Claimant ordered to pay reasonable share of Venezuela’s legal expenditures, plus interest, as well as full costs of arbitration; failure to comply with security for costs order taken into account in decision on costs

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Tribunal sees no evidence of a genuine investment

BIT’s definition of ‘investment’ needs to be interpreted in light of general requirements inherent in investment system rationale

Venoklim failed to prove that claimant’s establishment in the Netherlands had any other purpose than to ‘internationalise’ a domestic investment

ISDS system requires more than formal compliance with nationality requirements to qualify as foreign investor

First tribunal’s findings on claimant’s qualification as ‘investor’ fail to meet triple-identity test, and thus do not amount to res judicata

Tribunal finds support in other awards that saw no grounds for ‘fallback options’ after Venezuela’s withdrawal from ICSID Convention

Consent to ICSID Additional Facility Rules arbitration was intended to apply only until Venezuela ratified the ICSID Convention

Parties’ reference to prevailing treaty language is not a mere suggestion, but a binding indication

In light of clear textual elements, tribunal excludes that “unconditional consent” to ICSID arbitration can transfer to ICSID AF arbitration

Background: Second arbitration sees notable procedural developments, including order on security for costs

Ecuador cannot contradict its own acts

Majority sees no public policy issue in ordering that Ecuador shall comply with its contractual obligations, but affords right to raise further objections to the state

Dissenter sees no contractual obligation for Ecuador to respect the determinations of the 2018 Award when ruling on Petromanabí’s share of the Liquidation Value

Tribunal majority sees contractual commitment to respect determination of appropriate compensation, irrespective of parties’ involvement in underlying arbitration

Majority declines to rule on respondent’s objection based on sole principle of procedural fairness, seeing risk of unauthorised decision ex aequo et bono

Dissenter opines that Rule 32(2) does not apply at all

Article 32(2) of UNCITRAL Arbitration Rules has limited relevance due to lack of res judicata effect

Background: Tribunal is called on to adjudicate effect of previous award in context where res judicata does not apply

Costs lie where they fall

Arbitrators see no abuse of rights

Tribunal stresses binding effect of previous award under UNCITRAL rules, inviting parties to make additional submissions on the matter

Tribunal finds that ‘triple identity’ test is not met

Arbitrators treat res judicata as procedural matter

Tribunal considers that Ecuador TLC could not have waived third party rights

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