Summary

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 Nur Natalia Adnan and Julia A. Garza

Summary

In its Decision on Jurisdiction, the Tribunal declined jurisdiction over the dispute between Menzies Middle East and Africa SA (incorporated in Luxembourg) and Aviation Handling Services International Limited (incorporated in British Virgin Islands) against Senegal under the Bilateral Investment Treaties between Senegal and the Netherlands and Senegal and the United Kingdom, through the operation of the Most Favored Nation clause contained in Article II of the General Agreement on Trade in Services; and the Bilateral Investment Treaty between Senegal and the United Kingdom, respectively. The dispute concerned actions taken by Senegal over AHS SA, a company in Senegal owned by Menzies Middle East and Africa SA and Aviation Handling Services International Limited, that the claimants alleged were tantamount to expropriation and had not been conducted according to the law. Claimants requested damages for lost profits, loss of market share and loss of opportunity to obtain new exploitation licenses, moral damages and intellectual property rights damages.

The Tribunal concluded that Senegal did not expressly and unequivocally consent to arbitration with nationals of Luxembourg and the British Virgin Islands. It further found that consent to investment arbitration cannot be deduced from a joint analysis of the Most Favoured Nation clause in Article II of the General Agreement on Trade in Services and the Bilateral Investment Treaties that Senegal entered into with third countries of which Claimants are not nationals. The Tribunal held that refusing to respect its obligations under the Most Favoured Nation clause of the General Agreement on Trade in Services was a sovereignty prerogative of Senegal for which appropriate mechanisms were created under the same Agreement. Further, the Tribunal noted that finding that investment arbitration was indeed covered by the scope of the Most Favoured Nation clause would only create a future obligation to offer arbitration to service providers of other member States, but not an obligation to arbitrate in itself or an extension of the offer to arbitrate contained in Bilateral Investment Treaties. The Tribunal also found that Aviation Handling Services International Limited could not avail itself of the arbitration article contained in the Bilateral Investment Treaty between Senegal and the United Kingdom because said Treaty excludes the territories of the British Virgin Islands.

Main issues

jurisdiction ratione voluntatis, State sovereignty, consent to arbitration by States, offer to arbitrate by States, Most Favoured Nation clause, Article II of GATS

Menzies Middle East and Africa S.A. and Aviation Handling Services International Ltd. v. Republic of Senegal (ICSID Case No. ARB/15/21) - Award on Jurisdiction - 5 August 2016

Case report provided by International Arbitration Case Law (IACL)