The "clean hands" doctrine in investment Arbitration and its applicability to the Ecuadorian legal system

Authors

  • Andrés Armando Cervantes Valarezo Universitat Pompeu Fabra; Universidad de Especialidades Espíritu Santo.

DOI:

https://doi.org/10.18272/iu.v22i22.1133

Keywords:

Clean hands doctrine, Investment arbitration, Illegal investments, Corruption

Abstract

The Clean Hands doctrine is currently applied in international investment arbitration. Tis doctrine has the effect that arbitration tribunals declare their lack of competence over to process the dispute proposed by the investor and the host State. This doctrine could be applied when: a) the investment is illegal; and, b) when arbitrators fnd acts of corruption such as embezzlement, bribes or influence peddling. The article analyses, in frst place, how under a case law basis, the doctrine has been applied in different international investment arbitration procedures, concluding that there is no consensus on the nature of the doctrine "” whether or not it constitutes a customary law principle"” under international law nor about the required test standard. Second, the paper analyzes whether the Clean Hands doctrine could be applied or not in disputes on public contracts under Ecuadorian law.

Downloads

Download data is not yet available.

References

Baizeau, D. y Hayes, T. (2017). Te Arbitral Tribunal"™s Duty and Power to Address Corruption Sua Sponte. En A. Menaker (ed.), International Arbitration and the Rule of Law: Contribution and Conformity. Vol. 19 (pp. 225-265.), ICCA Congress Series, Kluwer Law International.

Cervantes, A. (2016). Inconveniencia del Arbitraje de Inversión CIADI y de Órganos regionales arbitrales para América Latina. Revista Internacional de Arbitraje, Universidad Sergio Arboleda (24), 104-123.

"” (2017). "Nuevo Constitucionalismo Latinoamericano y Arbitraje de Inversión". Spain Arbitration Review. Revista Del Club Español de Arbitraje, (30), 81-100.

Dumberry, P. y Dumas-Aubin, G. (2014). Te Doctrine of "Clean Hands" and the Inadmissibility of Claims by Investors Breaching International Human Rights Law. Transnational Dispute Management, 10(1).

Fach Gómez, K. (2017). Inversiones internacionales y corrupción en América Latina: La función del arbitraje de inversiones en el avance de la institucionalidad democrática. Max Planck Institute for Comparative Public Law, Research Paper Series, (23), 1-39.

Fitzmaurice, G. (1957). Te General Principles of International Law. RCADI, 92.

Gillis, J. (1994). Issues of Corruption before International Arbitral Tribunals; Te Authentic Text and True Meaning of Judge Gunnar Lagergren"™s 1963 Award in ICC Case N° 1110. Arbitration International, 10 (4), 277-294.

Habazin, M. (2016). Investor Corruption as a Defense Strategy of Host States in International Investment Arbitration: Investors"™ Corrupt Acts Give an Unfair Advantage to Host States in Investment Arbitration. Cardozo Journal of Confict Resolution, 18, 805 - 828.

Kaldunski, M. (2015). Principle of Clean Hands and Protection of Human Rights in International Investment Arbitration. Polish Review of International and European Law, 4, 69-101.

Marchán, J. (2011). El tratamiento del arbitraje en la nueva Constitución ecuatoriana. Revista Iuris Dictio, 12 (14), 203-215.

Mirzayev, R. (2012). International Investment Protection Regime and Criminal Investigations. Journal of International Arbitration, 29, 71-106. Moloo, R. y Khachaturian, A. (2010). Te Compliance with the Law Requirement in International Investment Law. Fordham International Law Journal, 34, 1473-1501.

Neira, E. (2007). El Estado y el juicio de arbitraje según la legislación ecuatoriana. Revista Iuris Dictio, 7 (11), 62-69.

Ofcina de las Naciones Unidas contra la Droga y el Delito (2016). La corrupción y el desarrollo.

Pavic, B. (2012) and International Commercial Arbitration. Te Role of Mandatory Rules and Public Policy. International Law in the New Two Decades: Form or Substance? (pp. 661-686). Wellington: Victoria University.

Reinisch, A. (ed). (2008). Standards of Investment Protection. Oxford: Oxford University Press.

Legislación:

Código Civil de la República del Ecuador. Registro Ofcial Nº 46, Suplemento, 24 de junio de 2005.

Constitución de la República del Ecuador. Registro Ofcial Nº 449, 20 de octubre de 2008.

Ley Orgánica del Sistema Nacional de Contratación Pública de la República del Ecuador. Registro Ofcial Nº 395, 4 de agosto de 2008.

Convenio sobre arreglo de diferencias relativas a inversiones entre Estados y Nacionales de otros Estados, en vigor desde el 14 de octubre de 1966.

Sentencias y laudos arbitrales:

Corte Constitucional de la República del Ecuador (2015). Sentencia Nº 325-15-SEP-CC, caso Nº 1139-13-EP, 30 de septiembre de 2015.

Corte Internacional de Justicia (1986). Nicaragua vs. Estados Unidos. Sentencia del 27 de junio de 1986.

Cámara Internacional de Comercio. Nº. 1110, 1963, dictado por el árbitro Gunnar Lagergren (partes confdenciales), YCA 1996.

CIADI / Centro Internacional de Arreglo de Diferencias Relativas a Inversiones (2001). Salini Construttori S.P.A & Italstrade S.P.A v. Reino de Marruecos. Caso No. ARB/00/4.

"” (2004). Tokio Tokelés v. Ucrania. Caso No. ARB/02/18.

"” (2006). F-W Oil Interests Inv. v. República de Trinidad y Tobago, Caso No. ARB/01/14.

"” (2006). Inceysa Vallisotelana S.L. v. la República del Salvador, Caso No. ARB/03/26.

"” (2006). World Duty Free Company Ltd. v. República de Kenia, Caso No. ARB/00/7.

"” (2007). Fraport AG Frankfurt Airport Services Worldwide v. República de Filipinas. Caso No. ARB/03/25.

"” (2008). Desert Line Projects LLC v. República de Yemen. Caso No. ARB/05/17.

"” (2008). Plama Consortium Ltd. v. República de Bulgaria. Caso No. ARB/03/24.

"” (2009). EDF (Services) Limited v. Rumania, Caso No. ARB/05/13.

"” (2010). Anderson y otros v. República de Costa Rica. Caso No. ARB (AF)/07/3.

"” (2010). Gustav F.W Hamester, GmbH & Co KG v. República de Ghana. Caso No. ARB/07/24.

"” (2010). Señor Saba Fakes v. República de Turquía. Caso No. ARB/07/20.

"” (2013). Metal-Tech Ltd. v. República de Uzbekistán, Caso No. ARB/10/3.

Published

2018-12-13

How to Cite

Cervantes Valarezo, A. A. (2018). The "clean hands" doctrine in investment Arbitration and its applicability to the Ecuadorian legal system. Iuris Dictio, (22). https://doi.org/10.18272/iu.v22i22.1133

Issue

Section

Monográfica