On 8 February 2005, the Arbitral Tribunal rendered its Decision on Jurisdiction. In the operative part, it ruled as follows:
A. As to the jurisdictional issues with respect to the ECT:
(1) Under Article 26 ECT and the ICSID Convention, the Tribunal has jurisdiction to decide on the merits the Claimant’s claims against the Respondent for alleged breaches of Part III of the ECT.
(2) Article 17(1) ECT has no relevance to the Tribunal’s jurisdiction to determine the Claimant’s claims against the Respondent under Part III of the ECT.
B. As to the merits of the Respondent ’s case under Article 17(1) ECT:
(1) Article 17(1) requires the Contracting State to exercise its right of denial and such exercise operates with prospective effect only, as it did in this case from the Respondent ’s exercise by letter of 18 February 2003.
(2) The second limb of Article 17(1) regarding "no substantial business activities" is met to the Tribunal’s satisfaction in favor of the Respondent; and
(3) The Tribunal declines for the time being to decide the first limb of Article 17(1) regarding the Claimant’s "ownership" and "control.
C. The most favored nation provision of the Bulgaria-Cyprus BIT, read with other BITs to which Bulgaria is a Contracting Party (in particular the Bulgaria-Finland BIT), cannot be interpreted as providing the Respondent’s consent to submit the dispute with the Claimant under the Bulgaria-Cyprus BIT to ICSID arbitration or entitling the Claimant to rely in the present case on dispute settlement provisions contained in these other BITs.
D. The Tribunal rejects the Respondent’s application to suspend the proceedings pending the final outcome of the litigation concerning Dolsamex and Mr. O ’Neill.
E The arbitration will now move to the second phase, that is, an examination of the parties’ claims on the merits.
F. A decision on costs is deferred to the second phase of the arbitration on the merits.
This decision is incorporated by reference into the present award (collectively the "Award").
Article 17 of the ECT provides:
Each Contracting Party reserves the right to deny the advantages of this Part [Part III] to:
(1) a legal entity if citizens or nationals of a third state own or control such entity and if that entity has no substantial business activities in the Area of the Contracting Party in which it is organized;...
Claimant is incorporated in Cyprus. Cyprus is a party to the ECT. Claimant has acknowledged that it does not have significant business activities in Cyprus (Claimant’s Rejoinder on Jurisdiction, footnote 49).
In its Decision on Jurisdiction, the Arbitral Tribunal decided that Article 17(1) of the ECT has no relevance to the Tribunal’s jurisdiction to determine Claimant’s claims against Respondent under Part III of the Treaty (para. 21 supra). It confirms this decision. The Tribunal will, therefore, examine Respondent’s arguments concerning the ownership and control of PCL in order to determine whether they justify a denial of the benefits of Part III to Claimant. As already indicated, the burden of proof to establish ownership and Control is on Claimant.
As the Tribunal stated in its Decision on Jurisdiction, "Mr. Vautrin ’s evidence as to his ultimate ownership and control of the Claimant is not only largely unsupported by contemporary documentation but... is materially inconsistent with parts of that documentation and also contradicted by other statements apparently attributable to Mr. Vautrin..." (para. 177). On the other hand, the Tribunal noted that it did not wish to reject his evidence adduced at the jurisdictional hearing at that stage of the proceedings (para. 178). During the merits phase and at the Final Hearing, the Parties made further submissions on all the evidence submitted, including Mr. Vautrin’s numerous statements and oral testimony. The Tribunal has reached the following conclusions on these disputed matters.
The Arbitral Tribunal has also considered the fact that there is litigation pending in Switzerland, discussed in the Decision on Jurisdiction, in which a company, Dolsamex S.A., and Mr. Timothy O’Neill claim ownership of PCL. However, until that litigation is completed, those claims remain just that: mere claims with allegations that cannot and do not affect the ownership or control of PCL.
In these circumstances, the Arbitral Tribunal decides that Mr. Vautrin owns and controls PCL. Since Mr. Vautrin is a French national (Exh. 1 to Mr. Vautrin’s First Declaration, 25 March 2004), and France is a Contracting Party to the ECT, Respondent cannot rely on Article 17(1) of the ECT to deny to PCL the benefits of Part III of the Treaty.
