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force a norm.” The Court did not expound on how far corporate liability extends under the ATS be- cause the plaintiffs conceded that corporate li- ability is only available where “the violations are directed, encouraged, or condoned at the corpo- rate defendant’s decisionmaking level.”

After having satisfied itself that corporate liability was possible under the ATS, the Seventh Circuit examined whether the actions of Firestone did indeed violate customary international law. This was a two-part inquiry: what is the applicable cus- tomary international law, and did the treatment of child labor at the Firestone facility violate it? In embarking on this analysis, the Court pointed to three international conventions that could, argu- ably, create an international legal norm—the UN Convention on the Rights of the Child, the ILO Minimum Age Convention, and the ILO Worst Forms of Child Labor Convention. The Court found that the language of all three conventions to be too vague to create customary law that prohibits a company from employing children. Moreover, Firestone did not employ children; it imposed strict quotas that induced adult employ- ees to recruit the help of their children. The plain- tiff’s complaint is therefore in some ways against this quota system. In holding for the respondent Firestone, the Court stated that it had not been given a sufficient basis for concluding that there had been a violation of customary international law.

The Seventh Circuit’s holding in this case is con- sistent with the ruling of the U.S. Court of Ap- peals for the D.C. Circuit in the recent case of Doe VIII v. Exxon Mobil Corp., but firmly at odds with the Second Circuit Court of Appeals decision in Kiobel. In the words of the Seventh Circuit, the Kiobel decision is “the outlier,” and it will be up to the U.S. Supreme Court to clarify whether corpo- rations can be held liable under the ATS.

* Submitted by Mollie A. Dapolito

High Threshold Set for the Disqualification of ICSID Arbitrators

An affiliate of the World Bank, the International Centre for the Settlement of Investment Disputes (ICSID) was chartered in 1965 by the Conven- tion on the Settlement of Investment Disputes Between States and Nationals of Other States (“the Convention”). To fulfill the goal of fostering international investment, ICSID’s mandate is to adjudicate disputes between private parties and member states which are alleged, among other things, to have expropriated the party’s invested resources.

When a dispute arises, a claimant applies to ICSID for a hearing, and the body notifies the respondent that a claim has been lodged. The respondent then submits to ICSID jurisdiction and absent an agree- ment otherwise, the parties each appoint one arbi- trator and ICSID’s Secretary-General names a third arbitrator to chair the panel. This three-person arbi- tration panel then oversees and decides the case.

Often, however, one party will object to the ar- bitrator appointed by the other party, due to the perception that the arbitrator is either beholden or biased to the other party. When only one appoint- ment is disputed, the other two arbitrators render a decision on the objection. When two appoint- ments are disputed, the decision is rendered by the Chairman of ICSID’s Administrative Council. Under Article 57 of the Convention, a party may move to disqualify an arbitrator for a manifest lack of that independence.

By contrast, the International Bar Association’s (IBA) arbitration panel guidelines require a lower burden; an opposing party need only show that an arbitrator has in fact been appointed repeat- edly by one of the parties or demonstrate “justi- fiable doubts as to the arbitrator’s impartiality or independence”.

Favoring a more practical application of the prin- ciples of arbitration, ICSID uses a process in which

ILSA Quarterly » volume 20 » issue 1 » October 2011


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