Investment Arbitration Reporter

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December 17, 2008 (Vol. 1, No. 17)

1. Editor's Note: Rounding up this issue's contents
2. Peru prevails in arbitration over contractual stability agreement; ICSID panel rules that investor was promised stabilization of existing laws, not a future guarantee against any discriminatory treatment; in related development, Peru moves to annul earlier award in favour of Duke Energy
3. UK electricity company wins UNCITRAL arbitration with Argentina; Argentina's necessity defence is rejected, but tribunal rules that foreign investor had no legitimate expectation to stability during 6 month peak of crisis
4. ANALYSIS: Tribunal in National Grid v. Argentina finds no expropriation or discrimination, but "fair and equitable treatment" and "protection and constant security" obligations are breached
5. Overview: Where things stand with Argentina and its many investment treaty arbitrations
6. Siemens, and its Argentine subsidiary, plead guilty to certain breaches of Foreign Corrupt-Practices Act (FCPA) in deal that brings US bribery investigation to a close; implications for ICSID arbitration with Argentina remain unclear, as information emerges of secret commercial arbitration over allegedly illicit payments
7. Emboldened by interim measures order in Mongolian windfall case, investors in Ecuador's energy sector ask arbitrators to OK payment of windfall taxes into special escrow fund rather than into state coffers
8. US investor files for arbitration against Georgia pursuant to US-Georgia BIT; meanwhile, tribunal in separate ICSID arbitration between Itera gas company and Georgia is constituted
9. ICSID registers new arbitrations against Gabon and Egypt

December 11, 2008 (Vol. 1, No. 16)

1. Editor's Note: Rounding up this issue's contents
2. ICSID tribunal declines jurisdiction over claim by German investor against Argentina; Arbitrators refuse to permit Wintershall to invoke Most-Favored Nation clause in Germany-Argentina BIT in order to access the arbitration provisions in the US-Argentina BIT
3. Director of Canada's arbitration branch stepping away from role as counsel in NAFTA Chapter 11 arbitrations; speculation mounts that Meg Kinnear may be nominated as Secretary-General of ICSID
4. Croatia prevails in confidential arbitration with Canadian investor; claimant argued unsuccessfully that his investments in office equipment venture were treated contrary to Canada-Croatia investment treaty
5. ICSID tribunal will permit European Commission to file legal brief in Energy Charter Treaty arbitration
6. Tribunal to hear Chevron's claim that Ecuador lacks judicial independence; Ecuador charges that investment treaty arbitration is designed to undermine faith in Ecuadorian courts as they wrestle with environmental pollution claims
7. Recent investment treaty arbitration related articles
8. South African Development Community tribunal rules that Zimbabwe land reform process breaches regional treaty; treaty obligations to uphold rule of law and refrain from discrimination are breached; right of compensation also breached
9. ANALYSIS: Enforceability of SADC judgment against Zimbabwe unclear, but judgment will doubtless be tabled in ongoing ICSID arbitration; claim for moral damages could invite comparison of differing valuation of such damages by earlier ICSID tribunals and human rights courts
10. US subsidiary of Canadian mining firm files CAFTA Notice of Intent to arbitrate against El Salvador; Pacific Rim complains of delays in approving environmental impact plan and issuing exploitation permit

November 25, 2008 (Vol. 1, No. 15)

1. Court documents reveal that Indian investor filed treaty claim against UK government in 2006; Foreign Office views UNCITRAL-based disputes as confidential and declines to disclose their existence
2. ICSID tribunal rules that a barrister may not appear as counsel for state in arbitration where another member of chambers sits on tribunal
3. Algeria not liable for treaty breaches related to dam project that foundered during civil war with Islamist guerrillas; MFN used to import obligations from other treaties; "full protection and security" is less demanding obligation in cases of severe civil unrest
4. German investor files request for arbitration in forestry dispute with Czech Government; Czech Republic says that claim appears to overlap with similar dispute involving a Luxembourg investor
5. German firm sues Ukraine under BIT; claimant complains of failure to enforce ICC arbitral award, and of malfeasance on part of state-owned petrochemical complex
6. Tribunal rejects Guatemala's objection to jurisdiction in CAFTA railroad dispute; arbitrators rule that partially defective waiver of local claims is not grounds for denying jurisdiction over entire case
7. Bush Administration sends US-Rwanda BIT to Senate for ratification,
8. British Institute to explore relationship of BITs and EU law
9. Ecuador's Attorney General holds workshop on investment arbitration

November 12, 2008 (Vol. 1, No. 14)