The Arbitral Tribunal does not accept Claimant’s argument that no approval by the Privatization Agency was necessary for PCL’s acquisition of Nova Plama’s shares because those shares had already been privatized under the First Privatization Agreement. Claimant itself did not at the time act in a manner consistent with the case it is now advancing; it actively sought and obtained the Privatization Agency’s approval to purchase Nova Plama’s shares from EEH. The First Privatization Agreement was clear, in its Article 22, that EEH did not have the right to sell or transfer Nova Plama’s shares for a period of five years without the prior approval of the Privatization Agency. When EEH did, within that period, sell its shares to PCL, the Privatization Agency’s approval was, therefore, required. Claimant’s submission that, even without the Privatization Agency’s agreement, it would have made an Investment within the meaning of ECT is irrelevant because, in fact, it sought and obtained the Privatization Agency’s consent to its purchase of the Refinery.
The Arbitral Tribunal has now to determine whether the alleged misrepresentation did in fact occur as alleged by Respondent, and, if so, what the consequences are for the application of the protections provided under the ECT claimed by Claimant.
Professor Markov cites a Bulgarian Supreme Court decision, in paragraph 55 of his 16 July 2006 opinion, as follows:
What is an interpositioned person? The concept of interpositioned person, known also in legal theory as "straw man" or "wooden head," requires the existence of an agreement between the real right-holder (real party) under the contract, i.e. the person economically interested in the transaction who actually enters into it, and the interpositioned person. Under this agreement the interpositioned person gives his consent that his name will appear in the real estate contract as though he is the party to the contract, whereas the contract is actually between the economically interested person and a third person, the other party to the contract.
In paragraph 56 of his 16 July 2006 opinion, Professor Markov cites the treatise, "Civil Law - General Part" by Professor Pavlova:
§ 5 of the Additional Provisions of TPSOMEA (the Privatization Act) deserves to be noted among the cases of invalidity for prohibition provided for in special legal provisions. Pursuant to this provision the acquisition transactions under this Act shall be invalid where they are executed through an interpositioned person or an undisclosed representative. The law refers to the cases where the transferee under the privatization transaction conceals his name using another person’s name (interpositioned person) or where a person in his own name acquires privatized property acting as a mandatary (a party to a mandate contract) on somebody else’s account and with an obligation to transfer the property acquired to the principal. The severe sanction, envisaged in the provision in question, is designed by the legislator to provide maximum transparency in the acquisitions through privatization transactions. The requirement to reveal the identity of the transferee under the transaction constitutes a guarantee against abuse of official and social position and allows the public to watch closely whether the law is circumvented through follow up actions.
Here, again, we are not dealing with a person who used the name of another person while entering into the Privatization Agreement, nor is the contract signatory acting as a mandatary for somebody else’s account and with an obligation to transfer the investment to the principal. In the present case, PCL was the contracting party, acting for its own account and in its own name.
As noted by Professor Markov in his expert report, Articles 27 and 29 of the Obligations and Contracts Acts (OCA) state:11
Art. 27. Contracts concluded by persons of legal incapacity, or by their agents without observing the requirements established for such agents, as well as contracts concluded under mistake, fraud, duress or extreme necessity shall be subject to invalidation.
Art. 29. Fraud shall constitute grounds for invalidating a contract provided that one of the parties has been misled by the other party into concluding the contract through intentional misrepresentation.
In addition, Article 12 OCA introduces the principle of good faith by stating that "parties must negotiate and enter contracts in good faith." According to Bulgaria’s expert, this principle covers various obligations of the parties, including the obligation to inform the other party of all facts relevant to making a decision concerning the conclusion of the contract.12
In its analysis, the Tribunal will follow Claimant’s presentation of the allegedly unlawful acts and omissions by Respondent (Section C). Accordingly, the Tribunal will first address the allegations regarding environmental damages (Section C.l infra), followed by the allegations regarding the action of the syndics (Section C.2 infra), the so-called paper profits (Section C.3 infra), the privatization of the Varna Port (Section C.4 infra) and Biochim Bank’s unlawful breaches of its debt settlement agreement with PCL (Section C.5 infra). Before addressing these allegations, the Arbitral Tribunal will consider the ECT protections invoked by Claimant (Section B infra). It will rely on those considerations in its subsequent analysis. The Tribunal will commence by presenting a summary of the Parties’ contentions on the merits and the relief sought (Section A infra).
