Data

Date:
01-06-2012
Country:
International Centre for Settlement of Investment Disputes (ICSID)
Number:
ARB/09/12
Court:
International Centre for Settlement of Investment Disputes (ICSID)
Parties:
Pac Rim Cayman LLC vs The Republic of El Salvador

Keywords

DISPUTE BETWEEN A UNITED STATES COMPANY AND THE SALVADORAN GOVERNMENT OVER THE LATTER'S ARBITRARY REFUSAL TO GRANT THE FORMER A MINING EXPLOITATION CONCESSION - REFERENCE TO UNIDROIT PRINCIPLES TO INTERPRET APPLICABLE LAW (INTERNATIONAL LAW)

JURISDICTION OF ICSID ARBITRAL TRIBUNAL CHALLENGED ON THE GROUND THAT DISPUTE HAD ARISEN WHEN CLAIMANT WAS NOT YET A UNITED STATES COMPANY

BREACH OF AN OBLIGATION UNDER INVESTMENT TREATY BY OMISSION - EXPLICIT REFUSAL TO GRANT CONCESSION NOT NECESSARY - MERE FAILURE TO RESPOND TO APPLICATION SUFFICIENT - REFERENCE TO ARTICLE 7.1.1 UNDIROIT PRINCIPLES

Abstract

Pac Rim Cayman LLC, a company organised under the law of Nevada, submitted a request for arbitration to the International Center for the Settlement of Investment Disputes (ICSID) invoking the violation by the Government of the Republic of El Salvador of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA). According to Claimant, Respondent was guilty of arbitrary and discriminatory conduct, lack of transparency, unfair and inequitable treatment in failing to act upon Claimant's application for a mining exploitation concession. Respondent denied the jurisdiction of the Arbitral Tribunal on the ground that according to the CAFTA the Tribunal was competent only with respect to disputes arising between nationals of two Contracting Parties, whereas in the case at hand the dispute had arisen at a time when Claimant was not yet a U.S. company but was still organised under the law of the Cayman Islands. Claimant rejected this argument on the ground that the events giving rise to the dispute, i.e. the refusal by the Government of El Salvador to grant the mining exploitation concession, occurred after its change of nationality so that the dispute came under the Tribunal's jurisdiction.

In deciding in favour of Respondent on this point the Tribunal pointed out that, although the explicit statement by the Government of El Salvador not to grant the concession was made after Claimant had become a U.S. company, the alleged violation of Defendant's obligations under the CAFTA had already begun beforehand by its continuous failure to respond to Claimant's application. In support of its finding the Tribunal referred to the ICSID decision in African Holding of America Inc. and Société Africaine de Construction au Congo S.A.R.L. vs Democratic Republic of Congo (ICSID Case No. ARB/05/21 of 29 July 2008)(see UNILEX) and the reference therein contained to Article 7.1.1 of the UNIDROIT Principles according to which non-performance includes defective or late performance.

Fulltext

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Source

See http://www.italaw.com/sites/default/files/case-documents/ita0935.pdf}}