1. Editor's Note: rounding up some of this issues' stories
2. Egypt prevails in ICSID arbitration over Suez canal dredging dispute; Acts of Suez Canal Authority not attributable to state; No denial of justice found,
3. Argentina ordered to provide heightened written assurances of prompt payment of award in long-running investment treaty dispute with Vivendi
4. Claimant in garbage disposal dispute with Canada seeks closed-door hearings and wants potential amicus curiae to pay $25,000 fee; tribunal postpones decision on hearing questions, while ratifying choice of parties to release many other documents to the public
5. Claimant and Canada exchange arguments in claim brought by US citizen for alleged expropriation of waste disposal business; Canada questions whether US citizen has invested in scheme which had been long understood to have been driven by Canadian investors
6. Bolivia settles bilateral investment treaty arbitration with Ashmore Energy over nationalization of key pipeline; Stockholm based arbitration is terminated; meanwhile tensions with US lead to withdrawal of trade preferences, but not BIT
7. Kazakhstan seeks to annul $125 Million ICSID award in dispute over cellular telecoms investment; IAReporter reviews other known BIT arbitrations including outcome of AIG, Biedermann, CCL cases, and rounds-up pending claims under BITs and Foreign Investment Law
8. Tribunal in CAFTA railway arbitration denies broad request for evidence preservation
9. Italian construction firm sues Argentina over highway privatization toll dispute
10. Cellular firm turns to ICSID in fight with Senegal
11. German investor threatens ICSID action in dispute with Turkmenistan
12. Danish hotel company, Helnan, seeks to annul award in its dispute with Egypt

October 22, 2008 (Vol. 1, No. 13)

1. Dow Chemicals puts Canada on notice of arbitration over lawn pesticides ban
2. ANALYSIS: stricter chemicals regulations by Canada attract NAFTA lawsuits
3. Swiss investor prevailed in 2003 in confidential BIT arbitration over South Africa land dispute; award remains unpublished, but IAReporter investigation unearths significant details about arbitration outcome
4. Miner's claim against South Africa moves forward slowly; Written pleadings not released to public; ICSID authorized to provide basic information on case to outside interests seeking to intervene
5. Tribunal finalized in ETI v. Bolivia arbitration; case to be closely watched as it arose after Bolivia notified ICSID of its withdrawal from the ICSID system
6. BIT arbitration quietly pursued by Swiss claimant against Republic of Uzbekistan in long-running dispute over payment for grain shipment; arbitrators may explore whether sales contract constitutes a foreign investment; similar question arose in earlier arbitrations with Kyrgyzstan, and investor in that dispute continues to seek payment for breach of treaty
7. Popular professor, expert and arbitrator passes away
8. Round-up of selected recent publications on international investment law

October 9, 2008 (Vol. 1, No. 12)

1. UNCITRAL tribunal rules that electricity claim can proceed against Dominican Republic; parallel CAFTA claim also proceeding; disputes arise out of energy crisis in Dominican Republic and alleged failure of state to subsidize electricity and ensure bill payments
2. ANALYSIS 1: Multi-layered corporate structure and purchase of assets for a nominal $2 do not preclude French investor Societe Generale's ability to pursue claim for breach of BIT against the Dominican Republic
3. ANALYSIS 2: Tribunal in Societe Generale - Dominican Republic case rejects treaty-retroactivity argument advanced by investor; tribunal also holds that its jurisdiction is determined by the date on which the French firm acquired its investments in the Dominican Republic
4. ICSID annulment committee in Enron case gives Argentina 60 days in which to confirm whether it will pay award forthwith in the event that annulment fails; committee rejects Argentine government view that claimants must turn to Argentine courts in order to enforce ICSID arbitration awards
5. Newly-released March 2008 award in energy charter treaty arbitration shows that Latvian claimant was owned by Russian interests; arbitrators side-step determination of Russia's status as ECT member-state - an issue that would have been seized upon in massive ongoing arbitrations over Yukos oil company
6. On Merits of AMTO v. Ukraine dispute, tribunal finds no breaches; denial of justice and umbrella clause claims dismissed among others
7. Majority upholds jurisdiction in Mytilineos v. State Union of Serbia and Montenegro; newly-released 2006 jurisdictional decisions shed light on progress of BIT arbitration claim
8. NGOs call on World Bank President to review role of ICSID, and its handling of Bolivia arbitration
9. ICSID/ICC/AAA symposium slated for November 14th in NYC

October 1, 2008 (Vol. 1, No. 11)

