The English court sets aside a Tribunal’s findings of lack of jurisdiction under a BIT

In a decision dated 2 March 2018 (the “Decision“), the English High Court has set aside parts of an award on jurisdiction (the “Award“) from a London-seated arbitration (the “Arbitration“) concerning claims brought by GPF GP S.a.r.l (“Griffin“) against Poland under the bilateral investment treaty between the Belgium-Luxembourg Economic Union and Poland (the “BIT“).

In so doing, the Court upheld Griffin’s application under section 67 of the 1996 English Arbitration Act (the “Act“), in which Griffin submitted that the Award issued by the tribunal (the “Tribunal“) on 15 February 2017 contained two separate errors as to substantive jurisdiction, namely:

  (i)  the Tribunal’s determination that it did not have jurisdiction over Griffin’s claims for breach of the Fair and Equitable Treatment (“FET“) standard in the BIT; and

  (ii)  the Tribunal’s determination, in respect of Griffin’s claims for indirect expropriation, that it had jurisdiction to consider only the effects of one specific allegedly expropriatory event, namely a decision of the Warsaw Court of Appeal, and not all the prior conduct of Poland.

All of Griffin’s claims should now proceed to the liability phase in the Arbitration. Poland has, however, expressly reserved the right to argue the compatibility of the BIT with EU law and any rights it may have in the context of the decision of the Court of Justice of the EU (“CJEU“) in the case of Achmea v Slovakia, which was issued just a few days after this judgment, on 6 March 2018.

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Bear Creek Mining Corp. v. Peru: the potential impact on damages of an investor’s contributory action and failure to obtain a social license

In an award dated 30 November 2017 (the “Award“), an ICSID Tribunal ordered Peru to pay around US$30.4million to Canadian company Bear Creek Mining (the “Claimant“) following its finding that a 2011 decree (“Decree 032“) constituted an unlawful indirect expropriation of the Claimant’s right to operate the Santa Ana mine (the “Project“).

This post discusses the disagreement between Karl-Heinz Bockstiegel (the president of the tribunal) and Michael Pryles (appointed by the Claimant) (together, the “Majority“), and Prof. Philippe Sands QC (appointed by Peru), on the assessment of damages. Prof. Sands considered that the damages should be reduced due to contributory fault on the part of the Claimant.

The impact the Claimant’s conduct had on the Tribunal’s calculation of damages was, in any case, significant. Given the extent of, and reasons for, the opposition to the Project by the time of Decree 032, the Tribunal thought a hypothetical purchaser would not have obtained the necessary ‘social license’ to proceed with the Project. Ultimately it awarded the Claimant only a fraction of the US$522 million claimed. The reduced damages award emphasises the importance of respect for human rights and engagement with indigenous communities by investors.

The respective views expressed by the arbitrators concerning the Claimant’s conduct are also interesting in light of the broader debate about the relevance of the human rights of non-parties in investor-state arbitration.

An overview of the overall Award can be found in the post published on 16 December 2017 on the Kluwer Arbitration Blog. Continue reading