ISDS Issues Note 2016


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led in 2015. The overall number of publicly known ISDS claims reached
By the end of 2015, a total of 444 ISDS proceedings have been concluded,
Following the recent trend, a high share of new cases in 2015 (about 40 per
cent) was brought against developed countries, including many cases by
European investors against European Union member States.
The majority of new cases invoked bilateral investment treaties (BITs), most
of them dating back to the 1990s. In about one third of all cases last year
foreign investors relied upon the Energy Charter Treaty, which by now is the
most frequently invoked treaty (87 cases), followed by the North American
Free Trade Agreement (56 cases), and the Argentina–United States BIT (20
State conduct most frequently challenged by investors in 2015 included
legislative reforms in the renewable energy sector, alleged direct
expropriations of investments, alleged discriminatory treatment, and
revocation or denial of licences or permits.
Newly led cases include, among others, claims related to events in
Crimea, a mass claim arising out of the Eurozone crisis, a case concerning
the prohibition of gaming, a rst-ever claim invoking the WTO General
Agreement on Trade in Services, and several tax-related disputes.
In 2015, ISDS tribunals rendered at least 51 decisions, of which 31 are
in the public domain. Most of the public decisions on jurisdiction were
in favour of the investor.
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17-21 JULY 2016 - NAIROBI, KENYA
TEENTH UNITED NA
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17-21 JULY 2016 - NAIROBI, KENYA
© This report can be freely cited provided appropriate
acknowledgement is given to UNCTAD.
Arbitral decisions adopted in 2015 touch upon a number of important legal
issues concerning the scope of treaty coverage, the conditions for bringing
ISDS claims, the meaning of substantive treaty protections, the calculation
of compensation and others. On some issues, tribunals followed previous
decisions, while on some other issues they adopted approaches that
departed from earlier decisions.
Some of the prominent decisions rendered in 2015 concerned investor
nationality, ownership and control. This topic – including approaches,
implications and policy challenges – receives in-depth coverage in
UNCTAD’s World Investment Report 2016.
I. Latest trends in ISDS
In 2015, the number of ISDS cases reached a record high with a continued large
share of cases against developed countries.
cases pursuant to international investment agreements (IIAs), which is the
highest number of cases ever led in a single year (gure 1). As arbitrations can
be kept condential under certain circumstances, the actual number of disputes
led for this and previous years is likely to be higher.
reached 696.
So far, 107 countries have been respondents to one or more
UNCTAD’s ISDS Navigator (
) is a comprehensive
information about each case and offers numerous user-friendly tools to search and lter the data.
Source:
©UNCTAD, ISDS Navigator.
Information about 2015 claims has been compiled on the basis of public sources, including specialized reporting services. UNCTAD’s statistics do not
cover investor-State cases that are based exclusively on investment contracts (State contracts) or national investment laws, or cases in which a party has
signalled its intention to submit a claim to ISDS but has not commenced the arbitration. Annual and cumulative case numbers are continuously adjusted as
Figure 1. Known ISDS cases, 19872015
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As in the two preceding years, in 2015 the relative share of new cases against
developed countries stood at about 40 per cent. Prior to 2013, fewer cases were
brought against developed countries. In all, 35 countries faced new claims last
year. Spain was the most frequent respondent in 2015, followed by the Russian
Federation (gure 2). Six countries – Austria, Cabo Verde, Cameroon, Kenya,
Developed-country investors brought most of the 70 known cases in 2015. This
follows the historical trend in which developed-country investors have been the
frequent home States in ISDS in 2015 were the United Kingdom, followed by
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Figure 3.
Most frequent home States of claimants, total as of end 2015
Figure 2.
Most frequent respondent States, total as of end 2015
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©UNCTAD, ISDS Navigator.
Source:
©UNCTAD, ISDS Navigator.
Intra-European Union disputes
Similarly to the two preceding years, intra-European Union (EU) cases accounted
for about one third of investment arbitrations initiated in 2015 (gure 4). Intra-
EU cases are proceedings initiated by an investor from one EU member State
against another member State. The overwhelming majority – 19 out of 26 – were
brought pursuant to the Energy Charter Treaty (ECT) and the rest on the basis of
intra-EU bilateral investment treaties (BITs). The overall number of known intra-
EU investment arbitrations totalled 130 by the end of 2015, i.e. approximately 19
per cent of all known cases globally.
Source:
©UNCTAD, ISDS Navigator.
Figure 4. Known ISDS cases and share of intra-European Union cases, 2006
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Figure 5. Known ISDS cases led,
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About two thirds of last year’s ISDS cases
were led with the International Centre for
(gure 5). Overall, 62 per cent of all known
Convention or ICSID Additional Facility
Source:
©UNCTAD, ISDS Navigator.
Applicable investment treaties
Whereas the majority of investment arbitrations in 2015 were brought under
BITs – most of them dating back to the 1990s –, the ECT was invoked in about
one third of the new cases. Looking at the overall trend, the ECT is by far the
most frequently invoked IIA (87 cases), followed by the North American Free
Trade Agreement (NAFTA) (56 cases). Among BITs, the Argentina–United States
BIT (20 cases) remains the agreement most frequently relied upon by foreign
In addition to the ECT (23 new cases), three other treaties were invoked more
NAFTA (3 cases)
Some other IIAs invoked by claimants in 2015 included the Commonwealth
Agreement for the Investment of Arab Capital in the Arab States (1980), and
the Investment Agreement of the Organization of the Islamic Conference (1981).
In one case, the claimants relied on four legal instruments at once, including the
WTO General Agreement on Trade in Services (GATS). This is the rst known
ISDS case invoking GATS as a basis for the tribunal’s jurisdiction.
About 76 per cent of the cases led in 2015 relate to activities in the services
sector, including:
Transportation and storage (7 cases)
Primary industries accounted for 14 per cent of new cases, while the remaining
10 per cent related to investments in manufacturing. This is broadly in line with
all cases arose in the services sector, 20 per cent in primary industries, and 14
Affected sustainable development sectors
A number of 2015 ISDS claims concerned sustainable development sectors
such as infrastructure and climate-change mitigation. Approximately 30 per
cent of cases concerned the regulation of renewable energy producers, all of
which were brought against EU member States (Bulgaria, Italy and Spain). Some
of the 2015 cases concerned environmental issues, indigenous protected areas,
Menzies Middle East and Africa S.A. and Aviation Handling Services International Ltd. v. Republic of
Section III offers a review of selected ISDS cases led in 2015.
Figure 4. Known ISDS cases and share of intra-European Union cases, 2006
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Measures challenged
Investors in 2015 most frequently challenged four types of State conduct:
Legislative reforms in the renewable energy sector (at least 20 cases)
Alleged direct expropriations of investments (at least 6 cases)
Alleged discriminatory treatment (at least 6 cases)
Other challenged measures included cancellations or alleged violations of
contracts or concessions, measures related to taxation, placement of enterprises
under external administration, as well as bankruptcy proceedings. In several
cases, information about governmental measures challenged by the claimant is
The amounts claimed in 2015 cases range from $15 million (in
Aeroport Belbek v.
Pugachev v. Russia
). Information regarding the amounts
with States often prevailing at the jurisdictional stage of the proceedings, and
investors winning more of the cases that reached the merits stage.
In 2015, ISDS tribunals rendered at least 51 decisions in investor-State disputes,
31 of which are in the public domain (at the time of writing).
decisions on jurisdictional issues were decided in favour of the State, while the
majority of those on merits ended in favour of the investor.
More specically, in 2015:
Ten decisions principally addressed jurisdictional issues, with one upholding
the tribunal’s jurisdiction (at least in part) and nine denying jurisdiction.
Out of 15 decisions on the merits, 12 accepted at least some of the investors’
liable, tribunals most frequently found breaches of the fair and equitable
Ten decisions awarded compensation to the investor, ranging from $8.6
million to $383.6 million. The average amount awarded was $120.2 million

including interest, legal costs or costs of arbitration.

This number includes decisions (awards) on jurisdiction and awards on liability and damages (partial
and nal) as well as follow-on decisions such as decisions rendered in ICSID annulment proceedings
and ICSID resubmission proceedings. It does not include decisions on provisional measures,

the claimant, not including interest, legal costs or costs of arbitration.
Six decisions related to annulments. ICSID ad hoc committees rejected ve
applications for annulment and partially annulled one award.
proceedings discontinued for other or unknown reasons.
By the end of 2015, a total of 444 ISDS proceedings are known to have been
concluded. About one third of all concluded cases were decided in favour of
the State (claims dismissed either on jurisdictional grounds or on the merits)
compensation awarded (gure 6).
Of the cases that ended in favour of the State, about half were dismissed for
lack of jurisdiction.
Looking at the totality of decisions on the merits (i.e. when a
breached any of the IIA’s substantive obligations), around 60 per cent were
decided in favour of the investor, and 40 per cent in favour of the State (gure 7).
UNCITRAL Transparency Rules
The United Nations Commission on International Trade Law (UNCITRAL)
Rules on Transparency in Treaty-based Investor-State Arbitration are now
applicable to a number of treaties concluded
and provide for a
“Transparency Registry”, which will be a central repository for the publication of
information and documents in treaty-based ISDS cases.

“covered investment”, the claimant was not a “covered investor”, the dispute arose before the treaty
entered into force or fell outside the scope of the ISDS clause, the investor had failed to comply with
certain IIA-imposed conditions (e.g. the mandatory local litigation requirement) or other reasons that
http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/2014Transparency.html

The rules came into effect on 1 April 2014 and are incorporated into the latest version of the
©UNCTAD, ISDS Navigator.
Source:
©UNCTAD, ISDS Navigator.
Note:
Excluding cases (1) dismissed by tribunals for lack of jurisdiction,
unknown reasons), and (4) decided in favour of neither party (liability
Figure 6.
Breach but
Figure 7.
in favour
in favour
UN Transparency Convention
Convention on Transparency in Treaty-based Investor-State Arbitration. The
Convention was opened for signature on 17 March 2015; it will enter into force
once three ratication instruments have been deposited. The Convention enables
States, as well as regional economic integration organizations (REIOs), to make
the UNCITRAL Transparency Rules applicable to ISDS proceedings brought
arbitration was initiated under the UNCITRAL Arbitration Rules.
ICSID Convention and New York Convention
In 2015, the ICSID Convention entered into force for San Marino and Iraq.
Andorra, Comoros, the Democratic Republic of the Congo and the State
Enforcement of Foreign Arbitral Awards (New York Convention).
Cases relating to reforms in the renewable energy sector
A total of 20 new cases relate to reforms in the renewable energy sector in Spain,
Italy and Bulgaria. Most of these cases – 16 out of 20 – were led against Spain
and relate to a series of measures adopted by the country in 2012 (including the
imposition of a 7 per cent tax on power generators’ revenues and a reduction
in subsidies for renewable energy producers). Meanwhile, Spain prevailed in
the rst decided case that relates to the same measures: in January 2016, the
tribunal in
Charanne v. Spain
rejected all claims on the merits, nding that the
measures did not breach Spain’s obligations under the ECT.
In 2015, solar investors launched three cases against Italy, which relate to
governmental decrees to cut tariff incentives for some solar power projects.
The investors, all from EU member States, base their claims on the ECT.
meantime, Italy withdrew from the ECT, effective from 1 January 2016.
Cases related to events in Crimea
least 5 (possibly, 6) relate to the events in Crimea. Following March 2014,
nationalizations took place in different economic sectors.
The claims brought

Belgium, Canada, Congo, Finland, France, Gabon, Germany, Italy, Luxembourg, Madagascar,
Mauritius, Sweden, Switzerland, the Syrian Arab Republic, the United Kingdom and the United

In the absence of reservations by the signatories, the Convention will apply to disputes where (i) both
the respondent State and the home State of the claimant investor are parties to the Convention;
and (ii) only the respondent State is party to the Convention but the claimant investor agrees to the
Charanne B.V. and Construction Investments S.a.r.l. v. Spain
(SCC), Award, 21 January 2016. See
Global Arbitration Review, “Spain wins rst solar case”, 26 January 2016. Available from http://
globalarbitrationreview.com/news/article/34513/.
Belenergia S.A. v. Italian Republic
Eskosol S.p.A. in liquidazione v. Italian Republic
(ICSID Case No.
Greentech Energy Systems
and Novenergia v. Italy

http://www.energycharter.org/who-we-are/members-observers/countries/italy/.

Available from
airport) by the Russian Federation. To date, the Russian Government has refused
to recognize the jurisdiction of arbitral tribunals in these cases or to take part in
the arbitral proceedings.
Mass claim relating to the Eurozone crisis
An ICSID claim was led against Cyprus by a group of 954 Greek investors, all
The claimants seek to recover their losses incurred as a result of Cyprus’s
€10 billion bailout following an agreement with the European Commission, the
banks. The claimants maintain that they were singled out and discriminated
Mining and environmental protection
Gabriel Resources, a Canadian gold exploration company, led an ICSID claim
against Romania, in relation to the Rosia Montana, a gold and silver mine in
western Romania.
In 1997 the project company was granted a licence to develop
the mine, but subsequently failed to receive an approval of the environmental
impact assessment and to obtain the environmental permit required to start
exploitation of the project. The company’s activities in Romania have attracted
opposition and public protest, in part because of the planned use of cyanide to
extract gold and silver from ore.
Opposition has also focused on archeological
evidence of Roman mining activities in the area, which have led to calls for the
site to be made a UNESCO World Heritage Site.
Prohibition of gaming
A claim led against the Czech Republic concerns the cancellation of licences
for video lottery terminals awarded for a 10-year term (in 2004) to Synot, a Czech
gambling group.
The licences, which were issued by the Ministry of Finance,
allowed these video lottery terminals to operate in towns and villages where
traditional slot machines had been banned by municipal authorities. However, in
2011 the Czech Constitutional Court upheld a complaint brought by a municipality
and ruled that local bans against slot machines also covered video gaming
machines. After a second judgment by the Constitutional Court on a related

that the ‘[Russia-Ukraine BIT] cannot
‘does not recognize the jurisdiction of an international arbitral tribunal at the Permanent Court of
which administers some or all of these proceedings,
http://www.pcacases.com/web/view/121
Theodoros Adamakopoulos and others v. Republic of Cyprus

Global Arbitration Review, “Greek creditors sue Cyprus over bailout”, 30 September 2015. Available
from
http://globalarbitrationreview.com/news/article/34192/greek-creditors-sue-cyprus-bailout/
(Jersey) v. Romania
(ICSID Case No. ARB/15/31),

In 2000, a massive cyanide spill occurred at the Baia Mare gold mine in northern Romania. The
Romania, Hungary, Serbia and Bulgaria and leading to the Black Sea.

