|Arbitration Rules||ICSID Rules of Procedure for Arbitration Proceedings 2006|
|Cl. C-Mem. Jur.||Claimants' Counter-Memorial on Jurisdiction originally dated June 1, 2018 and modified on June 6, 2018|
|Cl. Mem. Merits||Claimants' Memorial on the Merits dated December 15, 2015|
|Cl. Rej. Jur.||Claimants' Rejoinder on Jurisdiction dated September 7, 2018|
|CL-[#]||Claimants' Legal Authority|
|Cyprus-BLEU BIT||Agreement between the Republic of Cyprus and the Belgo-Luxemburg Economic Union on the Reciprocal Promotion and Protection of Investment, which entered into force on June 5, 1999|
|Cyprus-Greece BIT||The Agreement between the Government of the Hellenic Republic and the Government of the Republic of Cyprus for the Reciprocal Encouragement and Protection of Investments, which entered into force on February 26, 1993|
|Hearing||Hearing on Jurisdiction held from May 17, 2019 through May 18, 2019|
|ICSID Convention||Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated March 18, 1965|
|ICSID or the Centre||International Centre for Settlement of Investment Disputes|
|Resp. Mem. Jur.||Respondent's Memorial on Jurisdiction dated March 16, 2018|
|Resp. Rep. Jur.||Respondent's Reply on Jurisdiction dated July 27, 2018|
|RL-[#]||Respondent's Legal Authority|
|Tr. Day [#] [page]||Transcript of the Hearing|
|Tribunal||Arbitral tribunal constituted on September 28, 2016 and reconstituted on November 9, 2018 after the passing away of arbitrator Francisco Orrego Vicuña|
Professor Donald M. McRae President
Mr. Alejandro Escobar Arbitrator
Professor Marcelo G. Kohen Arbitrator
Ms. Martina Polasek Secretary of the Tribunal
For the Claimants:
Mr. Stephen Fietta Fietta LLP
Mr. Ashique Rahman Fietta LLP
Ms. Oonagh Sands Fietta LLP
Mr. Olav Haazen Grant & Eisenhofer P.A.
Ms. Caitlin Moyna Grant & Eisenhofer P.A.
Ms. Alice Cho Lee Grant & Eisenhofer P.A.
Mr. George Martsekis Grant & Eisenhofer P.A.
Mr. Toby Saviano Grant & Eisenhofer P.A.
Ms. Stephanie Johnson Grant & Eisenhofer P.A.
Mr. Geoffrey Jarvis Kessler Topaz Meltzer & Check, LLP
Mr. Ioannis Kyriakopoulos Kyros Law Offices
Ms. Maria Skiadioti Kyros Law Offices
Mr. Panagiotis Terlegkas Claimant
Ms. Vasiliki Terlegka Claimant
Mr. Georgios Androulakis Claimant
Mrs. Ioanna Giannakopoulou Wife of Mr. Georgios Androulakis
Mr. Evangelos Kopsidas Claimant
Mr. Tommy Dimopoulos Nephew of Mr. Evangelos Kopsidas
Mr. John Kontrafouris Claimant
Ms. Stella Kontrafouris Wife of Mr. Kontrafouris
For the Respondent:
Mr. Mark H. O'Donoghue Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr. Peter M. Wolrich Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr. Justin M. Jacinto Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr. Guillermo A. Ulke Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms. Luciana Ricart Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr. William Hampson Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms. Sena Tsikata Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr. Odysseas E. Stergianopoulos Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms. Madeline Murphy Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms. Bailey Ellicott Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr. Marvin Alexis Curtis, Mallet-Prevost, Colt & Mosle LLP
Mr. Joshua R. Krichman Curtis, Mallet-Prevost, Colt & Mosle LLP
Ms. Elena Zachariadou Law Office of the Republic of Cyprus
Ms. Mary-Ann Stavrinides Law Office of the Republic of Cyprus
Ms. Avgi Chrysostomou Ministry of Finance of the Republic of Cyprus
Mr. Michalis C. Stylianou Central Bank of Cyprus
Mr. Maria S. Kettirou Central Bank of Cyprus
Ms. Michelle Kirkpatrick B&B Reporters
Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.14
than six months after the former was transmitted.76 Accordingly, the Luxembourg Claimant failed to observe the waiting period required under the BIT.
