Caratube concluded a contract with Kazakhstan providing for the exploration and production of hydrocarbons, which terminated in 2008. Considering that the state had expropriated Caratube, the latter brought a request for arbitration before ICSID under the US-Kazakhstan BIT. The Arbitral Tribunal dismissed the case for lack of jurisdiction in an award dated 5 June 2012, as there was no evidence of “foreign control” of the company.
In 2013, Caratube submitted a second request for arbitration. According to Kazakhstan, this claim was an abuse of process, time-barred and precluded because of collateral estoppel and res judicata.
The Tribunal concluded in its award that Kazakhstan had breached its obligations to Caratube when it terminated their contract.
Nonetheless, the Tribunal rejected Caratube’s claims for lost profits or lost opportunities, finding that it had not sufficiently or convincingly established its claims. Instead, the Arbitral tribunal awarded US$ 39.2 million, representing Caratube’s investment costs (instead of US$ 1 billion requested by Caratube).
The Tribunal also stated it did not have jurisdiction over Devincci Hourani’s claims (Caratube’s majority shareholder) and rejected allegations that Kazakhstan had engaged in a politically motivated campaign against the Hourani family, finding that Caratube had not been able to prove a campaign of harassment by the State.
According to the Tribunal, Caratube did not wholly succeed in this arbitration. Therefore, it decided to split the costs of the case between the parties.