Summary

Reproduced from www.worldbank.org/icsid with permission of ICSID. (Document, does not apply to summary and/or TDM IACL Case Report below).

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Case Report (free download)

Case Report by Lisa M. Bohmer, Editor Diego Luis Alonso Massa

Summary

The dispute concerns a claim filed in relation to certain regulatory and other measures taken by the Respondent with respect to investments made by the Claimants in two cement companies.

The ICSID Tribunal was required to decide multiple objections raised by the Respondent to the Jurisdiction of the tribunal. These objections were as follows: (i) that the nationality of the claimants allegedly did not satisfy the requirements under the Kazakhstan - Uzbekistan BIT, (ii) that the claimants were not 'investors' under the BIT, (iii) that the claimants had not made an 'investment' under the BIT (due to an alleged lack of normative requirements of contribution and capital and the undertaking of risk), (iv) that the investments allegedly did not comply with several domestic laws of the Republic of Uzbekistan and were therefore to be denied protection under the BIT & (v) that the investments were allegedly vitiated by corruption.

The tribunal considered each of Respondent's objections in detail and held as follows. First, that all Claimants satisfied the nationality requirements on the dates relevant to the establishment of jurisdiction of the tribunal. Second, that there was sufficient evidence to conclude that the claimants were owners of the shares as on the relevant dates and were therefore 'investors' under the BIT. Third, that the normative as well as treaty requirements as to the definition of 'investment' were satisfied. Fourth, by a majority, the tribunal held that the Respondent had either not established non-compliance with the several domestic provisions which it had alleged to have been violated or that such non-compliance did not sufficiently impair a serious interest of the State in order to warrant a denial of the protection under the BIT. Fifth, the tribunal held that the ingredients for invoking the prohibition against corruption of governmental officials, whether implicit under the BIT or under international public policy, had not been established by the Respondent.

Therefore, the tribunal, by a majority denied all jurisdictional objections raised by the Respondents. Further, in its partial decision on costs, the tribunal reprimanded and imposed costs on the counsel for Respondents for breaches of confidentiality requirements that were peculiar to the sensitive nature of the arbitral proceedings.

Main issues

Jurisdiction, Nationality, Investment, Investor, Illegality, Corruption, Confidentiality.

Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A. v. Argentine Republic, ICSID Case No. ARB/03/19 - Annulment Proceeding - 5 May 2017

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