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Investment Dispute Settlement Commi

Investment Dispute Settlement Committee
With the increasing size of investment flow and the diversity of investment sources from all over the world, investment disputes are likely to arise among investors, or between the state and investors. This yields an urge to find a continuing and stable mechanism to deal with these disputes. Arbitration and court litigation are the two common and customary routes to resolve disputes among investors, or disputes between investors and the State. However, in an attempt to expedite the resolving of investment disputes and avoiding facing investors with the lengthy judiciary proceedings on the one hand or the costly arbitral proceedings on the other, negatively affecting the investment climate and reducing the State's ability to attract and preserve investments, endeavors have been made to lay the foundation for dispute settlement mechanisms contributing to the speedy resolving of investment disputes, e.g. the special economic courts, or to the amicable settlement of disputes outside the judiciary system and the arbitral tribunals. It is worth noting that the most recent amendment to the investment law in March of this year has introduced an entire new chapter to the investment law to regulate investment disputes settlement. [1] The investment law provides for two committees; the Ministerial Committee for the Settlement of Investment Disputes and the Committee for the Settlement of Investment Contracts Disputes. As for disputes that arise among investors, there are several mechanisms, including, but not limited to, the ‘Investor Disputes Settlement Centre’ at the General Authority for Investment that provides mediation services for investors should disputes arise between them.
Ministerial Committee for the Settlement of Investment Disputes
The Ministerial Committee for the Settlement of Investment Disputes looks into requests, complaints, or disputes that may arise between investors and administrative authorities.
Investment Disputes Settlement Committees were originally established under Law No. 8 of 1997. Moreover, Law No. 7 of 2000[2] was issued for the establishment of reconciliation committees in some disputes to which ministries and public entities are party. Several decrees have been issued by the Prime Minister regulating the investment dispute settlement committees, such as decree No. 115 of 2012, decree No. 32 of 2012, decree No. 714 of 2013, decree No. 363 of 2014 and decree No. 1092 of 2014. Recently, the Prime Minister issued decree No. 1272 of 2015[3] concerning the formation of the Ministerial Committee for the Resolution of Investment Disputes, and decree No. 1273 of 2015[4] regarding the formation, mandate and terms of reference of the technical secretariat of the Ministerial Committee for the Resolution of Investment Disputes. In its recent amendment in 2015, the investment law defines investment dispute settlement committee (the "Committee") and provides for its powers and competences. The law further provides that “the Cabinet of Ministers shall form a ministerial committee under the name "the Ministerial Committee for the Settlement of Investment Disputes", that shall have the authority to look into requests, complaints, or disputes that may arise between investors and administrative authorities in applying the provisions of the investment law". It is worth noting that after the adoption of Law No. 17 of 2015 in mid-March 2015, the former Minister of Justice suspended the activities of the Committee in anticipation of the formation of the Ministerial Committee by the Cabinet of Ministers pursuant to the provisions of the Investment Law. Similarly, the Executive Chairman of the General Authority for Investment and Free Zones suspended the activities of the Technical Secretariat authorized to study investor complaints and look into disputes arising between investors and administrative authorities in applying the provisions of the investment law in preparation for presenting such disputes to the Ministerial Committee. These decisions by the Minister of Justice and the Executive Chairman of GAFI have disrupted the work of the committee of which the raison-d’etre is to expedite the settlement of disputes and to decrease the amount of procedures. An important question also arises on the role of the committee, its ability to resolve disputes, and whether its decisions are binding or advisory? The investment law provides in Article No. (107) that "without prejudice to the right of the investor to resort to the judiciary, the Committee’s decisions, once approved by the Cabinet of Ministers, shall be enforceable and shall be binding to the administrative authorities concerned."
Prime Minister's decree No. 1272 of 2015 forming the Committee for the Settlement of Investment Disputes
It was expected that the decree No. 1272 of 2015 shall be issued only to form the Committee. However, the decree included other provisions regarding meeting schedules, meeting quorums and majorities required for the committee’s decisions, various provisions related to the decisions of the committee, and the period to resolve a dispute, set at thirty days, and hence, in our view, fulfilling the main objective for establishing the committee being the expediting of dispute resolution. The decree also highlighted the confidentiality of information, documents, and data presented to the Committee. As for the composition of the Committee, the decree provides in Article 1 that the committee shall be chaired by the Minister of Justice, and its members shall comprise the Minister of Industry, Trade and SME’s, the Minister of Local Development, the Minister of Housing, Utilities and Urban Communities (who has never been represented in the committee beforehand), the Minister of Finance, the Minister of Investment, the Secretary General of the Council of Ministers, and the Chairman of the Cabinet of Ministers’ advisory authority.
