ICSID, 18 May 2018, Quiborax S.A. y Non-Metallic Minerals S.A. v. Bolivia, no. ARB/06/2, Decision on Annulment on the request of Bolivia

Upon the request of Bolivia in the Quiborax S.A. y Non-Metallic Minerals S.A. v. Bolivia case, on 18 May 2018 an ICSID ad hoc Committee issued a decision on annulment of an arbitral award dated 16 September 2015. The dispute was settled in favor of the investor. Bolivia requested annulment on three grounds set forth in Article 52 of the ICSID Convention. It supported that the arbitral tribunal had manifestly exceeded its powers with regard to provisional measures, had seriously departed from a fundamental rule of procedure and had failed to state in the award the reasons on which it was based. Among others, two issues were at the heart of the request: provisional measures granted by the arbitral tribunal and its decision on the quantum.

Once it had recalled the general guidelines relating to annulment proceedings and to the grounds on which Bolivia relied, the ad hoc Committee rejected all its claims. First, the ad hoc Committee examined the allegations of manifest exceeding of powers by the arbitral tribunal regarding the inobservance of provisional measures by the State. It ruled that there was no sufficient articulation, required from the point of view of the annulment proceedings, between the award and the decision of arbitral tribunal finding a violation of Article 47 of the ICSID Convention. In the same vein, the ad hoc Committee lacks jurisdiction to decide whether the arbitral tribunal exceeded its powers by prioritizing arbitral case-law on the binding effect of provisional measures over their recommendatory character as set up in that Article 47 of the ICSID Convention. It pointed out the motivation given by the tribunal and the evolution of international law, deciding that there is no manifest, flagrant error in the application of the law. Then, the ad hoc Committee focused on the Bolivia’s claim that the provisional measures aimed at suspending of criminal proceedings violated the principle of separation of powers. Bolivia also claimed that these measures prevented it from ensuring an appropriate jurisdictional defense by proving the absence of covered investments. Both allegations were rejected since the State is a unity under international law and it contradicted itself by explaining to the tribunal that the criminal proceedings were not connected to the arbitration. Second, the ad hoc Committee refused to reconsider the decision on the request to disqualify an arbitrator. Thus, the ground of the failure to comply with the duty of impartiality is ill-founded. The same goes for the allegation of inappropriate qualification of the notion of investments, based on a refusal of the arbitral tribunal to apply the criterion of contribution into the host State’s economy. Finally, it turned to the claim on the quantum, based on all three grounds of annulment specified above. The ad hoc Committee concluded that the arbitral tribunal did not calculate the amount of compensation ex aequo et bono, the tribunal’s reasoning is clear from A to Z and the parties had had opportunities to comment on the applicable methodology. Thus, Bolivia incurs the costs of arbitration under the annulment proceedings. Each party bears its own costs of legal representation.

2018-06-27T21:55:39+00:00 May 18th, 2018|ICSID, International awards|0 Comments

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