The ASEAN Comprehensive Investment Agreement (the Agreement) is a multi-lateral treaty between the ten member states of the Association of South-East Asian Nations (ASEAN) which became effective in March 2012. The Agreement is intended to assist the creation of “a free and open investment regime in ASEAN in order to achieve the end goal of economic integration [within ASEAN]”. Thus, the Agreement’s central purpose is to encourage investors from ASEAN states to invest in other ASEAN states by giving them (with some exceptions and reservations) enforceable rights to protect their investments. On the question of investing in Thailand, see Investor-State Agreements in Thailand – encouraging investment by protecting foreign investors by Ally Law member firm Duensing Kippen. The ASEAN Agreement incorporates several provisions relating to the enforcement of an investor’s rights by arbitration as initially drafted by the United States in its “new model investment treaty” to address concerns that many international investment agreements gave too much protection to the investor at the cost of the interests of the State’s citizens.
The ASEAN Agreement provides various safeguards to eligible investors and allows such investors 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. Several dispute resolution options and tribunals are offered in which to file such a claim; if an investor chooses to submit a claim to arbitration the Agreement mandates specific procedures including timing, notice, and objection requirements to effect the submission. Many of the Agreement’s provisions relating to the investment State’s right in such arbitrations are intended to provide a more equitable consideration of the investment State’s interests and are radical departures from prior investment agreement models.
Arbitration under the ASEAN Agreement may only award: (a) monetary damages and any applicable interest; or (b) restitution of property, in which case the award must provide that the investment State may pay monetary damages and any applicable interest in lieu of restitution; and (c) costs and attorney’s fees in accordance with the ASEAN Agreement and the applicable arbitration rules. Notably, the ASEAN Agreement explicitly prohibits any award of punitive damages.
Given the economic and investment environment disparities between the ten ASEAN nations, the ASEAN Agreement is something cross-ASEAN investors should be aware of. If you are have invested in or are contemplating investing in Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Phillipines, Singapore, Thailand, or Vietnam, consult with your Ally Law member firm to determine your dispute resolution options and other mechanics of the countries subscribing to the Agreement. For more information about Ally Law member firm services and outstanding lawyers, contact us at mailto:email@example.com.