(9) The Cyprus-Greece BIT's fork-in-the-road clause precludes Claimants that brought the dispute to the Cypriot courts from resorting to arbitration
This Tribunal's jurisdiction is derived from international law, not EU Law. The Claimants submit that the Achmea Ruling is not binding upon this Tribunal, relying on awards such as Marfin.92 The application of the Achmea Ruling is limited as the CJEU only pronounced itself on whether investor-state arbitration under the BIT in that particular case was precluded by EU law. No findings were made regarding the general compatibility of intra-EU BITs with EU law and whether all intra-EU BITs are superseded by EU law.93
Marfin Investment Group Holdings S.A., Alexandros Bakatselos and others v. Republic of Cyprus (ICSID Case No. ARB/13/27), Award, July 26, 2018, CL-0264 ("Marfin" or "Marfin v. Cyprus").
Cl. Rej. Jur., paras. 62-63.
The Claimants mainly rely on the Alemanni and Ambiente awards which do not preclude a plurality of claimants.124 They agree with the jurisdictional test in Alemanni and Funnekotter : jurisdiction will exist where the claimants have (i) proper nationality under the treaty; (ii) the subject-matter arises "directly out of an investment by the claimants in the territory of the Respondent" and (iii) claims were brought for conduct that occurred after the relevant BIT came into force.125
Cl. C-Mem. Jur., paras. 117-120. See also Alemanni and Ambiente.
Having concluded that the present dispute constitutes a multi-party proceeding, a further conceptual clarification is in place: A multi-party proceeding can be the result of the initial submission of a certain number of separate individual arbitrations which are subsequently consolidated and joined with each other. There can be no doubt that such an ex post joinder or consolidation of proceedings is subject to a specific consent of the Parties....
The present dispute is not a case of consolidation of proceedings, however, but the original submission of a claim by a plurality of Claimants in one single ICSID proceeding. This appears to be conceded by the Respondent itself when it states in relation to the Abaclat case – which is analogous in this regard to the present dispute – that there "the claims were not filed on a separate basis and later aggregated, but were filed on an aggregate basis from the beginning, and may not be treated as individual claims.142
The Claimants rely on a series of other ICSID decisions to argue that a single multi-party claim does not require "specific or additional consent."143 Moreover, it is common for multiple claimants to initiate one arbitration under multiple BITs under the ICSID regime.144 The A v. B case relied on by the Respondent is irrelevant as it is not an ICSID case.
Cl. Rej. Jur., para. 211; See Flughafen Zürich A.G. and Gestión e Ingeniería IDC S.A. v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/10/19), Award, November 18, 2014, paras. 399-400, CL-0256 ("In reality, there is no consolidation of any kind; what has been produced is a joint claim brought by two Claimants, who had constituted a Consortium in Venezuela, and who claim that the same set of facts, attributable to Venezuela, has caused damage to their investment. The two Claimants agreed to act jointly in this arbitration... The consolidation in international arbitration consists of unifying in a single arbitration two or more proceedings initiated separately. In this arbitration from the beginning there was only one dispute that two Claimants filed against one Respondent - we are facing a multiplicity of plaintiffs, not a consolidation of proceedings.").
Cl. Rej. Jur., para. 212.
The Claimants argue that the Poštová award is an outlier and erroneous148 and further critique the Berschader award, pointing instead to other lines of investor-state jurisprudence which extend the scope of investment to indirect investments even if not expressly stipulated in the definition.149 Even if Poštová is followed, the present facts are distinguished on the basis that "the Greek Claimants who own indirect investments in Cyprus clearly had a right to the assets held by their investment vehicles."150
Cl. C-Mem. Jur., paras. 185-196.
