Dear Editor,
I support Justice Gino Persaud’s decision on enforcing the arbitral award from the International Chamber of Commerce (ICC) Award 2019. The case is ConocoPhillips Gulf of Paria B.V v. Corporacion de Venezolana de Petroleo, S.A, Petroleos de Venezuela S.A. Justice Persaud in his decision indicated that ‘The notions submitted by the AG in writing at paragraphs 69 and 71 of his submissions that if I were to recognise the Award it would be wholly offensive and expose the Court in the minds of the Guyanese people to allegations of unpatriotic and anti-nationalist conduct is an offensive submission if not a veiled threat to the independence of the judiciary designed to intimidate the Court’.
Further, Justice Persaud indicated that ‘The AG is not the legal guardian of the minds of the Guyanese people. It is an opportunistic political argument perhaps best suited to the hustings of an elections campaign than a sound legal argument suitable for a Court’. In my view, the judge’s decision on the recognition and enforcement of the Award was correct in law.
However, a question to be asked is whether the AG, in his submission, has blurred the lines between his role as the Attorney General, the chief legal officer and that of Minister of Legal Affairs, the chief advisor to the government on legal policy? Another important point for consideration is international dispute resolution, arbitral awards and their enforcement and execution. The Judge found that the company ConocoPhillips had successfully registered and enforced the award in the United Kingdom, United States, Jamaica, Trinidad and Tobago and other countries.
The International Centre for Settlement of Investment Disputes Convention (ICSID), Regulations and Rules, Section 6, Recognition and Enforcement of the Award, indicates under Article 54 (1) ‘Each Contracting State shall recognize an Award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that Award within its territories as if it were a final judgment of a court in that State. A Contracting State with a federal constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the Award as if it were a final judgment of the courts of a constituent state.’
Article 54 (3) indicates ‘Execution of the Award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought’. Article 55 ‘Nothing in Article 54 shall be construed as derogating from the law in force in any Contracting State relating to immunity of that State or of any foreign State from execution’.
The New York Convention – Convention on the Recognition and Enforcement of Foreign Arbitral Awards, governs the registration and enforcement of so-called “foreign” arbitral awards. The Convention notes that ‘Contracting States must generally recognize arbitration awards rendered in other Contracting States and enforce them in accordance with their rules of procedure.’ The grounds for a national court refusing enforcement are limited based to any of the following six reasons: public policy; lack of a valid arbitration agreement; violation of due process; excess of the arbitral tribunal’s authority; irregularity in the composition of the arbitral tribunal or arbitral procedure; or where the award has not yet become binding, has been set aside or suspended.
The Attorney General in this case used the grounds of public policy to request that the Guyana Court refuse to enforce the award. While one can understand the grounds used by the AG, based on public policy, the question is, was the substantive argument sufficient to convince the national court that the Award should not be enforced based on a point of law? While the public policy argument focused on the ‘essential security interest’ of Guyana, it was very broad. For the AG to indicate that if the court were to recognise the Award it would be offensive and expose the Court to allegations of being unpatriotic and anti-nationalist, was highly inappropriate.
The jurisprudence and practice on Investor-State Dispute Settlement (ISDS) is still evolving. As such, on the procedural side, perhaps the AG in his capacity of Minister of Legal Affairs, can explore State immunity, specifically, for the recognition, enforcement, and execution of arbitral awards by Guyana in relation to Venezuela, based on the border controversy. However, this may have to be an additional procedure, and if found to have merit and put into effect, it would be applicable in future cases. The company ConocoPhillips has already brought the case before the national courts and a decision was made to recognize and enforce the award based on current established procedures.
It may be an important point for the AG to note that in some cases, State immunity has been used to bar measures of execution of Investor-State Dispute Settlement awards. In the case of AIG v. Kazakhstan, an English court registered an ICSID award as an English judgment, however, the Court rejected its execution on the grounds that the assets in question benefitted from absolute immunity because they were the “property” of the Kazakhstan central bank, hence, they were sovereign rather than commercial assets.
Another landmark judgment in a case before the Hong Kong Court of Final Appeal held that absolute state immunity applies in Hong Kong China. Under the absolute theory, immunity applies to all foreign State assets whether they are used for sovereign or purely commercial transactions. Therefore, investors cannot execute awards against foreign States in Hong Kong China in the absence of a waiver of immunity. Can some limited immunity be considered for Guyana, in the case of Guyana and Venezuela, based on a substantive argument of public policy from the essential security interest perspective?
If Guyana should in the future effect a procedure for using State immunity, specifically for recognition, enforcement, and execution of arbitral awards in relation to Venezuela because of the border controversy, then judges in future cases would have this established national procedure for consideration. However, until the national Courts have some additional procedural positions for consideration, foreign investors are entitled to be accorded the general standards on fair and equitable treatment in enforcement of arbitral awards.
Therefore, Justice Persaud’s decision to recognize and enforce the arbitral Award was appropriate based on the jurisprudence and practice in International Investment Law, Investment Treaty Law, Administrative Law, International Centre for Settlement of Investment Disputes Convention (ICSID) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (The New York Convention).
Finally, while this case has presented a challenge in the Guyana context, it has presented an opportunity for Guyana, more specifically for the AG, to be creative and innovative and perhaps expand the jurisprudence and practice of ISDS, instead of the AG focusing on his feeling and threatening to take the judge to the Judicial Service Commission (JSC).
Sincerely,
Citizen Audreyanna Thomas
Advisor – Rule of Law Masters of
Jurisprudence
Rule of Law for Development August
2, 2024