1. Paris court declines to set aside confidential 2007 award rendered in BIT arbitration between Croat investor and Czech Republic
2. ANALYSIS: Arbitrators frown upon Czech Government's recourse to its courts in effort to invalidate property-lease contract with Croatian investor; tribunal rules that legitimate expectations of investor violated
3. Azerbaijan asks ICSID tribunal in Energy Charter Treaty case to dismiss claim following witness for investor's testimony as to provision of bribes
4. Path cleared for BIT arbitration by Swedish investors to challenge the withdrawal of investment incentives by Romania; Romania says withdrawal of incentives for investments in economically-depressed region was done in order to comply with European Union restrictions on state aid
5. ANALYSIS: Arbitrators in Romania case dismiss government's arguments that Swedish citizens were effectively Romanians, and thus unqualified to sue Romania at ICSID
6. ICSID arbitrators reject challenge to third member of tribunal in Lemire v. Ukraine arbitration
7. After much speculation as to its plans, Bolivia appoints defence counsel and an arbitrator in contentious ICSID arbitration over telecoms dispute
8. Arbitrators in UNCITRAL BIT arbitration order Mongolia to refrain from collecting windfall tax from Russian mining company while case is heard; funds to be put in escrow instead of remitted to government
9. NYC International Law Weekend to see panel discussions on international investment law

September 17, 2008 (Vol. 1, No. 10)

1. Bulgaria exonerated of any Energy Charter Treaty breaches in ICSID case; tribunal finds that misrepresentations by Plama Consortium Ltd and its owner underlay approval of refinery purchase; tribunal holds that misrepresentations by investor are fatal to its claim
2. Merits claims in Plama v. Bulgaria took issue with environmental and tax liabilities, and worker "riots"; tribunal finds that none of the claims would have succeeded on their merits
3. ANALYSIS: Award of costs to government in Plama case is latest in a handful of known treaty-based arbitrations to oblige investors to repay governments for some costs associated with unsuccessful claims; Meanwhile, Canadian forestry firm fails in its own bid to duck costs order in NAFTA dispute with US Government
4. US citizen files notice of intent to sue Canada over alleged NAFTA breaches in relation to private surgical facility; details of threatened claim are limited, and many questions unanswered about investments said to be at stake
5. ANALYSIS: Spectre of NAFTA suit over investments in Canada's health care sector has long been subject of speculation
6. Path cleared for examination of the merits in Occidental v. Ecuador arbitration at ICSID; jurisdictional ruling issued in Oxy's favour in claim for several Billion Dollars in compensation arising out of oil concession cancellation
7. European Commission seeks to intervene as amicus curiae in ICSID arbitrations to argue that long-term power purchase agreements between Hungary and foreign investors are contrary to European Community Law

September 8, 2008 (Vol. 1, No. 9)

1. Argentina prevails in large part in financial crisis dispute with insurance company; tribunal finds that most actions by Argentina are excused on account of necessity in face of financial crisis; ruling highlights continuing disagreement among arbitrators on major issue
2. Most breaches of US-Argentine BIT rejected in Continental Casualty case
3. Brazilian Government mandated to pursue limited range of investment protection standards; prospects for ratification of 1990s-era BITs with various developed countries remain highly unlikely
4. South African Court rebukes Government for not affording diplomatic protection to citizen with extensive farm-holdings in Zimbabwe; Court orders South African government ministries to remedy expropriations and violations of rights being suffered in Zimbabwe; SA Constitutional Court asked to review ruling
5. ANALYSIS: South African Judge offers view as to advantages of South Africa acceding to ICSID; however judgment does not take note of sensitive arbitration claim currently pending against South Africa in relation to Black Economic Empowerment programme
6. Tribunal selected in Canadian firm's UNCITRAL-based BIT arbitration with Czech Republic
7. Hearings slated for September 23-26 in only BIT case against Serbia; Greek investor quietly pursues UNCITRAL claim pursuant to Greece-Serbia bilateral investment treaty
8. Several new claims, including Energy Charter Treaty claim against Turkey, registered by ICSID in recent weeks

August 26, 2008 (Vol. 1, No. 8)

