Ecuador's attorney general proposes appellate system to resolve international disputes during UHLC oil and gas conference

Dr. Diego García Carrión, attorney general of Ecuador.

Dr. Diego García Carrión, attorney general of Ecuador.

Sept. 23, 2016 – The top attorney in Ecuador, Dr. Diego García Carrión, explained the need for clarity in international arbitration disputes at the 3rd Houston Oil and Gas Investment Arbitration conference hosted last week by the University of Houston Law Center's Environment, Energy & Natural Resources Center.

García Carrión presented his new book, "A Critical View of Investment Arbitration Based on Ecuadorian Experience: An Analysis of the Investor-state Dispute Settlement, Its Flaws, Contradictions and Proposals for a Change."

During his presentation, Ecuador's attorney general explained his country's main concerns about the investor-state dispute settlement system. He said a lack of coherence and accuracy concerning investor's rights and states' obligations can lead to inconsistencies in the interpretation of investment standards and how monetary judgments are decided

"A disparity of reasoning or ambiguity in the reasoning of arbitrators to establish a monetary judgment is another defect of the current arbitration system," García Carrión said  "In certain cases, arbitration tribunals give exaggerated deference to investors, despite their submission of illegitimate claims or even in cases when the investors have lost certain claims.

"In turn, contrary to what a subject of international law would expect, in certain cases, arbitral tribunals issue unclear reasoning to explain a monetary judgment awarded against a state."

To avoid confusion in the future, García Carrión suggested the development of a comprehensive appellate system for states and investors that determines arbitration awards.

Law Center Dean Leonard M. Baynes gave introductory remarks at the conference held at the Four Seasons Hotel in downtown Houston. He cited the Law Center's growing activity in the study of international investment arbitration with new classes and pointed to student successes in writing competitions at the International Centre for Settlement of Investment Disputes and moot arbitration competitions.

Greg W. Hopper, vice president and head of Americas gas and power consulting for Wood Mackenzie, provided an overview of the long-term outlook for natural gas and the international commercial considerations that will shape future market transactions.

The conference then focused on four panels that discussed trending topics such as the Trans-Pacific Partnership and its impact on investment arbitrations in the oil and gas sector, the annulment of arbitration awards in the oil and gas sector, the applicable law to environmental counterclaims, and a last panel on renewable energy and investment arbitration.

Local attorneys participated in the conference along with representatives of national and international firms, including Allen & Overy, Baker & Mackenzie, Chadbourne & Parke, Clifford Chance, Crowell & Moring, DLA Pipers, Greenberg Traurig, King & Spalding, and TozziniFreire Advogados.

The conference was sponsored by Crowell & Moring, Dechert, the Houston Journal of International Law and media partners Transnational Dispute Management Journal and the Oil, Gas & Energy Law Intelligence Journal.

Additional organizers include Ian Laird from the International Law Institute and Georgetown University, Professor Freddy Sourgens, associate director of the Washburn Oil and Gas Law Center and Professor Julian Cardenas, research professor at the Law Center's EENR Center.

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