Investment Arbitration Reporter, “As Romania grapples with mining regulation in aftermath of
2000 environmental catastrophe, a foreign investor loses patience with delays”, 21 January 2015.
Available from
http://www.iareporter.com/articles/as-romania-grapples-with-mining-regulation-
in-aftermath-of-2000-environmental-catastrophe-a-foreign-investor-loses-patience-with-delays/
Global Arbitration Review, “Canadian miner hopes to strike gold with ICSID claim against Romania”,
22 July 2015. Available from
http://globalarbitrationreview.com/news/article/33998/canadian-
miner-hopes-strike-gold-icsid-claim-against-romania/
WCV Capital Ventures Cyprus Limited and Channel Crossings Limited v. The Czech Republic
issue, the ministry withdrew the licences in 2013. The claimants alleged losses
equivalent to US$41 million. Reportedly, both claimant companies, incorporated
in Cyprus, are ultimately owned by the family of Ivo Valenta, a member of the
First ever case invoking the GATS
The year 2015 saw the rst ever ISDS case where the claimants invoked,
the WTO GATS.
The case concerns the provision of aircraft ground-
company incorporated in Luxembourg. It argues that – in the absence of a BIT
qualies as a “service supplier” under the GATS, and the latter’s most-favoured-
nation (MFN) treatment clause entitles it to access investor-State arbitration
under any BIT signed by Senegal, since Senegal did not exempt ISDS or BITs
from the GATS MFN clause as some other WTO Members have done. In other
words, the claimant does not allege any breaches of the GATS itself, but uses
the GATS as a “bridge” to a BIT otherwise unavailable to it.
Tax-related disputes
Companies have used the ISDS mechanism to challenge decisions regarding
International v. Korea
, two Dutch companies allege that a tax was wrongly levied
company.
Specically, the claimants contest the non-application of the Korea-
benetted from tax exemptions; they demand damages of US$168 million.
Cairn v. India
a draft assessment order issued
by the Indian tax authority in respect of the scal year 2006/7 in the amount of
US$1.6 billion plus any applicable interest and penalties.
Cairn argues that
Finally, in
Total E&P v.
the Uganda Revenue Authority upon the acquisition of interest in an oil and gas
block in the Lake Albert region.

Global Arbitration Review, “Senator takes on Czech Republic”, 29 September 2015. Available from
http://globalarbitrationreview.com/news/article/34182/senator-takes-czech-republic/
Menzies Middle East and Africa S.A. and Aviation Handling Services International Ltd. v. Republic of

Ibid., Procedural Order No. 2, 2 December 2015.
Hanocal Holding B.V. and IPIC International B.V. v. Republic of Korea
(ICSID Case No. ARB/15/17),

