Menu
Browse Options
Case Note – Guaracachi America Inc & Rurelec Plc vs Bolivia: Multiple bites at the cherry but only half the benefit

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.

Background

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 [...]

Damages as a Sanction for Commencing Court Proceedings in Breach of an Arbitration Agreement

Arbitration proceedings sometimes spawn a host of parallel court proceedings.  It is not unheard for parties to seek to instrumentalise courts, sometimes with the complicity of the courts themselves, to escape the jurisdiction of an arbitral tribunal.  Such conduct may, however, expose parties to liability for breach of the arbitration agreement, as was confirmed by a recent decision of the Swiss Supreme Court (4A_232/2013 of 30 September 2013).

In many cases, parties referring a dispute which is covered by an arbitration agreement to a state court do it for tactical reasons, with the hope of obtaining a more favourable decision from the courts in their home jurisdiction than from a neutra [...]

The invocation of “denial of benefits clauses”: when and how?

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 [...]

Kompetenz-Kompetenz in Brazil: alive and kicking

The Brazilian Superior Court of Justice (“STJ”) has issued, on 19 June 2013, a landmark decision addressing the principle of Kompetenz-Kompetenz (Resp. no. 1,278,852-MG Samarco Mineração S/A v Jerson Valadares da Cruz). The decision deals with the allocation of competence between arbitral tribunals and national courts to decide on the validity of an arbitration agreement. The STJ reasoned, for the first time, that court review on this issue is only permitted at two procedural stages: (i) in proceedings to set aside an arbitral award; or, (ii) in proceeding to resist the recognition and enforcement of an arbitral award.

Facts

Samarco Mineração S.A. (“Mineração”) entered into an agre [...]

Extending Arbitration Clauses after the Decisions of the English Supreme Court in VTB and Prest

and Benjamin Ainsley Gill

When seeking to extend an arbitration clause to a third party who is not a signatory to the clause, common law practitioners will often have resort to an argument that the corporate veil should be pierced – in other words, that the court or tribunal should disregard the separate legal identity of a company on the grounds that it is a façade or sham. Most often, the argument will be that the separate corporate identity of the company that signed the arbitration clause should be disregarded and the arbitration clause thereby extended to its parent company, or to an individual who owns or controls the signatory.

Two recent decisions of the English Supreme Court have [...]

Mauritian Supreme Court Robustly Rejects Challenge to Arbitrator Jurisdiction

In a recent decision, the Mauritian Supreme Court has roundly rejected a challenge to an arbitrator’s jurisdiction brought under section 20 of the Mauritian International Arbitration Act 2008, and in doing so touched upon the interesting question of the standard of review in such cases.

Section 20 of the International Arbitration Act 2008 (“IAA”) allows an arbitral tribunal to hear a challenge to its jurisdiction as a preliminary issue. If the challenge is rejected, the applicant may make an application to the Supreme Court to decide the challenge. The Supreme Court will be constituted as a panel of three judges, as with all substantive hearings under the IAA, and an appeal lies from t [...]

Contributors, Authors, Books, & More...