Publications

EGYPT

ICSID tribunal finds Egypt liable but declines to award damages

Egypt has been held liable for failing to provide the investors, in this case the Spanish construction group Cementos La Unión (and its subsidiary Aridos Jativa), with “effective means” to enforce their rights regarding a project to build and operate a large cement plant in Egypt.

This breach of the obligation to provide “effective means”, which is contained in the Egypt-U.S. bilateral investment treaty (BIT) was alleged on the basis of the Spain-Egypt bilateral investment treaty most favoured nation clause. 

While the arbitral tribunal found Egypt liable for such breach, the majority held that the breach of the BIT did not entitle the Spanish company to damages (claimed to be €240 million), as they would not have prevailed had they been provided such “effective means”. The tribunal also stated by majority that Egypt had respected the fair and equitable treatment standards of the BIT.   

IRAQ

Iraqi oilfield award enforcement refused by Washington court

The US District Court for the District of Columbia has refused to enforce an ICC award in favour of OGI Group Corporation –a Canadian engineering company– against Iraqi state-owned oil company SCOP, alleging lack of jurisdiction.

The Court considered that, even though SCOP is owned by the Iraqi Ministry of Oil, the Iraqi company is separate from the state for jurisdictional purposes. The judge argued that SCOP did not have the minimum connections with the US to establish the personal jurisdiction, to which it was entitled since it was not considered Iraq’s agent.

The ICC tribunal, seated in Geneva, issued the award in April 2018, granting the Canadian company US$ 11 million in damages, of which US$ 9.6 million have already been paid by SCOP, with US$ 1.4 million outstanding (including interest and costs).

NIGERIA

Nigeria barred from accessing hedge fund’s documents

A U.S. court has granted London-based hedge fund VR Capital Group Ltd.’s motion, overturning its previous ruling and thus blocking Nigeria from accessing its internal documents as part of the country’s attempt to stop a company VR partly owns –Process & Industrial Developments Ltd. (P&ID), a British Virgin Islands-registered company– from enforcing a US$10 billion arbitration award.

The discovery was sought by Nigeria in order to obtain information that supported its allegations of fraud and bribery by P&ID to former government officials to obtain a supply and processing contract that was the subject of the arbitration that resulted in the multi-billion dollar award.

The court has now overturned its previous ruling, which allowed Nigeria to gather information from U.S. banks concerning transactions involving companies and people affiliated with P&ID, as well as former government officials, on the grounds that the African nation misled the judge by denying any intention to use evidence obtained in the English proceedings in order to set aside the award.

The award in favor of P&ID was enforced by the Commercial Court in London last year. Nevertheless, the court subsequently stayed the enforcement and agreed to allow Nigeria a late challenge to the award on the grounds that was a “strong prima facie case” that it was tainted by corruption, perjury and dishonest conduct.