Debevoise & Plimpton LLP, “Debevoise and Kim & Chang to Defend Republic of Korea in ICSID
Arbitration Filed by IPICI and Hanocal”, 23 September 2015. Available from
http://www.debevoise.
Cairn Energy PLC v. India
Cairn Energy PLC, “Indian tax dispute”, 10 March 2015. Available from
http://www.cairnenergy.
Total E&P Uganda BV v. Republic of Uganda
Reuters Africa, “Total seeks arbitration over Uganda tax dispute”, 31 March 2015. Available from
http://af.reuters.com/article/ugandaNews/idAFL6N0WW4NE20150331
. Global Arbitration Review,
“Total les against Uganda”, 26 March 2015. Available from
http://globalarbitrationreview.com/
IV. 2015 decisions: an overview
According to the tribunal in
State Enterprise v. Moldova
Moldova and Ukraine concerning the supply of electricity into Moldova could
suggest an existence of an “investment” for the purposes of the ECT.
However,
the tribunal found that Energorynok’s claim to money under that agreement did
not qualify as an investment, reasoning that under Article 1(6)(c) of the ECT, a
“claim to money” must be associated with some other, self-standing investment
in the underlying energy-related economic activity out of which the claim to
money arose. To the tribunal, the claimant had “no role in the economic activity
carried out under the [agreement]”; it “acquired a debt, or was authorized to
collect a debt, but it did not acquire an investment under the ECT”.
the claimant’s minimal role in the operation with the more active role of the
Poštová banka and Istrokapital v. Greece
, the tribunal denied jurisdiction
for Poštová banka’s claims concerning Greek government bonds nding that
The tribunal
noted that the BIT contained a broad denition of investment in Article 1
However, the tribunal reasoned that the scope of the treaty terms
Convention on the Law of Treaties (VCLT) and that it could not “expand the
scope of the [protected] investments” beyond the State parties’ intentions.
“less encompassing language” than that in the Argentina-Italy BIT in the cases
Abaclat v. Argentina and Ambiente Ufcio v. Argentina
It stressed that the
reference to bonds in the Greece-Slovakia BIT was limited to “debentures of a
While the BIT also referred to “loans”, the tribunal was unwilling to equate that
term with government bonds that do not entail contractual privity, i.e. a direct
Equally, the tribunal decided that
“claims to money”, if they are to qualify as a covered investment, should arise
under a contractual relationship.
The tribunal decided that Greece’s sale of
State Enterprise Energorynok v. the Republic of Moldova
(SCC Case No. 2012/175), Final Award, 29
Ibid., para. 101.
Ibid., para. 86. The tribunal cited
(SCC Case No. 126/2003),
Award, 29 March 2005, and
Electrabel S.A. v. The Republic of Hungary
(ICSID Case No. ARB/07/19),
Decision on Jurisdiction, Applicable Law and Liability, 30 November 2012.
Poštová banka, a.s. and Istrokapital SE v. Hellenic Republic
(ICSID Case No. ARB/13/8), Award, 9
April 2015.
Ibid., para. 286.
Ibid., para. 308. The tribunal referred to
Abaclat and others (formerly Giovanna A. Beccara and
others) v. Argentine Republic
(ICSID Case No. ARB/07/5) and
Ambiente Ufcio S.p.A. and others
(formerly Giordano Alpi and others) v. Argentine Republic
Finally, the tribunal observed that a majority of the panel would also have
dismissed the claim on the basis that it did not concern an investment protected
Al Tamimi v. Oman
found that the lease agreements related to the
der the Oman-United States Free Trade Agreement (FTA) because they qualied
as “other tangible and intangible movable or immovable property” as mentioned
in the treaty’s denition of investment. According to the tribunal, the agreements
tal, the expectation of gain or prot, and the assumption of risk.
Ownership and control of investment
Occidental v. Ecuador (II)
the 60 per cent interest owned by Occidental in an oil block (Block 15), there
had been disagreement with respect to the remaining 40 per cent. One arbitra
tor opined that since Occidental had “farmed out” this 40 per cent share to the
Alberta Energy Corporation (benecial owner), and remained only a “nominee”
of that interest, it did not qualify as the owner of that investment.
Committee agreed with the dissenting arbitrator; it held that the majority of the
over an investment that, at the relevant time, no longer belonged to Occiden
tal, and in compensating the claimants for 100 per cent of the value of Block
15. Thus, the annulment decision reduced the original $1.77 billion award to
Guardian Fiduciary Trust v. Macedonia
, the tribunal had to resolve the issue
The BIT covers legal entities, regardless of
the country of incorporation, that are “controlled directly or indirectly” by Dutch
nationals. The ownership structure included an intermediate company, whose
tered in the Marshall Islands (benecial owner). Given that “different aspects of
the ownership [...] [were] divided”,
there was sufcient evidence that the Dutch entity exercised actual control over
the claimant. Having assessed the limited evidence provided on this issue by
the claimant, the tribunal came to the view that the Marshall Islands company,
not the Dutch entity, was in fact in control of the claimant. For example, it was
the director of the Marshall Islands company that had authorized the claimant’s
request for ICSID arbitration. Therefore, the tribunal held that the claimant did
If the tribunal were to follow the “‘objective’ approach, which would give the term ‘investment’ an
inherent meaning” (contribution, duration and risk). Ibid., paras. 359, 351-371.
Adel A Hamadi Al Tamimi v. Sultanate of Oman
(ICSID Case No. ARB/11/33), Award, 3 November
2015, paras. 278-280.
See further Chapter IV in UNCTAD (2016, forthcoming).
World Investment Report 2016: Investor
. New York and Geneva: United Nations.
(ICSID Case No. ARB/06/11) (II), Decision on Annulment, 2 November 2015.
Ibid., Dissenting Opinion (Award, 5 October 2012).
Ibid., Decision on Annulment, 2 November 2015, paras. 185-301.
Guardian Fiduciary Trust, Ltd, f/k/a Capital Conservator Savings & Loan, Ltd v. Macedonia, former
Yugoslav Republic of
(ICSID Case No. ARB/12/31), Award, 22 September 2015.
Non-existence of investment at the time the dispute arose
Accession Mezzanine v. Hungary
“ar[ose] directly out of an investment” for the purpose of establishing its jurisdiction
under the Hungary-United Kingdom BIT.
of a successful bid for commercial radio broadcasting rights in Hungary. Under
the Hungarian Media Law, the resulting Broadcasting Agreement was allowed to
be valid for a maximum of seven years, subject to renewal once without a new
term and the one-time renewal, the rights under the Broadcasting Agreement
came to an end and the respondent State put the rights up for tender.
The claimants were not successful in the 2009 tender and initially sought review
authority had acted unlawfully in some respects in awarding the licence to
a different bidder, the courts did not nd that the unlawfulness required or
permitted the termination of the new licence-holder’s rights or a “restoration”
Subsequently, in 2012, the claimants initiated
arbitration before ICSID.
As a jurisdictional defence, the respondent State argued that the claimants did
not have a right to a new licence, and hence there was no cognisable investment
in respect of a new licence, which could have been expropriated. The tribunal
agreed. Looking at Hungarian law as the source of the claimants’ alleged rights,
it concluded that once the Broadcasting Agreement had expired, “the Claimants
did not have a property right, contractual right or any other vested legal right
in Hungarian law in relation to the exploitation of a national radio frequency in
Hungary on the critical date of the alleged expropriation [i.e., the date on which
the new licence was awarded to another bidder]”.
Mamidoil v. Albania
, the tribunal addressed allegations of potential illegality.
The tribunal agreed with “the widely-held opinion that investments are protected
by international law only when they are made in accordance with the legislation
At the same time, the tribunal noted that “States must notbe
allowed to abuse the process by scrutinizing the investment
themselves of an obligation” or the “consequences of its standing agreement to
Albania’s rst argument was that the investment was illegal because Albanian
products at the Durres port. The tribunal rejected this argument on the ground
that the “decisive moment for the appreciation of the investment’s substantive
Accession Mezzanine Capital L.P. and Danubius Kereskedöház Vagyonkezelö Zrt. v. Hungary
(ICSID
Case No. ARB/12/3), Award, 17 April 2015, para. 58.
Ibid., para. 146. The tribunal also rejected the claimants’ argument that Hungary’s actions resulted in
an indirect expropriation of their shares in (and loans to) their local Hungarian company, “Danubius”,
which had been the broadcasting licence-holder. The tribunal held that the claimants’ expropriation
claim with respect to the shares and loans was “contingent upon procuring a new broadcasting
agreement […] [and thus arose] out of an alleged investment right that the Claimants never had”
(ICSID Case
No. ARB/11/24), para. 359.
Ibid., para. 483.
executed and the site was transferred to the claimant, “neither Party anticipated
the changes and restrictions on the port of Durres”.
As for Albania’s second
argument that the claimant had failed to obtain certain fundamental permits,
the tribunal partly agreed. In so doing, it rejected the claimant’s argument that
Albania was estopped from invoking illegality. Whereas the claimant argued that
last 12 years, the arbitrators found that since 2003, the State had consistently
insisted that the permits were lacking.
At the same time, the State had made
offers to legalize the claimant’s activities. To the tribunal, this showed that “in
that State’s own appreciation, the illegality of the investment was susceptible of
being cured”. The tribunal decided to uphold jurisdiction and assess the legal
“Time-sensitive restructuring” – jurisdictional objections based on
investors’ alleged abuse of process
Levy and Gremcitel v. Peru
process by the claimants.
It considered that an abuse of process objection
must be distinguished from a
ratione temporis
objection: “If a claimant acquires
an investment after the date on which the challenged act occurred, the tribunal
and there will be no room for an
abuse of process. Here, the Tribunal has established that Ms. Levy acquired her
investment prior to the challenged measure, even if it was just slightly before. In
such a situation, a tribunal has jurisdiction
ratione temporis
but may be precluded
from exercising its jurisdiction if the acquisition is abusive.”
In this respect, the tribunal agreed with the test formulated in
Pac Rim v. El
: to nd an abuse, “a specic future dispute” must be foreseeable at
the time of acquisition “as a very high probability and not merely as a possible
controversy”.
Having observed that “the threshold for a nding of abuse of
process is high”,
transfer of the shares of Gremcitel to Ms. Levy and the challenged measures. It
found that the “actual transfer of the shares occurred […] only one day before
[the challenged measure] was issued and 9 days before it was published”. In the
tribunal’s view, “[a] review of the record show[ed] that such striking proximity of
events [was] not a coincidence” and that the claimants could have foreseen that
the disputed measure was forthcoming.
According to the tribunal, “the only
reason for the sudden transfer of the majority of the shares in Gremcitel to Ms.
access to ICSID/BIT arbitration, which was otherwise precluded”.
Renée Rose Levy and Gremcitel S.A. v. Republic of Peru
(ICSID Case No. ARB/11/17), Award, 9
January 2015, paras. 191-195.
Ibid., para. 182. The tribunal in
Philip Morris Asia Ltd. v. Australia
arrived at the same conclusion
Philip Morris Asia Limited v. The Commonwealth of Australia
(UNCITRAL, PCA Case No. 2012-12), Award on Jurisdiction and Admissibility, 17 December 2015,
Renée Rose Levy and Gremcitel S.A. v. Republic of Peru
(ICSID Case No. ARB/11/17), Award,
Pac Rim Cayman LLC v. Republic of El Salvador
(ICSID Case No.
ARB/09/12), Decision on the Respondent’s Jurisdictional Objections, 1 June 2012, para. 2.99.
Renée Rose Levy and Gremcitel S.A. v. Republic of Peru (
ICSID Case No. ARB/11/17), Award, 9
January 2015, para. 186.
Levy and Gremcitel v. Peru
Philip Morris v. Australia
the timing and motivation for the claimant’s acquisition of Philip Morris (Australia)
the owner of Philip Morris (Australia) in February 2011 through a corporate
restructuring undertaken by the global parent of both companies, Philip Morris
International (United States). For a number of years prior to the restructuring,
the Australian government had been publicly considering legislation to mandate
Philip Morris companies argued would substantially diminish the value of their
investment in the country. As a consequence of the restructuring, the claimant,
as the owner of Philip Morris (Australia), initiated proceedings under the BIT
Australia’s adoption of “plain packaging” legislation in November 2011.
Australia argued that the claim was an abuse of rights because the corporate
restructuring had been motivated wholly or partly by a desire to gain access to
protection under the Australia-Hong Kong SAR BIT in order to bring a claim in
respect of the “plain packaging” legislation.
The claimant responded by noting
that the legislation had not been adopted at the time of the restructuring and,
further, that the restructuring had been undertaken for reasons other than to gain
access to protection under the relevant BIT.
The tribunal observed that “the mere fact of restructuring an investment to
However, “it may amount to an
abuse of process to restructure an investment to obtain BIT benets in respect
of a foreseeable dispute”.
As to the meaning of “foreseeable”, the tribunal
foreseeable when there is a reasonable prospect […] that a measure which may
give rise to a treaty claim will materialise”.
Applying this test to the facts before
it, the tribunal concluded that at the time of the restructuring, the dispute was
foreseeable to the claimant.
The claimant argued that the restructuring had been undertaken for reasons
other than to gain access to protection under the relevant BIT. In response, the
tribunal noted that, in general, even if the dispute was foreseeable, “it would not
restructuring, if the restructuring was justied independently of the possibility
of bringing such a claim”.
However, on the facts before it, the claimant had
failed to demonstrate other reasons for the restructuring. As a result, the tribunal
Khan Resources v. Mongolia
, the respondent State invoked the denial of
benets clause of the ECT in relation to one of the claimants (incorporated in the
Philip Morris Asia Limited v. The Commonwealth of Australia
(UNCITRAL, PCA Case No. 2012-12),
Award on Jurisdiction and Admissibility, 17 December 2015.
after the State’s offer of consent to arbitration was perfected by the investor).
In its decision on jurisdiction (rendered in 2012 but published in 2015), the tribunal
companies from treaty coverage, but gave the State a right that must be “actively
exercised”.
Secondly, the tribunal ruled that a State could not exercise this
right toward an investor after the latter commenced ISDS proceedings against
it. The tribunal based its reasoning on the object and purpose of the ECT “to
create a predictable legal framework for investments in the energy eld”. In the
tribunal’s view, such predictability would only exist if investors “know in advance
this issue remains divided as some decisions have allowed States to exercise
Local litigation requirement
of the Turkey-Turkmenistan BIT imposed a mandatory 1-year local litigation
requirement. The claimants contended that the treaty provided merely for an
option to submit the dispute to domestic courts, without requiring it.
tribunal agreed with the claimants that Article VII.2 allowed the investor to
that the claimants had not submitted the dispute to the courts of Turkmenistan
prior to arbitration “was no impediment to Claimants having brought these
proceedings”.
This outcome departs from an earlier decision in
Kiliç v. Turkmenistan
, where the
arbitrator) that the BIT required the claimant to submit its dispute to local courts
before pursuing international arbitration.
Noting the different outcome of the
explained that it reached its decision
based on evidence and arguments presented to it, and after nding that the
English version of the treaty, not the Russian version, was the authentic one.
Requirement to waive domestic litigation
According to the majority in
NAFTA (the provision obliges claimants to waive their right to initiate or continue
administrative or court proceedings with respect to the measures challenged
Khan Resources Inc., Khan Resources B.V. and Cauc Holding Company Ltd. v. the Government of
(UNCITRAL, PCA Case No. 2011-09), Decision on Jurisdiction,
Ibid., para. 426.
See, in particular,
Guaracachi America, Inc. and Rurelec PLC v. The Plurinational State of Bolivia
(UNCITRAL,PCACase No.2011-17), Award (corrected), 31 January 2014; and
Pac Rim Cayman
LLC v. Republic of El Salvador
(ICSID Case No. ARB/09/12), Decision on the Respondent’s
(ICSID Case No.
