Awards and Decisions

Majority clears Peru of any wrongdoing in relation to close down of French-owned bank; dissenting arbitrator says that majority misconstrued facts and law
Renée Rose Levy de Levi v. Republic of Peru, ICSID Case No. ARB/10/17, Award and Dissenting Opinion

Diana Rosert

A majority has rejected a claim by Renée Rose Levy, a French investor in the Peruvian banking sector, who reportedly sought US$7 billion in damages.[1]

In an award dated February 26, 2014, the tribunal established jurisdiction, but was divided over the merits of the claimant’s allegations. While two arbitrators—Rodrigo Oreamuno and Bernard Hanotiau—found no wrongdoing by Peru, the third arbitrator strongly disagreed with the majority decision. Joaquin Morales Godoy, the claimant’s nominee, considered that the tribunal should have rendered a merits and damages award in favour of Ms. Levy.

An annulment proceeding was registered on May 20, 2014 at Ms. Levy’s request.Meanwhile, US$50 billion are said to be at stake in another pending ICSID proceeding that involves the same claimant.[2]


Ms. Levy alleged that Peru and its state organs subjected Banco Nuevo Mundo (BNM), a French-owned bank in Peru in which she held shares, to arbitrary and illegal treatment that eventually involved the liquidation of the bank and amounted to indirect expropriation. Ms. Levy claimed that Peru’s acts and omissions violated fair and equitable treatment (FET), full protection and security and national treatment obligations stipulated in the France-Peru BIT.

The dispute revolved around an emergency regime for financial institutions put in place by Peru in 2000 to facilitate the restructuring of the banking sector through interventions by an oversight agency for banking, SBS. It was undisputed that BNM was subjected to this regime, pronounced insolvent and dissolved. In essence, the claimant argued that Peru, acting through SBS, caused BNM’s bankruptcy instead of helping the bank to overcome temporary illiquidity.

The majority came to the conclusion that the bank’s bad accounting and management practices, which it deemed to be in breach of Peru’s banking regulations, were the actual reason for BNM’s misfortune and that the state agency’s actions were justified. In his dissenting opinion, the third arbitrator stated that his “colleagues have construed the facts and the law to dismiss Claimant’s complaint” and that the majority’s legal analysis was “inaccurate and inconsistent.”

Tribunal confirms French nationality and other jurisdictional requirements

Peru pleaded for the tribunal to dismiss jurisdiction, arguing that Ms. Levy acquired her shares in BNM from her father at a time when the bank was already insolvent and allegedly without value. Peru also pointed out that the claimant held no interest in the bank when the actions in dispute took place. The respondent alleged that the transfer of rights from father to daughter constituted “abuse of process,” arguing that its sole purpose was to “manufacture” jurisdiction over the dispute. According to the respondent, the tribunal would infringe upon the discretion of Peru and its regulatory agency in enacting banking laws and regulations if it were to assume jurisdiction.

The tribunal rejected all of the Peru’s jurisdictional objections, confirming that the Levy family’s investment in BNM was in accordance with requirements set out in the BIT and the ICSID Convention. It determined that the claimant was a national of France and that the ICSID Convention, as well as the BIT, protected indirect minority interests such as Ms. Levy’s. The tribunal stated that “shares may be assigned at any time with no effect on the rights of the assignee.” It added that it was irrelevant whether the claimant had paid for the transfer of rights and that the insolvency did not “in itself” turn the investment valueless.

However, the tribunal decided that Ms. Levy had not proven that she was allowed to represent BNM in the proceedings and, therefore, only Ms. Levy could be accepted as a claimant, not BNM. The tribunal further determined that the respondent had not substantiated bad faith on the part of the claimant or that the transfer was undertaken to create jurisdiction. The tribunal concluded by stating that it was not precluded from examining state actions or actions of state organs in light of international law standards even if the respondent stated that these acts complied with national laws.

Majority finds no breach of fair and equitable treatment

Ms. Levy asserted that Peru violated the investor’s legitimate expectations and failed to guarantee legal stability, while also acting in a discriminatory and arbitrary manner. The majority ruled that Peru did not breach the fair and equitable standard with regard to any of the claimant’s allegations; the third arbitrator disagreed with this conclusion.

The claimant founded its legitimate expectations on a 1992 operating license issued by SBS to BNM. However, in the opinion of the majority, the claimant was “wrong” in assuming that this created legitimate expectations of return on investment. The majority considered that return on investment rested on the ability of BNM’s management.

