ISDS

CPTPPA – progress?

The kindlier version of the TPPA, the Comprehensive and Progressive TransPacific Partnership Agreement, has been in the press recently, with an excellent article from Simon Foote of Bankside Chambers in the NBR (sorry, I can’t link it, as it’s behind a firewall), and an article in the UK’s CDR magazine, in which Daniel Kalderimis from Chapman Tripp sheds some light on the revisions, and there are some nice quotes from Deborah Hart and from me in our AMINZ capacities.

For the moment, the CPTPPA remains stalled.  In the joint Ministerial Statement, released on 11 November while all representatives of the signing States were in Vietnam, a number of provisions in the original TPPA (of primary importance to the US) were suspended.  Formal signature, and final ratification remains up in the air, particularly with Canada suffering what appears to be speed wobble.  It’s a case of “watch this space”.

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By |November 16th, 2017|Dispute Resolution, ISDS|0 Comments

Public Sector Procurement after the Court of Appeal decision in Problem Gambling

On Tuesday, 14 November 2017, I was asked to present a paper at a Legalwise seminar on Public Decision Making and Reason Writing.  The focus of my paper was on the relevance of the Government Rules of Sourcing, the WTO Government Procurement Agreement (GPA), which New Zealand acceded to on 13 July 2015, and recent case law on importing public law issues into challenges of Government procurement projects.

The accepted position, outlined by Lord Hoffman in Pratt Contractors v Transit [2003] UKPC 83, is that internal government rules are a matter of compliance for the procuring body, but are not a basis for challenge by disappointed contractors.  That position was largely confirmed by the NZ Court of Appeal in 2008 in the case of Lab Tests v Auckland District Health Board [2008] NZCA 385.  In relation to the availability of judicial review, the Court of Appeal held that such review was really only available in cases of fraud, corruption and bad faith.

In Ririnui v Landcorp [2016] NZSC 62, the Supreme Court opened the door slightly on judicial review, however that case would seem to be relatively fact specific.

This approach was confirmed by the Court of Appeal, in A-G v Problem Gambling Foundation of New Zealand [2016] NZCA 609, overturning the decision of Woodhouse J in the High Court (Problem Gambling Foundation v A-G [2015] NZHC 1701).  Winkelmann J made a number of important findings in the Court of Appeal:

  • the narrow test for judicial review outlined by the Court of Appeal in Lab Tests is to be preferred, being available only in cases of fraud, corruption, bad faith and similar circumstances, and not as an avenue for disappointed bidders to challenge procurement processes
  • the Government Rules of Sourcing may bind Government agencies, but they do not impose a procedural obligation enforceable by potential contractors
  • fairness and good faith are requirements in procurement processes, however they only require honesty and a willingness to consider information which might change a reasonable and honestly held view – those evaluating tenders are not required to leave their previous experience at the door
  • if a request for proposals excludes the intention of creating legal relationships during the tender procedure, then a process contract cannot be implied
  • in order to establish a breach of legitimate expectation, the claimant must establish – (1) the nature of the commitment by the public authority, whether by promise, settled practice or policy; (2) that the reliance on the promise, practice or policy was legitimate; and (3) the appropriate remedy

Notably, the Court of Appeal has widened (slightly) the grounds for judicial review from the narrow test proposed in Lab Tests by the reference to similar circumstance, but that will really be factually specific for each case.  The Problem Gambling Foundation failed, in the Court of Appeal’s view, to make out that case.

In relation to the Government Rules of Sourcing, while they cannot be used a basis for challenge, as outlined by Winkelmann J, if a process contract can be implied, and if those Rules are incorporated into the tender procedures, either directly or by reference, then clearly they can be used as a basis for challenge.  That challenge would, then, be in contract, rather than by judicial review.

In relation to the GPA, while this is a State to State agreement, the NZ Government is required to establish a review board to hear complaints from suppliers from other States over breaches of the GPA.  The review board has the power to direct the contract to be set aside, the procurement process to be run again and/or to award damages for breach of the GPA.  While the Government Rules of Sourcing are broadly consistent with the GPA, the latter is more prescriptive.  Much like the current discussions over ISDS, it will be interesting to see if any foreign corporates take the opportunity to challenge a public procurement process in NZ.

A copy of my paper is available here:

Government Procurement – Legalwise

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John Walton in LawFuel’s 2016 list of arbitrators to watch

Legal publisher, LawFuel, has released its 2016 list of arbitration stars – John Walton has been listed as an “up-and-comer” or one to watch, along with former Solicitor-General Mike Heron QC, NZDRC’s John Green, rural specialist Ranald Gordon, Chapman Tripp’s Daniel Kalderimis and Russell McVeagh’s Sally Fitzgerald.

It’s an illustrious list. 

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TPPA – Chill Wind, or Hot Air

With the increase in global trade, and cross-border investment over the last 20 years in particular, it has become critical for parties to develop a means of settling disputes and for lawyers to be able to advise them.  International arbitration has provided a reliable and effective means of ensuring disputes are dealt with under the rule of law; it is an accepted means for parties to settle commercial disputes, and the only effective means for dispute resolution in cross border disputes.  The alternative would require one party to submit to the jurisdiction of the courts of the other.  In practical terms, that would constrain most inward investment from the First World into the developing world.

This is where much of the criticism of ISDS is centred.

The following article was published in the latest edition of LawNews, the publication of the Auckland District Law Society Inc.

TPPA – LawNews

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ISDS – What it means in practice

The arbitral award in the case of von Pezold v Republic of Zimbabwe, issued in July 2015, has recently been released online.

The case provides an interesting example of how investor state dispute settlement (ISDS) works in practice – it also gives an interesting perspective into ISDS at a time when the debate over the TPPA seems to be dominated by more heat than balance.

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