ARB/12/6), Decision on Respondent’s Objection to Jurisdiction under Article VII(2), 13 February
(ICSID Case No.
ARB/10/1), Decision on Article VII.2 of the Turkey-Turkmenistan Bilateral Investment Treaty, 7 May
2012, para. 11.1. Due to the claimant’s failure to satisfy the requirement, the tribunal dismissed the
claim for lack of jurisdiction. See Award, 2 July 2013.
(ICSID Case No.
ARB/12/6), Decision on Respondent’s Objection to Jurisdiction under Article VII(2), 13 February
in the NAFTA arbitration).
The tribunal pointed out that Article 1121 referred to
domestic proceedings under the law of
any Party
(i.e. Canada, Mexico or the
By majority, the tribunal rst held that the lawsuit brought before a United States
court against Canada covered “the same grounds” as the “measures” at issue
It then rejected the claimant’s argument that the
allows administrative or court proceedings under certain conditions (if they
concern “injunctive, declaratory, or other extraordinary relief not involving the
payment of damages”). The tribunal cited two reasons for doing so: (i) the United
States proceeding did involve a request for damages,
and (ii) the proceeding
was initiated before United States courts and not before Canadian courts (under
Article 1121, the exception for declaratory or injunctive relief is available only
for proceedings under the law of the disputing Party, i.e. Canada).
further noted that the claimant had later withdrawn the request for damages
in the United States proceeding and submitted a second notice of arbitration
after the start of the arbitration. The majority did not consider, however, that this
Tribunal wholly lacked jurisdiction”.
Temporal aspects of jurisdiction
Ping An v. Belgium
upholding Belgium’s objection
The jurisdictional controversy
same parties that entered into force on 1 December 2009 and that “substituted
and replaced” the 1986 BIT.
In
the ICSID case registered shortly after (September 2012), the claimants relied on
the substantive provisions of the 1986 BIT and invoked the 2009 BIT to establish
the tribunal’s jurisdiction.
The scope of the arbitration clause in the two treaties
was markedly different: whereas the earlier BIT covered only disputes over the
amount of compensation for expropriation, the later BIT covered “legal disputes”
Article 10(2) of the 2009 BIT provided that the BIT did not apply to any dispute or
claim “which was already under judicial or arbitral process” before 1 December
older BIT. However, the treaty did not expressly deal with pre-disputes that had
(UNCITRAL, PCA Case No. 2012-
25), Award on Jurisdiction, 2 April 2015.
Ibid., para. 320. The dissenting arbitrator, while nding that at least one of the United States court
claims “certainly rubs up against” the NAFTA claims, concluded that the domestic lawsuit did not
challenge the same measures as those at issue in the NAFTA claim and thus he “would nd the
waiver sufcient under Article 1121”. See Separate Dissenting Jurisdictional Statement (Award on
Ping An Life Insurance Company of China, Limited and Ping An Insurance (Group) Company of
China, Limited v. Kingdom of Belgium
(ICSID Case No. ARB/12/29), Award, 30 April 2015, para.
indicators” that the 2009 BIT was inapplicable to such disputes.
noted, in particular, that the contrary approach “would have the effect of allowing
the use of the much wider dispute resolution provisions of the 2009 BIT to bring
claims already notied under the 1986 BIT, with its far more limited substantive
Claims brought after the notice of denunciation of the ICSID
Venoklim v. Venezuela
brought after the respondent State gave its notice of denunciation of the ICSID
The claimant requested arbitration during the 6-month period
which – according to Article 71 of the Convention – must expire before the
denunciation takes effect. The tribunal rejected Venezuela’s argument that the
claim must be dismissed. It held that Venezuela was still a party to the Convention
at the time the claimant led its request for arbitration, and that giving immediate
effect to Venezuela’s notice of denunciation would run counter to the principle of
(the claim was registered by ICSID after the six-month period had expired) and
concluded that the relevant date for the purposes of establishing jurisdiction
Article 71) is the date of the request for arbitration.
Attribution of conduct to the respondent State
Clayton/Bilcon v. Canada
organs of a State) and 5 (Conduct of persons or entities exercising elements
of governmental authority) of the International Law Commission (ILC) Articles
on Responsibility of States for Internationally Wrongful Acts were “considered
as statements of customary international law on the question of attribution for
purposes of asserting the responsibility of a State towards another State”, and
that they were “applicable by analogy to the responsibility of States towards
It found that the conduct of an ad hoc environmental
de jure
an organ, equipped with a clear statutory role that included making
formal and public recommendations to state authorities”.
With reference to
Article 11 (Conduct acknowledged and adopted by a State as its own) of the ILC
“Even if the [Joint Review Panel] were not, by its nature, a part of the
apparatus of the Government of Canada, the fact would remain that
arriving at the conclusion that the project should be denied approval
under their environmental laws. […] On the facts of the present case, […]
Article 11 would establish the international responsibility of Canada even
if the [Joint Review Panel] were not one of its organs.”
Ibid., para. 229.
Venoklim Holding B.V. v. Bolivarian Republic of Venezuela
(ICSID Case No. ARB/12/22), Award, 3
April 2015. Note that this case was brought pursuant to Venezuela’s domestic investment statute
(the claimant later invoked a BIT but it was not recognized by the tribunal as an independent source
of jurisdiction). However, the tribunal’s conclusions regarding the point summarized here are relevant
Ibid., paras. 61-62.
Clayton and Bilcon of Delaware Inc. v. Government of Canada
(UNCITRAL, PCA Case No. 2009-04),
Award on Jurisdiction and Liability, 17 March 2015, para. 307.
Ibid., para. 319.
von Pezold and others v. Zimbabwe
case related to the land policy reforms
and redistributing it to black Zimbabweans. One of the issues that arose
the claimants’ land, could be attributed to the respondent government. The
claimants argued that the government actively encouraged and assisted the
The tribunal observed, however, that Article 8 (Conduct directed
or controlled by a State) of the ILC Articles on State Responsibility called for
“direction and control” on the part of the government, and that the actions of
“While there is ample evidence of Government involvement and
encouragement, the Tribunal is not persuaded that the acts of the
invaders were based on a direct order or under the direct control of
the Government when they initially invaded the Claimants’ properties.
Rather, the Government appears to have encouraged (and endorsed) the
However, the relevant State conduct (including the inaction of the police),
considered by the tribunal on the merits and ultimately found to be in breach of
the applicable BITs.
Clayton/Bilcon v. Canada
notes of the NAFTA Free Trade Commission
and the text of the NAFTA itself,
“‘fair and equitable treatment’ and ‘full protection and security’ [in NAFTA Article
1105] cannot be regarded as ‘autonomous’ treaty norms that impose additional
requirements above and beyond what the minimum standard requires”.
“NAFTA awards make it clear that the international minimum standard is not
limited to conduct by host states that is outrageous. The contemporary minimum
international standard involves a more signicant measure of protection.”
the tribunal, this standard required “tribunals to be sensitive to the facts of each
case, the potential relevance of reasonably relied-on representations by a host
state, and a recognition that injustice in either procedures or outcomes can
constitute a breach”.
Bernhard von Pezold and others v. Republic of Zimbabwe
(ICSID Case No. ARB/10/15), Award, 28
Clayton and Bilcon of Delaware Inc. v. Government of Canada
(UNCITRAL, PCA Case No. 2009-04),
Award on Jurisdiction and Liability, 17 March 2015, para. 432.
ADF Group Inc. v. United States of America
(ICSID Case No. ARB(AF)/00/1), Award, 9 January
Merrill & Ring Forestry L.P. v. The Government of Canada
Award, 31
March 2010, paras. 207, 208, 210 and 213.
Clayton and Bilcon of Delaware Inc. v. Government of Canada
(UNCITRAL, PCA Case No. 2009-04),
Award on Jurisdiction and Liability, 17 March 2015, para. 433. In so doing, the tribunal expressly
distanced itself from the approach taken in
Glamis Gold Ltd. v. United States of America
(UNCITRAL),
Award, 8 June 2009.
Clayton and Bilcon of Delaware Inc. v. Government of Canada
(UNCITRAL, PCA Case No. 2009-04),
Award on Jurisdiction and Liability, 17 March 2015, para. 444.
Applying this standard, the tribunal’s majority found a breach of NAFTA Article
1105 on the grounds that “the Investors were encouraged to engage in a
regulatory approval process costing millions of dollars and other corporate
Investors were specically encouraged by government ofcials and the laws of
In particular, the majority found it problematic that a statutory review panel had
adopted without notice to the investor an “unprecedented approach” to the
review of the project by reviewing the project according to “community core
values”, a criterion not previously identied nor found in the review panel’s
terms of reference.
To the tribunal, this and certain other aspects of the panel
review process (including that the investors were not given a fair opportunity to
present their case and the panel’s refusal to consider specicmitigationsteps
the level of the breach of NAFTA Article 1105.
The dissenting arbitrator took the view that what the review panel treated as
“core community values” was subsumed within other language found in its
terms of reference, including “terrestrial effects”, “marine effects”, “human
environment effects” and “cumulative effects”.
opined that the panel’s conduct, even if found to breach Canadian law, did not
the international minimum standard.
He warned that the majority’s approach
represented “a signicant intrusion into domestic jurisdiction” and created “a
chill on the operation of environmental review panels” that will be seen as “a
remarkable step backwards in environmental protection”.
The international minimum standard of treatment and enforcement
of environmental laws
Al Tamimi v. Oman
concerned an investment for developing and operating a
limestone quarry. The claimant complained, in particular, of being subjected
to harassment and unwarranted sanctions by Omani environmental and other
authorities, and to the ultimate termination of the quarry lease agreements. The
States FTA, which, like Article 1105 of the NAFTA, links the obligation to provide
Myers v. Canada
(a NAFTA case), the tribunal observed that “a nding that the
minimum standard has been breached ‘must be made in the light of the high
measure of deference that international law generally extends to the right of
domestic authorities to regulate matters within their own borders’”.
particular language of the Oman-United States FTA, the tribunal further noted
that a “strict ‘minimum standard of treatment’ provision such as Article 10.5
fair and equitable treatment or full protection and security provisions of other
Ibid., para. 740.
Clayton and Bilcon of Delaware Inc. v. Government of Canada
(UNCITRAL, PCA Case No. 2009-04),
Dissenting Opinion (Award on Jurisdiction and Liability, 17 March 2015), para. 15.
Adel A Hamadi Al Tamimi v. Sultanate of Oman
(ICSID Case No. ARB/11/33), Award, 3 November
under the Oman-United States FTA that the FTA contained specic provisions
indicating the high value placed by the parties on environmental protection. In
the rst place, the tribunal noted that Article 10.10 “provides a forceful protection
of the right of either State Party to adopt, maintain or enforce any measure to
ensure that investment is ‘undertaken in a manner sensitive to environmental
concerns’, provided it is not otherwise inconsistent with the express provisions
Beyond that, the tribunal looked to Chapter 17 of the FTA,
entitled “Environment”. While recognizing that Chapter 17 did not “fall directly”
the tribunal considered that “[t]he very existence of
enforcement of their respective environmental laws”.
To the tribunal, Chapter
17 made it “clear that the State Parties intended to reserve a signicant margin
environmental laws” and provided express textual acknowledgement by the
State Parties “that environmental law enforcement is not inherently consistent in
its application”.
In the case at hand, the claimant’s case rested largely upon
instances in which inconsistent advice had been given by Omani authorities
regarding his investment. While the tribunal accepted that this may have
created some confusion for the investor, it was not convinced that such conduct
and candour’ required for a breach of the minimum standard of treatment”.
Al Tamimi
concerned his arrest by Omani
longer held any contractual or property rights under Omani law, continued to
extract materials at the site of the original investment.
Following a warning
from the Omani authorities, the claimant was arrested on misdemeanour
environmental charges, prosecuted, convicted at rst instance, and ultimately
acquitted on appeal. While the claimant characterised the Omani action as
having “no legitimate basis in law”, the tribunal disagreed. Relying once again
on the express environmental provisions of the Oman-United States FTA, the
tribunal concluded that “this is precisely the kind of environmental regulatory
enforcement that the Parties sought to protect through the inclusion of Article
10.10 (as well as Chapter 17) in the US–Oman FTA”.
Moreover, the fact that
the claimant was ultimately acquitted of the charges brought against him was
Técnicas
Medioambientales Tecmed v. United Mexican States
(ICSID Case No. ARB(AF)/00/2), Award, 29
MTD Equity Sdn. Bhd. and MTD Chile S.A. v. Chile
(ICSID Case No. ARB/01/7),
Award, 25 May 2004. The tribunal also rejected the claimant’s reliance on an early NAFTA case,
(ICSID Case No. ARB(AF)/97/1), Award, 30
August 2000, on the ground that the award predated the NAFTA Free Trade Commission’s 31
provision applies the customary international law standard.
Adel A Hamadi Al Tamimi v. Sultanate of
(ICSID Case No. ARB/11/33), Award, 3 November 2015, para. 386 and fn. 774.
Adel A Hamadi Al Tamimi v. Sultanate of Oman
(ICSID Case No. ARB/11/33), Award, 3 November
Ibid., para. 389.
Ibid., para. 389. The tribunal further noted that “there is no legal basis for the Claimant to assert
that the Respondent bears the burden in this proceeding of proving actual environmental damage,
including for the purposes of Art 10.10 (the language of which protects State regulatory action which
to ensure that investment activity in its territory is undertaken in
a manner sensitive to environmental concerns’ (emphasis added))”.
Adel A Hamadi Al Tamimi v.
(ICSID Case No. ARB/11/33), Award, 3 November 2015, fn. 913.
Ibid., para. 399. This nding was
Given the date on which the Oman-United States FTA
came into force, the claimant’s claims directly based upon this inconsistent advice were not within
the tribunal’s jurisdiction. Ibid., para. 400. Nevertheless, the facts underlying these allegations did
serve to underpin a number of other claims which the claimant alleged arose later as a direct result
Adel A Hamadi Al Tamimi v. Sultanate of Oman
(ICSID Case No. ARB/11/33), Award, 3 November
wrong:
“A State must be permitted to take a legal position in relation to the
alleged or perceived violation of its existing laws, even if that position
turns out ultimately to be wrong, provided it does so in good faith and
with appropriate due process. To impose international liability in such a
context would signicantly undermine States’ long-recognised right to
reasonably exercise their police powers to enforce existing laws.”
Fair and equitable treatment – legitimate expectations
Awdi v. Romania
advertising company, through a privatization contract. As a condition of the
privatization agreement, the host State undertook “to make all reasonable efforts
[…] for a period of 49 years, of the lands […] relating to the points of sale existing
on Romania’s territory”.
To that end, the Romanian parliament enacted a law
however, four years after the privatization, the Romanian Constitutional Court
declared Law 442 unconstitutional.
Looking at the terms of the privatization contract, the tribunal found that Romania
had not taken “all reasonable efforts” to address the claimants’ land rights.
According to the tribunal, even after the Constitutional Court had repealed Law
442, it lay within the power of the Romanian government to address the issue of
land rights through the means of an “organic law”, a modality which the Court
had indicated expressly would pass constitutional muster.
Fair and equitable treatment – the relevance of host State condi
Mamidoil v. Albania
container terminal on a land plot in the Durres port area.
At issue were a
series of measures whereby, over a period of approximately ten years, Albania
modied the range of activities for which the Durres port area would be used,
