1. INTERNATIONAL
ARBITRATION
AND LATIN AMERICA
by
Luis M. O’Naghten
A kerman & Mackrell
International Latin A merican Bus ines s Initiative
Miami, Florida March 22-23

2. WHY INTERNATIONAL
ARBITRATION?
"In the transnational environment, international arbitration is the
only game. It is a de facto monopoly. … So the reason I insist that
international arbitration is not arbitration is that we can live without
arbitration. Countries A, B, and C may take different views –
encourage, discourage, or even outlaw arbitration – but if
international arbitration goes, international economic exchange will
suffer immensely."
~Jan Paulsson, "International Arbitration is not Arbitration,"
Stockholm International Arbitration Review, 2008:2

3. Why International
Arbitration?
• A tale of 2 horror stories
• The Chevron and Dole cases

4. Chevron's Ecuadorian
Environmental Contamination Case
• Chevron purchases Texaco in 2001 (including
Ecuadorian affiliate Texpet)
• Texpet accused of causing environmental damage to
rain forest (1966-1992)
• Texpet and Ecuador reached a 1995 settlement
(assumption of responsibility by Petroecuador)
• Texpet sued in NY federal court 1993
• Case dismissed case in 1996: forum non conviniens
• Plaintiffs in 2003 re-filed in Ecuador and Chevron
now faces a $27 Billion adverse judgment
• Chevron filed an arbitration against Ecuador in the
Permanent Court of Arbitration alleging denial of
justice claim

5. Osorio v. Dole Food Company
• Oct. 20, 2009 S. Dist. Fla. Federal court
refused to enforce a $97 million dollar
award against Dole ($647K per person)
• 150 Nicaraguans sued for having been
exposed to a pesticide (DBCP) b/w
1970-1982
• Nicaraguan court awarded judgment based
on "Special Law 364" enacted in 2000 to
handle the DBCP
• Plaintiffs sought enforcement in Florida
• Court ruled: "the judgment in this case did
not arise out of proceedings that comported
with the international concept of due
process."

6. Use Of International
Arbitration
Disadvantages  Not comfortable with
foreign law, courts and
to lack of understanding of
foreign procedure
international
 Difficulty in recognizing
litigation judicial awards
 Perception that foreign
courts may be corrupt
 Not wanting to deal with
foreign language
 Lack of confidentiality
 Too much time
 Too expensive

7. Use Of International
Arbitration
• Perceptions of international
arbitration*
 International arbitration is the
preferred mechanism of dispute
resolution for cross border disputes
 International arbitration is effective
 Enforcement procedures work
* International Arbitration: Corporate Attitudes and
practice, Study by PriceWaterhouseCoopers and the School
of International Arbitration, Queen Mary, University of
London, 2006 and 2008

8. Use of International
Arbitration
73% of in-house counsel prefer
arbitration to resolve cross-border disputes
* International Arbitration: Corporate Attitudes and Practice, Study by
PriceWaterhouseCoopers and the School of International Arbitration, Queen
Mary, University of London, 2006 and 2008

9. Use Of International
Arbitration
• 73% of in-house prefer arbitration to
resolve cross-border disputes*
 95% of in-house counsel insert some type of
dispute resolution clause to resolve cross border
disputes
 62% insist on arbitral clauses
 48% use standard arbitration clauses and 43%
tailor the clause to the individual contract
 88% satisfied with international arbitration
* International Arbitration: Corporate Attitudes and Practice, Study
by PriceWaterhouseCoopers and the School of International
Arbitration, Queen Mary, University of London, 2006 and 2008

10. Use Of International
Arbitration
 Ease of enforcement
of arbitral awards
Advantages to
(New York Convention) international
 Neutrality of arbitral arbitration
tribunals
 Flexibility
 Depth of expertise
of arbitrators
 Privacy and
confidentiality
 Finality

11. Use Of International
Arbitration
• Perceived disadvantages to international
arbitration
 Cost
 Length of time of proceedings
 Possibility of intervention by national courts into
the arbitral process
 Inability to compel third parties to join arbitral
proceeding

12. Use Of International
Arbitration
• Success of international arbitration*
 25% of cases resolved prior to final hearing; plus
7% resolved by settlement and consent decree
 49% of cases resolved with voluntary compliance
of arbitral award (76% of arbitral proceedings,
non-prevailing party voluntarily complied with
award)
 11% of cases result in recognition and enforcement
proceeding
 8% resolved by settlement followed by litigation
* International Arbitration: Corporate Attitudes and Practice, Study by
PriceWaterhouseCoopers and the School of International Arbitration,
Queen Mary, University of London, 2008

13. Use of International
Arbitration
• Statistics show increase use of
international arbitration*
 In 1992 there were 809 more US alienage
contract cases than international arbitrations
 In 2005, this was reversed: 1,749 more
international arbitrations than US alienage
contract cases
*Christopher A. Whytock, "The Arbitration-Litigation relationship in Transnational
Dispute Resolution: Empirical Insights from the US Federal Courts," in World
Arbitration & Mediation Review (Vol. 2, No. 5) (2008)

