An arbitral award (PCA Case No. 2011-17, 31 January 2014) arising out of the nationalisation of an electricity generation business in Bolivia has provided useful guidance on: (1) the ability of multiple investor claimants to bring joint claims against a state under separate BITs in a single proceeding; and (2) the time at which a state is entitled to invoke a denial of benefits clause to deny an investor the benefits of an investment treaty.
The Claimants, Guaracachi (a USA company) and Rurelec (a UK company) commenced a claim against Bolivia under the USA-Bolivia and the UK-Bolivia BITs arising out of the nationalisation in 2010 of Guaracachi’s 50.001% shareholding in Empresa Ele [...]
By Carmen Núñez-Lagos and Javier García Olmedo
In an award rendered on 31 January 2014, an arbitral tribunal constituted under the UNCITRAL Rules declined jurisdiction over the claims brought by one of two claimants against the Plurinational State of Bolivia on the basis of the application of a denial of benefits clause in the US-Bolivia BIT.1
The two claimants were Rurelec Plc, a company constituted under the laws of England & Wales, and its affiliate Guaracachi América Inc. (GAI), a company incorporated in the United States. The dispute concerned the alleged violation by Bolivia of certain provisions of the US-Bolivia BIT and the UK-Bolivia BIT (the BIT).
Among the various jurisdictio [...]
On 4 October 2013 the Tribunal constituted under Metal-Tech Ltd.’s claim against Republic of Uzbekistan (G. Kauffman-Kohler, C. von Wobeser, J. Townsend) issued the award on jurisdiction in the ICSID case ARB/10/03. The peculiar factual background of the case has been previously discussed here.
The approach taken by the Tribunal in this case deserves closer attention as this is one of the few where allegations of corruption managed to have decisive influence on the outcome of the case, unlike most of the cases where bribery considerations are usually ruled out as inconclusive and unproven, although discussed in the award.
A number of tribunals ha [...]
and Luis Miguel Velarde Saffer
Last December, the U.S. Supreme Court heard oral argument on BG Group v Argentina – an appeal from a controversial and much-criticized decision of the D.C. Circuit Court of Appeals. The case arose out of emergency actions taken by the Republic of Argentina in late 2001 in the wake of its economic meltdown. BG Group, a UK investor with a sizable stake in an Argentine gas distribution company, was adversely affected by the Argentine emergency measures and initiated UNCITRAL arbitration against Argentina pursuant to Article 8 of the Argentina-UK BIT. BG Group prevailed at the arbitration seated in Washington, D.C., and the resulting award came for review before [...]
It has been over two years since the DC Circuit Court of Appeals (“Circuit Court”) vacated an award in a bilateral investment treaty arbitration (BG Group PLC v. Republic of Argentina (UNCITRAL)) concluding that the panel did not have authority to adjudicate the dispute because the claimant had not satisfied a pre-arbitration requirement, namely, litigating before the local courts and waiting 18 months to commence arbitration. The decision surprised many in the international arbitration community and cast some doubt on the ability of investment treaty panels in arbitrations seated in the United States to decide their own authority. The case reached the U.S. Supreme Court (“Supreme Co [...]
On 4 October 2013, an ICSID tribunal rendered its decision in the investment treaty dispute between the Israeli company Metal-Tech Ltd. and Uzbekistan. In the award, the tribunal found that it lacked jurisdiction to hear the parties’ claims and counterclaims brought under the Israel-Uzbekistan BIT and Uzbek law due to corruption related to Metal-Tech’s investment in Uzbekistan. In particular, the tribunal found that payments of approximately USD 4 million made by Metal-Tech to several individuals, including an Uzbek government official and the brother of the then Prime Minister of Uzbekistan, while presented as remuneration for various consultancy services, in fact constituted corruption [...]