The “contribution of assets” requirement of the Salini test was often overlooked by commentators and tribunals, probably due to its “I-know-it-when-I-see-it” nature. The recent award in KT Asia Investment Group B.V. v Republic of Kazakhstan, however, demonstrates that a failure to meet the contribution requirement may put to rest a claim of an offshore company used to conceal the identity of its owner.
It is widely recognized that under Article 25 of the ICSID Convention an investment must involve a “contribution” of assets. As explained by Douglas (para. 273), the prior contribution of assets into the economy of the host state is a natural quid pro quo for the state to accord th [...]
and Rapolas Kasparavičius, LAWIN
An abundant number of agreements have been and will be concluded between states and investors operating under the bilateral investment regime and even a larger number of negotiations will fail before reaching the final stage of signature. An investor may spend large sums of money with the aim of concluding an agreement with the state. If the final agreement is not signed, these investments may be lost. Is the bilateral investment regime able to assist investors where investors spend large sums of money and where the negotiations are terminated by the state? Would the investor only be able to recover its costs or could the state also be liable for the investo [...]
It is not uncommon to see the losing party of an ICSID arbitration filing a frivolous request for annulment merely to engage the opposing party in settlement negotiations. Another frequent abuse of ICSID’s annulment mechanism is to attempt to re-litigate the merits at the annulment stage. An annulment proceeding under the ICSID Rules typically takes a couple of years and involves costs similar to those in a regular ICSID proceeding. For this reason, when an annulment request is filed, some opposing parties prefer to reach an early settlement for a discounted amount rather than waiting more time to receive full satisfaction.
In 2006, the ICSID Arbitration Rules were amended to include [...]
and Oleg Temnikov
The tribunal in Mesa Power Group, LLC v. Canada (PCA Case No. 2012-17, Procedural Order No. 2, 18 January 2013) recently stated with regard to bifurcation of proceedings that:
“[I]t is good… to let the parties ‘know where they stand’… at an early stage and not to impose the burden of full fledged proceedings on a party that disputes being subject to arbitration.” (para. 16)
The issue of bifurcation of proceedings in investment arbitration has been little explored partly due to the limited number of publicly available decisions. Additionally, there are no “absolute rules” in that the power to bifurcate falls within the tribunal’s discretion. (Tuli [...]
For centuries people have searched for the formula which may give them more gold. It may turn out that some investors have found it. As it will be explained, indirect investments through a chain of intermediary companies hides the risk of multiplication of claims and double recovery. But not according to the tribunal in Standard Chartered Bank v. United Republic of Tanzania (ICSID Case No. ARB/10/12, Award, 2 November 2012).
I. Standard Chartered Bank v. United Republic of Tanzania
This tribunal recently denied standing to an indirect investor by finding that:
“[P]rotection of the UK-Tanzania BIT requires an investment made by, not simply held by, an investor… (para. 257)
Article 52(4) of the ICSID Convention identifies the provisions of the Convention that apply, mutatis mutandis, to annulment proceedings: “[t]he provisions of Articles 41–45, 48, 49, 53 and 54, and of Chapters VI and VII . . . .” While there is wide agreement that an annulment committee may neither “amend or replace the award by its own decision, whether in respect of jurisdiction or the merits” (Schreuer, Commentary, Art. 52, ¶ 10), nor “direct a tribunal on a resubmission how it should resolve substantive issues in dispute” (MTD v. Chile, ICSID Case No. ARB/03/9 (Decision on Annulment, 21 March 2007), ¶ 54 (Guillaume, Crawford, Ordoñez Noriega)), there does not appear [...]