Weather Investments lauch claim against Algerian Government

Weather Investments, owned by Egyptian telecoms magnate Naguib Sawiris, launched a $5 billion claim against Algerian Government for alleged harassment and interference with the country’s telecoms operator Orascom Telecom Algerie.  Weather Investments havs invested over $3 billion and created 4,000 jobs after winning a competitive bid to build Algeria’s telecommunications infrastructure in 2001.  The claim has been lodged with the International Centre for the Settlement of Investment Dispute (ICSID) and is one of the largest claims to be brought before the international arbitration tribunal so far.

Weather Investments claim that the Algerian Government has repeatedly breached its responsibilities under the “agreement between the Belgo-Luxembourg Economic Union and the People’s Democratic Republic of Algeria concerning the reciprocal encouragement and protection of investments” signed by both parties in 1991.  The breaches include imposition of unjustified tax, customs blockades – preventing the company from importing necessary network equipment, and imposition of unjustified fines.

The Algerian Government, represented by Emmanuel Gaillard – head of international arbitration group at Shearman & Sterling, stated that they intend to defend the case vigorously and that they cannot see any room for the treaty breach.

Weather Investments had issued a notice of dispute earlier this year with an intention to settle within six months, and after failure to reach such settlement, the claimant had filed the ICSID arbitration which was acknowledged last Friday.

Sources:

http://www.ft.com/cms/s/0/9f78672a-316e-11e2-b68b-00144feabdc0.html#axzz2Cf71ssZC

http://english.alarabiya.net/articles/2012/11/19/250513.html

The Dublin Dispute Resolution Centre Opens Its Doors

By Timothy Foden, Associate, Allen & Overy LLP and Tiernan Fitzgibbon, Trainee, Allen & Overy LLP

 

The Dublin Dispute Resolution Centre opened its doors for business on 1 November 2012 and joins a growing number of venues in Dublin, such as the Dublin International Arbitration Centre and the Ormond Building, which cater for alternative dispute resolution (ADR). This continued growth in the number of Irish ADR centres comes on the back of a concerted effort by both the private and State sector to promote Ireland as a venue for international arbitration. Following the passing of the Arbitration Act 2010, which was largely based on the UNCITRAL Model Law on International Commercial Arbitration, Arbitration Ireland was formed as a cross sector lobbying group to promote Ireland as a venue for international arbitration. To date, Arbitration Ireland has held road shows in New York, Washington, London and Paris to highlight Ireland’s advantages as a venue for international arbitration given its neutrality, arbitration friendly legislation and judicial system. This promotion was also very much in evidence at the recently held International Bar Association Annual Conference in Dublin in early October of this year which attracted legal and arbitration practitioners the world over to experience the best in Irish hospitality and help cement its growing reputation as a forum for international arbitration.

 

Sources:

http://www.irishtimes.com/newspaper/finance/2012/1105/1224326142218.html

http://www.arbitrationireland.com/

http://www.dublinresolutioncentre.ie/index.php/

Saudis seek private arbitration court in London

In an attempt to attract foreign investment and build investor confidence, Saudi Arabia is planning to lobby the UK government to set up a confidential arbitration court in London that would hear commercial disputes relating to the Middle Eastern Kingdom.  The Saudi Government is aiming to attract former members of the UK judiciary and other leading figures in the legal industry to sit on the putative arbitration panel.  Saudi Arabia hopes that the establishment of this specialist arbitration court, in addition to the country’s extensive reform of its domestic arbitration system, will lead to a flood of foreign investment into the country and boom in international trade.

 

The Saudis’ intentions raise several questions, including, amongst others, whether the establishment of such a court is necessary and why existing institutions cannot be used instead.  What do you think?

Follow-Up: Ghanaian Court Actions

Following on from last Friday’s post on Blue Ridge petitioning the United States Court for the Southern District of New York for confirmation of the CMS Gas arbitral award against Argentina, there have been some interesting enforcement steps taken in a Ghanaian court in respect to Argentine assets.