Prime Minister's decree No. 1273 of 2015 forming the Technical Secretariat of the Committee for the Settlement of Investment Disputes
The Technical Secretariat of the Ministerial Committee coordinates between the parties of a dispute.
Decree No. 1273 of 2015 was issued to detail and explain all the provisions of the Technical Secretariat of the Committee. The Secretariat shall be chaired by the Minister of Investment and its members shall comprise the Executive Chairman of GAFI, one of GAFI’s vice chairmen, a Sector head of each of the Ministry of Industry, Trade and Small and Medium Enterprises, Ministry of Housing, Utilities and Urban Communities, Ministry of Local Development and, finally, a number of specialists and experts as chosen by the Minister of Investment. In view of its substantial role, the Technical Secretariat shall meet at least once a week, and shall be mandated to receive petitions and complaints, to study and analyze such complaints, and to prepare detailed and comprehensive reports on the disputes in question. Such reports shall be presented along with an executive summary to the Committee at its first meeting within thirty days from the date of receiving the dispute settlement application. The Technical Secretariat shall also be concerned with preparing the minutes of meetings, holding hearing sessions for the parties, notifying them of requests and sessions, and monitoring the enforcement of resolutions that have been approved by the Committee. Although the decree provides that the Technical Secretariat shall propose amicable settlement of disputes, it did not explicitly clarify the alternative channels in case the parties fail to reach amicable settlement of their dispute.  However, it is implicitly understood that judicial recourse is the alternative option. It should be noted that the decree provides for the creation of a website that allows parties to a conflict to follow up on the procedures, agenda of hearings, and the interim decisions that are issued. The last two articles of the decree prescribes that the Technical Secretariat shall prepare a semi-annual report to be presented to the Ministerial Committee for the Settlement of Investment Disputes. The report shall include an assessment "of its performance", as well as statistics on the disputes and legislations it has examined and that were ambiguous or that conflict with the Constitution or other laws or international treaties. This article is extremely important, because it draws attention to defective laws, and creates a forum to present such laws to a large number of officials which expedites their possible amendment.  Unfortunately, the first part of this article regarding the performance assessment is unclear as it is not understandable to have the technical secretariat assess its own performance, let alone the performance of the Ministerial Committee. The following article then provides that the Chairman of the Technical Secretariat shall determine the financial compensation of the members of Technical Secretariat which we find to be rather impractical. We believe the decree should have rather provided that the chairman shall prepare a budget to be approved by the Ministerial Committee. Additionally, the decree did not determine the sources of financing the activities of the Technical Secretariat, although this is understood to be the Investment Authority.
Conclusion
The amendments to the Investment Law were issued in mid-March 2015 and provided for the obligation of the Prime Minister to issue a decree forming the Ministerial Committee for the Settlement of Investment Disputes and its Technical Secretariat. However, these decrees were delayed for two months and were issued in May 2015. This disrupted the activities of the Technical Committee and its secretariat and put them on hold for two months; something which contradicts with the main purpose of the formation of the committee. Despite said delay, the two decrees have succeeded in laying out the responsibilities of the Committee and the Technical Secretariat being the body responsible for handling all proceedings starting from the receipt of petitions and complaints until the issuance of decisions and supervising their enforcement. Moreover, the decrees provided for the creation of a website to allow parties to a dispute to monitor procedures, agenda of hearings, and the interim decisions.   [1] Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 11 (bis), 12 March 2015. [2]  Law No. 7/2000 forming the Reconciliation Committees in some disputes to which ministries and public entities are party, Official Gazette, Issue 13 (bis), 4 April 2000. [3] Prime Minister's Decree No. 1272/2015 forming the Committee for the Settlement of Investment Disputes, Official Gazette, Issue No. 20 (bis) (a), 17 May 2015. [4] Prime Minister's Decree No. 1273/2015 forming the Technical Secretariat of the Committee for the Settlement of Investment Disputes, Official Gazette, Issue No. 20 (bis) (a), 17 May 2015.
