Cyprus sees treaty claim on bank shut-down defeated
An ICC tribunal has rejected a US$1.4 billion treaty claim against Cyprus brought by the former owners of FBME Bank, the Lebanese brothers Ayoub-Farid Saab and Fadi Saab, under the 2001 Lebanon-Cyprus bilateral investment treaty on the shut down of the bank after US authorities declared it was involved in money laundering and financing terrorism.
The tribunal dismissed the investor claim on damages and interim measures restraining Cypriot authorities from liquidating their local branch.
The tribunal also fully rejected the claimants’ claims and confirmed that Cyprus acted fairly as a regulator in responding to the failure of FBME.
All 28 EU Member State agree to terminate their intra-EU bilateral investment treaties to comply with the Achmea judgment
As confirmed by the European Commission´s website, all 28 Member states of the European Union have declared that they agree to terminate their intra-EU bilateral investment treaties to comply with the Achmea judgment.21 states – including Germany, France, Italy, Spain and the UK – also declared that Achmea applies to intra-EU investor-state arbitrations under the Energy Charter Treaty, agreeing to discuss with the European Commission what steps need to be taken in light of this.
Dutch Supreme Court confirms denial of Yukos bankruptcy recognition
In a decision dated 18 January 2019, the Dutch Supreme Court has confirmed that a Russian judgment declaring the bankruptcy of Russian oil company Yukos should be denied recognition on public policy grounds.The ruling means that the Dutch courts will not recognise the authority of Yukos’ liquidator to deal in the oil company’s assets.
The decision relates to Yukos bankruptcy in 2006 after being hit with back tax claims and fines of US$24 billion, in what its shareholders alleged was part of a state-orchestrated campaign against then CEO Mikhail Khodorkovsky. Most of the company’s assets were eventually acquired by Russian state-owned oil producer Rosneft. In 2014, an UNCITRAL tribunal in The Hague ordered Russia to pay US$50 billion to the former majority shareholders in Yukos after holding the state liable under the Energy Charter Treaty for the “politically motivated” expropriation of the oil company. That award was set aside on jurisdictional grounds by the district court in The Hague in 2016, a decision the Yukos shareholders are challenging before the Court of Appeal in The Hague.
The latest ruling does not relate to the ECT award but to a separate dispute over control of Yukos’ assets outside Russia. The Supreme Court said the lower court was correct to consider that legal acts carried out in the Netherlands pursuant to the Russian judgment were automatically invalid irrespective of the consequences.
Malta brings hospital construction arbitration against Swedish Skanska
A Maltese government entity, Foundation for Medical Services (FMS), has recently brought a claim against Sweden’s Skanska over alleged defective concrete used in the construction of a €600 million public hospital, claiming up to €150 million in its case against the Swedish construction group as the lead designer and contractor for the Mater Dei hospital southwest of the Maltese capital, Valleta.According to press reports, the case has been brought before the Malta Arbitration Centre.
The dispute relates to Skanska Malta JV contract awarded to build Mater Dei in 1995. FMS claims that Skanska had used lower-quality cement of a kind generally used to build pavements.
Swedish court rejects enforcement of ICSID award against Romania
In a decision dated 23 January 2019, the Nacka District Court in Stockholm has ruled that the Micula brothers, Swedish nationals of Romanian origin, cannot enforce their €178 million ICSID award against Romania in light of a decision by the European Commission that payment of the award would be incompatible with EU law.
The decision relates to an award obtained by the Micula brothers in 2013 after a majority ICSID tribunal found that the state’s early withdrawal of certain economic incentives benefiting their food production businesses was in violation of the Sweden-Romania bilateral investment treaty.
However, in 2015 the European Commission directed Romania not to pay the award on the basis that it amounted to a de facto reinstatement of the incentives and would constitute illegal state aid under EU law. Although the Swedish court recognised that under the ICSID Convention it is obliged to enforce ICSID awards in the same way as a legally enforceable Swedish ruling, it observed that such a ruling could not be executed if its enforcement was contrary to EU law.
UK settles dispute with Japan’s Fujitsu over a cancelled contract to upgrade NHS software
The UK government has reached an agreement in principle between Fujitsu and the Department of Health and Social Care to settle a £700 million dispute over a cancelled contract to upgrade an IT system for the National Health Service.The dispute relates to a 2005 £896 million contract won by Fujitsu to digitise patient records for health trusts in the South of England in 2002 – part of a £12 billion upgrade of the NHS's IT system. However, the government terminated the deal in 2008, following disputes with Fujitsu over the timetable for the project, the quality of its work and other issues.