ICSID Chair follows Mr. Dupuy’s recommendation, rejects arbitrator challenge

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CAFTA parties’ agreement on arbitrators’ nationalities applies to appointments made by the parties as well as appointments by ICSID’s Secretary-General

Treatment of similar provisions in NAFTA amounts to relevant practice and militates for allowing a party to appoint an arbitrator who holds the nationality of either party to the dispute

Matter is rendered more complex by Honduras’ refusal to participate in tribunal’s constitution

Mr. Dupuy finds that key question is whether Honduras consented to the appointment of an arbitrator holding the nationality of either party to the arbitration

ICSID Chair is tasked with ruling on the disqualification proposal and decides to seek recommendation from Pierre-Marie Dupuy

Background: Honduras challenges Mr. Rivkin, arguing that claimants could not appoint an arbitrator holding their nationalities under the ICSID framework

CAFTA requires public hearing – with best option being a livestream through ICSID’s website

Arguments in Rejoinder must be responsive to claimant’s previous pleadings

ILC Articles’ contributory fault rule does not contain exception for human rights obligations

USA considers that reflective losses cannot be awarded directly to the claimant under CAFTA

USA sets out views on treaty’s protections against discrimination and unlawful expropriation, as well as minimum standard of treatment and need for causal nexus

Tribunal has no power to hold hearings outside of Washington, D.C., absent agreement of the parties

Factual circumstances don’t justify grant of security for costs

Security for costs order requires exceptional circumstances

CAFTA does not cover mere contractual breaches

USA adds observations on distinction between indirect expropriation and regulatory measures

USA stresses role of police powers doctrine and proposes same standard of compensation for lawful and unlawful expropriations

USA reiterates that, in its understanding, legitimate expectations, good faith, and non-discrimination are not part of customary minimum standard of treatment

USA provides test to assess compliance with NT and MFN treatment

Tribunal should first assess if procurement exception applies

Limitations period is a rigid jurisdictional requirement

USA argues that definition of investment is only illustrative and must be assessed case-by-case, considering compliance with domestic laws of host state

Substantial business activities requirement aims to discourage “free riding” and can be invoked to deny benefits to shell companies

Background: Political shift in Dominican Republic leads to alleged exclusion of claimant from domestic market; US company claims various CAFTA breaches, while respondent raises jurisdictional objections

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