addressing the investor’s claims under the Albania-Greece BIT, the tribunal made
considerations relevant to its application.
the legal system and to due process”,
are “meant to favour the investors’ interests over other economic and social
Hassan Awdi, Enterprise Business Consultants, Inc. and Alfa El Corporation v. Romania
(ICSID Case
No. ARB/10/13), Award, 2 March 2015, para. 312.
Article 10.1 of the ECT provides: “Each Contracting Party shall, in accordance with the provisions
of this Treaty, encourage and create stable, equitable, favourable and transparent conditions for
Investors of other Contracting Parties to make Investments in its Area.”
(ICSID Case
No. ARB/11/24), Award, 30 March 2015, para. 613.
interests”.
Rather, the purpose of the standard is to bring “foreign investors
into the normative sphere of rational policy in the general interest”.
context of the State’s ability to regulate and the ability of those regulations to
“Economic, social, environmental and legal circumstances and problems
are by their nature dynamic and bound to constant change. It is
indispensable for successful public infrastructure and public services to
exist that they are adaptable to these changes. Accordingly, State policy
must be able to evolve in order to guarantee adequate infrastructure
and services in time and thereby the fair and equitable treatment of
predictability and State freedom for regulatory evolution, the tribunal considered
the fair and equitable standard in general and for the obligation to provide a stable
and transparent legal framework in particular”.
situation, with its infrastructure run down and with its legal framework, regulation
these circumstances matter”. It stated that “[a]n investor may have been entitled
to rely on Albania’s efforts to live up to its obligations under international treaties,
but that investor was not entitled to believe that these efforts would generate
the same results of stability as in Great Britain, USA or Japan”.
was incumbent upon the investor to exercise due diligence with respect to the
investment environment of the host State and to act accordingly: “[T]he standard
is addressed to both the State and the investor. Fairness and equitableness
Albania with respect to the investment. Of particular importance in this respect
was the tribunal’s repeated nding that nothing which the Government of Albania
had done served to create a “legitimate expectation” capable of supporting a
nding of liability.
Denial of justice – judicial conduct with respect to bankruptcy pro
Dan Cake v. Hungary
Portugal BIT, alleging mistreatment by the Hungarian courts in the liquidation of
Ibid., para. 614.
Ibid., para. 617. The tribunal cited a number of prior awards in support:
AES Summit Generation
Limited and AES-Tisza Erömü Kft. v. Republic of Hungary
(ICSID Case No. ARB/07/22), Award, 23
(ICSID Case No. ARB/05/8), Award, 11 September 2007, paras. 331-332;
Joseph Charles Lemire
v. Ukraine
(ICSID Case No. ARB/06/18), Award, 28 March 2011, para. 285;
Saluka Investments BV
v. The Czech Republic
(UNCITRAL), Partial Award, 17 March 2006, para. 305.
(ICSID Case
No. ARB/11/24), Award, 30 March 2015, para. 623.
Ibid., para. 626.
Ibid., para. 634.
Ibid., paras. 691-735. The majority and the dissent split principally on the question of when the
“legitimate expectation” may be created in order for it to be actionable – at the time of investment or
later.
to convene a “composition hearing” of Danesita’s creditors, which the investor
hoped would allow Danesita to be reorganized rather than liquidated. The tribunal
found that under Hungarian law, a debtor has a right to have a composition hearing
convened by the court, provided its request is accompanied by the documents
required by the Bankruptcy Act, or “deemed necessary”.
With respect to
Danesita’s application, it was “not disputed that the documents required by the
Bankruptcy Act were submitted with the request”.
refused the application, and instead ordered Danesita to make supplementary
lings, listing seven additional requirements to be fullled within fteen days
before a composition hearing could be convened. Danesita did not satisfy the
order and was subsequently liquidated in a public sale.
While recognizing that Hungarian law permits a court to require documents
Act, the tribunal undertook to consider each of the seven additional requirements
imposed by the Hungarian court. In so doing, the tribunal disclaimed any role
as a “court of appeal”, but rather observed that “it might regard the decision to
be unfair or inequitable if it found that some of the requirements were
unnecessary or impossible to satisfy, or in breach of a fundamental right
Applying this standard, the tribunal concluded variously of the individual
additional requirements that “it defeats common sense”, “appears almost
by the Court” of key underlying facts, and “is more than surprising”.
While
convened, it concluded that “the chance of a successful composition hearing
[…] was destroyed by the Bankruptcy Court’s decision to refuse to convene a
hearing within 60 days, as required by the law”.
The tribunal held that a denial
In reaching this
nding, the tribunal relied on a long line of arbitral decisions and a decision of
the International Court of Justice, which dened denial of justice as “a wilful
disregard of due process of law, an act which shocks, or at least surprises, a
Unreasonable interference with the management, maintenance,
Belokon v. Kyrgyzstan
(the award was rendered in 2014 but became public in
late 2015), the Kyrgyz bank in which the claimant had invested was made subject
to a “temporary administration” decree by the Kyrgyz central bank. Under the
decree, an administrator was appointed to “assume the authority of the Board
of Directors and of the Executive Boards of the Bank”.
In response, the former
bank managers applied to the Kyrgyz courts to challenge the imposition of
the temporary administration. Their application was rejected at all levels of the
Kyrgyz judicial system on the grounds that only the temporary administrator
could challenge the order of the central bank which had imposed the temporary
administration regime.
While there appeared to be no question that the Kyrgyz
tribunal concluded that the Kyrgyz law violated the Kyrgyzstan-Latvia BIT: “This
Dan Cake (Portugal) S.A. v. Hungary
(ICSID Case No. ARB/12/9), Decision on Jurisdiction and
Liability, 24 August 2015, para. 94.
Valeri Belokon v. Kyrgyz Republic
(UNCITRAL), Award, 24 October 2014, para. 71.
is an unreasonable limitation on an investment. For a state to be able to seize
control of a foreign investment and provide no remedy for access to the courts
to challenge that seizure is a violation of Article 2(3) of the BIT.”
In defence to the claim, the Kyrgyz Republic had argued that the claimant
individually, as the (sole) shareholder of the bank could have challenged the
decree in the Kyrgyz courts but failed to do so. The tribunal rejected this defence
is no answer to say that one of its shareholders (even a 100% shareholder) may
raise the entity’s grievance on his own behalf as an indirectly affected person.”
National treatment and comparators in “like circumstances”
Clayton/Bilcon v. Canada,
the claimants contended that they received
less favourable treatment than that accorded to Canadian investors “in like
circumstances”. The claimants’ project to operate a quarry and marine terminal
in the Canadian province of Nova Scotia had been rejected by the government
as a result of an environmental assessment process. The claimants argued that
their project was subjected to a stricter standard of review that had “never [been]
used except with respect to projects of far greater risk or magnitude”.
Bilcon identied a number of other projects involving quarries and marine
however, suggested that the possible comparators should be limited to those
that were subject to a joint federal Canada-provincial review panel and faced
signicant local community opposition (as did the Clayton/Bilcon project).
The tribunal disagreed with the respondent’s “narrow range of possible
comparators”, stating that the phrase “like circumstances” in NAFTA Article 1102
(National Treatment) was not “restricted as it is in some other trade-liberalizing
agreements, such as those that refer to ‘like products’”.
found that in three cases domestic investors were accorded more favourable
treatment and it was “unable to discern any justication for the differential and
adverse treatment accorded to [the claimants]”.
Umbrella clause and its relation to domestic laws
Khan Resources v. Mongolia
, the tribunal considered the umbrella clause of
the ECT, which requires the Contracting States to observe “any obligations”
entered into with a covered investor/investment. The tribunal considered
and more specically Mongolia’s obligations laid down in its Foreign Investment
Law. Without in-depth analysis, the tribunal held that “a breach by Mongolia of
any provision of the Foreign Investment Law would constitute a breach” of the
ECT’s umbrella clause.
Subsequently, having found that Mongolia’s actions
breached the Foreign Investment Law, the tribunal ruled that the same conduct
breached the ECT’s umbrella clause.
Ibid., para. 265.
Clayton and Bilcon of Delaware Inc. v. Government of Canada
(UNCITRAL, PCA Case No. 2009-04),
Award on Jurisdiction and Liability, 17 March 2015, para. 16.
Khan Resources Inc., Khan Resources B.V. and Cauc Holding Company Ltd. v. the Government
(UNCITRAL, PCA Case No. 2011-09), Award on the Merits, 2
March 2015, para. 295, citing its Decision on Jurisdiction, 25 July 2012 (became public in 2015),
expropriation is lawful or unlawful
Tidewater v. Venezuela
, the tribunal considered the legal effects of a number
of statutory measures adopted by Venezuela with respect to the claimant’s
investment in marine support services to the Venezuelan oil industry. Under the
statutes, Venezuela brought into public ownership all of the ships and marine
terminals in Venezuela owned by the claimant’s subsidiary, SEMARCA. The
claimant proceeded under the Barbados-Venezuela BIT, alleging that Venezuela
expropriated its shares in SEMARCA. Further, the claimant alleged that the
expropriations were illegal on the grounds that the compensation offered for
5 of the Barbados-Venezuela BIT and that Venezuela had failed to offer the
claimant any compensation for its shares in SEMARCA. The tribunal rejected the
claimant’s arguments. Citing the decision of the Permanent Court of International
Chorzów Factory
for the proposition that “illegality must stem
from a circumstance beyond the mere absence of compensation”,
the tribunal
concluded that in claims arising under investment treaties “[a]n expropriation
only wanting fair compensation has to be considered as a provisionally lawful
and award such compensation”.
Quiborax v. Bolivia
, the majority took the opposite view. In that
the claimant’s investment when it revoked a mining concession. Since Bolivia
had not accepted that the revocation constituted an expropriation at the time it
took the measures, the State had made no offer of compensation to the investor
as required for a lawful expropriation under Article IV(1) of the Bolivia-Chile BIT.
this requirement for legality”.
The dissenting arbitrator, however, relying on
Tidewater v. Venezuela
disagreed with the proposition that
expropriations might be treated as “unlawful” solely for the lack of compensation
at the time of the expropriation.
Indirect expropriation and the extent of effects on the investment
Mamidoil v. Albania
, the claimant alleged that a series of measures taken
expropriation under the ECT and the Albania-Greece BIT because they left the
the high threshold required to establish a claim of indirect expropriation, quoting
Santa Elena v. Costa Rica
Tidewater Investment SRL and Tidewater Caribe, C.A. v. Bolivarian Republic of Venezuela
(ICSID
Case No. ARB/10/5), Award, 13 March 2015, para. 130.
Ibid., para. 141. See further
Valeri Belokon v. Kyrgyz Republic
(UNCITRAL), Award, 24 October 2014,
para. 214 (nding that in a case of indirect expropriation the treaty provision requiring “adequate
compensation” for a lawful expropriation is inapplicable).
(ICSID Case No. ARB/06/2),
Award, 16 September 2015, para. 255.
Tidewater Investment SRL and Tidewater Caribe, C.A. v. Bolivarian Republic of Venezuela
(ICSID
Case No. ARB/10/5), Award, 13 March 2015, para. 146.
Venezuela Holdings B.V. and others v. Bolivarian Republic of Venezuela
(ICSID Case No. ARB/07/27),
Award, 9 October 2014, para. 301;
ConocoPhillips Gulf of Paria B.V. v. Bolivarian Republic of Venezuela
(ICSID Case No. ARB/07/30),
(ICSID Case No. ARB/06/2),
Partially Dissenting Opinion (Award, 16 September 2015), paras. 10-12.
(ICSID Case
No. ARB/11/24), Award, 30 March 2015, para. 559.
establish that it “has truly lost all the attributes of ownership”,
and not simply
to have incurred a loss of value as such.
of Albania’s challenged measures – closing the port on which claimant relied
investment, the tribunal concluded that it did not rise to the level equivalent to
an expropriation:
“The result of the measure was not Claimant’s loss of any of the
attributes of its property over the investment. Claimant remained entitled
to continue to use, possess, control, and dispose of the property. It is not
all elements which constitute the essence of property”.
Expropriation for a “public purpose”
Belokon v. Kyrgyzstan
, the State was held liable for,
the indirect
expropriation of the claimant’s investment in a bank in the Kyrgyz Republic.
Following a “regime change” in April 2010, the State undertook a number of
measures over the next two years directed towards the bank, its ofcers, and
the claimant individually. As a result of these measures the bank was initially
was placed into an indenite “sequestration regime”. In addition, a number of
the bank’s ofcers and the claimant individually were subject to more than four
years of ongoing criminal investigations and attempted prosecution for money
laundering and other violations of Kyrgyz law. Reviewing the claimant’s claim for
indirect expropriation under the Kyrgyzstan-Latvia BIT, the tribunal concluded
that notwithstanding the State’s acknowledged power to exercise its sovereign
“police powers” to protect its banking system,
there appeared to be little
legitimate public purpose to the measures. Instead, the tribunal concluded that
the measures appeared to have been motivated by “suspicions of wrongdoing
regime in mid-April 2010 may have been undertaken for a public purpose”,
given the uncertainty surrounding the change of regime, once that administration
was in place, the way in which it administered the bank suggested that the
State was not acting “in the interests of the public but to promote the narrower
interests of the government in obtaining by seizure of [the bank] what could
As a result, the Kyrgyz measures
Article 5 of the BIT.
Ibid., para. 566 (quoting
Compañia del Desarrollo de Santa Elena S.A. v. Republic of Costa Rica
(ICSID Case No. ARB/96/1), Award, 17 February 2000, para. 76).
Ibid., para. 570. The tribunal also cited and concurred with
El Paso Energy International Company
v. Argentine Republic
(ICSID Case No. ARB/03/15), Award, 31 October 2011, para. 245 and
AES
Summit Generation Limited and AES-Tisza Erömü Kft. v. Republic of Hungary
(ICSID Case No.
ARB/07/22), Award, 23 September 2010, para. 14.3.1. See
(ICSID Case No. ARB/11/24), Award, 30
March 2015, paras. 566-567.
(ICSID Case
No. ARB/11/24), Award, 30 March 2015, para. 579.
Valeri Belokon v. Kyrgyz Republic
(UNCITRAL), Award, 24 October 2014, paras. 192-193.
As discussed in part C, this nding did not affect the manner in which the tribunal approached the
“Public purpose” and “discrimination” in the expropriation analysis
Quiborax v. Bolivia
discrimination. In that case, Bolivia had effected an expropriation through the
revocation of a mining concession for the Gran Salar de Uyuni Fiscal Reserve, the
world’s largest dry salt at. While the tribunal “accept[ed] that Bolivia may have
had a legitimate interest in protecting the Gran Salar de Uyuni Fiscal Reserve”,
thereby expropriate the investment) was unlawful. The tribunal reasoned,
that other mining companies had been merely ned for the errors with which
the investor was charged.
Corn Products International v.
, which was addressing a national treatment claim, the Quiborax tribunal
international liability stemming therefrom, because it is undertaken to achieve
Belokon v. Kyrgyzstan
, the State argued that the measures it had taken were
justied on the grounds that the claimant’s investment, a bank, was engaged
the arbitration, however, the State produced no evidence to substantiate its
At the same time, evidence was introduced that the Kyrgyz Supreme
Court had twice quashed prosecutorial charges related to the case on the
grounds that they lacked sufcient substantiation.
The tribunal reected upon
the State’s argument that it should not be required to prove criminal violations in
order to justify taking action to combat nancial crimes like money laundering.
to justify interlocutory measures by a host state in order to provide time for
a thorough investigation of the allegedly suspicious activities”. The tribunal
concluded that “it ultimately remains for the host state to prove that money
