Reproduced from www.worldbank.org/icsid with permission of ICSID. (Document, does not apply to summary and/or TDM IACL Case Report below).
Case report (free download)
Case Report by J. Michael King, editor Ignacio Torterola
In its Award rendered on June 2, 2016, the Tribunal decided to uphold Panama's jurisdictional objection on the basis of Claimants' abuse of the international investment treaty system by attempting to establish artificial international jurisdiction over a pre-existing domestic dispute. In making its decision, the Tribunal considered: (i) the timing of the alleged investment in the hydroelectric power project; (ii) the terms of the transaction; and (iii) relevant incidents transpiring during the course of the proceeding. The Tribunal concluded that Claimants were inserted into the dispute for the purpose of securing international remedies soon after it became clear that execution of the Judgment of the Supreme Court of Panama at the center of the ongoing domestic dispute was not forthcoming. The Tribunal also found that the terms of the transaction pointed to a Panamanian national exercising de facto control of Claimants. The Tribunal further concluded that Claimants' multiple requests to suspend the ICSID proceedings revealed an intimate relationship between the ongoing domestic dispute and the present arbitration. Claimants' attempt to internationalize their purely domestic dispute therefore constituted an abuse of the arbitral process. Having satisfied this threshold jurisdictional bar, the Tribunal held that it did not need to consider the remaining jurisdictional objections. The Tribunal ordered Claimants to pay all of the costs of the arbitration as well as the vast majority of Respondent's legal fees and expenses.
Jurisdiction - abuse of process - foreign control - exclusive remedy - fork-in-the-road clause - security for costs - expropriation.
Case report provided by International Arbitration Case Law (IACL)