Tribunal declined to resort to MFN clause to rely on broader jurisdictional basis of Peru-Colombia BIT

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Tribunal drew distinction with previous awards that adopted a restrictive interpretation of analogous arbitration clauses

Supplementary means of interpretation provide no evidence against broad reading of arbitration clause; declaration under Article 25(4) of the ICSID Convention considered irrelevant to consent to arbitrate by the tribunal

Tribunal held that disputes “involving the amount of compensation for expropriation” cover broader expropriation claims under the BIT, including whether an expropriation had actually occurred

Investor made prima facie claim of unlawful expropriation

In the absence of an explicit limitation, tribunal found that excluding indirect investments from the scope of the BIT would constitute an arbitrary amendment of the treaty

Tribunal looked beyond date of direct acquisition of the investment, finding that previous indirect control was sufficient to constitute protected investment under the BIT

In the absence of an explicit limitation, the tribunal found no reason to exclude investments from Hong Kong from the scope of the BIT once the nationality requirement is met

Decision by state to confer its nationality enjoys “strong presumption of validity”; objecting party must satisfy “onerous” burden of rebutting this presumption

Tribunal considered that arbitration clauses are subject to same standard of interpretation as clauses containing substantive protections

Tribunal criticised “loser pays” principle, considering that the general standard under public international law is that each party should bear its own costs

Interest rate set at average rate of 10-year US bonds

Tribunal set high threshold for granting moral damages, which was not met by the investor

Fact that the investor retained ownership over the investment was considered irrelevant to the quantification of damages, since the company had no residual value

Tribunal rejected DCF model due to short track record of the investment, preferring to rely on the company’s adjusted book value

Tribunal excluded bad faith on the part of the investors for conducts that aimed at mitigating damage and protecting the claimant’s interests in the proceedings

Lack of adequate and effective remedies confirmed unlawfulness of the expropriation

Failure to comply with Peruvian laws and guidelines and absence of effective legal remedies deemed material to measures’ arbitrariness

Internal and Peruvian law provided for analogous standards to assess arbitrariness of state’s conduct

Police powers exception does not apply if state’s conduct is arbitrary or discriminatory

Impact and duration of interim measures resulted in an indirect expropriation of Mr Tza’s investment

Tribunal defined indirect expropriation based on impact of the measures, but held that exercise of police powers prevented compensation unless investor proved arbitrary or discriminatory conduct on the part of the state

Tribunal delved into details about conditions for imposing interim measures under Peruvian law, noting that exercise of discretionary powers by state authority must be based on an informed, justified, and reasoned decision

Tribunal considered that tax audit constituted a routine operation within the powers of the tax authority; full analysis on the point attached as a separate annex to the Award

Police powers deserve deference, but not when measures are unreasonable, discriminatory, or abusive

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