Ortiz Construcciones y Proyectos S.A. v. Algeria’s arbitration

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Global Legal Chronicle | 14 May 2020

Ortiz Construcciones y Proyectos S.A. v. Algeria’s arbitration

Shearman & Sterling’s International Arbitration team has secured a major victory for Algeria, in an investment treaty arbitration brought before ICSID by Spanish contractor Ortiz Construcciones y Proyectos S.A. (“Ortiz”). Chemloul & Associés also represented Algeria, while Herbert Smith Freehills represented Ortiz.

In 2013, Ortiz entered into a joint venture with Algerian state company OLA to build at least 5,000 pre-fabricated housing units over five years as part of a public program to develop affordable homes. This followed an agreement signed between Algeria and Spain to encourage Spanish building companies to invest in Algerian public construction projects.

The joint venture built a prefabrication plant for the project however it ultimately failed to secure a contract to sell the housing units with various Algerian authorities.

Ortiz filed its ICSID claim in 2017, arguing that Algeria had violated the Spain-Algeria bilateral investment treaty by denying its legitimate expectations to be awarded a contract for the purchase of the housing units.

The arbitral tribunal dismissed all of the investor’s claims, amounting to US$46 million, agreeing with Algeria position on all crucial aspects of the case and in particular that Algeria had not made an unconditional promise to grant public contracts to the investor.

Shearman & Sterling team advising Algeria wiith Partners Emmanuel Gaillard (Picture) and Maude Lebois and associate Charles Bouttier in Paris.

Chemloul & Associs represented Algeria with Partner Mohammed Chemloul and Amel Chemloul in Algiers.

Herbert Smith Freehills represented Ortiz with a team including Of counsel Manuel Rivero and associates Cecilia Tilve and Mlissa Sanchez Mansencaut in Madrid and partner Laurence Franc-Menget and associates Gregory Travaini, Lisa Stefani, Merlin Papadhopulli and Tiphaine Leverrier in Paris.