According to Claimant, despite the promises made at the pre-acquisition stage, the Bulgarian Government, its legislative and judicial bodies and other State organs and agencies "dashed" Nova Plama’s prospects of success. PCL found itself "a victim of a series of unlawful acts and omissions which individually and cumulatively defeated its efforts to operate the Refinery beyond 1999 and make good its investment." (Claimant’s Memorial on the Merits, para. 9). These unlawful acts and omissions included:
(i) Environmental damages'. Bulgaria’s sudden and unfair amendment of its environmental law to exclude the State’s liability for past environmental damages at the Refinery site, effectively making Nova Plama and PCL liable instead;
(ii) Paper Profits'. Bulgaria’s failure to amend its corporate income tax laws in a timely manner to enable PCL to file Nova Plama’s annual accounts;
(iii) Varna Port', the unlawful de facto privatization of the Varna Port, which Nova Plama relied upon for its crude oil supply;
(iv) Actions of the Syndics', the unlawful actions of Nova Plama’s syndics who, inter alia, instigated a riot at the Refinery which resulted in the first shutdown of the Refinery in April 1999; and
(v) Biochim Bank', the State-owned Biochim Bank’s deliberate breaches of its debt settlement agreement with PCL.
It is Claimant’s view that these acts are wholly the responsibility of Bulgaria and constitute a violation of several of the protections owed by Bulgaria under Articles 10(1) and 13 of the ECT. In particular, Claimant alleges that Bulgaria has:
(a) failed to create a stable, equitable, favorable and transparent conditions for making the investment;
(b) failed to provide fair and equitable treatment to Claimant’s investment;
(c) failed to provide to Claimant’s investment the most constant protection and security;
(d) subjected Claimant’s investment to unreasonable measures;
(e) breached contracts with PCL; and
(f) subjected Claimant’s investment to measures having an effect equivalent to expropriation.
(a) an order that Bulgaria pay PCL compensation for losses suffered as a result of the expropriation of its investment in the amount of USD122,258,000;
(b) an order that Bulgaria pay PCL compound interest on such compensation at a commercial rate from December 15, 1999 until the date of payment;
(c) in the alternative, an order that Bulgaria pay PCL (i) compensation for losses suffered as a result of the Other ECT Breaches, in the amount of USD122,258,000 and compound interest on the compensation awarded at a commercial rate established from December 15, 1999 until the date of payment;
(d) an order that Bulgaria pay PCL ’s costs occasioned by this arbitration, including the arbitrators’ fees and administrative costs fixed by ICSID, the expenses of the arbitrators, the fees and expenses of its experts, and the legal costs incurred by the parties (including fees of counsel); and
(e) any other relief that the Tribunal deems appropriate.
(a) to confirm that it has jurisdiction to entertain the claim as submitted by PCL and that such claims are admissible;
(b) to order the Republic of Bulgaria to indemnify Claimant in the amount of US$ 122,258,000 representing the fair market value of its investment in the Plama Refinery;
(c) subsidiarily, to order the Republic of Bulgaria to pay Claimant an amount of US$13,862,152 for its losses, outlays, unpaid loans, financings and expenses relating to its investment in the Plama Refinery, all of which have been lost due to Bulgaria ’s actions, together with compensation in the amount of US$ 10,000,000 representing its loss of a chance or opportunity of making a commercial success of the project.
(d) to award compound interest at a commercial rate on all sums awarded pursuant to b) and/or c) above from 15 December 1999 through the date of award and until such award is effectively paid in full;
(e) to declare that all costs of this arbitral proceeding, including legal fees, are to be borne by the Republic of Bulgaria; and
(f) to grant Claimant such other relief as the Arbitral Tribunal may deem appropriate.
(a) Environmental Damages: Claimant mischaracterizes not only the state of Bulgarian environmental law that was applicable when it acquired Nova Plama but also the terms of the First Privatization Agreement and of the 1999 amendment to the environmental law (Respondent’s Counter-Memorial on the Merits, para. 72);
(b) Actions of the Syndics: the syndic’s actions are not legally attributable to the State and, in any event, Claimant has failed to demonstrate in what manner the syndics acted contrary to law or otherwise improperly and in a manner that caused any harm to Claimant (Respondent’s Counter-Memorial on the Merits, para. 72);
(c) Paper Profits', the ECT Contracting States do not accept obligations under Article 10 of the ECT with regard to taxation and, in any event, the Bulgarian tax code and accounting rules were transparent and accessible to Claimant; and it had no basis to expect that it would receive some sort of exemption or special treatment (Respondent’s Counter-Memorial on the Merits, paras. 285, 308-309);
(d) Varna Port', the Varna Port is not "exclusive state property" and Claimant never had any legitimate or reasonable expectation that it would remain in the possession of the State; and its privatization was lawful (Respondent’s Counter-Memorial on the Merits, para. 311); and
(e) Biochim Bank'. Biochim Bank acted in a commercially predictable and reasonable manner in all its dealings with Nova Plama and did not breach any contractual obligations (Respondent’s Counter-Memorial on the Merits, para. 360).
