Summary

Source: icsid.worldbank.org

DECISION ON ANNULMENT

Members of the Tribunal

Prof. Dr. Rolf Knieper, President of the ad hoc Committee
Ms. Dyalá Jiménez Figueres, Member of the ad hoc Committee
Mr. Michael D. Nolan, Member of the ad hoc Committee

TABLE OF CONTENTS

INTRODUCTION AND PARTIES
PROCEDURAL HISTORY
REQUESTS FOR RELIEF
THE PARTIES' POSITIONS ON GROUNDS FOR ANNULMENT
Manifest Excess of Powers (Article 52(1)(b) Convention)
The Legal Standard
a) The Applicant's Position
b) The Claimant's Position
The Issue of Jurisdiction and Competence in Light of the EU Treaties
a) The Applicant's Position
b) The Claimant's Position
The Issue of Jurisdiction and Competence over
a) The Applicant's Position
b) The Claimant's Position
a) The Applicant's Position
b) The Claimant's Position
Serious Departure from a Fundamental Rule of Procedure (Article 52(1)(d) Convention)
The Legal Standard
a) The Applicant's Position
b) The Claimant's Position
The Issue of Jurisdiction and Competence in Light of the EU Treaties
a) The Applicant's Position
b) The Claimant's Position
The Issue of Jurisdiction and Competence over
a) The Applicant's Position
b) The Claimant's Position
a) The Applicant's Position
b) The Claimant's Position
The Tribunal's Adjudication of Damages
a) The Applicant's Position
b) The Claimant's Position
Failures to State Reasons (Article 52(1)(e) Convention)
The Legal Standard
a) The Applicant's Position
b) The Claimant's Position
The Issue of Jurisdiction and Competence over
a) The Applicant's Position
b) The Claimant's Position
a) The Applicant's Position
b) The Claimant's Position
The Tribunal's Adjudication of Damages
a) The Applicant's Position
b) The Claimant's Position
THE COMMITTEE'S ANALYSIS AND DETERMINATION
Manifest Excess of Powers (Article 52(1)(b) Convention)
The Legal Standard
The Issue of Jurisdiction and Competence in Light of the EU Treaties
a) The Hellenic Republic's Pleadings
b) Treaty Conflict
c) EU Law
d) Hypothetical Retroactive Effect
e) Reinforcing Arguments
The Issue of Jurisdiction and Competence over
Serious Departure from a Fundamental Rule of Procedure (Article 52(1)(d) Convention)
The Legal Standard
The Issue of Jurisdiction and Competence in Light of the EU Treaties
The Issue of Jurisdiction and Competence over
The Tribunal's Adjudication of Damages
Failure to State Reasons (Article 52(1)(e) Convention)
The Legal Standard
The Issue of Jurisdiction and Competence over The Tribunal's Adjudication of Damages
COSTS
The Parties' Cost Submissions
The Costs of the Proceeding
The ad hoc Committee's Decision
DECISION

INTRODUCTION AND PARTIES

1. This case concerns an application for annulment ("Annulment Application") of the award rendered on 15 April 2021 ("Award"), which incorporates the decision on jurisdiction and liability of 8 January 2019 ("Decision"), in the arbitration proceeding ICSID Case No. ARB/14/16 between the Cyprus Popular Bank Public ("Claimant" or "Laiki"), a commercial bank incorporated in the Republic of Cyprus, resolved in March 2013 and since then under the direction and control of its Resolution Authority, the Central Bank of Cyprus (the "CBC"), and the Hellenic Republic ("Applicant" or "Respondent," "Hellenic Republic" or "Greece"). They are collectively referred to as the "Parties". The Parties' representatives and their addresses are listed above.

2. The dispute in the original proceeding was submitted by the Claimant on 20 June, 2014 to the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") on the basis of the Agreement between the Government of the Hellenic Republic and the Government of the Republic of Cyprus for the Reciprocal Promotion and Protection of Investments, in force since 26 February 1993 (the "BIT" or the "Treaty"), and the Convention on the Settlement of Investment Disputes between States and Nationals of other States, dated 18 March 1965 (the "ICSID Convention").

4. [...]

3. The tribunal in the original proceeding was composed of Professor Juan Fernández- Armesto (president), Professor Giorgio Sacerdoti and Professor Philippe Sands (arbitrators) (the "Tribunal").

5. The proceedings were bifurcated. On 8 January 2019, the Tribunal rendered its 273- page Decision on Jurisdiction and Liability (the "Decision"); and on 15 April 2021, it rendered its 91-page Award (the "Award"). The Decision "is incorporated into and forms integral part of" the Award.

6. The Tribunal:

a) denied jurisdiction of the Centre and its competence for claims based on alleged violations of the Treaty on the functioning of the European Union ("TFEU"), the European Charter of European Rights ("ECFR") and the European Convention of Human Rights ("ECHR"), as not covered by the consent to arbitration under the BIT;

b) accepted jurisdiction of the Centre and its competence by rejecting the Respondent's objections that

- since Laiki was owned by the Republic of Cyprus, it was part of the State, and the dispute was in reality an inter-State dispute, by finding that Laiki had at all times retained its separate legal personality;

- Laiki had assigned its claims before the dispute and was not a party in interest, by finding that the claims against the Respondent had not been assigned to third parties;

- the Hellenic Republic's consent to arbitration in Article 9 of the BIT was incompatible with European law and thereby invalid, by finding that (i) the Tribunal did not have to apply European law and could not contradict it, (ii) Laiki had a legitimate expectation that Article 9 of the BIT and Greece's consent to arbitration had remained valid and that neither the EU Treaties nor the CJEU's jurisdiction had retroactive effects, (iii) the primacy of EU law had only internal effects and is of limited relevance in investment arbitration governed by international law, and (iv) the issue of obstacles to enforceability is not decisive for the adjudication of a claim;

- the lack of mandatory amicable settlement negotiations led to the inadmissibility of the proceeding, by finding that the Claimant had tried to initiate such negotiations and that they had proven futile.

c) dismissed the major part of the claims on the merits, with respect to alleged violations of the BIT in the context of

- Laiki's participation in the debt exchange of private creditors, by finding that it had participated voluntarily in the process and had waived its right to accede to arbitration, thereby causing the inadmissibility of the claim;

- the cumulative impact of all measures by the Respondent during the financial crises, allegedly amounting to a composite breach and thus creeping expropriation, by finding that the impact of the events on the Claimant was unfortunate but not attributable to Greece, as no underlying pattern, systematic policy, common denominator, purpose nor intent were discernible.

d) granted compensation for damages in an amount of EUR 34.5 million resulting from the Respondent's violations of Articles 2(2) and 3(1) of the BIT

7. As will be discussed below, the Applicant asserts three grounds for annulment in accordance with Article 52(1) (b), (d) and (e) of the ICSID Convention.

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DECISION

444. For the foregoing reasons, the ad hoc Committee decides unanimously:

(1) The Application for Annulment of the Award is rejected.

(2) Each Party bears its own costs and fees.

(3) The Applicant bears the costs of the annulment proceeding, including the fees and expenses of the Committee and the costs of the Centre.

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