14. Use Of International
Arbitration
US alienage contract cases
vs.
international arbitrations

15. Use Of International
Arbitration
ICC Cases
• Case load doubled from 1992 (337 cases)
to 2008 (663 cases)

16. Use Of International
Arbitration
ICDR Cases
• 1999 cases 453
• 2008 cases 703 (55%
increase)/ 81
mediations
800
700
600
500
400
300
200
100
0
1
2
2
2
2
2
2
2
2
2
9
0
0
0
0
0
0
0
0
0
9
0
0
0
0
0
0
04
0
07
9
1
2
5
8
0
3
6

17. ARBITRATION IN
LATIN AMERICA

18. Historical Policy
Toward Arbitration
• Calvo Doctrine Summarized
–National law governs the rights of
foreign investors.
–A host state for foreign investors is not
required to confer any international
standard of treatment.
–Foreign investors should seek relief
through local courts alone (i.e., not
through diplomatic protection).

19. Historical Policy
Toward Arbitration
• Calvo Doctrine Restated
“The foreign investor [under ICSID], by virtue of the fact that
he is a foreigner, [is given] the right to sue a sovereign state
outside its national territory, dispensing with the courts of
law. This provision is contrary to the accepted principles of
our countries [in Latin America] and, de facto, would confer a
privilege on the foreign investor, placing the nationals of the
country concerned in a position of inferiority.”
~ Chilean Governor to the World Bank, Tokyo, 1964

20. Evolution of Latin American
Arbitration
1930 1960s-1970s
Late 1800s Global Protectionism 1975-2000
Calvo Doctrine Economic Demise of
Crisis Calvo
Doctrine 1990s
Free Market
Policies/BITs
1900 1925 1950 1975 2000
2010
Return of
1958
1976 Calvo?
New York
Convention Panama
Convention

21. Compendium of Latin American Arbitration Law
Country New York Panama Arbitration Washington BITs FTAs
Convention Convention Laws Convention
ARGENTINA 1989 1994 1967/81 1994 55 0
BOLIVIA 1995 1998 1997 1995 (07) 20 1
BRAZIL 2002 1995 1996 NO 0 0
CHILE 1975 1976 2004 1991 39 11
COLOMBIA 1979 1986 1989/96/98 1997 2 1
COSTA RICA 1987 1978 1998 1993 14 5
DOMINICAN
REP. 2002 NO 2008 NO 9 3
ECUADOR 1962 1991 1997 1986 (09) 25/17 0
EL SALVADOR 1998 1980 1989/93 1984 20 6
GUATEMALA 1984 1986 1995 2003 13 4
HONDURAS 2001 1979 2000 1989 9 5
MÉXICO 1971 1978 1993 NO 24 12
NICARAGUA 2003 NO 2005 1995 16 4
PANAMA 1985 1976 1999/2006 1996 17 4
PARAGUAY 1998 1997 2002 1983 27 0
PERU 1988 1989 2008 1993 30 2
URUGUAY 1988 1989 1988 1993 26 1
VENEZUELA 1995 1985 1998 1995 23 0
Compendium of Latin American Arbitration Law © 2009

22. ICC ARBITRATION
TRENDS

23. ICC Arbitrations
Latin American Parties

24. ICC Arbitrations
Latin American Parties
14 12.1%
12.6% 12.4%
11.4% 12%
12 9.8%
10.8% 11%
9.2%
10 8.7%
8
6
4
2
0
1999 2001 2003 2005 2007
Percentage

25. ICC Arbitrations
Latin American Parties
250
203 200
192 192
200 175
185
170
137
150 132
121
Latin American
Parties in ICC
100 Arbitrations
50
0
1999 2001 2003 2005 2007

26. ICC Arbitration Venues
Latin America
Venue
 Legal considerations are most important
 Logistical considerations must be considered

27. International Arbitration in
Latin America
• Arbitration Venues
• ICC countries - 2007

28. Advocacy in International
Arbitration
• Arbitration Venues
• ICC cities - 2007

29. ICC Arbitrations
Place of Arbitrations in Latin America
10
8.3%
8 6.3% 6.3%
5.5%
6 4.6%
4.5%
3.5%
4 2.8%
2
0
2001 2002 2003 2004 2005 2006 2007 2008
Percentage

30. ICC Latin American Venues
Country 2004 2005 2006 2007 2008
Argentina 11 4 3 5 1
Bolivia 1 0 0 0 0
Brazil 10 1 14 14 8
Chile 1 0 1 4 4
Colombia 1 1 0 0 0
Cuba 0 0 0 1 0
Guatemala 0 1 0 0 0
Mexico 10 10 11 8 9
Panama 0 0 0 0 1
Peru 0 0 0 0 1
Uruguay 1 2 0 0 4
Venezuela 1 0 0 0 0