(a) Claimant failed to establish a causal connection between Bulgaria ’s conduct and the failure of its investment; [footnote omitted]
(b) Claimant failed to particularize and quantify its alleged loses; [footnote omitted]
(c) Claimant’s use of the DCF method of valuation is inappropriate because Plama has no relevant history of profitability as its cash flows for years were all negative; [footnote omitted]
(d) Even if one were to accept a valuation of Claimant’s investment on the basis of the DCF method, Claimant’s valuation of Plama is flawed in numerous material respects; [footnote omitted]
(e) Plama was not a money-making enterprise [footnote omitted].
The Tribunal observes that, on a number of occasions, tribunals in investment arbitrations have found a strong correlation between this standard and the fair and equitable treatment standard. For instance, the tribunal in Saluka noted that:
The standard of "reasonableness" has no different meaning in this context than in the context of the "fair and equitable treatment" standard with which it is associated; and the same is true with regard to the standard of "non-discrimination". The standard of "reasonableness" therefore requires, in this context as well, a showing that the State’s conduct bears a reasonable relationship to some rational policy, whereas the standard of "non-discrimination" requires a rational justification of any differential treatment of a foreign investor.39
The relevant part of Article 13 of the ECT reads as follows:
Investments of Investors of a Contracting Party in the Area of any other Contracting Party shall not be nationalized, expropriated or subjected to a measure or measures having effect equivalent to nationalization or expropriation (hereinafter referred to as "Expropriation") except where such Expropriation is:
(a) for a purpose which is in the public interest;
(b) not discriminatory;
(c) carried out under due process of law; and
(d) accompanied by the payment of prompt, adequate and effective compensation.
Such compensation shall amount to the fair market value of the Investment expropriated at the time immediately before the Expropriation or impending Expropriation became known in such a way as to affect the value of the Investment (hereinafter referred to as the "Valuation Date").
The Tribunal observes that it is widely acknowledged that expropriation can result from State conduct that does not amount to physical control or loss of title but that adversely affects the economic use, enjoyment and value of the investment. This approach was adopted by the Iran-U.S. Claims Tribunal in the Starret Housing Corp v. Iran case in the following terms:
[I]t is recognized by international law that measures taken by a State can interfere with property rights to such an extent that these rights are rendered so useless that they must be deemed to have been expropriated even though the state does not purport to have expropriated them and the legal title to the property formally remains with the original owner.45
This position has been reiterated by a number of subsequent arbitral tribunals. In the Tecmed v. Mexico arbitration, the tribunal stated:
... it is understood that the measures adopted by a State, whether regulatory or not, are an indirect de facto expropriation if they are irreversible and permanent and if the assets or rights subject to such measure have been affected in such a way that "... any form of exploitation thereof..." has disappeared; i.e. the economic value of the use, enjoyment or disposition of the assets or rights affected by the administrative action or decision have been neutralized or destroyed... Under international law, the owner is also deprived of property where the use or enjoyment of benefits related thereto is exacted or interfered with to a similar extent, even where legal ownership over the assets in question is not affected, and so long as the deprivation is not temporary. The government’s intention is less important than the effects of the measures on the owner of the assets or on the benefits arising from such assets affected by the measures; and the form of the deprivation measure is less important than its actual effects. (Footnotes omitted)46
In case of restitution, privatization or investment in new construction facilities by foreign and Bulgarian natural and legal persons, such persons shall not be liable for environnemental damages resulting from past actions or omissions.48
The Second Privatisation Agreement (Article 4) provided that:
Plama Consortium Limited shall ensure the maintenance of the required level of the environmental conditions related to the activities of the company in accordance with the provisions of the Bulgarian law. Plama Consortium shall bear no responsibility for any environmental pollution arising prior to the date of signing of this Agreement." (R ’s Exh. 676)
In the event of privatisation, with the exception of privatisation agreements concluded prior to 1 February 1999, or in case of restitution, or in the event of investment in new construction facilities by foreign and Bulgarian natural and legal persons, the liability for any environmental damages resulting from past actions or omissions shall be borne by the State under such terms and procedures as set forth by the Council of Ministers.
