The most relevant updates of The Americas from the global International Arbitration and ADR practice group at Garrigues.


Italian construction group to proceed with a claim against Argentina

An ICSID tribunal has allowed Italian construction group Salini Impreglio to proceed with a claim against Argentina over a bridge and toll road project that was affected by the state’s emergency measures during its 2001 financial crisis. In a unanimous decision a tribunal rejected Argentina’s objections that the claim was time-barred and fell foul of a local litigation requirement in the treaty under which it was filed.

Argentina settles Ezeiza prison ICC arbitration

Argentina has agreed to pay US$57 million in bonds to an Italian-Argentine consortium to settle a decade-old ICC claim over unpaid fees for the construction of a prison complex on the outskirts of Buenos Aires. In a decree issued on 26 March 2018, Argentine President Mauricio Macri authorized the issuance of Argentine-peso denominated bonds to satisfy debts owed under a contract with Unión Transitoria de Empresas (UTE), a construction consortium 65% owned by the Argentine-Italian Techint group and 35% by subsidiaries of Italy’s Impregilo. The decree ratifies an amended version of settlement terms originally drawn up in 2011 to end an ICC arbitration commenced by UTE and its trustee and grantor, the Argentina-based Santander Río Trust, over a contract for the construction of the Ezeiza prison complex.


2016 yearbook on International Arbitration in Brazil presented

In March 2018, the Comitê temático de Arbitragem of the Centro de Estudos das Sociedades de Advogados (CESA) presented the 2016 Yearbook of Arbitration in Brazil. According to the yearbook, in 2016 there were a total of 671 arbitrations in course with some link with Brazil (267 cases were initiated in 2016). CAM-CCBC and CIESP were the leading institutions regarding the number of arbitration proceedings administered, with 268 cases and 103, respectively, of the total of 671 cases. The ICC stood out among the international institutions with 83 cases under its administration during 2016.

It is interesting to note that, except in the arbitrations administered by the ICC, there was no appointment of foreign arbitrators. This may be due to the fact that (except for the cases administered by the ICC and LCIA) the law applicable to the merits of the disputes was Brazilian law.

The average duration of the arbitration proceedings varied depending on the institution, but the average of the most relevant institutions (in terms of cases administered) was around 20 months.

The appointment of women as arbitrators represents, in general, a low percentage with respect to the total of appointments (the best numbers are presented by AMCHAM and CAMFIEP with 21.22% and 20%, respectively) and, in general, the institutions, with the exception of ARBITAC and CAMARB, did not offer information on the appointment of arbitrators under 40 years of age. 20.8% of the arbitrations were submitted to a single arbitrator.

Upper Court of Justice reviews the tribunal´s power to re-assess pre-arbitral interim measures granted by courts

The Fourth Chamber of the Upper Court of Justice decided recently that an arbitral tribunal has jurisdiction to (re)assess a pre-arbitral interim measure on early production of expert evidence previously granted by the judiciary. The Upper Court of Justice held that, while the judiciary is competent to grant provisional remedies in cases where parties cannot wait for the constitution of the arbitral tribunal, this does not implicitly waive the arbitrator's jurisdiction to assess the interim measure granted.


Carrizo family brings treaty claims against Colombia over bank measures

A family of investors in a bank that was nationalized during Colombia's financial crisis in the 1990s have filed two investment treaty claims against the state. Latvian-born US national Astrida Benita Carrizos is bringing her claim under the US-Colombia free trade agreement, also seeking to use the treaty's most-favoured nation (MFN) clause to import provisions from Colombia’s bilateral investment treaties with India and Switzerland. Meanwhile, a separate claim under UNCITRAL rules has been filed by Astrida Benita's sons Alberto, Felipe and Enrique Carrizosa, under the same combination of treaties.

Colombia-Spain re-negotiate existing BIT

Colombia and Spain are in the process of re-negotiating and updating their Bilateral Investment Treaty (BIT) dated 31 March 2015 currently in force. Talks have been triggered by investment treaty arbitrations filed by major Spanish companies such as Telefónica and Gas Natural, against Colombia.

Colombia hit with two ICSID claims on environmental preservation zone

Canadian mining companies Red Eagle Exploration and Galway Gold have filed separate investment treaty claims against Colombia under the Canada-Colombia free trade agreement. The disputes concern mines in the Vetas mining district of northern Colombia and a 2014 determination by the Colombian Ministry of Environment that a portion of the mines fell within a preservation zone wetland where mining is prohibited on environmental grounds, thus barring mining in areas under the contract agreed with the companies.

Dominican Republic

UNCITRAL claim for landfill claim

Jamaican national, Michael Lee-Chin, who owns the Dominican-registered Lajún Corporation, has launched a claim for over US$300 million against the Dominican Republic, claiming his landfill site was illegally expropriated by the state using its military. The claim has been brought under a 1998 free trade agreement (FTA) between the Caribbean community, of which Jamaica is part, and the Dominican Republic. Under the terms of the FTA, which entered into force in 2002, UNCITRAL rules will apply to the case and Lee-Chin has proposed that it be administered by the Permanent Court of Arbitration in The Hague.