measures taken were in accordance with its international obligations”.
The principle of proportionality
In a number of cases over the past year, parties invoked the principle of
proportionality as an element of their pleadings. In
Al Tamimi v. Oman
claimant argued that “proportionality” was a part of customary international law
and an element of the international minimum standard of treatment found in
the Oman-United States FTA. In a non-disputing party submission, the United
States strongly disagreed with this view, taking the position that the minimum
standard of treatment under customary international law does not include
a general obligation of proportionality, and that proportionality itself is not “a
(ICSID Case No. ARB/06/2),
Award, 16 September 2015, para. 245.
Ibid., para. 253 (quoting
Corn Products International, Inc. v. United Mexican States
(ICSID Case No.
ARB(AF)/04/1), Decision on Responsibility, 15 January 2008, para. 142).
Valeri Belokon v. Kyrgyz Republic
(UNCITRAL), Award, 24 October 2014, para. 151.
Ibid., para. 161. Putting the matter in terms of a general approach, the tribunal stated: “If the
host state, notwithstanding its resources and powers, is unable to discharge the burden of proof
before a municipal court, an international tribunal will nd itself in a situation where it cannot, in the
state. Anything else would y in the face of any notion of due process.” Ibid., para. 163.
self-standing obligation” in customary international law.
The tribunal found it
unnecessary to address the issue in order to decide the case.
Electrabel v. Hungary
principle of proportionality in connection with the application of Article 10.1
of the ECT and its prohibition of arbitrary treatment. The
adopted the approaches of other tribunals that “a measure will not be arbitrary
if it is reasonably related to a rational policy”. It took the view that “this includes
the requirement that the impact of the measure on the investor be proportional
for incorporating a test of proportionality into Article 10.1, but simply footnoted
a number of other investment treaty awards decided under different treaties and
a decision of the European Court of Human Rights.
The test of proportionality,
the tribunal observed, “has been developed from certain municipal administrative
laws and requires a balancing or weighing exercise so as to ensure that the
effects of the intended measure remain proportionate in regard to the affected
rights and interests”.
In rejecting Electrabel’s claim, the tribunal stated that its
role in reviewing the State’s conduct was not that of a court of appeal. However,
it said little else with respect to the standard of review that ought to be applied
in its test of proportionality.
Claims arising out of conduct during the investor-State arbitration
Quiborax v. Bolivia
treaty claims, which the claimant alleged were in violation of the ICSID Convention
and Bolivia’s duty to arbitrate in good faith. In particular, the claimant alleged
that Bolivia violated Article 47 of the ICSID Convention by refusing to comply
with the tribunal’s decision on provisional measures;
Convention and Regulation 14 of the Administrative and Financial Regulations by
failing to pay its share of the advance costs of the arbitration;
its initiation of criminal proceedings against various ofcers of the
held that it had jurisdiction to hear these allegations, it rejected the claimant’s
application for relief.
The tribunal accepted that Bolivia was under an obligation to arbitrate in good
faith. Pointing to Article X of the Bolivia-Chile BIT, the tribunal held that Bolivia’s
the agreement to arbitrate under the ICSID Convention, implied a duty to act
in good faith and not to act in a manner that would undermine or frustrate the
arbitral process.
As to both Article 47 and Article 61 of the ICSID Convention,
Adel A Hamadi Al Tamimi v. Sultanate of Oman
(ICSID Case No. ARB/11/33), Award, 3 November
Electrabel S.A. v. The Republic of Hungary
(ICSID Case No. ARB/07/19), Award, 25 November
Belokon v. Kyrgyzstan
stated that “[t]he Tribunal does not consider
Valeri Belokon v. Kyrgyz Republic
(UNCITRAL), Award, 24
Electrabel S.A. v. The Republic of Hungary
(ICSID Case No. ARB/07/19), Award, 25 November
para. 219.
(ICSID Case No. ARB/06/2),
Award, 16 September 2015, para. 576.
the tribunal found that Bolivia had breached its obligations but found no absence
of good faith. Commenting on Bolivia’s argument that it did not believe that the
tribunal’s interim measures under Article 47 were obligatory because of the article’s
the tribunal held that there was no badfaith:
“[G]iven the text of Article 47 and the relatively recent evolution of
nd that [Bolivia’s] failure to comply with the Decision on Provisional
Measures amounts to a breach of its duty to arbitrate in good faith.”
With respect to the violation of Article 61, the tribunal concluded that declaratory
relief was unnecessary as the violation could be addressed in the tribunal’s order
on costs. Finally, as to the criminal proceedings commenced by Bolivia during
the pendency of the arbitration, the tribunal refused to treat these as evidence
of bad faith. The tribunal cited two reasons for doing so. First, it held that it
was unable to conclude “that Bolivia’s sole purpose in initiating the criminal
proceedings was to frustrate the Claimants’ rights in this arbitration”.
it concluded, regardless of Bolivia’s motivations, “the criminal proceedings did
not cause actual harm to the Claimants’ procedural rights”.
Unlawful expropriation – valuation date and relevance of ex post
Belokon v. Kyrgyzstan
, the tribunal found that the respondent State acted
unlawfully when it indirectly expropriated the claimant’s investment in a Kyrgyz
bank without any legitimate public purpose. At the damages stage of the
valuation date as the date of the award (as some other tribunals have done
in cases of unlawful expropriation). Instead, the tribunal held that it would use
the date of expropriation as the valuation date because it was “evaluating a
business which in effect no longer exists” and because of “the way this case
he Quiborax v. Bolivia
(discriminatory) expropriation, the tribunal rejected Bolivia’s arguments that
the valuation date should be the date of expropriation. The tribunal stated in
Article VI(2) of the BIT [for lawful expropriations], but the full reparation
principle under customary international law as enunciated by the PCIJ
in Chorzów and restated in Article 31 of the ILC Articles, because [the
tribunal] is faced with an expropriation that is unlawful not merely because
compensation [from Bolivia to the investor] is lacking.”
Article 47 of the ICSID Convention provides: “Except as the parties otherwise agree, the Tribunal
may, if it considers that the circumstances so require, recommend any provisional measures which
should be taken to preserve the respective rights of either party.”
(ICSID Case No. ARB/06/2),
Award, 16 September 2015, para. 583 (noting that “Bolivia may not have been aware of the binding
nature of these provisional measures when it failed to comply with them”).
Ibid. The tribunal further rejected the claimant’s argument that Bolivia had breached its duty of good
faith by challenging the entire tribunal for alleged prejudgment of the case following the interim
measures order. Ibid., para. 595.
Valeri Belokon v. Kyrgyz Republic
(UNCITRAL), Award, 24 October 2014, para. 309.
(ICSID Case No. ARB/06/2),
As a result, the tribunal’s majority held, following a wide range of arbitral, judicial
and scholarly opinions, that when faced “with an expropriation that is unlawful
not merely because compensation is lacking, [the tribunal’s] task is to quantify
the losses suffered by the claimant on the date of the award” and “what must
To this end, the majority concluded:
“[A]ssessing the value of the investment on the date of the award [...]
allows the Tribunal to take into consideration ex post data, i.e., information
available after the date of the expropriation. Its task is to compensate
the Claimants’ actual loss on the date of the award. [...] Using actual
information available on the date of the expropriation, as it allows to
‘re-establish the situation which would,
One arbitrator strongly dissented from the majority’s reliance on ex post data,
describing the approach adopted by the majority as “an ultraminority position”.
Relying heavily on a close reading of the Permanent Court’s judgment in
Chorzów
Factory
, the dissent observed that under the Court’s test, the goal of reparation
is to “re-establish the situation that would
To the dissenting arbitrator, this meant that the
proper approach to reparation must aim to “compensate the consequences of
the illegal act of the State, as appreciated at the time of such expropriation, not
or other circumstances”.
In the combined decision rendered in
Vivendi v. Argentina (II)
AWG v.
initial breach of the relevant BITs had occurred in 2002, when Argentina adopted
measures which radically affected the nancial equilibrium of a water concession
agreement. The concession was subsequently terminated by Argentina in 2006.
matter of customary international law, the tribunal held that the quantication of
compensation required it to undertake a three-step process:
situation where Argentina did not take measures that violated its treaty
as a result of the offending measures that Argentina did take [...]. Third, the
Tribunal must subtract the second value from the rst and then actualize
that amount by means of an appropriate interest rate to arrive at the
damages owing to the Claimants so as to put them in the nancial position
they would have been had Argentina not breached the applicable BITs.”
Award, 16 September 2015, para. 370.
(ICSID Case No. ARB/06/2),
Partially Dissenting Opinion (Award, 16 September 2015), para. 44.
Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. (formerly Aguas
of the breach in 2002 until the termination of the concession in 2006 or until
2023, the date of the concession’s expiration according to original terms. The
tribunal rejected Argentina’s argument for the earlier date stating that this would
“seriously undervalue the investments”. While the tribunal agreed with Argentina
“that the risk of termination was always present in the Concession”, it held that
discount to present value the remaining twenty-one years of projected cash
Establishing compensable harm – burden and standard of proof
Mobil Investments v. Canada (I),
the majority addressed the quantication
expenditures incurred by claimants in connection with their investment were
compensable as damages. In addressing the issue, the majority reiterated its
previous holding from the liability phase that the claimants bore the burden of
proof to show that each contested expenditure was compensable under its
The majority also reiterated that because its conclusions
with respect to the compensability of the expenditures were dependent upon
violated the NAFTA, “the relevant standard of proof is ‘reasonable certainty,’ not
‘absolute certainty’”.
Faced with considerable evidentiary difculties at the
quantum stage, the claimants argued that under customary international law
uncertainty in the record should be construed against the wrongdoer, Canada.
the tribunal rejected the claimants’ argument, nding that the references relied
upon by the claimants provided an insufcient basis on which to establish a rule
of international law.
Tidewater v. Venezuela
, the tribunal held that certain measures enacted by
Venezuela had resulted in an indirect expropriation of the claimants’ business of
providing maritime support services to various Venezuelan state oil companies.
The tribunal considered that a discounted cash ow (DCF) analysis was the most
tribunal was the matter of “country risk”, i.e. “the risk of investing in a particular
country, here Venezuela”.
From the State’s perspective, any commercial
government intervention that has always accompanied the investment activities
Argentinas, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A.)
v. Argentine Republic
(ICSID Case No. ARB/03/19), Award, 9 April 2015, para. 28.
Mobil Investments Canada Inc. and Murphy Oil Corporation v. Government of Canada
(ICSID Case
No. ARB(AF)/07/4), Award, 20 February 2015, para. 52.
Ibid., para. 52. Similarly, in the combined decision rendered in
Vivendi v. Argentina (II)
AWG v.
would the Claimants’ investments be worth by the year 2023 if Argentina had not violated the BITs”,
the tribunal held that international law “does not demand absolute certainty” in valuing damages
not violated its international obligations.
Suez, Sociedad General de Aguas de Barcelona, S.A. and
Vivendi Universal, S.A. (formerly Aguas Argentinas, S.A., Suez, Sociedad General de Aguas de
Barcelona, S.A. and Vivendi Universal, S.A.) v. Argentine Republic
(ICSID Case No. ARB/03/19) and
AWG Group Ltd. v. The Argentine Republic
(UNCITRAL), Award, 9 April 2015, para. 30.
Mobil Investments Canada Inc. and Murphy Oil Corporation v. Government of Canada
(ICSID Case
No. ARB(AF)/07/4), Award, 20 February 2015, para. 53.
Tidewater Investment SRL and Tidewater Caribe, C.A. v. Bolivarian Republic of Venezuela
(ICSID
Case No. ARB/10/5), Award, 13 March 2015, para. 182.
in Venezuela, including the risk that the government would reserve a certain
The claimants, on the other hand, argued that
concerns about the impact of “certain Venezuelan government policies, such
as its nationalisation agenda, which heightened the level of legal, regulatory
and political risk” should be excluded from valuation because of the protection
against uncompensated expropriation provided in the BIT.
As a result of the
differences in approaches, the State proposed a country risk discount rate of
contrast, proposed a signicantly lower discount rate of 1.5 per cent overall.
The tribunal rejected the claimants’ limited approach to country risk. It explained
its decision by noting that although the BIT provided protection against
uncompensated expropriation, it did not prohibit all State taking of private
property. Rather, under the BIT, once it had been established that an expropriation
of the investment would pay a “willing seller” in the circumstances, the tribunal
Compound v. simple interest
In the combined decision rendered in
Vivendi v. Argentina (II)
AWG v.
the tribunal provided a three-point articulation of the “strong reasons,
both economic and legal”, which it found justied the choice of compound interest
calculation over simple interest. First, because the customary international law
goal of full compensation seeks to place the injured party in the position that
such party would have been if the injury had never taken place, “[c]ompound
interest is more effective at achieving that result than is simple interest”.
Second, there is a trend in favour of applying compound interest in damages
calculations among international tribunals.
Third, the use of compound
interest “is standard practice in business and nance when calculating nancial
accurately reects economic reality than simple interest”.
Quiborax v. Bolivia
, the respondent State objected to the tribunal’s application
of compound interest on the ground that Bolivian law required simple interest.
The tribunal rejected the argument, concluding that “[r]eparation for expropriation
is governed by international law and full reparation includes interest for late
payment”. It added: “The application of national law may be appropriate for
contract claims, but not for a claim of breaches of the BIT.”
Ibid., para. 186. The tribunal adopted the respondent State’s proposed discount rate of 14.75 per
cent, calling it “a reasonable, indeed conservative, premium”. Ibid., para. 190.
Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. (formerly Aguas
Argentinas, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A.)
v. Argentine Republic
(ICSID Case No. ARB/03/19), Award, 9 April 2015, para. 65.
Ibid., para. 65 (citing
Total S.A. v. Argentine Republic
(ICSID Case No. ARB/04/1), Award, 27
(ICSID Case No. ARB/06/2),
Award, 16 September 2015, paras. 520, 521 (citing
Duke Energy Electroquil Partners and Electroquil
S.A. v. Republic of Ecuador
(ICSID Case No. ARB/04/19), Award, 18 August 2008).
AWG v. Argentina
, the claimant relied on Article 40(1) of the UNCITRAL
Arbitration Rules (1976) to seek the costs of the arbitration from Argentina, against
Argentina-United Kingdom BIT.
The tribunal rejected the application. Although
and the claimant had recovered far less than it originally claimed. Moreover, the
tribunal noted that the case “generated novel and complex procedural issues”
and “while the pleadings on record in this case are vast, counsel for both parties
conducted themselves according to the highest professional standards”. It
further noted: “Certainly it would have been difcult, if not impossible, for a
reasonable party to have predicted the potential success of claims arising out
amount of compensation that should be awarded.”
As a result, the tribunal
concluded that there was sufcient reason to depart from the general principle
articulated in Article 40(1) and to order the claimant and Argentina each to bear
their own costs and share appropriately in the administrative expenses of the
proceeding.
A rather more cursory approach was taken in
Belokon v. Kyrgyzstan
. There, the
claimant had been successful on its claims for indirect expropriation, violation
