Plaintiffs IC Power Ltd ("IC Power") and Kenon Holdings Ltd ("Kenon") (together, "Plaintiffs"), by and through their undersigned counsel, allege as follows for their Complaint against Defendant Republic of Peru ("Defendant" or "Peru"):
I. NATURE OF THE ACTION
1. This is an action to recognize and enforce an arbitral award (the "Award") issued in Plaintiffs' favor and against Peru on October 3, 2023 in ICSID Case No. ARB/19/19. A true and correct copy of the Award is attached hereto as Exhibit A. The Award in favor of Plaintiffs was issued by an arbitral tribunal (the "Tribunal") constituted pursuant to the Free Trade Agreement between Peru and Singapore (the "Treaty") in the context of arbitration proceedings (the "Arbitration") conducted in accordance with the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the "ICSID Convention"), 17 U.S.T.
1270, 575 U.N.T.S. 159 (Mar. 18, 1965), and under the auspices and pursuant to the arbitration rules of the International Centre for the Settlement of Investment Disputes ("ICSID"). True and correct copies of the Treaty and the ICSID Convention are attached hereto as Exhibits B and C, respectively. Pursuant to Article 54 of the ICSID Convention and 22 U.S.C. § 1650a, Plaintiffs request that this Court (1) enter an order recognizing the Award in the same manner as a final judgment issued by a court of a state of the United States, (2) enter judgment in Plaintiffs' favor in the amounts and currency denominations embodied in the Award, and (3) grant any other and further relief that the Court may deem appropriate.
A. Summary of the Dispute
7. Plaintiffs are limited companies incorporated and based in Singapore, from where they oversaw and managed their investments around the world. See Ex. A ¶ 91. Until 2017, Plaintiffs controlled three Peruvian companies (the "Peruvian Subsidiaries") that owned and operated several electric power plants in Peru (the "Plants"). Id. ¶ 92.1 Through the Plants, the Peruvian Subsidiaries operated in the Peruvian electricity system, transmitting power through the network and providing certain ancillary services. Id. ¶ 93. The parties' dispute arises out of resolutions passed by Peru's mining and energy regulator ("OSINERGMIN") that Plaintiffs alleged were inconsistent with Peru's obligations under the Treaty and caused them to incur losses.
Id. ¶ 165.
8. Specifically, Plaintiffs alleged that shortly after one of the Peruvian Subsidiaries, Kallpa GSA, was awarded the exclusive right via tender process to provide the Firm Base Provision of the secondary frequency regulation ("SFR") service, which is a service designed to maintain the frequency of the electric power system, OSINERGMIN implemented a regulatory measure, Resolution No. 141, in June 2016 that unilaterally modified Kallpa GSA's rights under the scheme. Id. ¶¶ 141, 347. Plaintiffs argued that the tender award included a guarantee that Kallpa GSA's power plants would be continuously dispatched, but Resolution No. 141 reversed that guarantee in breach of Peru's obligations under the Treaty, causing substantial losses to Plaintiffs. Id. ¶¶ 138-39, 167, 325. Plaintiffs further alleged that in May 2017, OSINERGMIN implemented another regulatory measure, Resolution No. 164, that fixed a new methodology for calculating transmission line tolls that discriminated in favor of state-owned power generators, including primarily Electroperú, while harming Plaintiffs' Peruvian subsidiaries. Id. ¶ 457.
9. Plaintiffs filed a request for arbitration against Peru under the Treaty on June 12, 2019. Id. ¶ 10. The Tribunal issued the Award on October 3, 2023, finding that Peru breached the fair and equitable treatment standard as contained in Article 10.5 of the Treaty. As a result of this breach, the Tribunal awarded Petitioners $110.7 million in compensation for damages arising out of Peru's breach of the Treaty, pre- and post-award interest, and costs in the amounts of $4,931,993.58 and $640,684.23. Ex. A ¶ 624.
VI. PRAYER FOR RELIEF
WHEREFORE, Plaintiffs respectfully request that this Court enter an order and judgment:
a. Recognizing the Award and enforcing the pecuniary obligations imposed by the Award as if the Award were a final judgment of a court of general jurisdiction of one of the several States;
b. Entering judgment in Plaintiffs' favor in the amounts specified in the Award, including the principal amount of $110.7 million, costs, and pre- and post-award interest as granted by the Tribunal (and/or rectified or supplemented by ICSID pursuant to the Request for Supplementation/Rectification); and
c. Awarding such other and further relief as may be proper.
Dated: November 14, 2023
Award / Laudo