Cl. C-Mem. Jur., paras. 175-178; Cl. Rej. Jur., para. 193; See Tza Yap Shum v. Republic of Peru (ICSID Case No. ARB/07/6), Decision on Jurisdiction (Spanish), June 19, 2009, para. 101, CL-0229. Ioannis Kardassopoulos v. Georgia (ICSID Case No. ARB/05/18) ("Kardassopoulos") was equally clear on this point. After noting the lack of express wording on whether an indirectly held asset was an "investment," it quoted the tribunal in Siemens and held that: "the indirect ownership of shares by Claimant constitutes an 'investment' under the BIT and the ECT." See Kardassopoulos, Decision on Jurisdiction, July 6, 2007, para. 124, CL-0201.
Cl. Rej. Jur., para. 198.
Further, the Claimants argue that there is no basis to the Respondent's specific allegations with regard to a small number of Claimants who hold "indirect" investments. Mr. Leontiadis owned Seaworthy Bay Inc. well before the dispute arose.151 Mr. Melas also owned his Cypriot and Liberian holding companies before the dispute arose.152 With regard to Mr. Kopsidas and Mr. Sarioglou, their investments are protected under the Cyprus-Greece BIT even though they were owned through "beneficial interests" in intermediary companies.153 Jurisdiction is not precluded when claimants who are shareholders own investments through a corporate chain, including multiple intermediary companies, even when the companies are incorporated in third states.154 Finally, there is no distinction between investments acquired through a majority or minority interest in a holding vehicle. Therefore, the investments owned by Messrs. Konstantinou and Chrissovelonis, who own minority shares in companies registered in Cyprus, which in turn hold assets in Bank of Cyprus and Laiki, are also covered by the Cyprus-Greece BIT.155
Cl. Rej. Jur., para. 202.
Cl. Rej. Jur., para. 203.
Cl. Rej. Jur., para. 204, referring to Occidental Petroleum Corporation and Occidental Exploration and Production Company v. Republic of Ecuador (ICSID Case No. ARB/06/11), Decision on Annulment, November 2, 2015, para. 259, CL-0269.
Cl. Rej. Jur., paras. 206-209, referring to Yury Bogdanov v. Moldova, SCC Arbitration No. V114/2009, Final Arbitral Award, March 30, 2010, para. 67, CL-0231.
Cl. Rej. Jur., para. 208.
Additionally, the Claimants contend that notice/resolution provisions are non-jurisdictional in nature, relying on a series of arbitral awards such as Biwater v. Tanzania, Bayindir v. Pakistan, and Société Générale v. Pakistan.167 Further, relying on a series of arbitral awards and academic commentaries, the Claimants argue that if settlement is deemed to be futile, failure to comply with the notice/resolution provision does not impede jurisdiction.168
Cl. C-Mem. Jur., paras. 204-206; Cl. Rej. Jur., para. 221; See Biwater Gauff (Tanzania) Ltd. v. Tanzania (ICSID Case No. ARB/05/22), Award, July 24, 2008, CL-0066; Bayindir Insaat Turzim Ticaret Ve Sanayi A.S. v. Pakistan (ICSID Case No. ARB/03/29), Decision on Jurisdiction, November 14, 2005, CL-0063; Société Générale de Surveillance S.A. v. Pakistan (ICSID Case No. ARB/01/13), Decision on Objections to Jurisdiction, August 6, 2003, CL-0226.
Cl. C-Mem. Jur., paras. 207-210; Cl. Rej. Jur., para. 222.
(9) Claimants do not violate the fork-in-the-road provision
The Claimants agree that Article 9(2) of the Cyprus-Greece BIT is a fork-in-the-road provision but dispute the applicable test for the preclusion of claims and the basis upon which it is triggered. The Claimants submit that the prevailing test is the "Triple Identity" test, as established by a series of arbitral tribunals.174 Under this test, a claim is precluded under the provision if: (i) the dispute is between the same parties, (ii) the same object is at stake and (iii) the dispute arises under the same claim.175 The Claimants also submit that the purpose of the fork-in-the-road clause is to "prevent parallel proceedings concerning the same investment dispute from being conducted in different fora"176 as opposed to limiting all claims.177
Cl. C-Mem. Jur., paras. 264-265.