The majority then rejected the claimant’s assertion that Peru lacked transparency when it enacted the emergency regime, because BNM was not invited to alleged “consultations” between Peru and major banks. The majority explained that the decree was published in Peru’s official gazette a day after the said meeting and the latter therefore served merely to inform but not consult the largest banks. In addition, it remarked that Peru was under no obligation to involve stakeholders in its regulatory activity.

The claimant also complained that “abrupt and disproportionate” withdrawals of state-owned companies’ funds from BNM destabilized it and that the Ministry of Economy and Finance abstained from measures to “neutralize” these withdrawals. Rather, the majority considered that the events and their impact demonstrated the failure of the bank—not of the respondent—, and identified several occasions in which SBS informed the bank about vulnerabilities in this respect and recommended risk mitigation. Ms. Levy further criticized SBS for failing to take action when false rumors about BNM’s financial situation endangered the bank. However, the majority concluded that SBS was not guilty of negligence, because a financial panic was “very difficult to control,” and SBS had only limited possibilities at its disposal and they came with the risk of adverse effects.

With regard to the refusal of Peru’s Central Reserve Bank (BCR) to give BNM a temporary loan, the majority held that no “absolute certainty” of approval could have been expected, particularly because it was considered “evident” that BNM lacked sufficient collateral. Furthermore, Ms. Levy alleged that the state agency’s intervention impaired BNM’s loan portfolio. However, the majority determined that SBS actions were in order and the claimant’s expectations were unsubstantiated given BNM’s accounting irregularities and million dollar losses reported in SBS inspection reports and an audit report by PwC. The majority also noted that SBS was eventually able to recover about US$161 million “for the benefit of BNM’s depositors and creditors” rather spoke in favour of the respondent’s intervention in SBS.

While the claimant saw the zero valuation of BNM’s equity as a coercion attempt by SBS, the majority confirmed that SBS was empowered to determine the real capital value of BNM, and no indications of arbitrary or illegal practice had been demonstrated. It then explained that the banking laws required that a bank had to be liquidated following an intervention by SBS. The majority recalled that SBS’s decision to dissolve BNM was based on an audit by PwC that supported the existence of insolvency and was thus justified. The majority inferred that the liquidation of the bank could not have been a threat, since in any event BNM would have been liquidated so as to comply with banking laws. Overall, the actions of SBS could not be described as taken in bad faith, the majority determined.

The majority also dismissed the accusation that SBS disregarded domestic judicial decisions and thereby failed to guarantee legal stability, stating that the chain of events suggested by Ms. Levy was “unsound,” since some events allegedly in contempt with court rulings occurred before such rulings were even rendered.

Dissenting opinion finds Peru liable for FET breach

While disagreeing with the majority’s decision in all respects, the third arbitrator focused his analysis on Peru’s violations of the FET standard, which he deemed to have occurred.

For example, he considered that the non-invitation of BNM to Peru’s meeting with banks spurred a “loss of confidence” in BNM and resulted in reduced interbank lending by the other invited banks. In his opinion, this was “more than a mistake by the State,” because it had serious repercussion for BNM. With regard to withdrawals of public deposits, he came to the conclusion that through its actions and omissions “the State aggravated BNM’s illiquidity situation.” He also contested that the fear of adverse effects was a valid excuse for SBS’s inaction in the face of a financial panic. Furthermore, Mr. Godoy believed that it was “certain” that the BCR loan would be approved, since BNM had provided sufficient collateral. He criticized that BCR did not provide other—in other words ‘the real’—reasons for the rejection of the loan, which manifested a violation of the investor’s legitimate expectations.

He also emphasized that SBS’s actions related to the intervention and the dissolution of BNM “do not meet the minimum requirements of proportionality, reasonability, and predictability.” In his opinion, the recovery of some US$161 million cast doubt on the respondent’s assertion that the bank was insolvent; he suggested that this even disproved the insolvency thesis. The dissenting arbitrator saw it as proven that SBS was responsible for an “arbitrary act” which caused BNM’s losses and created an “insolvency situation that actually did not exist.” Moreover, he opined that the majority showed “unawareness” of Peruvian banking law, because the co-arbitrators failed to see that the emergency regime constituted a substantial change in the legal framework, for instance suspending rehabilitation proceedings for banks by shareholders and creditors available under previously applicable banking law. He therefore considered the emergency regime to be contrary to the claimant’s legitimate expectations. Finally, as concerned legal stability, Mr. Godoy determined that SBS had violated some court orders and therefore “infringed” upon the standard.

