Lexology | 23 January 2017
International arbitration news round-up
by Deirdre Lyons Le Croy
Philip Morris v Uruguay case highlights importance of timing in arbitration
In Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Philip Morris challenged Uruguay’s new tobacco control legislation and claimed that Uruguay expropriated its investment and denied it fair and equitable treatment, among other breaches of the Switzerland-Uruguay bilateral investment treaty ("BIT"). The case is important, not only because it represents the first time that a tobacco company has sued a sovereign state before an international forum, but also because it concerns the limits of regulations setting forth restrictions in the tobacco industry. The ICSID dismissed all claims by Philip Morris, ordering it to bear the full cost of the arbitration and to pay Uruguay US$7 million as partial reimbursement of the country’s legal expenses.
DC District Court enforces US$21 million arbitration award against Argentina
In Republic of Argentina v. AWG Group Ltd., 2016 WL 5928464 (D.D.C Sept. 30 2016), the decision by the US District Court for the District of Columbia provides guidance on the issue of whether the losing party may seek to vacate an award on the grounds that one of the arbitrators had a conflict of interest that impaired his or her impartiality or independence. Argentina had urged the court to refuse to enforce the award under the New York Convention and to vacate the award under the Federal Arbitration Act on the ground that the arbitrator appointed by AWG was a director of UBS AG, which held shares in companies doing business with AWG. The court rejected the challenge to the arbitrator, noting that the connection was "so remote and trivial that no reasonable person would conclude that she was partial to a party as a result of that relationship".
Chile wins Clarín case arbitration
In Victor Pey Casado and President Allende Foundation v Republic of Chile (ICSID Case No. ARB/98/2), a second ICSID tribunal has refused to grant monetary compensation to publisher Victor Pey Casado for the loss of his business after the seizure of his newspaper, El Clarín, under the Pinochet regime. The tribunal found that Victor Pey Casado had failed to show any loss for which he should receive monetary compensation. Victor Pey Casado first filed for arbitration against Chile in 1997 under the Chile-Spain bilateral investment treaty.
Rusoro awarded US$967.77 million by ICSID for the expropriation of its investments in Venezuela
In Rusoro Mining Limited v The Bolivarian Republic of Venezuela (ICSID Case No ARB(AF)/12/5), Rusoro filed its request for arbitration before the ICSID in 2012 under the Canada-Venezuela BIT. In its award, the tribunal upheld Rusoro’s claims that Venezuela breached its obligations under the BIT by unlawfully expropriating Rusoro’s investments without paying compensation and by imposing certain restrictions on the export of gold. As a result of these breaches, the tribunal ordered Venezuela to pay damages of US$967.77 million as at the date of expropriation (2011), together with interest accrued between that date and the date of actual payment.
América Móvil starts arbitration proceedings against Colombia
Mexican telecom company, América Móvil SAB de CV, has registered a claim at the ICSID against Colombia pursuant to the Free Trade Agreement between Mexico and Colombia ("FTA Mexico – Colombia"). The purpose of the arbitration is the intended reversal of the alleged expropriation of certain wireless telecommunications assets which are now operated by AMX’s Colombian operating subsidiary, Comunicación Celular, S.A. América Móvil will request to the arbitration tribunal compensation relating to breaches to the FTA Mexico-Colombia and international law provisions.