Cl. C-Mem. Jur., para. 267.
i. The CJEU has ruled that Article 267 and 344 of the TFEU preclude a provision in a bilateral investment treaty between two EU states allowing for claims to be brought by the nationals of a member state against another member state.
ii. In accordance with Articles 59 and 30 of the VCLT, the later treaty, the TFEU, takes priority over the earlier BITs, including the Cyprus-Greece BIT and the Cyprus-BLEU BIT.
iii. BITs between two EU states are incompatible with the EU Treaties.
Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.203
With respect to the first basis for considering EU law, the Tribunal does not see the fact that the domestic law of the parties may be based on EU law to be relevant to the determination of its jurisdiction. The jurisdiction of a tribunal established under international agreements has to be determined by international law and although the domestic law of the parties may be relevant for determining certain matters, such as whether a claimant is in fact a national of one of the parties to the BIT, it is not a basis for determining whether a tribunal has jurisdiction over the dispute. As the tribunal in CSOB v. Slovakia208 pointed out,
The question whether the parties have effectively expressed their consent to ICSID jurisdiction is not be be answered by reference to national law. It is governed by international law as set out in Article 25(1) of the ICSID Convention.
A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject matter and: (a) it appears from the later treaty or is otherwise established that the parties intended that the matter should be governed by that treaty; or (b) the provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable of being applied at the same time.
When all the parties to the earlier treaty are parties also to the later treaty but the earlier treaty is not terminated or suspended in operation under article 59, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty.
[T]he test of whether two treaties deal with the "same subject matter" is resolved through the assessment of whether the fulfilment of the obligation under one treaty affects the fulfilment of the obligation of another. This "affecting" might then take place either as strictly preventing the fulfilment of the other obligation or undermining its object and purpose in one or another way.
Any dispute between either Contracting Party and an investor of the other Contracting Party concerning an investment, expropriation or nationalization of an investment…
any legal dispute arising directly out of an investment between a Contracting State… and an investor of another Contracting State which the parties to the dispute consent in writing to submit to the Centre.
Assuming that the Tribunal has jurisdiction over the claims of several Claimants, it is difficult to see how such a Tribunal could lose such jurisdiction when the number of Claimants outgrows a certain threshold.228
Although this is hardly a satisfactory basis on which to rest jurisdiction, it is grounded on an important point. A claim can only proceed if a tribunal has jurisdiction over a claimant. Thus, in multi-party proceedings a tribunal must have jurisdiction over each of the individual claimants.
Any dispute relating to investments that arises between an investor from one of the Contracting Parties and the other Party…231
The Alemanni tribunal concluded that it was unable to determine the actual rights of each party, and whether the actual effects of Argentina's conduct on those rights were sufficiently similar to constitute a single dispute, because these questions were closely intertwined with the substance of the dispute between the parties. Thus, it decided to defer a decision on whether it had jurisdiction until the merits phase, thus joining jurisdiction to the merits.232
The actual process set out by the Abaclat tribunal in subsequent procedural orders involved consideration of the merits in two main phases, Phase 2 and Phase 3, with Phase 2 divided into three sub-phases. The first part of Phase 2 involved the tribunal in identifying the issues on the merits on the basis of the submissions of the parties and the second phase involved verification of the data provided by the claimants on each individual claim, dealing with such matters as "nationality and domiciliation requirements, and that they have made relevant investments".258 The verification process was to be conducted by experts appointed by the tribunal.
Abaclat and others v. Argentine Republic (ICSID Case No. ARB/07/5), Procedural Order No. 12, July 7, 2012, para. S(i).
