ACP Axos Capital GmbH v. Republic of Kosovo
ICSID · Investment (ICSID and treaty) · Kosovo · 3 May 2018
Why it matters
This case clarifies the definition of 'investment' under the Germany-Yugoslavia BIT, particularly in the context of failed privatization tenders. The tribunal held that a bidder's contractual rights from a tender process, without a final share purchase agreement, do not constitute an 'investment' under the BIT. It also addressed the distinction between contractual claims and investment treaty claims, reinforcing that mere participation in a tender does not create a protected investment.
Summary
ACP Axos Capital GmbH, a German company, participated in a tender to privatize Post and Telecommunications of Kosovo (PTK). After being selected as the preferred bidder, Axos entered into negotiations with Kosovo's Privatization Committee. However, the privatization process was cancelled before a final Share Purchase Agreement (SPA) was signed. Axos initiated ICSID arbitration under the Germany-Yugoslavia BIT, claiming that its rights under the tender process constituted a protected investment. The tribunal analyzed whether Axos had made an 'investment' under Article 1(1) of the BIT, which includes various forms of assets. Axos argued that its contractual rights, including a right to be paid wasted expenses, qualified as 'claims to money' under the BIT. The tribunal rejected this, finding that the tender documents explicitly stated that no contractual relationship existed until the SPA was signed, and that the cancellation right was reserved. The tribunal also dismissed Axos' alternative theory that its wasted expenses constituted an investment, noting that the tender terms barred such claims. Consequently, the tribunal declined jurisdiction, holding that no investment existed under the BIT. The award ordered Axos to bear all arbitration costs and pay Kosovo's legal fees.
The detail
Parties: ACP Axos Capital GmbH v. Republic of Kosovo
Case number: ICSID Case No. ARB/15/22
Outcome: The Tribunal declined jurisdiction; Claimant's claims dismissed. Claimant ordered to pay Respondent USD 1,713,349.40 and EUR 132,446.20 in costs.
Applicable law: Germany-Yugoslavia BIT (1990); ICSID Convention; Kosovo law
Issues in play: The dispute centered on whether the Claimant had made a qualifying 'investment' under the BIT, specifically whether a contractual right arising from a tender process constituted an 'investment' under Article 1(1) of the BIT.
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