Full protection and security: majority sees no denial of justice

Ms. Levy contended that she was denied justice because no administrative remedies existed against some of SBS’s measures. She also alleged that SBS disobeyed court judgments—a claim that the majority had already dealt with and dismissed in the FET context.

At the outset, the majority agreed with Ms. Levy that the full protection and security standard went beyond the protection of physical security, and also encompassed investor rights more generally. Yet, the majority rejected this claim, finding that the “Peruvian judicial system does provide remedies to protect the rights of persons subject to its jurisdiction in this area.” It explained that although administrative remedies did not exist, BNM shareholders submitted various claims against SBS to domestic courts and that judgments were delivered in those cases. As such, the majority concluded that the claimant had access to judicial remedies and “received due process.”

The majority also found that the claimant’s allegations concerning a 2006 court decision in favour of SBS—that it was arbitrary, ignored the arguments of BNM shareholders and manifested the government’s interference in judicial decision-making—were unjustified.

Majority finds lack of evidence to support a breach of national treatment

The claimant identified specific banks and brought examples of government action towards them, which in its view evidenced less favorable treatment for BNM. The majority decided that before it could determine whether other banks were treated more favorably, it first needed to assess whether “like circumstances” existed between BNM and the banks that the claimant suggested for the comparison. The majority considered that being a bank was not by itself a sufficient criterion for comparability, and that the “segment [of a bank] and the number of individuals affected, its market share, and other similar factors” needed to be taken into account.

The majority deemed that in terms of loans and deposits BNM was not comparable to the second largest bank of Peru; neither was it comparable to a bank that had a similar market share, but affected a larger group of individual depositors as opposed to corporate depositors.

Ultimately, the majority rejected the claimant’s allegation with regard to national treatment, considering it impossible to verify whether the treatment afforded to other banks was “different” and if so, why it was different. The majority was inclined to believe that “when there was a different treatment, this was due to the existence of justifiable circumstances,” because in its view insufficient evidence existed to prove otherwise.

In contrast, the claimant’s appointee, Mr. Godoy, was convinced that the majority’s conclusion that the other banks were not comparable was false. In his opinion, the allegation that Peru breached national treatment was “appropriate.”

Majority considers allegation of indirect expropriation “not true”

Based on the same facts, Ms. Levy claimed that the actions of SBS amounted to “creeping expropriation,” that the expropriation lacked a public interest or necessity purpose and that Peru should pay compensation for damages. Ms. Levy also asked the tribunal to assess the proportionality between Peru’s intent and effects of the interference on the investor’s legitimate expectations.

However, the majority ruled that the intervention into BNM and its dissolution constituted “legitimate acts of ‘police power’” and were not an expropriation. In the majority’s opinion, Peru’s intention was to help rather than to harm BNM, whereas it attributed the responsibility for the bank’s collapse to “bad banking practices” and negligence on the part of BNM managers. Contrary to this, the dissenting arbitrator found that it was solely due to the acts of the state and state organs that the claimant incurred damages, because BNM was not insolvent to begin with.

Mr. Godoy stated that the tribunal should have found Peru liable for treaty breaches and made an award on damages.

All claims for damages denied; full arbitration costs allocated to the claimant

Since none of the claimant’s allegations had been upheld, the majority also rejected all claims for damages. It decided that the claimant should bear its own costs as well as the full costs for ICSID proceedings and arbitrator fees. The majority reasoned that this cost allocation was “fair and appropriate” in light of the finding that the bank was itself responsible for the bankruptcy and that bank officials had been negligent. The third arbitrator, however, saw no reason why Ms. Levy should pay the entire arbitration costs, emphasizing that the claimant had won on jurisdiction.

The tribunal was composed of Rodrigo Oreamuno (presiding arbitrator), Joaquin Morales Godoy (claimant’s nominee) and Bernard Hanotiau (respondent’s nominee).

The award is available at

The dissenting opinion of Joaquin Morales Godoy is available at

Claims against Hungary dismissed as investors had no property rights capable of expropriation
Emmis et al. v. Hungary, ICSID Case No. ARB/12/2, Award

Martin Dietrich Brauch

In an award dated April 16, 2014, an ICSID tribunal dismissed expropriation claims by three broadcasting companies against Hungary. The tribunal considered that, after the expiration of the Hungarian broadcasting license they held from 1997 until 2009, the investors no longer had any valuable assets that Hungary could have taken.