a Kyrgyz bank, and the tribunal had valued compensation at approximately
US$15 million. Relying on Article 40(1), the claimant sought recovery of its legal
costs of approximately €2 million. The tribunal refused to make an order for full
costs. Rather, the tribunal noted that the claimant had not prevailed on some
claims and had not recovered the full amount it had sought. It further added, in
apparent reference to the €2 million amount, that “the Tribunal is conscious that
the reasonability of fees includes a measure of proportionality”.
As a result, the
tribunal held that it would be “just and proper that the Respondent contribute to
50% of the Claimant’s costs of presenting its case”.
Vivendi v. Argentina (II),
AWG v. Argentina
Article 40(1) states: “[…] the costs of the arbitration shall in principle be borne by the unsuccessful
Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. (formerly Aguas
Argentinas, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A.)
v. Argentine Republic
(ICSID Case No. ARB/03/19), Award, 9 April 2015, para. 113.
Ibid., para. 113.
Valeri Belokon v. Kyrgyz Republic
(UNCITRAL), Award, 24 October 2014, para. 333. With respect to
fees (€500,000) were proportionate by the same measure.
Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. (formerly Aguas
Argentinas, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A.)
v. Argentine Republic
(ICSID Case No. ARB/03/19), Award, 9 April 2015, para. 115.
of ICSID awards is that each side is to pay its own costs”.
In the cases at
hand, the tribunal decided not to award costs, either legal or arbitral. In its view,
had raised “both legal and factual issues of great complexity”.
Moreover, the
tribunal indicated a disinclination to award costs in light of “the great discrepancy
Awdi v. Romania
partial costs order on the respondent State, even though the claimant had failed
on most of its claims and had recovered only a small fraction of the amount it had
originally claimed: approximately €7.7 million (approx. $8.6 million) recovered
against more than €300 million originally claimed.
decision on the grounds that “the outcome of the case has been to some extent
in Claimants’ favour, the Tribunal having rejected Respondent’s jurisdictional and
admissibility objections” and the claimant having achieved some recovery on
As a result, the respondent State was ordered to pay US$1million
Al Tamimi v. Oman
the tribunal issued a partial costs award in favour of the
respondent State, shifting 75 per cent of the respondent’s legal and arbitral
of claimant’s claims had been dismissed, (b) “it should have been clear” to the
claimant prior to commencing proceedings that certain provisions of the Oman-
United States FTA posed “serious barriers to the overall viability” of his case, and
(c) the evidence showed that the claimant largely had been “the author of his
own misfortune through his wilful disregard of Oman’s environmental laws”.
The respondent State was not awarded full costs, it seems, because an earlier
challenge it had made to the claimant’s nationality to raise claims under the FTA
had also made an unsuccessful challenge to the tribunal’s jurisdiction
Electrabel v. Hungary
the tribunal refused to issue an award for legal costs in
favour of the successful respondent State, although it did require the unsuccessful
claimant to bear the costs of the arbitration.
The tribunal noted that while the
State had prevailed in all respects on the merits, factual developments occurring
subsequent to the ling of the claim (for which neither side bore responsibility),
(the European Commission)
which acted as “a second respondent more hostile to
than Hungary
itself”, had served to complicate the proceedings to an extent which made it
Hassan Awdi, Enterprise Business Consultants, Inc. and Alfa El Corporation v. Romania
(ICSID Case
No. ARB/10/13), Award, 2 March 2015, para. 529.
Ibid., para. 531. The Claimant had alleged total legal fees of approximately €2.37 million, US$1.32
Adel A Hamadi Al Tamimi v. Sultanate of Oman
(ICSID Case No. ARB/11/33), Award, 3 November
Ibid., para. 478. Also, in
Guardian Fiduciary Trust v. Macedonia
, the tribunal ordered the claimant to
reimburse 80 per cent of the respondent State’s fees and expenses (
Guardian Fiduciary Trust, Ltd,
f/k/a Capital Conservator Savings & Loan, Ltd v. Macedonia, former Yugoslav Republic of
(ICSID
Case No. ARB/12/31), Award, 22 September 2015, para. 151).
Electrabel S.A. v. The Republic of Hungary
(ICSID Case No. ARB/07/19), Award, 25 November
Ibid., paras. 233-234. The tribunal also acknowledged its own culpability in complicating the
Tidewater v. Venezuela
, the tribunal made a partial costs award in claimants’
favour (approximately 33 per cent). Although the claimants had been successful
on their expropriation claim, they had unsuccessfully argued that the expropriation
had been unlawful. The tribunal concluded that this had “result[ed] in signicant
wasted costs in the evidentiary phase” and therefore refused to award the
Mobil Investments v. Canada (I)
(under the ICSID Additional Facility Rules)
justied not awarding costs.
State counterclaims
Perenco v. Ecuador
Ecuador’s counterclaim.
In this case, led in 2008 under the Ecuador-France
BIT and two concession contracts, the claimant is challenging Ecuador’s 99 per
cent tax on windfall oil prots. In a decision issued in 2014, the tribunal decided
on the quantum of damages due to the claimant. The respondent State led
its counterclaim in 2011, alleging that Perenco had caused an “environmental
catastrophe” through its operation of oil elds in violation of the contracts and
Ecuadorian environmental law, seeking around $2.5 billion in compensation for
remediation activities.
the tribunal observed that “a State has wide latitude
under international law to prescribe and adjust its environmental laws, standards
and policies in response to changing views and a deeper understanding of the
In light of the Ecuadorian Constitution’s
focus on environmental protection, the arbitrators held that “when choosing
environment is to be preferred”.
certain issues posed by Ecuadorian law, holding, for example, that the 4-year
statute of limitations does not bar the counterclaim.
While to the tribunal, the available evidence suggested that Perenco’s conduct
was “very troubling” and did not “paint a picture of a responsible environmental
steward”,
to investigate the matter.
proceedings through its decision to bifurcate liability and damages in a way that was not ultimately
helpful to the resolution of the claim. Ibid., para. 235.
Tidewater Investment SRL and Tidewater Caribe, C.A. v. Bolivarian Republic of Venezuela
(ICSID
Case No. ARB/10/5), Award, 13 March 2015, paras. 215-216.
Mobil Investments Canada Inc. and Murphy Oil Corporation v. Government of Canada
(ICSID Case
No. ARB(AF)/07/4), Award, 20 February 2015, paras. 176-177.
(ICSID Case No. ARB/08/6), Interim
Decision on the Environmental Counterclaim, 11 August 2015.
In contrast to some earlier cases that involved counterclaims, here the claimant did not dispute
However, Perenco did contend that Ecuador’s counterclaim was decient as a matter of law.
Ibid., para. 588. The tribunal criticized party-appointed experts, stating that “each was attempting
to achieve the best result for the party by whom they were instructed, and that they crossed the
Application for revision of an award upon discovery of previously
Mobil v. Venezuela
, the tribunal disagreed with the respondent State’s argument
that an application for a revision of a tribunal’s award under Article 51 of the
ICSID Convention may be based upon facts that occurred after the issuance of
the award.
expressly require that the discovered fact predate the Award”, it concluded that
“both the textual implications of the provision as well as its object and purpose
conrm that the discovered fact needs to have existed before the Award was
rendered”.
The tribunal also noted the practice of the International Court of
Justice of refusing applications for revision based on post-judgment facts.
Third-party funding
v.
Turkmenistan
was being funded by a third-party funder. Specically, the tribunal ordered to
to what extent it/they will share in any successes that Claimants may achieve
The tribunal noted that such a disclosure is important to
arbitrators are affected by the existence of third-party funder”,
referring to a
Respondent’s concern that if it is successful in this arbitration and a costs order
party funder will have disappeared”.
Venezuela Holdings B.V. and others v. Bolivarian Republic of Venezuela
(ICSID Case No. ARB/07/27),
Ibid., paras. 3.1.16-3.1.17.
(ICSID Case No.
ARB/12/6), Procedural Order No. 3, 12 June 2015, para. 13.
Ibid., para. 12.
V. Conclusions
With 70 cases initiated in 2015, the number of new treaty-based investor-State
available arbitral decisions in 2015 show that on some issues, tribunals followed
previous decisions, while on some other issues they adopted approaches that
departed from earlier decisions.
disputes. Today, a consensus exists on the need to reform the investment
well as systemic issues related to the overall IIA regime. UNCTAD’s Road Map
for IIA Reform and its Investment Policy Framework offer policy options in this
regard,
and have been used by more than 100 countries when reviewing their
Most
new IIAs include rened language that aims to preserve the right to regulate
while maintaining protection of investors, and to improve investment dispute
Several countries and regions are adopting innovative approaches to
a new model BIT focusing on investment promotion and facilitation, dispute
prevention and alternatives to arbitration instead of traditional investment
protection and ISDS. The country has concluded several Cooperation and
Facilitation Agreements on this basis in 2015. In Europe, much policy attention
has been given by the European Commission to developing a new approach
to investment protection, with a particular emphasis on the right to regulate
review concluded in February 2016) reect this new approach.
Developments in Brazil and at the EU level are just two examples; many more
countries and regions undertake reform efforts at different levels of policymaking
(national, bilateral, regional and multilateral). Signicant progress has been
achieved in this rst phase of IIA reform. Countries have built consensus on
the need for reform, identied reform areas and approaches, reviewed their IIA
modern IIAs.
However, much remains to be done, particularly with regard to the large
body of old treaties. The second phase of IIA reform will require countries
to intensify collaboration and coordination to address the systemic risks
UNCTAD (2015).
World Investment Report 2015: Reforming International Investment Governance
New York and Geneva: United Nations. http://unctad.org/en/Pages/DIAE/World%20Investment%20
Report/World_Investment_Report.aspx
UNCTAD (2016, forthcoming).
World Investment Report 2016: Investor Nationality – Policy
. New York and Geneva: United Nations.
UNCTAD’s World Investment Forum 2016 offers the opportunity to discuss
how to carry IIA reform forward.
This Issues Note was prepared by Sergey Ripinsky and Diana Rosert,
Giannakopoulos and Malvika Monga provided helpful inputs and
prepared by N. Jansen Calamita, Director of the Investment Treaty
Forum and Senior Research Fellow at British Institute of International
the University of Amsterdam.
Comments on Section IV were gratefully received from Eric de Brabandere,
Martin Brauch, Chester Brown, Caroline Henckels, Mavluda Sattorova,
Stephan Schill, Catharine Titi and Ignacio Torterola.
of Joerg Weber and the overall guidance of James Zhan.
Known treaty-based ISDS
http://investmentpolicyhub.unctad.org/ISDS/FilterByCaseName
9REN Holding S.a.r.l v. Kingdom of Spain (ICSID
Case No. ARB/15/15)
Spain
Luxembourg
The Energy Charter Treaty
Abed El Jaouni and Imperial Holding SAL v.
Lebanese Republic (ICSID Case No. ARB/15/3)
Lebanon
Germany
Germany - Lebanon BIT (1997)
Abertis Infraestructuras, S.A. v. Argentine Republic
(ICSID Case No. ARB/15/48)
Argentina
Spain
Argentina - Spain BIT (1991)
Aeroport Belbek LLC and Mr Igor Valerievich
Kolomoisky v. The Russian Federation (UNCITRAL,
PCA Case No. 2015-07)
Russian
Federation
Ukraine
Russian Federation - Ukraine
BIT (1998)
Aktau Petrol Ticaret A.S. and Som Petrol Ticaret
A.S. v. Republic of Kazakhstan (ICSID Case No.
ARB/15/8)
Kazakhstan
Turkey
Kazakhstan - Turkey BIT
(1992)
Ali Alyafei v. Hashemite Kingdom of Jordan (ICSID
Case No. ARB/15/24)
Jordan
Qatar
Arab Investment Agreement
(1980)
Álvarez y Marín Corporación S.A. and others v.
Republic of Panama (ICSID Case No. ARB/15/14)
Panama
Costa Rica;
Netherlands
Netherlands - Panama BIT
(2000); Central America-
Panama FTA
Anglia Auto Accessories Ltd v. The Czech Republic
(SCC)
Czech Republic
United
Kingdom
Czech Republic - United
Kingdom BIT (1990)
ArcelorMittal S.A. v. Arab Republic of Egypt (ICSID
Case No. ARB/15/47)
Egypt
Luxembourg
BLEU (Belgium-Luxembourg
Economic Union) - Egypt BIT
(1999)
B.V. Belegging-Maatschappij “Far East” v.
Republic of Austria (ICSID Case No. ARB/15/32)
Austria
Malta
Austria - Malta BIT (2002)
11
B3 Croatian Courier Coöperatief U.A. v. Republic
of Croatia (ICSID Case No. ARB/15/5)
Croatia
Netherlands
Croatia - Netherlands BIT
(1998)
BayWa r.e. Renewable Energy GmbH and BayWa
r.e. Asset Holding GmbH v. Kingdom of Spain
(ICSID Case No. ARB/15/16)
Spain
Germany
The Energy Charter Treaty
Belenergia S.A. v. Italian Republic (ICSID Case No.
ARB/15/40)
Italy
Luxembourg
The Energy Charter Treaty
Cairn Energy PLC v. India (UNCITRAL)
India
United
Kingdom
India - United Kingdom BIT
(1994)
Capital Financial Holdings Luxembourg S.A. v.
Republic of Cameroon (ICSID Case No. ARB/15/18)
Cameroon
Luxembourg
The Energy Charter Treaty
Cavalum SGPS, S.A. v. Kingdom of Spain (ICSID
Case No. ARB/15/34)
Spain
Portugal
The Energy Charter Treaty
Consorcio GLP Ecuador v. Republic of Ecuador
(UNCITRAL)
Ecuador
Spain
Ecuador - Spain BIT (1996)
Cortec Mining Kenya Limited, Cortec (Pty) Limited
and Stirling Capital Limited v. Republic of Kenya
(ICSID Case No. ARB/15/29)
Kenya
United
Kingdom
Kenya - United Kingdom BIT
(1999)
Cube Infrastructure Fund SICAV and others v.
Kingdom of Spain (ICSID Case No. ARB/15/20)
Spain
France;
Luxembourg
The Energy Charter Treaty
Dawood Rawat v. Republic of Mauritius
(UNCITRAL)
Mauritius
France
France - Mauritius BIT (1973)
Devincci Salah Hourani and Issam Salah Hourani
v. Republic of Kazakhstan (ICSID Case No.
ARB/15/13)
Kazakhstan
United
Kingdom;
United States
of America
Kazakhstan - United Kingdom
BIT (1995); Kazakhstan -
United States of America BIT
(1992)
E.ON SE, E.ON Finanzanlagen GmbH and E.ON
Iberia Holding GmbH v. Kingdom of Spain (ICSID
Case No. ARB/15/35)
Spain
Germany
The Energy Charter Treaty
ENERGO-PRO a.s. v. Republic of Bulgaria (ICSID
Case No. ARB/15/19)
Bulgaria
Czech Republic
The Energy Charter Treaty;
Bulgaria - Czech Republic BIT
(1999)
24
Eskosol S.p.A. in liquidazione v. Italian Republic
(ICSID Case No. ARB/15/50)
Italy
Belgium
The Energy Charter Treaty
Everest Estate LLC and others v. The Russian
Federation (UNCITRAL, PCA Case No. AA577)
Russian
Federation
Ukraine
Russian Federation - Ukraine
BIT (1998)
Gabriel Resources Ltd. and Gabriel Resources
(Jersey) v. Romania (ICSID Case No. ARB/15/31)
Romania
Canada; United
Kingdom
Canada - Romania BIT (2009);
Romania - United Kingdom
BIT (1995)
Gilward Investments B.V. v. Ukraine (ICSID Case
No. ARB/15/33)
Ukraine
Netherlands
Netherlands - Ukraine BIT
(1994)
Greentech Energy Systems and Novenergia v. Italy
(SCC)
Italy
Denmark;
Luxembourg
The Energy Charter Treaty
Hanocal Holding B.V. and IPIC International B.V.
v. Republic of Korea (ICSID Case No. ARB/15/17)
Korea, Republic
Netherlands
Korea, Republic of -
Netherlands BIT (2003)
Hydro Energy 1 S.à r.l. and Hydroxana Sweden AB
v. Kingdom of Spain (ICSID Case No. ARB/15/42)
Spain
Luxembourg;
Sweden
The Energy Charter Treaty
Hydro S.r.l. and others v. Republic of Albania
(ICSID Case No. ARB/15/28)
Albania
Italy
Albania - Italy BIT (1991)
ICS Inspection and Control Services Limited v.
The Argentine Republic (II) (UNCITRAL)
Argentina
United
Kingdom
Argentina - United Kingdom
BIT (1990)
Indian Metals & Ferro Alloys Ltd v. Republic of
Indonesia (UNCITRAL)
Indonesia
India
India - Indonesia BIT (1999)
J.P. Busta and I.P. Busta v. The Czech Republic
(SCC)
Czech Republic
United
Kingdom
Czech Republic - United
Kingdom BIT (1990)
JGC Corporation v. Kingdom of Spain (ICSID Case
No. ARB/15/27)
Spain
Japan
The Energy Charter Treaty
JKX Oil & Gas plc, Poltava Gas B.V. and Poltava
Petroleum Company v. Ukraine (UNCITRAL)
Ukraine
United
Kingdom;
Netherlands
Ukraine - United Kingdom BIT
(1993); Netherlands - Ukraine
BIT (1994); The Energy
Charter Treaty
Kontinental Conseil Ingénierie v. Gabonese
Republic (UNCITRAL)
Gabon
Tunisia
OIC Investment Agreement
(1981)
KS Invest GmbH and TLS Invest GmbH v. Kingdom
of Spain (ICSID Case No. ARB/15/25)
Spain
Germany
The Energy Charter Treaty
Landesbank Baden-Württemberg, HSH Nordbank
AG, Landesbank Hessen-Thüringen Girozentrale
and Norddeutsche Landesbank-Girozentrale v.
Kingdom of Spain (ICSID Case No. ARB/15/45)
Spain
Germany
The Energy Charter Treaty
Limited Liability Company Lugzor and others v.
The Russian Federation (UNCITRAL, PCA Case
No. 2015-29)
Russian
Federation
Ukraine
