BRAZIL

The municipality of Sao Paulo envisages new Dispute Board mechanisms

On 22 February 2018 the municipal government of Sao Paulo approved Law 16,873, which provides for the possibility of including Dispute Boards to resolve disputes regarding contracts with the municipality of Sao Paulo. The new law represents a turning point in the development of the Dispute Boards in Brazil, given the importance of the economy of the city of Sao Paulo.

The Dispute Boards may have a review nature (recommendations are issued), adjudication nature (binding decisions are issued) or hybrid nature (both recommendations and decisions are issued). The Disputes Boards will consist of three people (preferably two engineers and one lawyer) and may be regulated in an annex to the public contract or by reference to the rules of an institution.

COLOMBIA

Celebrating five-years of its Arbitration Act with positive figures on foreign award enforcements

2017 marked the fifth anniversary of the National and International Arbitration Statute of Colombia. As indicated by its name, the law introduced dual arbitration regulations. With respect to international arbitration, the UNCITRAL Model Law on Arbitration was taken as a reference. The new features incorporated on the basis of the Model Law included the establishment of an expedited proceeding for processing the recognition of international arbitral awards, as well as the grounds on which said recognition can be refused. The latter are the same grounds as those contemplated in the New York Convention and the aforesaid Model Law, with the express modification, in connection with the ground for refusing informal recognition, that the award must violate the international public policy of Colombia. The bodies designated to conduct the recognition proceeding are the Civil Cassation Chamber of the Colombian Supreme Court, if the matter is private, and the Section Three Plenary of the Council of State, if one of the parties is a Colombian public entity or someone discharging administrative functions in Colombia.

Second telecoms claim

Spain's Telefónica has made good on its threat to bring an ICSID claim against Colombia over the reversion of its assets in a telecoms concession – while another treaty claim filed by Mexican telecoms group América Móvil over the same measures continues. The claim, which was filed under the Spain-Colombia bilateral investment treaty, was registered on the ICSID website on 20 February 2018.

ECUADOR

Former Petrobras subsidiary wins claim over Ecuadorean oil projects

A former subsidiary of Brazilian state oil company Petrobras and its partners have won US$515 million in an UNCITRAL claim against Ecuador over its nationalization of two Amazon oil projects. A tribunal at the Permanent Court of Arbitration in The Hague awarded damages to EcuadorTLC - now owned by Argentina's Pampa Energia - a subsidiary of Japan’s Inpex and Panama-registered Cayman International Exploration Company. The damages are over half of the US$890 million the claimants had originally sought.

New BITs talks begin

Ecuador has sent a proposal to 16 countries inviting them to renegotiate its cancelled bilateral investment treaties and urging them to accept a new model BIT that requires resolution of disputes by arbitration in the region. It is understood that the new model BIT will include a dispute resolution mechanism that complies with the country’s constitution – in light of a 2013 constitutional court decision which concluded the mechanisms in Ecuador’s BITs were a "waiver of sovereign jurisdiction" and violated the principle of supremacy.

MEXICO

Mexico has signed the ICSID Convention

With the future of NAFTA and its investor-state dispute settlement provisions looking uncertain, Mexico has opted to sign the ICSID Convention. Mexico is the 162nd country to sign and, if it goes on to ratify the convention, will be the 154th country to do so.

The development means that all three North American states are now signatories of the convention. The United States signed it the year it was drawn up, 1965, and ratified it the following year. Canada signed it in 2006, with ratification taking place seven years later.

PANAMA

Tyre dispute leads to milestone trademark ruling

In what is thought to be the first decision of its kind, an ICSID tribunal has recognised that trademark licences can qualify for protection under an investment treaty – ruling that a claim by two US subsidiaries of Japanese tyre maker Bridgestone against Panama can continue.

Trump in ICC fight over Panama hotel

Trump International Hotels Management and Trump Panama Hotel Management are facing a US$15 million ICC claim from the Panamanian company that owns the Trump International Hotel & Tower Panama over its “abysmal management”.

The Panamanian company, TOC, is controlled by a foundation made up of the owners of 369 units in the Panama hotel. Over 200 of these are owned by Panamanian sister companies known as Ithaca Capital Investments I and II.

The Trump companies – which have been run by Trump's sons since the start of his presidency – say TOC’s claims are “bogus”, a “complete sham and a fraud”. They have filed their own, much larger counterclaim worth US$150 million, and attempted to join the Ithaca companies and their managing director Orestes Fintiklis to the Panama-seated arbitration as third parties.

PERU

Peruvian pipeline project leads to new claims

Brazilian construction group Odebrecht has launched an arbitration against its partners in a US$7.3 billion Peruvian gas pipeline project that collapsed in the wake of a high-profile corruption scandal – as Peru faces a second threat of a treaty claim over the same concession.

Odebrecht brought the claim before the Lima Chamber of Commerce against local subsidiaries of Spanish energy company Enagás and Peruvian construction group Graña y Montero, its partners in the consortium for the Gasoducto Sur Peruano (GSP) project. The GSP is one of Perú´s largest infrastructure projects. The 34-year concession included a 1,100-kilometre pipeline stretching from gas fields in the country’s inland jungle region to the southern port city of Ilo.

VENEZUELA

PDVSA company wins appeal over transfer of US assets

A Delaware appeal court has ruled that a US subsidiary of Venezuela’s national oil and gas company PDVSA did not commit a “fraudulent transfer” when it moved US$2.8 billion of assets out of the United States in an alleged bid to evade the country’s ICSID creditors.

In a 2-to-1 majority opinion dated 3 January 2018, the US Court of Appeals for the Third Circuit ruled that Canadian mining company Crystallex could not bring the claim against PDV Holding as it was not its debtor.

While it did not condone the actions of the PDVSA entities, the court was “constrained” to conclude that a transfer by a non-debtor could not amount to a “fraudulent transfer” under the Delaware Uniform Fraudulent Transfer Act (DUFTA).

Rio panel rules against Venezuela

US shipbuilder, Huntington Ingalls, has won nearly US$129 million in an ad hoc Rio de Janeiro-seated arbitration with Venezuela’s defence ministry over the repair and upgrade of naval frigates, a dispute that began over 15 years ago.