1. Editor's Note: Round-up of this issue's contents
2. CORRECTION RE: Presiding arbitrator in EDF v. Argentina arbitration
3. ICSID tribunal finds Peru in breach of certain tax stabilization commitments owed to Duke Energy, but absolves government of other breaches; tribunal awards $18.4 Million in damages
4. ANALYSIS: ICSID Tribunal grapples for the first time with the meaning and extent of tax stabilization in Duke v. Peru contract arbitration
5. Duke Energy obtains $5.57 Million (US) in dispute with Ecuador over energy generation; tribunal finds certain breaches of power purchase agreements, as well as violations of two obligations in US-Ecuador BIT; Other BIT violations, including denial of justice rejected; Duke had sought $24.7 Million (US) in damages.
6. Tribunal in Duke v. Ecuador finds breach of certain obligations under Power Purchase Agreements; Further breaches found of US-Ecuador BIT's umbrella clause and fair and equitable treatment standard; arbitrators reject allegations of denial of justice and impairment by arbitrary conduct
7. Bolivia prevails in US and UK courts in fight over funds with Telecom Italia subsidiary; Telecom Italia subsidiary ETI says Bolivia not participating in ICSID arbitration to date; ETI nominates Prof. Francisco Orrego Vicuna of the University of Chile as arbitrator; two other arbitrations proceed at ICSID and Stockholm
8. Cypriot energy trader files claim against Poland under Energy Charter Treaty; Poland has faced at least 8 other treaty arbitrations
9. ICSID tribunal upholds jurisdiction in Vannessa Ventures v. Venezuela arbitration; Canadian firm claims breaches of Canada-Venezuela BIT in relation to alleged expropriation of mining concession
10. Mexico's CEMEX announces arbitration against Venezuela over nationalized cement enterprise

August 7, 2008 (Vol. 1, No. 7)

1. Editor's Note: What's inside this issue
2. Kazakhstan to pay $125 Million, plus sizable interest for breach of treaty protections owed to Turkish telecoms firms Telsim and Rumeli; jurisdiction to hear ICSID arbitration had been opposed by Kazakhstan in light of fraud scandal engulfing former owners, and subsequent take-over of claimants by a Turkish state agency
3. IN-DEPTH: Multiple treaty breaches claimed by Telsim and Rumeli, several of which rely on MFN clause; tribunal finds breach of fair and equitable treatment and expropriation provisions
4. Divided ICSID tribunal declines jurisdiction over treaty claim by US investor against Democratic Republic of the Congo
5. Remaining members of tribunal in EDF v. Argentina case reject challenge to Prof. Gabrielle Kaufmann-Kohler; challenge decision echoes outcome in another set of challenges in ICSID cases between Argentina and multinational water companies; tribunal subsequently confirms jurisdiction over claim by EDF and its co-claimants
6. Argentina faces a third investment treaty claim by hold-out bond-holders; Process of agreeing tribunal members in other cases was protracted; Experts differ as to prospects for debt-holders to challenge Argentina's default and subsequent partial-offer of compensation
7. ICSID tribunal declines to update damages owing in LG&E - Argentina case; US gas company won $57 Million in 2007 for losses from 2000 to early 2005, but tribunal holds "supplementary decision" process is not appropriate means for claiming further damages
8. Ecuador settles ICSID-based contract arbitration with City Oriente; Claim was the first of several arbitrations to challenge Ecuador's imposition of windfall royalties on oil sector
9. Working Group explores interface between foreign investment and sustainable development in Latin America

July 28, 2008 (Vol. 1, No. 6)

1. Editor's Note: round-up of this edition's contents
2. In an unusual outcome, Tanzania held to have violated treaty protections owed to foreign water services company, Biwater Gauff, but no damages flow from these breaches; ICSID tribunal holds that firm's ill-managed operation of Dar es Salaam water supply had brought company to brink of collapse by the time Tanzanian Government actions served to breach UK-Tanzania investment treaty
3. IN-DEPTH: Tanzania's handling of City Water deemed an expropriation; tribunal finds project was worthless by time of expropriation
4. IN-DEPTH: Other treaty breaches, including of the Fair and Equitable Treatment standard, upheld in Biwater Gauff (Tanzania) Ltd. v. Republic of Tanzania
5. CONTRACT ARBITRATION: ICSID proceeding between Tanzanian state electric authority and Malaysian-controlled power producer is disinterred, as disputes flare as to payment and performance under power contract; Tanzania entity failed in earlier bid to void contract on grounds of alleged bribery
6. Argentina and Siemens asks annulment committee to suspend proceedings, following request by Argentina for revision of arbitral award in light of recent evidence of alleged bribes paid by German firm Siemens; Argentina was ordered to pay $217+ Million in compensation in 2007 judgment for breach of Germany-Argentina BIT, but has long maintained that arbitrators should have explored allegations of bribery
7. U.S. investors make good on threat to launch NAFTA claim against Canada over conduct of environmental assessment process; proposal for basalt quarry and oceanic-shipping from coastal province of Nova Scotia to U.S. was nixed