In 1997 the Hungarian Radio and Television Broadcasting Board (ORTT) launched a tender process for rights to broadcast two nationwide commercial FM radio frequencies. The successful bidder of one of them was Sláger Rádió Műsorszolgáltató Zrt. (Sláger), a Hungarian company wholly-owned by Dutch companies Emmis International Holding, B.V. and Emmis Radio Operating, B.V. (Emmis) and Swiss-controlled Hungarian company MEM Magyar Electronic Media Kereskedelmi és Szolgáltató Kft. (MEM).

Sláger and ORTT concluded a broadcasting agreement on November 18, 1997. Pursuant to Hungary’s Media Law then in force, a radio license could be issued for seven years and renewed only once at the broadcaster’s request, without tender, for an additional five years. Accordingly, on November 18, 2004 Sláger’s license was extended until November 18, 2009. Although there were several disputes regarding fines ORTT levied against Sláger for infringement of its broadcasting obligations, all of them were settled, and Sláger enjoyed the full term of the agreement.

In June 2009 ORTT initiated a new call for tenders to award the frequency then held by Sláger once its license expired in November. Sláger submitted a bid, but was not successful. Emmis and MEM claimed that the tendering process was irregular, unlawful and politically influenced, and that ORTT should have disqualified the prevailing bidder based on conflicts of interest, an unfeasible business plan and lack of broadcasting experience in Hungary.

The investors unsuccessfully sought injunctions in Hungarian courts to prevent ORTT from executing a broadcasting agreement with the winning bidder. Later, they sought a court declaration that the agreement was unlawful. They obtained it from the Metropolitan Court of First Instance and the Court of Appeals, but the Hungarian Supreme Court finally declared that ORTT’s conduct was lawful.

The arbitration proceedings

In October 2011 Emmis and MEM initiated ICSID arbitration against Hungary based on the Netherlands-Hungary BIT and the Switzerland-Hungary BIT, claiming that Hungary had unlawfully expropriated their investment in the Sláger license, among other claims. In a decision issued on March 11, 2013, the arbitral tribunal dismissed all non-expropriation claims, ruling that its jurisdiction was limited to expropriation. After a hearing on Hungary’s jurisdictional objections to the remaining claims, the tribunal finally decided on them in an award of April 16, 2014.

Did the investors have rights capable of expropriation?

In the present award, the tribunal considered whether the investors had property rights capable of expropriation in 2009. For such determination, it turned to the law of the host State, Hungary, evaluating the evidence presented by the parties, including the opinion of Hungarian law experts, and giving weight to the determinations of domestic courts on how Hungarian law should be understood and applied.

It found that “it is an essential attribute of a proprietary right that it be an asset capable of ownership, valuation and alienation,” before analyzing the sources of property rights arguably held by the investors.

First, the investors argued that the 1997 broadcasting agreement had granted them property rights in respect of the 2009 tender. However, based on evidence of Hungarian law, the tribunal considered that under the 1997 agreement ORTT had no obligation toward the investors regarding the period after November 18, 2009 that could constitute valuable assets capable of expropriation.

Second, the investors claimed that their participation in the 2009 tender granted them an incumbent advantage that was to be regarded as a property right. The tribunal concluded that ORTT was not obliged by Hungarian law to accord an incumbent advantage to the investors, a conclusion supported by both expert opinion and Hungarian court decisions issued at the time.

The tribunal considered that these two conclusions were corroborated by the investors’ own conduct. In their filings with the regulatory authorities in the United States and in Hungary, the investors had expressly declared that they did not attach a value to the broadcasting license after November 2009, given the lack of a renewal expectancy beyond the 12-year period. In addition, they had lobbied in 2008 for an amendment to the Media Law to permit the renewal of their licenses without tender beyond 2009; however, the amendment was held unconstitutional by the Hungarian Supreme Court. Both examples demonstrated, as the tribunal acknowledged, that the investors did not expect to have rights to the frequency after the expiration of the license.

Third, according to the investors, their participation in the 2009 tender granted Sláger four additional rights: the right to a properly established tender procedure, the right to a timely tender, the right to a fair and objective tender evaluation in accordance with transparent scoring criteria; and the right not to compete against unqualified or improperly qualified bidders. The investors’ case was that, had ORTT complied with these rights, Sláger should have been declared the winning bidder.

While the tribunal recognized the existence and importance of those rights, it considered that they did not constitute valuable proprietary assets belonging to the investors. First, the rights were more like due process rights held by all bidders, while property rights are held by their owner to the exclusion of others. Second, they were rights regarding participation in a process to determine whether the investors would acquire ownership rather than rights that could be “freely sold and bought, and thus ha[ve] a monetary value” (using the words the Amoco case before the Iran–US Claims Tribunal). The tribunal also invoked the holding in Waste Management II that “[n]on-compliance by a government with contractual obligations is not the same thing as, or equivalent or tantamount to, an expropriation.”

