

Over spring break, HMNCP students Daniel Holman ’14 and Mark Johnson ’14, under the supervision of Clinical Instructor and Lecturer on Law Rory Van Loo ’07, traveled to Lima, Peru, to consult on the nation’s innovative investor-State dispute management and response system. The Sistema de Coordinación y Respuesta del Estado en Controversias Internacionales de Inversión (State Coordination and Response System for International Investment Disputes or “SICRECI“) is the focal point of Peru’s efforts to engage responsibly in international investment and proactively prevent and resolve investor-state disputes.

Investor-state arbitration refers to a growing class of cases in which private investors can bring legal claims against host governments in an international forum, typically using jurisdiction provided by treaties and free trade agreements. The increased volume of investor-State disputes has become an important issue for developing States in particular, as the cost of litigation and the amounts in controversy are often high. Peru created SICRECI as a way to prevent and manage investment disputes more effectively (one way of doing this is, for example, by centralizing notice of disputes and legal expertise within the government).

The Peruvian Ministry of Economy and Finance (PMEF) engaged HNMCP to advise it on ways to integrate lessons from negotiation and dispute resolution into PMEF management of investment lawsuits. While working together with the government attorneys that coordinate the State’s defense for cases headed to arbitration, Daniel and Mark conducted numerous interviews with SICRECI stakeholders and experts in international arbitration to supplement their research in investor-state dispute settlement.

Based on their research, Daniel and Mark presented a report to the PMEF with their observations and recommendations for improving SICRECI through the application of dispute systems design models and problem-solving negotiation strategies.