Ecuador faces UNCITRAL claim for Amazon oilfield development

A Singaporean company, Gente Oil Ecuador (GOE), has filed a notice of arbitration in an UNCITRAL claim brought against Ecuador under a contract for the development of an Amazon oilfield. GOE accuses the state of breaching a contract for the development of the Singue oil field in northeastern Ecuador and that Ecuador has breached the contract by unilaterally seeking to impose new terms, failing to comply with an obligation to act in good faith, and preventing the company from performing the contract.

UNCITRAL tribunal finds against Ecuador in pharma case

An UNCITRAL panel has unanimously held in a partial award that Ecuador is liable for a denial of justice in light of the treatment of US pharmaceuticals company Merck Sharp & Dohme by its courts. The tribunal ruled that Ecuador is liable for its courts ordering Merck to pay damages in relation to a breakdown in negotiations to sell a small manufacturing plant to a local competitor. The tribunal said it was an “inescapable fact” that the outcome of lengthy litigation in Ecuador over the failed deal for the sale of a plant had been to force the company to compensate the intended buyer for damage suffered, “without any proper process for establishing […] whether it is causally linked to the defendant’s unlawful actions”.


Mexico-EU two-tier permanent investment court idea moving forward

On 22 April 2018, the EU and Mexico published an Agreement in Principle involving a new trade deal and providing for, amongst other things, a standing investment court to hear disputes over investment protection provisions in the treaty. This permanent two-tier investment court, aimed to hear EU-Mexico related investor-state disputes, would replace the earlier trade agreement between the two parties signed in 2000, which did not contain any ISDS provisions.

State faces US$700 million NAFTA claim threat from insolvent oil drilling company

An oil drilling company that became insolvent after its contracts with Mexico's national oil company Pemex were cancelled has threatened Mexico with a US$700 million NAFTA claim.

The NAFTA dispute would allegedly concern actions taken by Pemex that have affected the investors' interests. It is understood that the Claimants would be alleging fraud and discrimination on the part of Pemex and accusing the state of violating provisions under NAFTA guaranteeing equal treatment for Mexican and US investors and prohibiting the expropriation of assets.

Mexico ratifies the ICSID Convention

Further to our report in the April 2018 edition of our newsletter, on 26 April 2018 the Mexican Senate ratified the ICSID Convention. In accordance with Article 68 of the ICSID Convention the ICSID Convention will come into force for Mexico 30 days after the ratification instrument has been deposited with ICSID.


Trump turns to BIT

As reported in the April 2018 edition of our Newsletter, 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”. Despite the Trump administration’s reported hostility to investor-state dispute settlement in the NAFTA renegotiations, the US president’s lawyers have invoked the protections of the US-Panama bilateral investment treaty in a letter to his Panamanian counterpart requesting intervention in a dispute over the luxury hotel. The letter says that a Panamanian court’s approval of the eviction of Trump Organization staff from the hotel in the midst of a dispute with the owners over its management constitutes a violation of the US-Panama BIT and could lead to the government being held liable for damages.


ArcelorMittal prevails in enforcement proceedings

A Minnesota court has issued a default judgment confirming an ICC award worth over US$1.4 billion in favour of the US arm of steelmaker ArcelorMittal against an Indian-owned supplier of iron ore pellets. In an order on 30 March 2018, a judge at the US District Court for the District of Minnesota confirmed the award in favour of Delaware company ArcelorMittal USA and instructed that judgment be entered against the debtor, Mauritius-registered Essar Steel.


Kimberly-Clark brings ICSID claim against Venezuela

US multinational, Kimberly-Clark, has brought a claim against Venezuela at ICSID over the seizure of its factory in the country during a national toilet paper shortage. Kimberly-Clark’s Dutch holding company and two of its subsidiaries have brought the claim on the basis of three bilateral investment treaties that Venezuela has signed with the Netherlands, Spain and Belgium-Luxembourg. The claim will proceed under ICSID´s Additional Facility Rules in light of Venezuela’s denunciation of the ICSID Convention.

ConocoPhillips secures one of the largest ICC awards in history

US oil company ConocoPhillips has been awarded US$2.04 billion, one of the largest ICC awards in history, in a case against Venezuela's national oil and gas company PDVSA and two of its subsidiaries for the expropriation of two heavy crude oil projects more than a decade ago arising from contracts for the onshore Hamaca and Petrozuata projects in the oil-rich Orinoco belt in central Venezuela. The state increased royalty rates and income taxes on projects in the Orinoco Belt in 2007 as part of a new oil and gas regime which also required foreign companies to migrate to a different structure of contract with a minimum of 50% state participation through PDVSA. On 26 April 2018 the Bermuda and Dutch-incorporated subsidiaries of ConocoPhillips filed an application at the US District Court of the Southern District of New York, seeking an order that confirms and enforces the award against PDVSA and two of its subsidiaries.