On 22 December 2017, an ICSID tribunal issued a final award on merits and costs in favour of a Lithuanian investor against Latvia. The dispute arose from an annulled lease agreement concluded between E-energija and Latvia during the process of privatisation of a heating and hot water supply system and their further nationalisation without compensation. Such changes occurred following newly the elected local authority in 2008, when the 30-year lease agreement had been in force for 3 years at the time. The negotiations started in 2008 did not lead to any result. The investor filed an arbitration request in 2012.
The arbitral tribunal rejected the State’s objection to jurisdiction based on the duration of the conducted negotiations. On merits, it concluded that the seizure of the investors’ assets, as well as the failure of local authorities to set up a development plan of heat supply and to provide the investor with all necessary information, breached the BIT. The arbitral tribunal also found arbitrary the replacement of the investor by a parastatal entity in the midst of crisis to ensure the maintenance of the furnished services. As reparation, the investor obtained 1,5 million euros plus compound interests. One arbitrator issued a dissenting opinion on costs.