Any arbitration proceeding shall be conducted in accordance with the provisions of this Section and, except as the parties otherwise agree, in accordance with the Arbitration Rules in effect on the date on which the parties consented to arbitration. If any question of procedure arises which is not covered by this Section or the Arbitration Rules or any rules agreed by the parties, the Tribunal shall decide the question.
The development of procedural rules for dealing with mass claims does not constitute merely filling a gap in the ICSID framework, but rather involves developing an entire framework for a new form of proceeding.267
The present Tribunal agrees. Article 44 permits a tribunal to deal with a question of procedure that arises when applying the existing procedural framework and the question is not answered by the existing rules. It does not provide a mandate for a tribunal to invent its own procedural framework.
The Claimants argue that this proceeding is not a consolidation of separate proceedings but instead a single proceeding with a plurality of claimants,279 as upheld in the Ambiente jurisdictional decision.280 The Claimants argue further that several ICSID decisions hold that the initiation of a single proceeding by multiple claimants does not require "specific or additional consent."281 The Claimants add that it is common for multiple claimants to initiate one arbitration under multiple BITs under the ICSID Convention.282 They submit that the A v. B case is not an ICSID case and is therefore irrelevant.
Cl. Rej. Jur., para. 210.
Ambiente, paras. 123-124.
Cl. Rej. Jur., para. 211; See Flughafen Zürich A.G. and Gestión e Ingeniería IDC S.A. v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/10/19), Award, November 18, 2014, paras. 399-400, CL-0256.
Cl. Rej. Jur., para. 212.
The Respondent argues that certain claims based on indirectly held investments should be dismissed because the Cyprus-Greece BIT does not expressly provide for the protection of indirect investments.283 The Respondent argues that Claimants may not establish jurisdiction by asserting ownership of, or other interests in, entities established in Cyprus or third states which in turn hold assets in Cyprus.284 The Respondent notes that each of the Contracting Parties has concluded BITs with other states expressly covering indirect investments.285 To read the same provision into the Cyprus-Greece BIT would undermine and render otiose the express references to indirect investments in those other treaties.286 The Respondent further relies on the Poštová banka287 award to argue that the Cyprus-Greece BIT, under which it was rendered, does not entitle shareholders of an entity to treat the latter's investment as the shareholder's own.
Resp. Mem. Jur., paras. 453-459; Resp. Rep. Jur., paras. 204-208.
Resp. Mem. Jur., para. 452.
Resp. Mem. Jur., para. 454.
"DESIRING to strengthen their economic cooperation to the mutual benefit of both countries on a long term basis,
HAVING, as their objective, to create favourable conditions for investments by investors of either Contracting Party in the territory of the other Contracting Party,
RECOGNISING that the promotion and protection of investments, on the basis of the present Agreement, will stimulate the initiative in this field."
• Claimant No. 221 is designated as Mr. Ioannis Leontiadis, but the Respondent contends that the actual Claimant is a Liberian company, Seaworthy Bay Inc., which authorized its director Mr. Leontiadis to claim on its behalf. The Respondent says there is no indication Mr. Leontiadis is even a shareholder of Seaworthy Bay Inc.339 In addition, this company authorized Mr. Leontiadis to bring a claim on its behalf only after the initial notice of dispute and thus the claim is an abusive attempt to create jurisdiction over a pre-existing dispute.340 Even if Mr. Leontiadis is considered to be the owner of Seaworthy Bay Inc., the bonds are held by another U.K. entity and Mr. Leontiadis is at best an owner of indirect investments.341
• Claimant No. 2, CNP Asfalistiki Ltd, does not appear to be a Greek national, and the Claimants have not tendered sufficient proof to establish that the nationality requirement has been satisfied.342 In any event, the CNP Asfalistiki Ltd structure appears to be organized under Cypriot laws.343 The claims of Claimant No. 2 have been withdrawn but CNP Asfalistiki Ltd continues to be a Claimant.
• Claimant No. 417, Athanasios Vasileiou, is not a Greek national.