iarbnews

Uruguay faces global enforcement battle over $30M ICSID award as LARAH pursues seizures in Luxembourg and beyond Executive summary: In November 2024, Latin America Regional Aviation Holding (LARAH) began enforcement proceedings in Luxembourg to recover a USD 30 million ICSID Award issued against Uruguay, stemming from the 2012 liquidation of Pluna, Uruguay’s national airline. The ICSID Tribunal found Uruguay had violated its fair and equitable treatment obligations under the Panama-Uruguay BIT, forcing LARAH to divest its shares without compensation. Uruguay, citing a 2012 MOU indemnifying it against shareholder claims, attempted a settlement with SARAH, another shareholder, but negotiations failed due to LARAH's demand to terminate criminal proceedings against its directors. While denying awareness of enforcement actions, Uruguay reaffirmed its commitment to comply with the Award, as LARAH pursues additional recovery efforts globally. On 15 November 2024, the Panamanian company Latin America Regional Aviation Holding (LARAH) initiated enforcement proceedings in Luxembourg for an Award issued earlier this year by an ICSID arbitral...

With nearly 500 million native Spanish speakers, Spain and its leading arbitration centre are stepping up efforts to establish Spanish as the language of choice in international arbitration Executive summary: On the occasion of the International Congress “The Spanish Language and International Law” held in Madrid in November 2024, CIAM-CIAR, CEIA and the Spanish Ministry of Foreign Affairs signed a Manifesto to promote Spanish as the language of choice in international arbitration, in particular for cases involving Ibero-American parties. The Manifesto highlights the global importance of Spanish, with nearly 500 million speakers, and points to the fact that Spanish is underused in international arbitration, despite the significant number of Ibero-American parties involved. The initiative is in line with Spain’s broader efforts to promote Spanish in the international legal and diplomatic spheres, reinforced by the recent Memoranda of Understanding (MOUs) signed with several Latin American countries to strengthen Spanish representation in international organisations and the United Nations. The Manifesto, together with the MOUs, reflect Spain’s commitment to strengthen the use of Spanish internationally in the diplomatic and legal sphere, thereby contributing also to the repositioning of Madrid as a key arbitration centre for Spanish-speaking parties, while promoting the presence of the Spanish language in...

Spanish firm Cobra files ICSID arbitration against Peru over Majes Siguas II project dispute Executive summary:  Concesionaria Angostura Siguas, S.A., a subsidiary of the Spanish group Cobra, filed a request for arbitration against the Republic of Peru over the Majes Siguas II irrigation project (ICSID Case No. ARB/24/43) with the ICSID Secretary General on 16 October. While the precise grounds of the claim have not been made public, media reports suggest that Cobra is seeking damages of USD 1.4 billion. At the heart of the dispute are delays, breaches of contract and increased costs resulting from technical changes to the project, in particular the switch to a pressurised irrigation system. Awarded to Cobra in 2015, the project has made minimal progress, with only 11% completed in 14 years. In spite of efforts to restart work, including a transfer agreement between the national government and the regional government of Arequipa, arbitration proceedings have now escalated, with Cobra alleging multiple breaches of contract. The ICSID Secretary-General registered, on 16 October 2024, a request submitted by Concesionaria Angostura Siguas, S.A. owned by the Spanish Group Cobra, for the institution of arbitration proceedings against the Republic of Peru (ICSID Case No. ARB/24/43) related to...

ICSID Tribunals affirm lack of jurisdiction over intra-EU disputes in two key awards favouring Spain Executive summary: Two ICSID tribunal have ruled that the Energy Charter Treaty does not confer jurisdiction on them to hear disputes between EU Member States and investors from other EU Member States. On 11 October 2024, two ICSID tribunals for the first time upheld the "intra-EU objection" and confirmed that they do not have jurisdiction to hear disputes between EU Member States and investors from other EU Member States under the Energy Charter Treaty (ECT). These decisions constitute a major development, as previous ICSID tribunals had not applied the intra-EU objection in the same way. The cases were brought by the Belgian company Sapec, S.A. and the Danish company European Solar Farms A/S, which sought compensation from Spain for changes to its renewable energy support scheme. The tribunals ruled that they could not adjudicate on disputes between EU Member States and intra-EU investors due to the primacy of EU law. This decision aligns ICSID tribunals with the position taken by the European Commission and EU courts, and may bring to an end the debate on the application of the intra-EU objection in investment arbitrations. An ICSID Arbitral Tribunal has once again addressed the so-called "intra-EU objection," affirming this time the primacyof European Union (EU) law in determining its jurisdiction under the Energy Charter Treaty (ECT), and ultimately...

ICSID Tribunal orders Peru to pay Kuntur Wasi USD 91 million in damages for unilateral termination of contract to build and operate Chinchero International Airport Executive summary: An ICSID tribunal has rendered its final award in the arbitration brought by Kuntur Wasi S.A. against the Republic of Peru. The arbitration concerned Peru's unilateral termination of the concession contract for Chinchero International Airport, with the tribunal finding that Peru's actions in 2018 were "arbitrary and unjustified". Consequently, Peru was ordered to pay US$91 million in damages to the Claimants, covering the return of the guarantee, business profits, indirect costs and the penalty for the termination of the contract. The award, issued on 13 May 2024, confirms that Kuntur Wasi and its executives acted in good faith and in accordance with Peruvian law during the negotiation and signing of the contract and its addendum. Furthermore, the tribunal awarded interest up to 28 February 2024 and additional interest up to the date of payment, on an annual compounded basis. An ICSID Arbitral Tribunal has issued its final award in the arbitration proceedings initiated in July 2018 by Sociedad Aeroportuaria Kuntur Wasi S.A. (Kuntur Wasi) and Corporación América S.A. against the Republic of Peru (Case No. ARB/18/27)....