With the increasing size of investment flow and the diversity of investment sources from all over the world, investment disputes are likely to arise among investors, or between the state and investors. This yields an urge to find a continuing and stable mechanism to deal with these disputes. Arbitration and court litigation are the two common and customary routes to resolve disputes among investors, or disputes between investors and the State. However, in an attempt to expedite the resolving of investment disputes and avoiding facing investors with the lengthy judiciary proceedings on the one hand or the costly arbitral proceedings on the other, negatively affecting the investment climate and reducing the State's ability to attract and preserve investments, endeavors have been made to lay the foundation for dispute settlement mechanisms contributing to the speedy resolving of investment disputes, e.g. the special economic courts, or to the amicable settlement of disputes outside the judiciary system and the arbitral tribunals. It is worth noting that the most recent amendment to the investment law in March of this year has introduced an entire new chapter to the investment law to regulate investment disputes settlement. [1] The investment law provides for two committees; the Ministerial Committee for the Settlement of Investment Disputes and the Committee for the Settlement of Investment Contracts Disputes. As for disputes that arise among investors, there are several mechanisms, including, but not limited to, the ‘Investor Disputes Settlement Centre’ at the General Authority for Investment that provides mediation services for investors should disputes arise between them.
Ministerial Committee for the Settlement of Investment Disputes
The Ministerial Committee for the Settlement of Investment Disputes looks into requests, complaints, or disputes that may arise between investors and administrative authorities.
Investment Disputes Settlement Committees were originally established under Law No. 8 of 1997. Moreover, Law No. 7 of 2000[2] was issued for the establishment of reconciliation committees in some disputes to which ministries and public entities are party. Several decrees have been issued by the Prime Minister regulating the investment dispute settlement committees, such as decree No. 115 of 2012, decree No. 32 of 2012, decree No. 714 of 2013, decree No. 363 of 2014 and decree No. 1092 of 2014. Recently, the Prime Minister issued decree No. 1272 of 2015[3] concerning the formation of the Ministerial Committee for the Resolution of Investment Disputes, and decree No. 1273 of 2015[4] regarding the formation, mandate and terms of reference of the technical secretariat of the Ministerial Committee for the Resolution of Investment Disputes. In its recent amendment in 2015, the investment law defines investment dispute settlement committee (the "Committee") and provides for its powers and competences. The law further provides that “the Cabinet of Ministers shall form a ministerial committee under the name "the Ministerial Committee for the Settlement of Investment Disputes", that shall have the authority to look into requests, complaints, or disputes that may arise between investors and administrative authorities in applying the provisions of the investment law". It is worth noting that after the adoption of Law No. 17 of 2015 in mid-March 2015, the former Minister of Justice suspended the activities of the Committee in anticipation of the formation of the Ministerial Committee by the Cabinet of Ministers pursuant to the provisions of the Investment Law. Similarly, the Executive Chairman of the General Authority for Investment and Free Zones suspended the activities of the Technical Secretariat authorized to study investor complaints and look into disputes arising between investors and administrative authorities in applying the provisions of the investment law in preparation for presenting such disputes to the Ministerial Committee. These decisions by the Minister of Justice and the Executive Chairman of GAFI have disrupted the work of the committee of which the raison-d’etre is to expedite the settlement of disputes and to decrease the amount of procedures. An important question also arises on the role of the committee, its ability to resolve disputes, and whether its decisions are binding or advisory? The investment law provides in Article No. (107) that "without prejudice to the right of the investor to resort to the judiciary, the Committee’s decisions, once approved by the Cabinet of Ministers, shall be enforceable and shall be binding to the administrative authorities concerned."
Prime Minister's decree No. 1272 of 2015 forming the Committee for the Settlement of Investment Disputes
It was expected that the decree No. 1272 of 2015 shall be issued only to form the Committee. However, the decree included other provisions regarding meeting schedules, meeting quorums and majorities required for the committee’s decisions, various provisions related to the decisions of the committee, and the period to resolve a dispute, set at thirty days, and hence, in our view, fulfilling the main objective for establishing the committee being the expediting of dispute resolution. The decree also highlighted the confidentiality of information, documents, and data presented to the Committee. As for the composition of the Committee, the decree provides in Article 1 that the committee shall be chaired by the Minister of Justice, and its members shall comprise the Minister of Industry, Trade and SME’s, the Minister of Local Development, the Minister of Housing, Utilities and Urban Communities (who has never been represented in the committee beforehand), the Minister of Finance, the Minister of Investment, the Secretary General of the Council of Ministers, and the Chairman of the Cabinet of Ministers’ advisory authority.
