Any arbitration under the Asean Agreement may only award:
(a) monetary damages and any applicable interest; or
(b) restitution of property, in which case the award must provide that the investment State may pay monetary damages and any applicable interest in lieu of restitution; and
(c) costs and attorney’s fees in accordance with the Asean Agreement and the applicable arbitration rules.
Notably, the Asean Agreement explicitly prohibits any award of punitive damages. The Asean Agreement also prohibits an investor from enforcing an award issued under the ICSID Convention until either:
(a) 120 days have elapsed from the date the award was rendered and no disputing party has requested revision or annulment of the award; or
(b) revision or annulment proceedings have been completed.
In the case of a final award under the ICSID Additional Facility Rules, the UNCITRAL Arbitration Rules, or other arbitration rules selected by the parties, an investor may not enforce the award until:
(a) 90 days have elapsed from the date the award was rendered and no disputing party has commenced a proceeding to revise, set aside, or annul the award; or
(b) a court has dismissed or allowed an application to revise, set aside, or annul the award and there is no further appeal.
Provisions such as:
(1) essentially limiting damages awardable to an investor to sums of money and excluding punitive damages; and
(2) prohibiting an investor from immediately enforcing an award,
were also unheard of in the old investment model agreements (including the ones that Thailand is a party to mentioned above) and are also intended to give due consideration to the investment State’s interests.
Finally, the Asean Agreement also defines any claim that is submitted to arbitration under the Asean Agreement to be a “commercial” relationship or transaction for purposes of Article 1 of the New York Convention.
This is important because some countries enforce arbitration agreements under the New York Convention only if they are “commercial” in nature. These countries have in the past presumed that awards issued pursuant to investment treaties did not arise from a commercial relationship and are, therefore, not commercial in nature. Thus, the Asean Agreement provides for the broadest possible enforcement breadth under the Convention.
This is the third and final part of the “Arbitration in Asean” series. See also “Phuket Law: Arbitration in Asean – Legal rights in agreements enforced” (click here) and “Phuket Law: Settling the score – How to file arbitration claims under the Asean Agreement” (click here).
DUENSING KIPPEN is an international law firm specialising in business transaction and dispute resolution matters, with offices in Bangkok and Phuket, Thailand and affiliated offices in 45 other countries. Visit them at: duensingkippen.comns are intended to provide a more equitable consideration of the investment State’s interests.