OOO Manolium Processing v Belarus - PCA Case 2018-06 - Final Award - Redacted - 22 June 2021
Juan Fernández-Armesto (Chairman)
Table of Contents
Glossary of Terms and Abbreviations
Table of Cases
1. The Parties
2. Administrative services
3. The Treaty: dispute resolution clause
4. Procedural history
II. Applicable Law
1. The Termination Dispute
2. The Tax Dispute
3. Manolium-E's bankruptcy and the second tax audit
4. The involvement of President Lukashenko
IV. Relief Sought by the Parties
V. Jurisdictional Objections
1. Ratione Temporis Objection
2. Domestic Law Objection
3. Ratione Materiae Objection
4. Overall conclusion
1. The Tax Dispute
2. The Termination Dispute
1. The Parties' positions
2. Decision of the Tribunal
2. Calculation methodology
3. Dies a quo
4. Dies ad quem
1. The Parties' Legal Costs
2. The Arbitrators' Fees and Expenses and the Tribunal's Other Costs 162
3. Deposits for costs
4. Allocation of costs
1. This is an ad hoc investment arbitration dispute subject to the Arbitration Rules of the United Nations Commission on International Trade Law, as revised in 2013 [the "UNCITRAL Rules"]. The proceeding concerns various alleged breaches by the State of Belarus of provisions of Annex 16 to the Treaty on the Eurasian Economic Union dated 29 May 2014, which entered into force on 1 January 2015 [the "Treaty" or the "EEU Treaty"].
2. The claimant, a Russian company, entered into an "Investment Contract" with the Minsk City Executive Committee [the "Minsk Municipality" or the "MCEC"] and the Unitary Enterprise "Transport and Communications Office of the MCEC"
["Minsktrans"], which required it to build several public facilities in order to obtain the right to develop a shopping, cultural and entertainment complex in the Minsk city center [the "Investment Object" or the "Mall"].
3. The claimant alleges that it held an investment in Belarus, protected under the Treaty, and that due to Belarus's breach of the Treaty it was completely deprived of this investment. It therefore requests USD 20.4 million ["M"] in compensation for the loss of the public facilities it had built and USD 155.9 M as lost profits resulting from the loss of the right to build the Mall.
744. For the foregoing reasons the Tribunal:
1. Declares that it has ratione temporis jurisdiction to decide (i) all measures related to the Tax Dispute (ii) those measures related to the Termination Dispute which occurred after the Effective Date.
2. Declares that it lacks jurisdiction to adjudicate the Termination and the Tax Disputes applying the Belarusian Investment Law.
3. Dismisses Respondent's Ratione Materiae Objection.
4. Declares that the Republic of Belarus adopted taxation and enforcement measures against Manolium-E and Claimant with consequences equivalent to those of expropriation, in breach of Arts. 79, 80 and 81 of the Protocol.
5. Declares that the Republic of Belarus breached the FET standard established in Art. 68 of the Protocol.
6. Orders the Republic of Belarus to pay Claimant USD 20,434,679 as compensation.
7. Orders the Republic of Belarus to pay Claimant interest on the compensation, accrued between 27 January 2017 and the date of actual payment, calculated at the higher of (i) the NBB Published Rate or (ii) LIBOR for six-month deposits denominated in USD, such interest to be capitalized six-monthly in arrears.
8. Orders the Republic of Belarus to pay Claimant (i) the totality of Claimant's contribution to the Arbitrators' Fees and Expenses and the Tribunal's Other Costs, which amounts to EUR 402,424.88, and (ii) 75% of Claimant's Legal Costs, which amount to USD 1,438,405.46.
9. Orders the Republic of Belarus to pay Claimant interest on the amounts awarded in point 8 supra, from the date of this Award until the date of payment calculated at the higher of (i) the NBB Published Rate or (ii) LIBOR for six- month deposits denominated in USD, such interest to be capitalized six- monthly in arrears.
10. Dismisses all other claims.
Place of arbitration: The Hague, the Netherlands.
Date: 22 June 2021.