Prime Minister's decree No. 1273 of 2015 forming the Technical Secretariat of the Committee for the Settlement of Investment Disputes
The Technical Secretariat of the Ministerial Committee coordinates between the parties of a dispute.
Decree No. 1273 of 2015 was issued to detail and explain all the provisions of the Technical Secretariat of the Committee. The Secretariat shall be chaired by the Minister of Investment and its members shall comprise the Executive Chairman of GAFI, one of GAFI’s vice chairmen, a Sector head of each of the Ministry of Industry, Trade and Small and Medium Enterprises, Ministry of Housing, Utilities and Urban Communities, Ministry of Local Development and, finally, a number of specialists and experts as chosen by the Minister of Investment. In view of its substantial role, the Technical Secretariat shall meet at least once a week, and shall be mandated to receive petitions and complaints, to study and analyze such complaints, and to prepare detailed and comprehensive reports on the disputes in question. Such reports shall be presented along with an executive summary to the Committee at its first meeting within thirty days from the date of receiving the dispute settlement application. The Technical Secretariat shall also be concerned with preparing the minutes of meetings, holding hearing sessions for the parties, notifying them of requests and sessions, and monitoring the enforcement of resolutions that have been approved by the Committee. Although the decree provides that the Technical Secretariat shall propose amicable settlement of disputes, it did not explicitly clarify the alternative channels in case the parties fail to reach amicable settlement of their dispute.  However, it is implicitly understood that judicial recourse is the alternative option. It should be noted that the decree provides for the creation of a website that allows parties to a conflict to follow up on the procedures, agenda of hearings, and the interim decisions that are issued. The last two articles of the decree prescribes that the Technical Secretariat shall prepare a semi-annual report to be presented to the Ministerial Committee for the Settlement of Investment Disputes. The report shall include an assessment "of its performance", as well as statistics on the disputes and legislations it has examined and that were ambiguous or that conflict with the Constitution or other laws or international treaties. This article is extremely important, because it draws attention to defective laws, and creates a forum to present such laws to a large number of officials which expedites their possible amendment.  Unfortunately, the first part of this article regarding the performance assessment is unclear as it is not understandable to have the technical secretariat assess its own performance, let alone the performance of the Ministerial Committee. The following article then provides that the Chairman of the Technical Secretariat shall determine the financial compensation of the members of Technical Secretariat which we find to be rather impractical. We believe the decree should have rather provided that the chairman shall prepare a budget to be approved by the Ministerial Committee. Additionally, the decree did not determine the sources of financing the activities of the Technical Secretariat, although this is understood to be the Investment Authority.
Conclusion
The amendments to the Investment Law were issued in mid-March 2015 and provided for the obligation of the Prime Minister to issue a decree forming the Ministerial Committee for the Settlement of Investment Disputes and its Technical Secretariat. However, these decrees were delayed for two months and were issued in May 2015. This disrupted the activities of the Technical Committee and its secretariat and put them on hold for two months; something which contradicts with the main purpose of the formation of the committee. Despite said delay, the two decrees have succeeded in laying out the responsibilities of the Committee and the Technical Secretariat being the body responsible for handling all proceedings starting from the receipt of petitions and complaints until the issuance of decisions and supervising their enforcement. Moreover, the decrees provided for the creation of a website to allow parties to a dispute to monitor procedures, agenda of hearings, and the interim decisions.   [1] Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 11 (bis), 12 March 2015. [2]  Law No. 7/2000 forming the Reconciliation Committees in some disputes to which ministries and public entities are party, Official Gazette, Issue 13 (bis), 4 April 2000. [3] Prime Minister's Decree No. 1272/2015 forming the Committee for the Settlement of Investment Disputes, Official Gazette, Issue No. 20 (bis) (a), 17 May 2015. [4] Prime Minister's Decree No. 1273/2015 forming the Technical Secretariat of the Committee for the Settlement of Investment Disputes, Official Gazette, Issue No. 20 (bis) (a), 17 May 2015.