The decision recently delivered in the case Central Santa Lucia L.C. v. Meliá Hotels International S.A., brought before the First Instance Court of Palma de Mallorca (the “Decision”), is one of the first rendered by a European court concerning confiscated property in Cuba after the end of suspension of Title III of the Libertad Act (“Helms-Burton Act”) beginning 2 May 2019. The suit was filed in Spain by a Cuban American family as the heir to the former landowner.
The decision can be appealed before a higher Spanish court. The appeal was filed in due time.
Following an incident last November, the International Tribunal for the Law of the Sea (“ITLOS”) has prescribed provisional measures requiring Russia to release three Ukrainian naval vessels.
The November 2018 incident and institution of arbitration
In late November 2018, the Russian coast guard arrested and detained three Ukrainian naval vessels near the Kerch Strait in the Black Sea. The 24 Ukrainian servicemen on board the vessels were also arrested and detained. The Russian authorities have since commenced criminal proceedings against the servicemen.
Ukraine subsequently instituted arbitration proceedings against Russia under Annex VII to the United Nations Convention on the Law of the Sea (the “Convention”). It alleged that Russia had breached its obligations under the Convention, notably in respect of the immunity of foreign naval vessels. These proceedings are in addition to a separate Annex VII arbitration which Ukraine commenced in 2016.
On 6 April 2018, a Tribunal constituted under the UNCITRAL Arbitration Rules rendered an Award on Jurisdiction in the case Dawood Rawat v. The Republic of Mauritius (PCA Case 2016-20). Following a thorough analysis of the interpretation of the 1973 Investment Protection Treaty between the Republic of France and Mauritius (the “France-Mauritius BIT” or the “Treaty”), the Tribunal denied protection of the relevant investment protection treaty to a dual national – a French-Mauritian businessman – despite the treaty was silent on its application to dual nationals. This approach was contrary to prior investment treaty decisions, such as Serafín García Armas and other v Venezuela, in which tribunals have rejected jurisdictional objections brought by respondent states where relevant the bilateral investment treaty (“BIT”) was silent on the exclusion of dual nationals.
The German Federal Supreme Court (Bundesgerichtshof) recently held that creditors cannot bring claims against the Hellenic Republic before the German courts in the context of Greece's debt restructuring in 2012 , finding that Greece enjoys immunity from jurisdiction before the German courts (decision of 8 March 2016; docket number VI ZR 516/14).
In the ICSID decision of Guardian Fiduciary Trust Ltd f/k/a Capital Conservator Savings & Loan Ltd v Former Yugoslav Republic of Macedonia (ICSID Case No. ARB/12/31) issued on 22 September 2015, the Tribunal declined jurisdiction on the basis that the Claimant failed to establish that it qualified as a national of the Netherlands for the purposes of the Netherlands – Macedonia BIT (the BIT).
The BIT provides a wide definition of "national" which extends to "legal persons….controlled, directly or indirectly…." by a national of a contracting party. The Claimant, Guardian Fiduciary Trust Limited (Guardian), a company incorporated in New Zealand, brought the claim under the BIT, arguing that it qualified as a national of the Netherlands as it was ultimately controlled by a Dutch foundation which had a registered office in the Netherlands. Having determined that the issue of control was ultimately a matter of evidence, and not something to be determined solely on the basis of an analysis of New Zealand law, the Tribunal concluded that the Claimant had failed to provide that necessary evidence. It further concluded that the limited evidence before it suggested that the Claimant was in fact indirectly controlled by another entity of a different jurisdiction.
In issuing the decision, the Tribunal considered it appropriate, in the circumstances, to award the State Respondent, the Former Yugoslav Republic of Macedonia (Macedonia), 80% of its costs.
This decision does not so much highlight the complexities of establishing control in a complex ownership structure, as it does the importance of properly establishing and evidencing the basis for a Claimant's assertion of a Tribunal's jurisdiction over the claim. Failure to do so may, as in this instance, leave a Claimant footing the bill for the State Respondent's costs.
In an Award on Jurisdiction rendered earlier this year in National Gas S.A.E. v. Arab Republic of Egypt (ICSID Case No. ARB/11/7), an ICSID tribunal declined jurisdiction to hear a claim brought against Egypt under the Egypt-UAE BIT by an Egyptian corporate claimant whose immediate shareholders were two UAE shell companies but who was ultimately controlled by an Egyptian-Canadian dual national. The claimant had sought to argue that despite being an Egyptian company that it was entitled to take advantage of a limited exception in Article 25(2)(b) of the ICSID Convention which provides that in certain circumstances a national of an ICSID Contracting State can include a national of the State party to the dispute if there is an element of “foreign control“. However, these arguments were rejected by the tribunal, not least because the “control” of the claimant rested ultimately with an Egyptian national and not the two UAE shell companies.
In Kiobel v Royal Dutch Petroleum Co, the US Supreme Court held that the presumption against extraterritorial application of US laws applies to claims under the Alien Tort Statute (ATS). The Supreme Court left open the possibility of ATS claims which “touch upon and concern” US territory, provided that they “do so with sufficient force to displace the presumption against extraterritorial application“. However, they provided limited guidance as to how that standard should be interpreted.
The circumstances in which the presumption against extraterritorial application will be displaced have recently been considered by courts in the Second, Fourth, Ninth and Eleventh Circuits in the cases of In re: South African Apartheid Litigation, Al Shimari v CACI Premier Technology Inc., Doe v Cisco Systems Inc., and Cardona v Chiquita Brands International Inc. Following these decisions, it appears that in order to establish jurisdiction under the ATS it will be necessary to show that some conduct which contributed to the alleged harm has taken place on US soil.
Herbert Smith Freehills has issued the latest edition of its Indian international arbitration e-bulletin. This issue considers some significant decisions of the Indian courts, including two decisions on the arbitrability of fraud claims and a decision of the Supreme Court concerning the power of Indian courts to intervene in foreign-seated arbitrations.
The e-bulletin also reports on some interesting news stories on India-related arbitration claims, including the ongoing GMR-Maldives dispute and a decision on the termination of an arbitral tribunal’s mandate.
In OPIC Karimun Corporation v Venezuela, an ICSID tribunal has held that Venezuela’s Investment Law’s reference to ICSID did not, without more, provide consent to ICSID jurisdiction. Due to the ambiguous wording of the law, the tribunal looked at the intention of Venezuela and was unable to conclude that it had intended to provide consent. This was despite evidence from one of the drafters of the law that he had intended the relevant provision of the law to constitute such consent. The Tribunal drew a distinction between the intention of the drafters, and the intention of the State.