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 Edoardo Mazzoli, Editor Ignacio Torterola
The dispute arose out of a decision of the Panamanian Supreme Court - dated May 2014 - in which the Court held the companies Bridgestone Licensing Services, Inc. ("BSLS") and Bridgestone Americas, Inc. ("BSAM") liable vis-à-vis a competitor, the Luque Group. The Bridgestone companies started an opposition proceeding before the courts of Panama to ascertain that the registration in Panama - by Luque Group - of the trademark RIVERSTONE, interfered with Bridgestone group rights under the trademarks owned BRIDGESTONE and FIRESTONE, both registered in Panama. Following the conclusion of these proceedings in favour of Luque Group, the latter started a lawsuit against BSLS and BSAM, claiming that the opposition proceedings had been wrongly initiated and had led to the halting of sales of RIVERSTONE tyres for fear that its stock would be seized in the event of losing the proceedings. The Court ordered the BSLS and BSAM to pay US$ 5 million, upholding the arguments put forward by Luque Group. The claimants (BSLS and BSAM) subsequently launched an ICSID investment arbitration proceeding, arguing that the Supreme Court's judgment had undermined and thus reduced the value of their trademarks. In summary, the claimants contended that the judgment of the Panamanian Supreme Court was unjust and arbitrary, and that it violated Panama's obligations under the United States-Panama Trade Promotion Agreement (TPA) with respect of the concept of denial of justice, deeming the Supreme Court judgement heavily unfair - in violation of the principles of due process -, arbitrary and even heavily impacted by the corruption. Panama took part in the proceeding defending the Supreme Court judgment. While the Tribunal held that it had jurisdiction to hear the case, it did not hold the Respondent liable for denial of justice. Indeed, the Tribunal found that some errors of judgment were detectable but such errors did not amount at all to demonstrating that the judgment was the product of incompetence or corruption. As for costs, the Tribunal ordered the Claimants to reimburse the Respondent the expended portion of the advances paid by the Respondent to ICSID, and to pay US$ 6.5 million towards Panama's legal costs and expenses.
for the purposes of establishing ICSID jurisdiction, the Tribunal was requested to ascertain whether the trademarks constituted an investment in the host State, Panama. The Tribunal first followed the text of the definition under the applicable investment chapter of the TPA, concluding that "investment" could reasonably include "intellectual property rights". On the merits, the Tribunal reviewed the proceedings conducted before the Panamanian Supreme Court to ascertain whether there could be ground to establish a liability for denial of justice.
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