Last week, Ghana’s Superior Court of Judicature granted NML Capital Limited, a judgment creditor of Argentina, an injunction and interim preservation order against the Argentine-owned vessel ARA Libertad, which arrived last Monday at the Tema port.  The injunction and preservation order was granted pending hearings on the enforcement in Ghana of judgments against Argentina issued by the aforementioned SDNY and supported by similar judgments in London.

As many readers are likely aware, this case is among hundreds of court actions brought by private creditors around the world seeking to enforce various judgments and awards against Argentina.  Argentina may obtain release of the ship by posting a bond with the High Court in Accra.

Given the narrowing enforcement options with respect to States that shield their assets, is ship arrest becoming the only viable means of enforcing an award against a foreign state that does not honour its obligations?  What are other effective methods to enforce a Sovereign award or judgment debtor to pay up?

S.D.N.Y. Court Breaks New Ground on the Enforcement of ICSID Awards

This past Sunday, the US District Court for the Southern District of New York issued an important decision on the enforceability of an ICSID award under the bilateral investment treaty between Argentina and the US.

The decision relates to the CMS Gas award and is noteworthy for the fact that it deals with issues of first impression such as the assignability of an ICSID award and whether there should be a limitations period in the enforcement of such an award.  It is also remarkable given the small number of published US court opinions dealing with the enforcement of ICSID awards.

Factual background

On January 8, 2010, Blue Ridge Investments L.L.C (‘Blue Ridge’) filed a petition in the US District Court for the Southern District of New York to confirm an ICSID award obtained against Argentina five years earlier by initial claimant CMS Gas Transmission Company (‘CMS’).  CMS brought a claim against Argentina in 2001.  The Tribunal found that Argentina had breached its obligations to CMS under the bilateral investment treaty between the US and Argentina, and awarded $133.2 million plus interest in compensation (the ‘Award’).  Argentina has not paid any portion of the Award to date.

In 2008 Blue Ridge purchased the Award, thus becoming its assignee.  Soon thereafter, Blue Ridge notified Argentina that it was the successor-in-interest to CMS and sought to enforce the Award in the Southern District of New York.  After two previous aborted attempts at enforcement, Blue Ridge again sought to have the award recognised and Argentina moved to dismiss on several grounds, discussed below.

Decision

US District Judge Paul G. Gardephe considered, amongst other things, whether Blue Ridge, as an assignee, lacked standing to seek recognition and enforcement of the Award.  Argentina argued that the term ‘party’ as used in Article 54(2) and throughout the ICSID Convention, refers to parties to the underlying arbitration, and therefore, only the original parties can seek recognition or enforcement of an award under Article 54(2).

Judge Gardephe went on to examine the meaning of the term ‘party’ or ‘parties’ under different articles of the ICSID Convention, carrying out a thorough textual analysis before concluding that the ICSID Convention used the term “party” in different ways depending on the meaning of each particular article and that there was nothing in Article 54 that limited the identity of those who could rightfully seek enforcement to the parties to the underlying arbitration.  Thus, Blue Ridge, as assignee, was able to seek enforcement.

Furthermore, the court considered whether there should be a limitations period for the enforcement of an ICSID award in the US courts.  As regards to limitation period, the Court concluded that under Article 54 of the ICSID Convention “a federal court is to treat the award of the arbitral tribunal as it would be a final judgment from a state court”.  Therefore, a 20-year statute of limitations which, under New York law, governs the enforcement of a final money judgment from a court of another state, is applicable in to the enforcement of an ICSID award in the New York courts.

Issues for Discussion

This decision may be seen as an important milestone International Arbitration case law as it may provide a new category of ‘tradable’ awards that can be bought and sold to third parties that may have nothing to do with the initial arbitral proceedings and may, potentially, fall short of satisfying essential requirements for bringing arbitral proceedings in the first place.

Additionally, the application of a 20-year statute of limitations seems controversial given the silence of the ICSID Convention (and, indeed, the U.S. implementing statute) on the matter.

 

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