In conclusion, the tribunal held that the only property right ever held by the investors capable of expropriation was the broadcasting right under the 1997 agreement, which was a right of limited duration that expired in 2009. No other investor rights having met the requirement of a property right that could have been expropriated, the tribunal dismissed the investors’ claims for lack of jurisdiction.

An itch to assess a breach of fair and equitable treatment?

The “Factual Background” section of the award referenced a joint statement issued on November 18, 2009 by the ambassadors to Hungary of nine States, condemning “non-transparent behaviour affecting [foreign] investors in such areas as public utilities, broadcasting, and elements of the nation’s transportation infrastructure” in Hungary, and suggesting that “[p]assing, implementing and enforcing new anti-corruption legislation could be an important factor in helping meet the aspirations of Hungary’s citizens for renewed economic growth, and prosperity” (paragraph 42).

While irrelevant to the tribunal’s deliberations on jurisdiction, the mention to the joint statement could be a sign of the tribunal’s eagerness to assess whether Hungary breached the fair and equitable treatment standard in its treatment of the investors in the 2009 tender.

Having stressed that both applicable BITs only allow arbitration in cases of expropriation claims , the tribunal reasoned that: “[h]ad the Tribunal been granted a broader jurisdiction, it would have been possible to determine whether Claimants’ investments in Sláger would benefit from, for example, the Treaties’ fair and equitable treatment standard when it came to adjudging the Respondent’s conduct of the [2009] bid” (emphasis added, paragraph 144).

The tribunal was composed of Prof. Campbell McLachlan (president), Hon. Marc Lalonde (claimant’s appointee) and Mr. J. Christopher Thomas (respondent’s appointee).

The award is available at: Earlier decisions in this case are available at:

ICSID-AF tribunal upholds jurisdiction, dismisses all claims by medical technology minority investors in Poland
David Minnotte and Robert Lewis v. Republic of Poland, ICSID Case No. ARB(AF)/10/1

Matthew Levine

A London-seated ICSID-Additional Facility arbitration tribunal has rejected all claims brought against Poland by two American investors. The claimants had a minority stake in a medical technology enterprise that went bankrupt after being investigated by tax authorities for financial wrongdoing.

The tribunal found jurisdiction under a 1990 U.S.-Poland economic relations treaty.


The claimants’ business partner Zygmunt Nizioł established Laboratorium Frakcjonowania Osocza Sp. z o.o. (LFO) to carry out a Polish Ministry of Health tender to build and operate the country’s first blood plasma fractionation plant

After considerable negotiations which concluded in 1997, LFO secured a US$34,651,000 loan from a domestic banking consortium. A significant aspect of these negotiations was the State Treasury’s provision to the banking consortium of a surety for up to 60% of the loan’s value.

During this same period, Niziol on behalf of LFO negotiated an agreement with the claimants, David Minnotte and Robert Lewis, which resulted in each holding 16.5% of the shares in LFO. During the arbitration, there was significant disagreement between the claimants and the respondent on the details of this capitalization phase.

In 1998, LFO was the subject of an inspection by Polish tax authorities in relation to, inter alia, the amount of LFO’s shareholders’ financial contributions and the way in which LFO spent those funds. Subsequently, the Ministry of Finance wrote to the banking consortium and requested that the loan payment be suspended pending certain conditions.

Following extensive exchanges between Poland and the consortium lead, the loan agreement was terminated in 2001. Ultimately, LFO defaulted on the loan and declared bankruptcy in 2006, by which time the total owing was US$22,746,309.12. Poland partially reimbursed the banking consortium per the terms of the surety.

Arbitration process witnesses complicated and legally tenuous business relationships

Following the constitution of the tribunal, the claimants requested an interim order that Poland suspend criminal proceedings against and take immediate steps to ensure that no arrest warrants would be issued against Messrs Minnotte and Lewis; a similar request was also made in relation to Mr Niziol. After a hearing via videoconference, the tribunal rejected these requests but decided to nevertheless organize the proceedings outside Europe.