Respondent contests the reliability of an expert report prepared for Nova Plama in 1999 (the so-called "Control P. Report" - R’s Exh. 521) as an assessment of the measure of past environmental damage. It is upon this report that Claimant relies to determine its estimate of the cost of remediation of past environmental damage. Respondent contends that the Control P. Report is not consistent with the established methodology for assessing the existence of damages actually requiring remediation and that it does not properly assess the costs of any such remediation. It contends that the report fails to distinguish between remediation of past environmental damages and measures regarding compliance with current regulations for re-establishing refinery operations and does not set out reliable costs estimates for the measures it advises should be taken (Respondent’s Counter-Memorial on the Merits, paras. 130 et seq.).
In light of the foregoing, the Arbitral Tribunal comes to the question of whether there is any element in this confusing situation which establishes a violation by Bulgaria of its obligations under the ECT.
The Arbitral Tribunal finds no evidence that the modification of Bulgaria’s environmental law in 1999 was aimed directly against Claimant and its investment in Nova Plama or in favor of Neftochim. That modification, implemented pursuant to recommendations made by the World Bank, is seen by the Arbitral Tribunal rather as an effort by Bulgaria to meet its obligations under Article 10(1) of the ECT to create favorable conditions for Investors.
With respect to Claimant’s allegation as to the violation of the last sentence of Article 10(1) of the ECT, the Tribunal finds no violation by Bulgaria of its contractual undertakings to PCL. The amendment of the Environmental Law did not breach Article 4 of the Second Privatization Agreement since this provision did not shift Nova Plama’s liability to the State.
In addition, the Arbitral Tribunal has examined the evidence to see what harm or loss to Claimant or its investment resulted from Nova Plama’s liability to clean up past pollution, assuming it existed. Claimant’s contention that it could not obtain financing for the project given the large liability for past pollution on its books is not supported by sufficient documentary evidence of a contemporary nature. The only document in the record is a letter from a Swiss insurance company, Intersure, (C’s Exh. 204) saying that it needed "confirmation that the outstanding ecological issue has been solved." But such a letter from one insurance company hardly proves that financing was impossible to obtain because of any liability for environmental clean-up. As Counsel for Claimant stated at the January-February 2008 hearing (H. Tr. Day 1, 28 January 2008, p. 42), "no company or bank would advance money to [Nova Plama] because Plama itself had bad credit."
Given this conflicting evidence, the Arbitral Tribunal is unable to form any firm view as to what really transpired. The burden of proof being on Claimant, the Tribunal cannot, therefore, rule in its favor concerning these allegations, including with respect to its claim under Article 12 of the ECT.
Except as otherwise provided in this Article, nothing in this Treaty shall create rights or impose obligations with respect to Taxation Measures of the Contracting Parties. In the event of any inconsistency between this Article and any other provision of the Treaty, this Article shall prevail to the extent of the inconsistency [...]
Even putting aside Article 21 of the ECT, the Tribunal finds no action by Respondent which comes anywhere near to being unfair or inequitable treatment or amounting to expropriation. When Claimant purchased the shares of Nova Plama and negotiated its Debt Settlement Agreement, it was or should have been aware of the taxation treatment that would be accorded to debt reduction by Bulgarian law. It could not have had any legitimate expectation that it would be treated otherwise. It had Ernst & Young, one of the world’s leading tax advisory firms, advising it on its acquisition.
The evidence also shows that Bulgaria did not in fact seek to collect the taxes which were due from Nova Plama.57 On the contrary, there is much evidence in the record which demonstrates the Government of Bulgaria’s efforts to try to assist Claimant and Nova Plama in this respect (C’s Exhs. 273, 275, 282). While in its Post-Hearing Submission, Claimant asserts that its damage from the "hollow" tax is readily quantifiable at USD 23 million (see para. 91), nowhere does it say that it ever had to pay any such tax. And in the end, in 2001, Bulgaria changed its tax laws to exempt Nova Plama from any taxation on these "paper profits". (See Report of Transacta, 28 July 2006, paras. 59 et seq.-, Respondent’s Counter-Memorial on the Merits, paras. 289-301; Respondent’s Rejoinder on the Merits, paras. 123-4). In terms of diligence, Bulgaria’s behavior with regard to the above is beyond reproach and the claim concerning the violation of the standard of constant protection and security under the ECT is without merit.
In conclusion, the Arbitral Tribunal finds no evidence that Bulgaria violated its obligations under the ECT (assuming it applies to this issue) towards Claimant with respect to the paper profits issue and, therefore, rejects Claimant’s claims.
