CEAC lost the arbitration against Montenegro, has to cover court expenses too

CDM | 27 July 2016

CEAC lost the arbitration against Montenegro, has to cover court expenses too

Investment arbitration process between CEAC Holdings Limited and Montenegro was finished yesterday, on 26th of July, in a way that the arbitration tribunal declared itself non-jurisdictional for this process, it was said from the Ministry for economy.

Arbitration tribunal of the International center for solving investment disputes ICSID in Paris, found that CEAC doesn’t have a headquarters on Cyprus, and that because of this it doesn’t represent a foreign investor in terms of international agreement for protection of foreign investments, which would enable it to start this type of arbitration procedure against Montenegro.

Additionally, it was emphasized from the ministry, having in mind that CEAC started the procedure in which it couldn’t even prove that it’s qualified to participate in the process, the tribunal decided that the judicial cost of around 900.000 euros has to be covered by CEAC in full amount, including also the expenses that Montenegro had regarding this process.

Let us remind you, CEAC started the arbitration procedure in March of 2014, based on the bilateral agreement on foreign investments protection between Cyprus and Montenegro, claiming that Montenegro broke several obligations from this agreement, and although it never said the total amount, it was speculated that it will demand a 600 million euros reimbursement.

We would also like to remind you that in May of this year, International center for solving international conflicts in Paris decided in Montenegrin interest regarding the arbitration process that was started by MNSS and Recupero, former owners of Steel factory Niksic, asking for over 100 million euros of reimbursement.

source: CDM