Committee says tribunal failed to apply treaty exception available to Argentina

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Claimant failed to substantiate multi-million-dollar valuation proposed by commission established under Venezuelan law

Enactment of a general law did not constitute a commitment for the purposes of the BIT’s umbrella clause

Venezuela’s disregard of its own procedures amounted to arbitrary conduct

Tribunal distinguished current MST from Neer v. Mexico standard

Arbitrators rejected invocation of police powers doctrine due to lack of due process

Venezuela’s erratic expropriation procedure breached its own laws, tribunal found

Measures adopted in response to ‘coffee crisis’ in 2002-2009 did not amount to creeping expropriation

Tribunal found no evidence of fraudulent objective that would bar admissibility of claims

Tribunal conceded that clean hands principle may impact admissibility of claims, but set high standard of proof

Longreef’s shareholding in CAFAMA met both BIT’s definition of ‘investment’ and Salini criteria

Tribunal excluded contribution to development of host state as criterion to define investment

Article 25 of the ICSID Convention does not contain an autonomous definition of the term ‘investment’

Incorporation of foreign company for tax reasons does not prove, in itself, an abuse of rights or breach of good faith under the BIT

Tribunal found no exceptional circumstances that warranted piercing the corporate veil

Control by nationals of the host state held irrelevant under the applicable BIT

Sunset clause extends to arbitration agreement

Background: Venezuela expropriated coffee business held by Dutch entity controlled by Venezuelan nationals

Background: energy crisis prompts state’s recourse to private power generation projects

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Committee says tribunal failed to apply treaty exception available to Argentina

Costs were split according to relative outcome of different stages of the proceedings

Interest set at LIBOR + 2%, compounded semi-annually

Tribunal awarded 42.2 million USD, based on expected exchange rate and country risk premium

Tribunal referred to World Bank Guidelines to define fair market value

Circumstances of the case warranted setting valuation date at day prior to illegal expropriation

Counterfactual scenario cannot ignore regulatory risk