Russian Federation - Ukraine
BIT (1998)
Lion Mexico Consolidated L.P. v. United Mexican
States (ICSID Case No. ARB(AF)/15/2)
Mexico
Canada
NAFTA
Littop Enterprises Limited, Bridgemont Ventures
Limited and Bordo Management Limited v. Ukraine
(SCC)
Ukraine
Cyprus
The Energy Charter Treaty
Mathias Kruck and others v. Kingdom of Spain
(ICSID Case No. ARB/15/23)
Spain
Germany
The Energy Charter Treaty
Menzies Middle East and Africa S.A. and Aviation
Handling Services International Ltd. v. Republic of
Senegal (ICSID Case No. ARB/15/21)
Senegal
United
Kingdom;
Netherlands
Netherlands - Senegal BIT
(1979); Senegal - United
Kingdom BIT (1980)
Mobil Investments Canada Inc. v. Canada (ICSID
Case No. ARB/15/6)
Canada
United States
of America
NAFTA
46
Mohammad Reza Dayyani and others v. Republic
of Korea (UNCITRAL)
Korea, Republic
Iran, Islamic
Republic of
Iran, Islamic Republic of -
Korea, Republic of BIT (1998)
Nabucco Gas Pipeline International GmbH in Liqu.
v. Republic of Turkey (ICSID Case No. ARB/15/26)
Turkey
Austria
Austria - Turkey BIT (1988)
OperaFund Eco-Invest SICAV PLC and Schwab
Holding AG v. Kingdom of Spain (ICSID Case No.
ARB/15/36)
Spain
Malta;
Switzerland
The Energy Charter Treaty
Orange SA v. Hashemite Kingdom of Jordan
(ICSID Case No. ARB/15/10)
Jordan
France
France - Jordan BIT (1978)
Paz Holdings Ltd. v. Plurinational State of Bolivia
(UNCITRAL)
Bolivia,
Plurinational
State of
United
Kingdom
Bolivia, Plurinational State of -
United Kingdom BIT (1988)
PJSC Ukrnafta v. The Russian Federation
(UNCITRAL, PCA Case No. 2015-34)
Russian
Federation
Ukraine
Russian Federation - Ukraine
BIT (1998)
Privatbank and Finance Company Finilion LLC v.
The Russian Federation (UNCITRAL, PCA Case
No. AA568)
Russian
Federation
Ukraine
Russian Federation - Ukraine
BIT (1998)
PT Ventures, SGPS, S.A. v. Republic of Cabo
Verde (ICSID Case No. ARB/15/12)
Cabo Verde
Portugal
Cabo Verde - Portugal BIT
(1990)
Resolute Forest Products Inc. v. Canada
Canada
United States
of America
NAFTA
Salini Impregilo S.p.A. v. Argentine Republic (ICSID
Case No. ARB/15/39)
Argentina
Italy
Argentina - Italy BIT (1990)
Samsung Engineering Co., Ltd. v. Sultanate of
Oman (ICSID Case No. ARB/15/30)
Oman
Korea,
Republic of
Korea, Republic of - Oman
BIT (2003)
Sergei Viktorovich Pugachev v. The Russian
Federation (UNCITRAL)
Russian
Federation
France
France - Russian Federation
BIT (1989)
58
Shanara Maritime International, S.A. and Mareld
Ltd. Inc. v. United Mexican States
Mexico
Panama
Mexico - Panama BIT (2005)
Silver Ridge Power BV v. Italian Republic (ICSID
Case No. ARB/15/37)
Italy
Netherlands
The Energy Charter Treaty
SolEs Badajoz GmbH v. Kingdom of Spain (ICSID
Case No. ARB/15/38)
Spain
Germany
The Energy Charter Treaty
Stabil LLC and others v. The Russian Federation
(UNCITRAL, PCA Case No. 2015-35)
Russian
Federation
Ukraine
Russian Federation - Ukraine
BIT (1998)
Stadtwerke München GmbH and others v.
Kingdom of Spain (ICSID Case No. ARB/15/1)
Spain
Germany
The Energy Charter Treaty
Stans Energy Corp. and Kutisay Mining LLC v.
Kyrgyz Republic (II) (UNCITRAL, PCA Case No.
2015-32)
Kyrgyzstan
Canada
CIS Investor Rights
Convention (1997)
State General Reserve Fund of the Sultanate of
Oman v. Republic of Bulgaria (ICSID Case No.
ARB/15/43)
Bulgaria
Oman
Bulgaria - Oman BIT (2007)
STEAG GmbH v. Kingdom of Spain (ICSID Case
No. ARB/15/4)
Spain
Germany
The Energy Charter Treaty
Strabag SE v. Libya (ICSID Case No. ARB(AF)/15/1)
Libya
Austria
Austria - Libya BIT (2002)
Theodoros Adamakopoulos and others v. Republic
of Cyprus (ICSID Case No. ARB/15/49)
Cyprus
Greece;
Luxembourg
Cyprus - Greece BIT (1992);
BLEU (Belgium-Luxembourg
Economic Union) - Cyprus BIT
(1991)
Total E&P Uganda BV v. Republic of Uganda
(ICSID Case No. ARB/15/11)
Uganda
Netherlands
Netherlands - Uganda BIT
(2000)
Watkins Holdings S.à r.l. and others v. Kingdom of
Spain (ICSID Case No. ARB/15/44)
Spain
Luxembourg;
Netherlands;
Spain
The Energy Charter Treaty
WCV Capital Ventures Cyprus Limited and
Channel Crossings Limited v. The Czech Republic
(UNCITRAL)
Czech Republic
Cyprus
Cyprus - Czech Republic BIT
(2001)
known treaty-based ISDS cases
Only countries with at least one known case in either category are included.
http://investmentpolicyhub.unctad.org/ISDS/FilterByCountry
respondent State
Albania
Algeria
Argentina
Armenia
Australia
Austria
Azerbaijan
Bahamas
Bangladesh
Barbados
11
Belgium
Belize
Bermuda
Bolivia, Plurinational State of
Bosnia and Herzegovina
British Virgin Islands
Bulgaria
Burundi
Cabo Verde
Cameroon
Canada
Chile
China
24
Congo, Democratic Republic of the
Costa Rica
Croatia
Cyprus
Czech Republic
Denmark
Dominican Republic
Ecuador
Egypt
El Salvador
Equatorial Guinea
Estonia
Ethiopia
Finland
France
Gabon
Gambia
Georgia
Germany
Ghana
respondent State
Gibraltar
Greece
46
Grenada
Guatemala
Guyana
Hong Kong, China SAR
Hungary
India
Indonesia
Iran, Islamic Republic of
Ireland
Israel
Italy
Japan
58
Jordan
Kazakhstan
Kenya
Korea, Republic of
Kuwait
Kyrgyzstan
Lao People's Democratic Republic
Latvia
Lebanon
Lesotho
Libya
Lithuania
Luxembourg
Macao, China SAR
Macedonia, The former Yugoslav
Republic of
Madagascar
Malaysia
Malta
Mauritius
Mexico
Moldova, Republic of
Mongolia
80
Montenegro
Morocco
Mozambique
Myanmar
84
Netherlands
80
Nicaragua
Nigeria
Norway
Oman
Pakistan
Panama
Paraguay
Peru
11
Philippines
respondent State
Poland
Portugal
Qatar
Romania
Russian Federation
Saudi Arabia
100
Senegal
101
Serbia
102
Seychelles
103
Singapore
104
Slovakia
105
Slovenia
106
South Africa
107
Spain
108
Sri Lanka
109
Sudan
110
Sweden
111
Switzerland
112
Tajikistan
113
Tanzania, United Republic of
114
Thailand
115
Trinidad and Tobago
116
Tunisia
117
Turkey
11
118
Turkmenistan
119
Uganda
120
Ukraine
121
United Arab Emirates
122
United Kingdom
123
United States of America
138
124
Uruguay
125
Uzbekistan
126
Venezuela, Bolivarian Republic of
127
Viet Nam
128
Yemen
129
Zimbabwe
Annex 3. Arbitral decisions rendered in 2015
The arbitral decisions and follow-on decisions issued in 2015 are available at:
http://investmentpolicyhub.unctad.org/ISDS/FilterByYear
A. Decisions upholding jurisdiction (at least in part) (without examining the
No. ARB/12/6), Decision on Respondent’s Objection to Jurisdiction under Article VII(2),
13 February 2015 (Lew, J. D. M. (chair), Hanotiau, B. and Boisson de Chazournes, L.)
B. Decisions rejecting jurisdiction (in toto)
Accession Mezzanine Capital L.P. and Danubius Kereskedöház Vagyonkezelö Zrt.
v. Hungary
(ICSID Case No. ARB/12/3), Award, 17 April 2015 (Rovine, A. W. (chair),
(UNCITRAL, PCA Case
No. 2012-25), Award on Jurisdiction, 2 April 2015 (Derains, Y. (chair), Chertoff, M. and
Lowe, V.), with Separate Dissenting Jurisdictional Statement by Chertoff, M.
Grupo Francisco Hernando Contreras v. Republic of Equatorial Guinea
ARB(AF)/12/2), Award, 4 December 2015 (Sepúlveda Amor, B. (chair), Orrego Vicuña, F.
and Vinuesa, R. E.), with Dissenting Opinion by Orrego Vicuña, F.
Guardian Fiduciary Trust, Ltd, f/k/a Capital Conservator Savings & Loan, Ltd v. Macedonia,
former Yugoslav Republic of
(ICSID Case No. ARB/12/31), Award, 22 September 2015
(Heiskanen, V. (chair), Bucher, A. and Stern, B.)
Philip Morris Asia Limited v. The Commonwealth of Australia
2012-12), Award on Jurisdiction and Admissibility, 17 December 2015 (Böckstiegel, K.-
H. (chair), Kaufmann-Kohler, G. and McRae, D. M.)
Company of China, Limited v. Kingdom of Belgium
(ICSID Case No. ARB/12/29), Award,
30 April 2015 (Collins, L. (chair), Williams, D. A. R. and Sands, P.)
Poštová banka, a.s. and Istrokapital SE v. Hellenic Republic
Renée Rose Levy and Gremcitel S.A. v. Republic of Peru
State Enterprise Energorynok v. the Republic of Moldova
Final Award, 29 January 2015 (Turck, N. (chair), Tirado, J. and Knieper, R.)
C. Decisions nding State’s liability for IIA breaches (at least in part)
Clayton and Bilcon of Delaware Inc. v. Government of Canada
No. 2009-04), Award on Jurisdiction and Liability, 17 March 2015 (Simma, B. (chair),
Dan Cake (Portugal) S.A. v. Hungary
and Liability, 24 August 2015 (Mayer, P. (chair), Paulsson, J. and Landau, T.)
Adel A Hamadi Al Tamimi v. Sultanate of Oman
(ICSID Case No. ARB/11/33), Award, 3 November
2015 (Williams, D. A. R. (chair), Brower, C. N. and Thomas, J. C.)
Electrabel S.A. v. The Republic of Hungary
(ICSID Case No. ARB/07/19), Award, 25 November 2015
(Veeder, V. V. (chair), Kaufmann-Kohler, G. and Stern, B.)
(ICSID Case
No. ARB/11/24), Award, 30 March 2015 (Knieper, R. (chair), Hammond, S. A. and Banifatemi, Y.),
E. Decisions awarding compensation
AWG Group Ltd. v. The Argentine Republic
(UNCITRAL), Award, 9 April 2015 (Salacuse, J. W. (chair),
Kaufmann-Kohler, G. and Nikken, P.)
Bernhard von Pezold and others v. Republic of Zimbabwe
(ICSID Case No. ARB/10/15), Award, 28
July 2015 (Fortier, L. Y. (chair), Williams, D. A. R. and Hwang, M.)
Hassan Awdi, Enterprise Business Consultants, Inc. and Alfa El Corporation v. Romania
No. ARB/10/13), Award, 2 March 2015 (Bernardini, P. (chair), Gharavi, H. G. and Dolzer, R.)
Khan Resources Inc., Khan Resources B.V. and Cauc Holding Company Ltd. v. the Government
(UNCITRAL, PCA Case No. 2011-09), Award, 2 March 2015
(Williams, D. A. R. (chair), Fortier, L. Y. and Hanotiau, B.)
Mobil Investments Canada Inc. and Murphy Oil Corporation v. Government of Canada
(ICSID Case
No. ARB(AF)/07/4), Award, 20 February 2015 (van Houtte, H. (chair), Janow, M. and Sands, P.)
OI European Group B.V. v. Bolivarian Republic of Venezuela
(ICSID Case No. ARB/11/25), Award, 10
March 2015 (Fernández-Armesto, J. (chair), Orrego Vicuña, F. and Mourre, A.)
Oxus Gold v. Uzbekistan
(UNCITRAL), Final Award, 17 December 2015 (Tercier, P. (chair), Lalonde,
M. and Stern, B.), with Partially Dissenting Opinion by Lalonde, M.
Award, 16 September 2015 (Kaufmann-Kohler, G. (chair), Lalonde, M. and Stern, B.), with Partially
Dissenting Opinion by Stern, B.
Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. (formerly Aguas
v. Argentine Republic
(ICSID Case No. ARB/03/19), Award, 9 April 2015 (Salacuse, J. W. (chair),
Kaufmann-Kohler, G. and Nikken, P.)
Tidewater Investment SRL and Tidewater Caribe, C.A. v. Bolivarian Republic of Venezuela
(ICSID
Case No. ARB/10/5), Award, 13 March 2015 (McLachlan, C. A. (chair), Rigo Sureda, A. and Stern, B.)
F. Decisions on the application for annulment
Daimler Financial Services AG v. Argentine Republic
Iberdrola Energía, S.A. v. Republic of Guatemala
13 January 2015 (Barros Bourie, E. (chair), Bernardini, P. and Shaw, J. L.)
ARB/10/1), Decision on Annulment, 14 July 2015 (Rigo Sureda, A. (chair), Böckstiegel,
K.-H. and Shin, H.-T.)
v. Republic of Ecuador
November 2015 (Fernández-Armesto, J. (chair), Feliciano, F. P. and Oreamuno Blanco,
(ICSID Case No. ARB/11/28), Decision on Annulment, 30 December 2015 (Tomka, P.
(chair), Booth, C. and Schreuer, C. H.)
Tza Yap Shum v. Republic of Peru
12 February 2015 (Hascher, D. (chair), McRae, D. M. and Williams, D. A. R.)
Lao Holdings N.V. v. Lao People’s Democratic Republic
Decision on the Merits, 10 June 2015 (Binnie, I. (chair), Hanotiau, B. and Stern, B.)
ARB/08/6), Interim Decision on the Environmental Counterclaim, 11 August 2015
(Tomka, P. (chair), Kaplan, N. and Thomas, J. C.)
Venezuela Holdings B.V. and others v. Bolivarian Republic of Venezuela
Kohler, G. and El-Kosheri, A. S.)
Antin Infrastructure Services Luxembourg S.à.r.l. and Antin Energia Termosolar B.V. v.
(ICSID Case No. ARB/13/31), Decision on the Respondent’s request
E. (chair), Orrego Vicuña, F. and Thomas, J. C.)
Ayoub-Farid Saab and Fadi Saab v. Cyprus
2015 (Tercier, P. (chair), Fadlallah, I. and Veeder, V. V.)
Border Timbers Limited, Timber Products International (Private) Limited, and Hangani
Development Co. (Private) Limited v. Republic of Zimbabwe
Award, 28 July 2015 (Fortier, L. Y. (chair), Williams, D. A. R. and Hwang, M.)
CEAC Holdings Limited v. Montenegro
(ICSID Case No. ARB/14/8), Decision on the
Respondent’s preliminary objections pursuant to ICSID Arbitration Rule 41(5), 27 January
2015 (Hanotiau, B. (chair), Park, W. W. and Stern, B.)
Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of Spain
(ICSID Case No. ARB/13/36), Decision on the Respondent’s request to address the
objections to jurisdiction as a preliminary question, 9 February 2015 (Crook, J. R. (chair),
Alexandrov, S. A. and McLachlan, C. A.)
Elektrogospodarstvo Slovenije - razvoj in inzeniring d.o.o. v. Bosnia and Herzegovina
(ICSID Case No. ARB/14/13), Decision on the Respondent’s preliminary objections
Stanivukovic, M. and Greenwood, C.)
Erhas and Others v. Turkmenistan
(UNCITRAL), Award, 8 June 2015 (Mourre, A. (chair),
Alexandrov, S. A. and Douglas, Z.), with Separate Declaration by Alexandrov, S. A.
Gambrinus, Corp. v. Bolivarian Republic of Venezuela
Award, 15 June 2015 (Bernardini, P. (chair), Lalonde, M. and Dupuy, P.-M.)
Georg Gavrilovic and Gavrilovic d.o.o. v. Republic of Croatia
(ICSID Case No. ARB/12/39),
Decision on the Respondent’s request to address the objections to jurisdiction as a
preliminary question, 21 January 2015 (Pryles, M. C. (chair), Alexandrov, S. A. and
Scherer, M.)
ARB/13/10), Decision on Objections to Jurisdiction, 15 June 2015 (Park, W. W. (chair),
Tschanz, P.-Y. and Stern, B.)
Inversión y Gestión de Bienes, IGB, S.L. and IGB18 Las Rozas, S.L. v. Kingdom of
(ICSID Case No. ARB/12/17), Award, 14 August 2015 (Oreamuno Blanco, R. (sole
KBR, Inc. v. United Mexican States
(ICSID Case. No. UNCT/14/1), Award, 2015 (Rigo
Sureda, A. (chair), Kaufmann-Kohler, G. and Lozano Alarcón, G.)
Marco Gavazzi and Stefano Gavazzi v. Romania
on Jurisdiction, Admissibility and Liability, 21 April 2015 (van Houtte, H. (chair), Veeder,
V. V. and Rubino-Sammartano, M.), with Dissenting Opinion by Rubino-Sammartano, M.
Novera AD, Novera Properties B.V. and Novera Properties N.V. v. Republic of Bulgaria
(ICSID Case No. ARB/12/16), Award, 27 August 2015 (Townsend, J. M. (chair), Schwebel,
S. M. and Caron, D. D.)
Suez, Sociedad General de Aguas de Barcelona, S.A. and Interagua Servicios Integrales
de Agua, S.A. v. Argentine Republic
(ICSID Case No. ARB/03/17), Award, 4 December
2015 (Salacuse, J. W. (chair), Kaufmann-Kohler, G. and Nikken, P.)
Transglobal Green Energy, LLC and Transglobal Green Panama, S.A. v. Republic of
(ICSID Case No. ARB/13/28), Decision on the admissibility of the Respondent’s
preliminary objections pursuant to ICSID Arbitration Rule 41(5), 17 March 2015 (Rigo
Sureda, A. (chair), Schreuer, C. H. and Paulsson, J.)
Tvorni
a Osijek d.o.o. v. Republic of Serbia
(ICC), Award, 15 July 2015
UAB “ARVI” ir ko and UAB “SANITEX” v. Republic of Serbia
Award, 16 March 2015 (Buergenthal, T. (chair), Brower, C. N. and Varady, T.), with
Separate Opinion by Brower, C. N.
Objections to Jurisdiction, 13 April 2015 (Yusuf, A. A. (chair), Sachs, K. and Douglas, Z.)
Vincent J. Ryan, Schooner Capital LLC, and Atlantic Investment Partners LLC v.
(ICSID Case No. ARB(AF)/11/3), Award, 24 November 2015 (Khan,
M. A. (chair), Orrego Vicuña, F. and von Wobeser, C.),
Orrego Vicuña, F.
I. Decisions on the proposal for disqualication of a member of the Tribunal
Case No. ARB/15/8), Decision on the Proposal to Disqualify Bernard Hanotiau, 9
CEAC Holdings Limited v. Montenegro
(ICSID Case No. ARB/14/8), Decision on the
Proposal to Disqualify Arbitrator Brigitte Stern, 12 June 2015
Paria B.V. v. Bolivarian Republic of Venezuela
(ICSID Case No. ARB/07/30), Decision on
the Proposal to Disqualify a Majority of the Tribunal, 1 July 2015
Paria B.V. v. Bolivarian Republic of Venezuela
(ICSID Case No. ARB/07/30), Decision on
the Proposal to Disqualify L. Yves Fortier, Q.C., Arbitrator, 15 December 2015
EDF International S.A., SAUR International S.A. and León Participaciones Argentinas
S.A. v. Argentine Republic
(ICSID Case No. ARB/03/23), Decision on the Proposal to
Disqualify Teresa Cheng, 20 November 2015 (ICSID annulment proceedings)
Fábrica de Vidrios Los Andes, C.A. and Owens-Illinois de Venezuela, C.A. v. Bolivarian
Republic of Venezuela
(ICSID Case No. ARB/12/21), Decision on the Proposal to
Disqualify a Majority of the Tribunal, 16 June 2015
Highbury International AVV, Compañía Minera de Bajo Caroní AVV, and Ramstein Trading
Inc. v. Bolivarian Republic of Venezuela
Proposal for Disqualication of Professor Brigitte Stern, 9 June 2015
Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v.
(ICSID Case No. ARB/04/16), Decision on Proposal to Disqualify All
the Members of the Tribunal, 4 June 2015
Total S.A. v. Argentine Republic
(ICSID Case No. ARB/04/1), Decision on the Proposal to
Disqualify Teresa Cheng, 26 August 2015 (ICSID annulment proceedings)
Electricite de France (EDF) International S.A. v. Republic of Hungary
Gold Reserve Inc. v. Bolivarian Republic of Venezuela
(ICSID Case No. ARB(AF)/09/1),
Decision of Paris Court of Appeal, 29 January 2015 (Judicial review by national courts)
Lee John Beck and Central Asian Development Corporation v. Kyrgyz Republic,
review by national courts)
Sanum Investments v. Lao People’s Democratic Republic
(UNCITRAL, PCA Case No.
2013-13), Judgment of Singapore High Court, 20 January 2015 (Judicial review by
Stans Energy Corp. v. Kyrgyz Republic
For the latest investment trends
International Investment Agreements (IIAs),
please visit the website of the UNCTAD
www.unctad.org/diae
www.unctad.org/iia
Mr. James X. Zhan
Director
UNCTAD
Tel.: 00 41 22 917 57 60

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