October 2020: Series 3

Trade Updates 

Mahima Balaji

WTO Launches a New Import Licensing Platform 

On 9th October 2020, the WTO launched a new import licensing database that gathers import licensing information, analysis, reporting, and streamlines notification procedures for member states. With the rationale to enhance efficiency, transparency and access to information, the database seeks to be a comprehensive information centre containing all members’ legislation, procedures and product information relating to import licensing.

India Withdraws Import of Duty Free Tyres under DFIA Scheme 

The Directorate General of Foreign Trade, on 6th October 2020, passed a notification amending Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, read with para 1.02 of the Foreign Trade Policy, 2015-2020,  disallowing import of tyres under the Duty Free Authorisation (“DFIA”) scheme. Where, under the DFIA, exporters were allowed to import products at zero duty for three years. The move showcases another step by the government to promote domestic manufacturing. 

United States — Large Civil Aircraft: Arbitrator Issues Decision 

After a long-standing dispute between the United States and the European concerning subsidies to their largest civil aircraft manufacturers, Airbus and Boeing, on 13th October 2020, a WTO arbitrator issued its decision on the level of countermeasures. It ruled that the EU may request authorization from the DSB to take countermeasures with respect to the US for illegal subsidies to Boeing. Effectively, the EU can seek roughly $4 billion in retaliation to the dispute.

WTO Secretariat: Global IP and COVID-19. 

The WTO Secretariat published a new report on how the global intellectual property system relates to COVID-19. The report points to (TRIPS) as the most comprehensive multilateral agreement on IP, providing for a framework in which much-needed innovation in relation to COVID-19 can be encouraged, shared and disseminated, while balancing rights and obligations. 

Some of the key points include: 

• COVID-19 and access to technologies. Where the IP system is designed to facilitate access to existing technologies and support the creation, manufacturing and dissemination of new technologies.

• Importance of IP in promoting, regulating and managing innovation. Particularly where initiatives have addressed the voluntary sharing and pooling of IP rights in global efforts to tackle the pandemic.

• Including TRIPS and compulsory licensing —  where WTO members may grant such licences and government use orders for health technologies, such as medicines, vaccines and diagnostics, as well as any other product or technology needed to address COVID-19. 

• Urgency associated with national and regional IP offices to take initiatives to expedite or simplify their administration of the IP system to support development of products aiding combating the virus.

International Arbitration

UK Supreme Court Decision on what Law Governs Arbitration Agreement when Main International Contract Silent

Ruchi Chaudhury

What happens when an international dispute arises on what law must apply to an arbitration agreement, when the main contract itself contains no express choice of the law that must govern it? Additionally, what lies ahead if the arbitration agreement expresses its choice of law, but the parent contract governing the parties does not? 

The United Kingdom Supreme Court held that where parties have expressed no choice of law to govern the arbitration agreement, nor have they chosen the law to govern the contract as a whole, the court will determine what law will apply by using the law which the arbitration agreement is most closely connected to. 

The decision rendered on 9 October 2020 came after disputes arose between a Russain company and a subcontracting Turkish engineering company involved in a construction project in Russia. Initially, the Turkish party were subcontractors with another main party contracting with the Russian party. The sub-contract between the Turkish party had included an agreement that disputes between them would be determined through arbitration proceedings in London, but the main contract with the Russian company expressed no such provision. Soon, the Turkish party assumed the rights and obligations as the main contracting party under the parent contract. Upon dispute, the question arose as to whither lay the law and court for arbitration, when the parent agreement was silent? 

The UK Supreme Court evoked common law principles to hold that London is where. Why?  There existed reasonable expectations of (sub)contracting parties who had specified a location for the arbitration without choosing the law to govern the contract; The approach upholds the principle of legal certainty, thus allowing parties to predict easily which law the court will apply in the absence of choice.  

The Court’s decision drew from common law authority, rather than EU law authority — like the EU’s Rome I Regulation. Early comments from lawyers expect this decision to, therefore, find currency throughout the Commonwealth. 

The case is Enka Insaat Ve Sanayi A.S. v 000 Insurance Company Chubb, [2020] UKSC 38 (full text available of the judgment here; short summary here).

Human Rights and Humanitarian Law

Aditi Nagpal

Indonesia’s Omnibus Bill Revises Over 79 Laws Without Proper Public Consultation

Indonesia recently approved a Bill that pushes a stimulus package of neoliberal reforms in the midst of the pandemic. Branded as the ‘omnibus Bill’, armed with more than 1,200 articles and being over 1,028 pages long, it’s aim is to revise over 79 laws in a single strike. The outcome is the elimination of several regulations concerning business and investment. 

The primary motivation of the Bill is to attract investment by slashing regulations and certain labour and environment protections in order to create jobs and attract investments, as noted by member of Parliament, Heri Gunawan. The glaring procedural improprieties include weakening environmental safeguards such as permit requirements and environmental impact assessments. With regard to labour related concerns, the new Bill focuses on a new business license regime, and provisions for relaxation associated with investment opportunities in Indonesia, where it also opens up the possibility for outsourcing (read more about the reforms here).

The primary issue for which this has been met with protests and strikes across the region, primarily owing to the lack of public consultation and the lack of access of the Draft Bill to the general public at large. Article 25 of the International Covenant on Civil and Political Rights (ratified by Indonesia in 2005), provides that every citizen shall have the opportunity to take part in public affairs, and this sweeping law needs to be reconsidered in this light. An open letter further highlights the significant repercussions the Bill may have associated with the laxity in environmental compliance and the labour market, including deregulation. 

The lack of procedural propriety, transparency, and the substance of the Bill itself, raise concerns relating to Indonesia’s human rights obligations under international law. 

South Sudan: Starvation as a Method of Warfare

South Sudan has been experiencing a catastrophic humanitarian crisis over the last four years, owing to the civil war. One of the concerning repercussions is the hunger crisis in the region which remains to be a disaster caused by the conflict. Oxfam estimates that over 7.1 million people (about half the country’s population) are facing extreme and deadly hunger. 

On 8th October 2020, a Conference Room Paper addressed the brutal armed conflict and it’s glaring impact on the civilian population, particularly resulting in acute food shortage. In its report, featuring a compelling update on the increasing intersection between international humanitarian law and international human rights law, the Commission on Human Rights in South Sudan highlighted and addressed that starvation is being used as a method of warfare in South Sudan, which is a violation of Rule 53 of the customary rules of IHL. 

The Report of the Commission stated that the food insecurity in various areas of South Sudan was linked directly to the conflict and was almost entirely human-induced, and this food insecurity is being used by both the Government and opposition forces for their own gain. This was specifically noted in the contexts of food insecurity in Western Bahr el Ghazal, Jonglei, and Central Equatoria States. 

The Report must be read with the Report of the Commission of Inquiry on South Sudan’s (AUCISS) Report on transitional justice and accountability, which is a key document following the Revitalized Agreement on Resolution of Conflict in South Sudan (R-ARCSS). 

Read the report here, and read a summary here.

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