31. ICSID Cases Against
Latin American States
Increase in ICSID Cases Against Latin American States
TOTAL CASES FILED EACH YEAR (EXCLUDING THE CARIBBEAN)
35 31
30 27 27
25
19
20
14
15
11 10 12
10 21
15
5
5 7
10
5 4 4 5
2
0
1998 1999 2000 2001 2002 2003 2004 2005 2006
(Partial)
Total ICSID Cases
ICSID Latin American Parties

32. ICSID Cases Against Latin
American States
% of ICSID/ICSID(AF) Cases Against Latin American States
19%
58%
39%
42% 61%
81%
58% 19% 39%
PENDING CASES CONCLUDED CASES ALL CASES
TOTAL 103 101 204
LATIN
AMERICAN 60 20 80
STATES

33. Survey of Arbitration in Latin
America
ARBITRATION LAW
Argentina 1967, ‘81
TREATIES NY CONVENTION 1989
PANAMA 1994
CONVENTION
ICSID CONVENTION 1994
BITs 55 IN FORCE
FTAs/MITs MERCOSUR 0
ICC CASES PER YEAR 2000 12
2004 30
2008 17
ICSID CASES PENDING 36
CONCLUDED 6

34. Survey of Arbitration in Latin
America
Bolivia
ARBITRATION LAW 1997
TREATIES NY CONVENTION 1995
PANAMA CONVENTION 1998
ICSID CONVENTION 1995 (07)
BITs 20 IN FORCE
FTAs/MITs ANDEAN COMMUNITY 1
ICC CASES PER YEAR 2000 2
2004 1
2008 0
ICSID CASES PENDING 2
CONCLUDED 0

35. Survey of Arbitration in Latin
America
Brazil
ARBITRATION LAW 1996
TREATIES NY CONVENTION 2002
PANAMA CONVENTION 1995
ICSID CONVENTION NO
BITs 0 IN FORCE
FTAs/MITs MERCOSUR 0
ICC CASES PER YEAR 2000 10
2004 30
2008 49
ICSID CASES PENDING 0
CONCLUDED 0

36. Survey of Arbitration in Latin
America
Chile
ARBITRATION LAW 2004
TREATIES NY CONVENTION 1975
PANAMA CONVENTION 1976
ICSID CONVENTION 1991
BITs 39 IN
FORCE
FTAs/MITs US-CHILE FTA, CH-EU, CH- 11
EFTA
ICC CASES PER YEAR 2000 5
2004 8
2008 5
ICSID CASES PENDING 3
CONCLUDED 0

37. Survey of Arbitration in Latin
America
Colombia
ARBITRATION LAW 1989, ’96,
’98
TREATIES NY CONVENTION 1979
PANAMA CONVENTION 1986
ICSID CONVENTION 1997
BITs 2 IN FORCE
MITs ANDEAN COMMUNITY, GROUP OF 3 1
ICC CASES PER YEAR 2000 3
2004 8
2008 2
ICSID CASES PENDING 0
CONCLUDED 0

38. Survey of Arbitration in Latin
America
Ecuador
ARBITRATION LAW 1997
TREATIES NY CONVENTION 1962
PANAMA CONVENTION 1991
ICSID CONVENTION 1986 (09)
BITs 17 IN
FORCE
FTAs/MITs ANDEAN COMMUNITY 0
ICC CASES PER YEAR 2000 4
2004 0
2008 2
ICSID CASES PENDING 5
CONCLUDED 1

39. Survey of Arbitration in Latin
America
Perú
ARBITRATION LAW ADOPTED 1996
TREATIES NY CONVENTION 1988
PANAMA CONVENTION 1989
ICSID CONVENTION 1993
BITs 30 IN
FORCE
FTAs/MITs US-PERU FTA, ANDEAN COMMUNITY 2
ICC CASES PER YEAR 2000 2
2004 2
2008 2
ICSID CASES PENDING 2
CONCLUDED 1

40. Survey of Arbitration in Latin
America
Venezuela
ARBITRATION LAW ADOPTED 1998
TREATIES NY CONVENTION 1995
PANAMA CONVENTION 1985
ICSID CONVENTION 1995
BITs 23 IN
FORCE
FTAs/MITs ANDEAN COM. (w/drew),
GROUP OF 3, MERCOSUR 0
ICC CASES PER YEAR 2000 9
2004 3
2008 2
ICSID CASES PENDING 3
CONCLUDED 3

41. Luis M. O’Naghten
Shareholder, Akerman Senterfitt
Miami Global Practice Group
Practice Area: International complex commercial litigation and
arbitration before United States courts and international arbitration
panels (under ICC, AAA/ICDR, and UNCITRAL rules); handles a wide
range of disputes in several countries in Latin America and Spain;
focus on international financial frauds, energy disputes, corporate
disputes; fluent in Spanish; 20+ years in field
Clients: Foreign sovereigns; parties adverse to foreign sovereigns;
major international banks; US based and foreign multinational
corporations; US energy companies
Professional affiliations: ICC Commission on Arbitration; ICC
Task Force on Revision of Rules; USCIB Arbitration Florida Sub-
Committee
Education: Georgetown University; Columbia Law School
Contact: luis.onaghten@akerman.com or at 305.982.5687