{"id":423,"date":"2010-01-12T14:32:00","date_gmt":"2010-01-12T19:32:00","guid":{"rendered":"http:\/\/itn.mattrock.ca\/2010\/01\/12\/icsid-tribunal-sides-with-chile-rejects-claimants-partial-revision-request-in-long-running-dispute-over-el-clarin-newspaper\/"},"modified":"2013-01-24T02:43:34","modified_gmt":"2013-01-24T08:43:34","slug":"icsid-tribunal-sides-with-chile-rejects-claimant-s-partial-revision-request-in-long-running-dispute-over-el-clarin-newspaper","status":"publish","type":"post","link":"https:\/\/www.iisd.org\/itn\/2010\/01\/12\/icsid-tribunal-sides-with-chile-rejects-claimant-s-partial-revision-request-in-long-running-dispute-over-el-clarin-newspaper\/","title":{"rendered":"ICSID Tribunal sides with Chile, rejects claimant’s partial revision request in long running dispute over El Clarin newspaper"},"content":{"rendered":"

By Fernando Cabrera Diaz<\/span><\/strong><\/p>\n

January 13, 2010<\/span><\/strong><\/p>\n

An ICSID<\/span> tribunal has rejected a partial revision request by Pey Casado and the Presidente Allende Foundation of an award rendered in their long-running dispute with Chile over the takeover and closure of the El Clarin newspaper during the early days of the Pinochet regime. This is the first time that an ICSID tribunal has issued a decision relating to a revision request.<\/span><\/p>\n

As reported previously by Investment Treaty News, the dispute traces its roots to the 1973 coup which overthrew the socialist Chilean President Salvador Allende. Mr. Pey Casado claims he is the rightful owner of El Clarin which was taken over by the dictatorship of General Augusto Pinochet and expropriated by decrees issued under Law No. 77 of 1973, allegedly due to the paper\u2019s sympathies to the Allende Government.<\/span><\/p>\n

Mr. Pey Casado fled Chile in 1973 to return to his birthplace of Spain. He has assigned 90% of his claim against Chile to the Salvador Allende Foundation, a non-profit group established in 1990 to promote freedom of the press and democratic values in Spanish speaking nations.<\/span><\/p>\n

The tribunal\u2019s May 8, 2008 decision on the merits awarded the claimants just over US$ 10 million plus interest, a fraction of the US$ 400 million in damages they originally sought.\u00a0 The claim was fundamentally based on the alleged expropriation of El Clarin in 1973.\u00a0 However, the tribunal rejected the expropriation claim and instead found a violation of the fair and equitable treatment provisions of the 1994 Chile-Spain BIT<\/span>.\u00a0 Specifically, the tribunal found that Chile breached its obligations under the BIT when in April of 2000 it compensated third parties US$ 10 million for the expropriation of the newspaper, instead of the claimants.<\/span><\/p>\n

Subsequently, the claimants requested revision of the tribunal\u2019s award under ICSID Convention<\/span> Article 51.\u00a0 In particular, the claimants argued that they had become aware of new information for the tribunal\u2019s consideration with respect to its expropriation claim.\u00a0 The tribunal, however, ultimately disagreed, holding that the claimants could not meet the burden of proof in establishing that the information would have changed the outcome of the award.<\/span><\/p>\n

At issue was a press release issued by Chile\u2019s Consejo de Defensa del Estado (CDE) on February 22, 2008 referring to a Chilean Supreme Court decision awarding damages in the expropriation of a different newspaper, Horizonte Presse.\u00a0 The claimants allege that they only became aware of CDE\u2019s press release on May 18, 2008, ten days after the tribunal\u2019s decision on the merits was handed down.<\/span><\/p>\n

The claimants argued that CDE\u2019s press release acknowledged that there was consistent Chilean Supreme Court jurisprudence that the confiscation decrees issued under Decree Law No. 77 of 1973 were null and void ab initio.* Based on that acknowledgement, the claimants reasserted that the government\u2019s expropriation of El Clarin was a continuing illegal act under Chilean law that began in 1973 and continued until well after the Chile-Spain BIT came into force.\u00a0 Accordingly, the claimants argued that they were entitled to significantly more than a $10 million damage award.<\/span><\/p>\n

In analysing the revision request, the tribunal noted that under Article 51(1) the claimants were required to prove three things: (1) the discovery of a new fact; (2) that neither the claimants nor the tribunal knew of the fact at the time the award was rendered and that such lack of knowledge was not due to the claimants\u2019 negligence; and (3) that the fact would have changed the outcome of the award.<\/span><\/p>\n

On the first requirement, the tribunal was satisfied that the contents of the CDE\u2019s press release, however characterized, constituted a fact.\u00a0 As to whether it was a new fact, the tribunal expressed doubts that the claimant, Mr. Pey Casado, and\/or his lawyers were not aware of the agreement between Horizonte Presse and the CDE because the settlement in that case was widely reported, and in particular was reported in the El Mercurio newspaper to which Mr. Pey Casado was a subscriber.<\/span><\/p>\n

The tribunal, however, ultimately based its decision on a finding that the claimants did not meet the third requirement that the \u2018new\u2019 fact would have a decisive effect on the underlying award, because it agreed with Chile that CDE\u2019s press release applied only to the Horizonte Presse case. Furthermore, given that legal precedent in and of itself is not binding under Chilean law in subsequent cases, even if the CDE\u2019s press release referred to jurisprudence beyond the Horizonte Presse case, such jurisprudence would not be binding on other cases such as Mr. Pey Casado\u2019s case.\u00a0 Based on these findings the tribunal rejected the claimants\u2019 request for partial revision.<\/span><\/p>\n

The three-member tribunal was composed of Pierre Lalive of Switzerland (President), Mohammed Chemloul of Algeria and Emmanuel Gaillard of France. The long-running dispute was first registered in 1998 and has seen three arbitrators resign, and both sides complain of the \u201cglacial pace\u201d of the proceedings.<\/span><\/p>\n

On July 6, 2009 ICSID registered an application by Chile for the institution of annulment proceedings relating to the tribunal\u2019s May 8, 2008 award on the merits.<\/span><\/p>\n

* ITN<\/span> spoke to Mara Senn, one of the lawyers representing Chile at Arnold & Porter LLP, who said that the CDE was merely defending Chile\u2019s settlement in the Horizonte Presse case and that the language cited by claimants did not refer to the jurisprudence of nullity but rather to the Supreme Court\u2019s consistent position on the issue of damages.<\/span><\/p>\n

Sources:<\/span><\/p>\n

ITN Reporting<\/span><\/p>\n

Revision Request, June 2, 2008, available at Investment Treaty Arbitration at: <\/span>http:\/\/ita.law.uvic.ca\/documents\/PeyRevisionSPA.pdf<\/span><\/a><\/p>\n

Revision Decision, November 18, 2009 available at investmnetclaims.com<\/span><\/p>\n

Award on the Merits, May 8, 2008 available at investmentclaims.com<\/span><\/p>\n

Previous ITN Reporting:<\/span><\/p>\n

\u201cWorld Bank President will rule on Chile\u2019s effort to disqualify tribunal in ICSID case,\u201d By Luke Eric Peterson and Damon Vis-Dunbar, Investment Treaty News, 14 December 2005, available at: <\/span>http:\/\/www.IISD<\/span>.org\/pdf\/2005\/itn_dec14_2005.pdf<\/span><\/a><\/p>\n