Claimant’s contentions that Respondent violated its obligations vis-à-vis PCL under the ECT can be dismissed in a relatively brief manner. This is so because the Arbitral Tribunal finds no evidence that Nova Plama was in any way denied access to Varna Port and to the use of its facilities on commercially reasonable terms. In its submissions to the Tribunal, Claimant complains about the effects of the privatisation of Varna Port on its ability to use the port and its facilities. It alleges that the new owner of the port threatened Nova Plama’s representatives and intended to drive the company back into bankruptcy; but the Tribunal has been unable to verify these allegations through any cogent evidence in the record. Otherwise, the concerns expressed by Claimant seem largely theoretical; and there is persuasive evidence that in practice - if Nova Plama had really wanted access to the port and its facilities - it could have obtained it on terms equivalent to other users. The evidence shows that Rexoil, an affiliated company of Nova Plama, imported oil through Varna Port throughout the year 1999. Why Nova Plama could not do the same was never explained to the satisfaction of the Arbitral Tribunal.
The fact that the Government privatized Varna Port is not, in and of itself, violative of any obligation it owed to Claimant under the ECT. There is nothing in the ECT which would prevent Bulgaria from privatizing its ports so long as it was done in a way which did not discriminate against Claimant and did not deprive it of a right necessary to the economic operation of the Refinery - a right which it obtained under its agreements with the Government to purchase the shares of Nova Plama. Nothing in the evidential record persuades the Tribunal that the privatization of Varna Port was done otherwise.61 As for Bulgaria’s amendment of its Maritime Law in 2004, the Arbitral Tribunal finds nothing arbitrary or unlawful in this enactment.
Respondent’s final argument that, in any event, this amendment occurred after 18 February 2003, when Bulgaria exercised its right to deny the privileges of the ECT to Claimant, falls away, given that the Tribunal in this Award decides that Mr. Vautrin owned or controlled Claimant (para. 95 supra).
As noted above, Claimant contends that Biochim Bank, a State-owned bank, "coerced" Nova Plama into accepting "burdensome amendments" and deliberately refused to fulfill its obligations under the Debt Settlement Agreement and the Recovery Plan, causing Nova Plama great difficulties in obtaining new financing. Moreover, Claimant alleges that the State interfered with Biochim Bank and prevented it from reaching a settlement agreement with Nova Plama prior to Biochim Bank’s privatization. Claimant attributes this unlawful conduct to the State on one of two alternative grounds: (i) because Biochim Bank was a State-owned bank and the State used its ownership interest to direct the bank’s acts; and (ii) because of the application of Article 22 of the ECT to Biochim Bank’s conduct.
Article 8 of the ILC Articles on State Responsibility contemplates the possibility that the conduct of companies or enterprises owned or controlled by the State be attributable to that state. In the Commentary to the Articles, the ILC notes that:
Since corporate entities, although owned by and in that sense subject to the control of the State, are considered to be separate, prima facie their conduct in carrying out their activities is not attributable to the State, unless they are exercising elements of governmental authority..63
However, before the question of attribution arises, it is first necessary to determine whether the corporation has in fact engaged in an unlawful act. The ILC notes in this respect that "[i]f such corporations [State-owned and controlled] act inconsistently with the international obligations of the State concerned the question arises whether such conduct is attributable to the State."64 The Arbitral Tribunal will therefore proceed to determine whether Biochim Bank acted inconsistently with Respondent’s obligations under the ECT.
On the evidence before it, the Arbitral Tribunal is not persuaded that Biochim Bank acted vis-à-vis Claimant and Nova Plama other than reasonably for its own commercial interests. Nor does it accept Claimant’s argument that Biochim Bank’s refusal to give up its mortgage over Nova Plama’s assets amounted to a breach by Respondent of its obligations vis-à-vis Claimant in violation of Article 10(1) of the ECT.
Under these circumstances, the Tribunal considers that Biochim Bank has not engaged in any unlawful act. There is, therefore, no need to address the question of attribution, nor the issue under Article 22 of the ECT.
Claimant contended that the re-opened bankruptcy proceedings in 2005 were violative of its rights (Claimant’s Memorial on the Merits, paras. 229 et seq). The claim was subject to supplementation, depending on the outcome of local proceedings initiated to contest the decision to re-open the bankruptcy proceedings. Claimant did not submit evidence which persuaded the Tribunal of the merits of this claim.
Already registered ?