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Settling the score – How to file arbitration claims under the Asean Agreement

Following our first article in this “Arbitration in Asean” series, which explained the new model for arbitration under the Asean Agreement, this article focuses on filing claims.


Jerrold Kippen

Saturday 8 April 2017, 11:00AM

An adjudicator hears a claim at the Kuala Lumpur Regional Centre for Arbitration (KLRCA), one of the avenues investors can take in instituting an arbitration claim under the Asean Agreement. Photo: KLRCA
An adjudicator hears a claim at the Kuala Lumpur Regional Centre for Arbitration (KLRCA), one of the avenues investors can take in instituting an arbitration claim under the Asean Agreement. Photo: KLRCA


The Asean Agreement provides several different protections to eligible investors and allows such investor to submit a claim against the investment State for loss of, or damage to, their investment as a result of a breach of the Asean Agreement by failing to provide such protections.

The investor who incurs such loss or damage may then submit a claim:

(a) to the courts or administrative tribunals of the investment State, provided that such courts or tribunals have jurisdiction over such claims; or

(b) under the ICSID (International Centre for Settlement of Investment Disputes) Convention and the ICSID Rules of Procedure for Arbitration proceeding, provided that both the investment State and the investor’s State are parties to the ICSID Convention; or

(c) under the ICSID Additional Facility Rules, provided that either the investment State or the investor’s State is a party to the ICSID Convention; or

(d) under the UNCITRAL (United Nations Commission on International Trade Law) Arbitration Rules; or

(e) to the Regional Centre for Arbitration in Kuala Lumpur, or any other regional centre for arbitration in Asean; or

(f) if the disputing parties agree, to any other arbitration institution, provided that resort to any arbitration rules or forum under sub-paragraphs (a) to (f) excludes resort to any other.

If the investor chooses to submit its claim to arbitration under one of the five options above, then:

(a) the submission must be made within three years of the time at which the disputing investor became aware, or should reasonably have become aware, of the breach of an obligation under the Asean Agreement that causes the claimed loss or damage; and

(b) the investor must provide written notice of its intent to submit the claim, and details of the claim, to the investment State at least ninety days before the claim is submitted; and

(c) the notice of arbitration must be accompanied by the investor’s written waiver of the investor’s right to initiate or continue any proceedings before the courts or administrative tribunals of the investment State, or other dispute settlement procedures, of any proceeding with respect to any measure alleged to constitute the breach. This does not, however, preclude the investor from seeking interim measures of protection from any relevant court or tribunal.



The Asean Agreement also regulates certain matters regarding the conduct of any arbitration pursuant to the Asean Agreement as follows:

(a) where any preliminary objection to admissibility or to the tribunal’s jurisdiction is raised, the arbitration tribunal is required to decide it in the form of an award before proceeding to any remaining merits of the case;

(b) where a preliminary objection is to any claim against the investment State specifically, the investment State must file its objection no later than thirty days after the constitution of the tribunal stating as specifically as possible why the claim is: (1) “manifestly without merit”; or (2) “outside the jurisdiction or competence of the tribunal”;

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(c) the tribunal is explicitly empowered to award reasonable costs in connection with any preliminary objection to the prevailing party;

(d) where the parties have not agreed to the place of arbitration, the tribunal is empowered to determine the place of arbitration provided that such place is a party to the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards;

(e) where the dispute relates to an alleged taxation measure, the investment State and the investor’s State, including representatives of their tax administrations, are required to hold consultations to determine whether the measure in question is, indeed, a taxation measure.

This is of import because the Asean Agreement does not protect investors from taxation measures by a party State, except where such taxation affects the transfer of an investor’s funds or where it amounts to an “expropriation” (as defined by the Asean Agreement).

Where the investor claims that the investor State’s adoption or enforcement of a taxation measure has resulted in the “expropriation” (as defined by the Asean Agreement) of the investor’s investment, the investment State and the investor’s State, upon request from the investment State, are required to hold consultations with a view to determining whether the taxation measure in question has an effect equivalent to such expropriation.

The arbitration tribunal is not required to defer to either of the States’ decisions in these regards but it is required to “accord serious consideration”

to them. But, if the either State fails to provide their decision in a timely manner, then the tribunal must proceed without it; and

(f) The Asean Agreement also allows an investment State to provide transparency regarding any arbitration proceeding to its citizens by allowing the parties to make publicly available all awards, and decisions produced by the tribunal. However, both the parties and the tribunal are required to keep any information submitted in the proceeding (that is specifically designated as confidential) protected from public disclosure.


There are also provisions giving the investment State the right to:

(1) submit an objection that the claim is manifestly without merit (essentially without merit as a matter of law assuming the facts are as agreed, i.e. what would be referred to in American jurisprudence as “summary judgement motion”) and to have that objection ruled on before the tribunal proceeds further;

(2) to have reasonable non-discriminatory taxation measures excluded from any basis of a claim of expropriation and to have the right to official comment thereon with the tribunal bound to give due consideration thereto; and

(3) to provide transparency to its citizens by making public any non- specifically-confidential information regarding the arbitration.

These are all radical departures from the old investment agreement model. For example one will not find any of these measures under Thailand’s bilateral investment agreements with the United Kingdom (1978), China (1985), Sweden (2000) nor Germany (2002). These new-model provisions are intended to provide a more equitable consideration of the investment State’s interests.


This is the second part of the “Arbitration in Asean” series. See also “Phuket Law: Arbitration in Asean – Legal rights in agreements enforced”. (Click here.)

DUENSING KIPPEN is an international law firm specializing in business transaction and dispute resolution matters, with offices in Bangkok and Phuket, Thailand and affiliated offices in 45 other countries. Visit them at:



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