On 25 May 2018, an ICC arbitral tribunal with its seat in Paris issued a final award in favour of a Cypriot investor, Olin Holdings Ltd, against Libya.
The dispute arose from the State’s measures directed at the factory owned by the investor. Specifically, in the 1990s, Libya adopted new legislation on foreign investments, seeking to stimulate flows of foreign capital. In this context, Claimant decided to build and operate a new dairy products and juice plant in Libya. For these purposes, it obtained licenses and started construction in a plot situated in an industrial zone, with the State’s approval. One year later, in 2006, when the factory was built, Claimant received an eviction order on the grounds of the State’s dispossession of the plant.
The investor tried to obtain an exemption from expropriation, as granted for one private national company and a State-owned entity, and in parallel challenged the legality of the expropriation order in national courts. In 2010, whereas the Court of Appeal ruled in favour of Claimant, some of the executive authorities requested it to vacate the premises. In 2011, a revolution occurred in the country, while the proceedings were brought by Claimant. In 2014, the State’s lower court dismissed the case stating that the investor failed to adduce evidence of any harm it had suffered as a result of the expropriation order. In 2016, Libya contested the decision of the Court of Appeal on the cancelled expropriation order and informed Claimant that, due to losses of profits, its license would not be renewed in the forthcoming year unless new capital was injected. After additional investments, the State refused to prolong Claimant’s license in 2017.
The arbitral tribunal decides in its award on numerous allegedly violated standards of protection, invoked by Claimant and on the counterclaim filed by Respondent. First, the arbitral tribunal concludes that under the Cyprus-Libya BIT, Respondent has breached the prohibition of unlawful expropriation, the obligation not to impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment, expansion, or sale of Olin’s investments, the fair and equitable treatment, as well as the national treatment standard. The arbitral tribunal rejects a violation of the full protection and security standard. Second, it dismisses the Respondent’s counterclaim in the lack of evidence. As reparation, the investor obtains 18,225,000 euros for losses. Respondent also supports Claimant’s costs of arbitration in totality and 75 per cent of the investor’s legal fees.