Human Rights Defenders Inc., as assignee of Natale Palazzo, Rodolfo Scodeller and Antonio Basile v. Swiss Confederation - ICSID Case No ARB/20/29 - Order of Discontinuance - 18 January 2022
Reproduced from www.worldbank.org/icsid with permission of ICSID.
ORDER OF THE TRIBUNAL DISCONTINUING THE PROCEEDING
Members of the Tribunal
Sir Daniel Bethlehem QC, President
Mr Gabriel Bottini, Arbitrator
Mr Toby Landau QC, Arbitrator
1. On 29 May 2020, the International Centre for Settlement of Investment Disputes ("ICSID") received a request for arbitration from Human Rights Defenders Inc. ("HRDI" or "the Claimant"), as assignee of Mr. Natale Palazzo, Mr. Rodolfo Scodeller and Mr. Antonio Basile for the institution of arbitration proceedings under the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States ("the ICSID Convention"), in respect of a dispute with the Swiss Confederation ("the Request").
2. Together, the Claimant and the Swiss Confederation (or "the Respondent") are referred to as the Parties.
3. On 17 August 2020, the ICSID Secretary-General registered the Request pursuant to Article 36(3) of the ICSID Convention and Rules 6(1)(a) and 7(a) of the ICSID Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (the "ICSID Institution Rules") and notified the Parties of the registration. In the Notice of Registration, the Secretary-General invited the Parties to proceed to constitute an Arbitral Tribunal as soon as possible in accordance with Rule 7(d) of the ICSID Institution Rules.
4. In the absence of an agreement between the Parties, on 24 November 2020, the Respondent invoked Article 37(2)(b) of the ICSID Convention regarding the number of arbitrators and the method of their appointment. In accordance with that provision, the Tribunal shall consist of three arbitrators--one arbitrator appointed by each Party and the third, the presiding arbitrator, appointed by the agreement of the Parties.
5. On 17 November 2020, the Respondent appointed Mr. Toby Landau QC, a national of the United Kingdom, as an arbitrator. The Respondent also invoked Article 38 of the ICSID Convention on that same date and requested that the Chairman of the ICSID Administrative Council appoint the arbitrators not yet appointed.
6. On 13 January 2021, consequent upon the appointments' procedure prescribed in Article 38 of the ICSID Convention, the ICSID Secretary-General, in accordance with Rule 6(1) of the ICSID Rules of Procedure for Arbitration Proceedings (the "ICSID Arbitration Rules") notified the Parties that the Tribunal was deemed to have been constituted as of that date. In addition to Mr. Landau QC, appointed by the Respondent, the Tribunal is composed of Mr. Gabriel Bottini, a national of the Argentine Republic, and Sir Daniel Bethlehem QC, a national of the United Kingdom, as presiding arbitrator, both having been appointed by the Chairman of the ICSID Administrative Council in accordance with Article 38 of the ICSID Convention. Mr. Alex B. Kaplan, ICSID Legal Counsel, was designated to serve as Secretary of the Tribunal.
7. By letter dated 20 January 2021, the Tribunal Secretary, writing on behalf of the Tribunal, requested each Party to make an initial advance payment in the amount of USD 125,000.00, pursuant to ICSID Administrative and Financial Regulation 14(3)(d). Payment was due within thirty days after the date of that request, i.e., by 22 February 2021. By the same letter, the Tribunal enquired about the Parties' availability for the Tribunal's First Session to be held on 11 or 12 March 2021, "pending the receipt of funds". For completeness and the avoidance of doubt, the Tribunal also noted that, given the absence of financial contributions to that date, it would take no further steps in the proceedings "until it is in receipt of funds".
8. By an application dated 29 January 2021 and submitted under Rule 41(5) of the ICSID Arbitration Rules (the "Rule 41(5) Application"), the Respondent submitted that the Claimant's claims are "manifestly without legal merit" and "fall manifestly outside the jurisdiction of ICSID and the competence of the Tribunal under Article 25 of the ICSID Convention. The Respondent accordingly requested that the Tribunal, inter alia, "dismiss HRDI's claims for manifest lack of legal merit under Rule 41(5) of the ICSID Arbitration Rules".
9. By letter dated 1 February 2021, the Tribunal indicated a briefing schedule for submissions on the Respondent's Rule 41(5) Application. In doing so, it also reiterated that it would take no further steps in the proceedings until it was in receipt of funds, as per the Tribunal Secretary's letter of 20 January 2021.
10. On 5 February 2021, ICSID's financial department confirmed its receipt of a wire transfer from the Respondent corresponding to the Respondent's portion of the requested advance payment.
11. By the due date of 22 February 2021, ICSID had not received payment from the Claimant of its share of the advance on costs of the arbitration.
12. On 23 February 2021, in accordance with Administrative and Financial Regulation 14(3)(d), ICSID informed the Parties of the Claimant's default and gave either Party the opportunity to make the required payment within 15 days, i.e., by 10 March 2021.
48. The Tribunal decides that the arbitration proceeding is hereby discontinued pursuant to ICSID Administrative and Financial Regulation 14(3)(d).