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Page Number: 18.0

14 

ZF AUTOMOTIVE US, INC. v. LUXSHARE, LTD. 

Opinion of the Court 

Russia and Lithuania’s intent that an ad hoc panel exercise
governmental authority.  For instance, the treaty does not 
itself create the panel; instead, it simply references the set 
of rules that govern the panel’s formation and procedure if 
an  investor  chooses  that  forum.  In  addition,  the  ad hoc 
panel “functions independently” of and is not affiliated with
either Lithuania or Russia.  5 F. 4th, at 226.  It consists of 
individuals chosen by the parties and lacking any “official
affiliation with Lithuania, Russia, or any other governmen-
tal or intergovernmental entity.”  Ibid.  And it lacks other 
possible indicia of a governmental nature.  See ibid. (“[T]he
panel receives zero government funding,” “the proceedings 
. . . maintain confidentiality,” and the “ ‘award may be made
public only with the consent of both parties’ ”).4 

Indeed, the ad hoc panel at issue in the Fund’s dispute
with Lithuania is “materially indistinguishable in form and
function” from the DIS panel resolving the dispute between
ZF  and  Luxshare.  Brief  for  George  A.  Bermann  et  al.  as 
Amici Curiae 19.  In a private arbitration, the panel derives 
its  authority  from  the  parties’  consent  to  arbitrate.  The 
ad hoc panel in this case derives its authority in essentially 
the  same  way.    Russia  and  Lithuania  each  agreed  in  the 
treaty to submit to ad hoc arbitration if an investor chose 
it.  The Fund took Lithuania up on that offer by initiating 
such an arbitration, thereby triggering the formation of an 

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4 Comparing Article 10 of the treaty (governing investor-state disputes)
with Article 11 (governing state-to-state disputes) further suggests that
the ad hoc panel under Article 10 is of a nongovernmental nature.  Arti-
cle 11 provides that an unsettled dispute between the countries “shall, 
upon the request of either Contracting Party, be submitted to an Arbitral
Tribunal.”  App. to Pet. for Cert. in No. 21–518, p. 65a.  Each country is
involved in forming that arbitral body and funds its operations.  See id., 
at 66a–67a.  Article 11 also provides, under some circumstances, for the 
countries  to  invite  officials  of  the  International  Court  of  Justice  to  ap-
point  the  body’s  members.  Id.,  at  66a.  This  reflects  a  higher  level  of 
government  involvement  and  highlights  the  absence  of  such  details  in
Article 10’s ad hoc arbitration option.