ICSID, 18 August 2017, Eurogas Inc. (US) and Belmont Resources Inc. (Canada) v. Slovak Republic, no. ARB/14/14

In 1998, exclusive rights for mining activities at the Gemerska Poloma deposit in Slovakia were awarded to Rozmin, a Slovak Republic-incorporated company in which Eurogas (US), and Belmont Resources (Canada), hold a 90% shareholding interest.
In early 2005, the Slovak Republic unexpectedly revoked Rozmin’s mining rights without warning, justification or compensation.
The request for arbitration was submitted according to ICSID Convention, US-Czechoslovakia BIT and Canada-Slovak Republic BIT. The Claimants sought 1.65 billion $ of damages.
The Arbitral Tribunal presided by Pierre Mayer, and composed of Emmanuel Gaillard and Brigitte Stern issued an award in favour of Slovakia. The Tribunal grounded its decision in information uncovered by the Slovak Ministry of Finance (and their counsel Squire Patton Boggs) as to the fact that Eurogas was a resurrection of a previously and identically named corporation registered in 1985 in the US state of Utah (bankrupt in the 2000s), who had originally made the subject investment of the present dispute.
The ‘resurrected’ company was formed during the bankruptcy proceedings and was composed of the same management team than the first company – information that was not originally disclosed to the Tribunal. It was argued that this second company had no interest in the Slovakian mine, which was among the first company’s assets in bankruptcy. Eurogas counter-argued that there had been a merger between both the old and new companies. The Tribunal found that the new company did not acquire the asset and declined jurisdiction over its claim.
The majority of the Tribunal, Pierre Mayer and Brigitte Stern, also stated that it lacked
jurisdiction rationae temporis. Emmanuel Gaillard issued a dissenting opinion on this point, stating that a dispute cannot arise until all of its constituent elements have finally come into existence. He concluded that the Tribunal had to have jurisdiction in the present dispute.

2018-01-14T19:18:11+00:00 August 18th, 2017|ICSID, International awards|0 Comments

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