The tribunal ultimately observed that «[T]he full facts underlying this claim may never be known, but it is evident that the Claimants relied to a remarkable degree upon their trust in their Polish associates, and in particular Mr Niziol.» The tribunal even wondered if the claimants «…trusted too much, and perhaps overestimated the extent to which their previous commercial successes demonstrated a level of business acumen sufficient to overcome the obstacles of operating in a foreign country, in a foreign language, and within a foreign legal and administrative system.»

Jurisdiction not affected by Poland’s fraud-related objections

The tribunal found that it had jurisdiction under the “Treaty between the United States of America and the Republic of Poland concerning Business and Economic Relations” of March 21, 1990. (The tribunal referred to the Treaty as ‘the BIT’ and this usage is adopted in the following.)

Poland objected to the tribunal’s jurisdiction on the grounds that LFO’s conduct, and by extension the claimants’ investment in LFO, was characterized by fraud, deceit and bad faith.

The tribunal observed that the “[the BIT] does not define an ‘investment’ in terms that explicitly require the investment to be made in accordance with the host State’s law.” But that “it is now generally accepted that investments made on the basis of fraudulent conduct cannot benefit from BIT protection; and this is a principle that is independent of the effect of any express requirement in a BIT that the investment be made in accordance with the host State’s law.”

The tribunal proceeded to find that “[T]here may be circumstances where fraud is so manifest, and so closely connected to facts (such as the making of an investment) which form the basis of a tribunal’s jurisdiction as to warrant a dismissal of claims in limine for want of jurisdiction. This situation is, however, likely to be exceptional; and it is not the situation in the present case.“

Tribunal finds that fraud and deceit claims may also be relevant at the merit stage

The tribunal considered whether, having found the claims within its jurisdiction and admissible, they should be dismissed on the merits because of the respondent’s allegations of fraud and deceit.

The tribunal decided that the particular allegations should not entirely deprive the claimants of coverage under the U.S.-Poland BIT. Rather, it considered whether the facts underlying those allegations justified some or all of the State’s conduct towards the claimants’ investment.

Tribunal rejects three theories of indirect expropriation

The tribunal considered three alleged instances of expropriation and found in all three cases that the facts and evidence did not support the claimants’ position.

First, the claimants alleged that Poland pressured Kredyt Bank as organizer of the banking consortium to cease funding LFO’s line of credit, which forced the failure of the LFO project. The tribunal found “no evidence that indicates that the Respondent’s dealings with Kredyt Bank were motivated by anything other than a legitimate concern to protect its position as a guarantor and fulfil its responsibilities as an accountable user of public funds.”

Second, the claimants argued that Poland’s failure to supply plasma for testing purposes caused delays, which led to the failure of the project. The tribunal found that “the [relevant] express terms … cannot be construed as requiring the Respondent to deliver plasma for the purposes of pre-production testing, either on demand or by any given date.” The tribunal further observed that while Poland maintained a domestic monopoly on the supply of plasma, LFO remained free to import plasma from foreign markets at this stage of the project.

Third, the claimants alleged that a strategic investor in the LFO project had been pressured or induced by authorities to divest itself. The tribunal found that there was insufficient evidence to reach this conclusion.

No violation of fair & equitable treatment obligation

The claimant advanced five separate circumstances that it believed had violated its legitimate expectation to fair and equitable treatment under the BIT. The tribunal stated that “the State must be shown to have acted delinquently in some way or other if it is to be held to have violated that standard. It is not enough that a claimant should find itself in an unfortunate position ….”

In the first scenario, the tribunal concluded that the claimants had not shown that “they had any legitimate expectations that were defeated by the conduct of the Respondent.”

In the remaining scenarios, the tribunal found that, notwithstanding the claimants’ legitimate expectations, “the Claimants have not made out their claim that the Respondent acted in a manner that was unfair or inequitable.”

Costs borne by claimants

The tribunal ordered the claimants to bear all of the arbitration costs and Poland’s reasonable legal fees. It identified three factors informing this decision: the claimants had failed to establish any breach of the treaty; the claimants had placed “a good deal of weight … on inferences drawn from circumstantial evidence”; and Poland had had the burden of refuting the claimants’ arguments.

The tribunal was composed of Maurice Mendelson (claimants’ nominee), Eduardo Silva Romero (Poland’s nominee), and Vaughan Lowe (President).

The award is available at:

[1] Sidley Austin LLP, Representative Engagements in Investor-State Arbitrations. Retrieved from

[2]Renée Rose Levy and Gremcitel S.A. v. Republic of Peru, ICSID Case No. ARB/11/17. For the amount in dispute, see Sidley Austin LLP, Representative Engagements in Investor-State Arbitrations. Retrieved from