Environmental Engineering Reference
In-Depth Information
4.8 Public Policy and State Immunity Illustrate the Need
of Cooperation
Public policy and state immunity are two of the main reasons why arbitration
awards are not enforced in the in MENA countries. To date, arbitration courts,
states and sometimes even their national courts have tried to limit the application of
state immunity as tool to prevent foreign award implementation. This is different
concerning public policy. Due to the definition problem and hence the scope of
public policy, it is almost impossible to constrain it. Public policy might cause
problems in countries where the Shari
a has a lot of influence on the legal system.
The biggest problem is that both tools are frequently misused to avoid execution
of unwanted arbitration awards. Nevertheless, there is a great acceptance of arbi-
tration within the Arab world and only a few arbitration awards have been subject to
discussion. Both state tools emphasize the importance that both partners (e.g. an
investor and Morocco/ONE) cooperate. The best way to avoid utilization of these
tools is to have a good partnership prior to this event. Both parties must accept and
tolerate each other to successfully complete the project. This includes the avoidance
of stereotypes like European supremacy and Arab states being less developed. As
the term PPP already includes partnership, it seems to be forgotten from time to
time that partnerships are a mixture of “give-and-take.”
In the case of Morocco, national and international public policy might apply.
Morocco does not have the reputation of resorting to public policy. The experiences
with previous oil concessions in the Middle East also illustrate that the objection to
public policy was not an issue. As long as the project contributes to the economy,
there is only a low risk that someone will raise the issue of public policy. This is
closely connected to the importance of financial support to make the project
beneficial right from the start. Then a basic rule might be set up: the more the
Shari
'
a influences the national legal system, the higher the risk is that public policy
claims will be used to avoid recognition of foreign awards. With regard to state
immunity, an investor should demand a waiver of immunity of execution. This is
especially important since the normal arbitration agreement does not encompass
such a waiver. French national courts in particular viewed an ICC arbitration clause
as a waiver. However, this decision was highly controversial and thus cannot
directly apply to other cases. Moroccan courts have not dealt with this issue yet.
The ICSID Convention faces fewer problems with state immunity, but the issue of
immunity from execution also remains. This underlines its importance, but it is
going to be difficult for an investor to negotiate a comparable waiver.
It is important both parties should try to avoid arbitration in the first place. This
can only happen if they are willing to accept that it is a partnership. Hence, both
sides must benefit from the cooperation. Only if there is a positive atmosphere of
talks and cooperation can issues like public policy and state immunity be
circumvented. Negotiations must be free of any stereotypes an investor should
not try to get as much benefit out of the project as possible and Morocco should not
try to offload as many obligations as possible due to resentments towards Europe.
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