July 16, 2008 (Vol. 1, No. 5)

1. Editor's note: A brief run-down of our stories
2. Egypt prevails in ICSID arbitration with Danish hotel company; Investor had accused Egypt of conspiring to terminate long-term management contract so as to privatize hotel
3. IN-DEPTH: ICSID tribunal finds no breaches by Egypt in treatment of Helnan International
4. Poland held to have discriminated against US agricultural firm in allotment of sweetener quotas; Arbitrators reject several other alleged treaty breaches - including breach of legitimate expectations - and award Cargill $16.3 Million (plus interest) of $150 Million+ claimed; Poland imposed production quotas in lead-up to joining European Union, leading to breach of investment protections
5. Advocate General sides with European Commission in its bid to have European Court of Justice declare Austria and Sweden in violation of EU law for failure to remedy "incompatibility" of earlier BITs and EU law
6. Award in Archer Daniels Midland & Tate and Lyle Ingredients America v. Mexico is released in redacted form; Following partial arbitration victory, US agriculture giants continue to seek further damages from Mexico
7. IN-DEPTH: Award in ADM & TLIA v. Mexico finds discrimination and imposition of prohibited performance requirements, but no expropriation

July 1, 2008 (Vol. 1, No. 4)

1. Transparency issue to remain on UNCITRAL radar screen
2. Quarreling between Republic of Georgia and gas company spills over into ICSID
3. Czech Republic to pay Dutch firm Saluka $181 Million (US), plus 55 Million interest; contractual counter-claim withdrawn as disputes come to close
4. Namibian Government appeals expropriation case to Supreme Court in effort to overturn High Court ruling in favour of German landholders asserting property rights and investment treaty protections
5. U.S. makes eastern push as investment treaty talks opened with China, Vietnam, India - and promised with Russia
6. Two treaty claims by BP and Pan-American against Argentina to be dropped; proceedings had been suspended for some time, as parties pursued amicable settlement; earlier jurisdictional rulings had stoked umbrella clause debate
7. Czech Republic continues efforts to overturn confidential jurisdictional ruling in BIT arbitration with German investor; Prague Court to hear arguments as to incompatibility with EU law, as arbitral proceeding continues in BIT dispute

June 18, 2008 (Vol. 1, No. 3)

1. Editor's Note
2. A first unconditional ICSID win for Argentina, as Chilean investors fail to make out claim arising out of financial crisis
3. Challenge to ICSID arbitrator fails on basis of alleged lack of independence arising from concurrent arbitral appointments by the same government
4. UNCITRAL Member-Governments convene in New York as Canada renews push for transparency
5. After 40+ years, ICSID to have its own full-time Secretary General
6. Canada, USA agree to nip expropriation claim in bud in tax case
7. Japan maintains rapid negotiating pace on investment pacts
8. Latest Japanese pacts with Laos and Cambodia offer glimpse of latest Japanese thinking on investor protection
9. ICSID registers new claim against Ukraine

June 3, 2008 (Vol. 1, No. 2)

1. New Challenge to arbitrator fails in Argentine water arbitrations; non-executive directorship of Swiss bank with shareholdings in Suez and Vivendi not deemed grounds for disqualification
2. IN-DEPTH: Co-arbitrators see connections between arbitrator and claimants as too tenuous and remote to justify disqualification bid
3. Schedule set for chemical company's case against Canada; hearings to be closed to public
4. Single ICSID tribunal will consolidate contract, treaty, and investor-state agreement claims of US energy generation firm against Ecuador
5. TRENDS: Ecuador seeing flow of claims challenging energy windfall measures despite recent move to avoid ICSID arbitration
6. Filings in South Africa Mining arbitration pushed back two months
7. Claimants file revision bid in Pey v. Chile arbitration at ICSID
8. British Institute to host discussion on European Union BITs and EU law

May 16, 2008 (Vol. 1, No. 1)

1. Publisher's Note: About this publication
2. Venezuela surprises the Netherlands with termination notice for BIT
3. ICSID's longest-running claim is resolved as newspaper owner prevails in dispute with Chile
4. Russian gold miner pursues arbitration over Mongolia windfall tax
5. Kyrgyz Republic settles BIT claim with UK miner, Oxus
6. ICSID tribunal dismisses Romania's objections to investor's corporate structure
7. ANALYSIS: ICSID open where BITs set loose nationality tests