Agility for Public Warehousing Company K.S.C. v. Republic of Iraq
ICSID · Investment (ICSID and treaty) · Iraq · 22 Feb 2021
Why it matters
This award clarifies the standard for denial of justice in investment arbitration, particularly regarding the exhaustion of local remedies and the role of legislative interference. It also addresses the temporal scope of BIT protections and the requirement for a 'final' decision by the highest court. The case is notable for its detailed analysis of Iraqi administrative and constitutional law.
Summary
Agility, a Kuwaiti company, invested in Korek Telecom, an Iraqi mobile operator. In 2014, Iraq's Communications and Media Commission (CMC) declared the 2011 equity transaction void, ordering restoration of the pre-transaction shareholding. Agility challenged this before the CMC Appeals Board and Iraqi courts, but the CMC order was upheld. Meanwhile, the Iraqi Parliament recommended the CMC order be implemented, and the Kurdistan Regional Government issued a decree affecting Korek's license. Agility brought an ICSID claim under the Kuwait-Iraq BIT, alleging expropriation, unfair treatment, and denial of justice. The tribunal dismissed most claims as time-barred under the BIT's temporal scope, but allowed the denial of justice claim and the claim regarding failure to implement the CMC order. On the merits, the tribunal found no expropriation because the CMC order did not deprive Agility of its investment; the order only voided the transaction, leaving Agility's underlying shares intact. The FET claim failed because Iraq's actions were not arbitrary or unreasonable; the CMC had legitimate regulatory concerns. The denial of justice claim failed because Agility did not exhaust local remedies: the Iraqi courts had not issued a final decision on the merits, and the legislative recommendation did not constitute a denial of justice. The tribunal also rejected MFN and other claims. Agility was ordered to pay Iraq's costs.
The detail
Parties: Agility for Public Warehousing Company K.S.C. v. Republic of Iraq
Case number: ICSID Case No. ARB/17/7
Outcome: All claims dismissed; Respondent awarded costs of USD 5,175,604.64 plus interest.
Applicable law: Kuwait-Iraq BIT (2015); ICSID Convention; customary international law
Issues in play: The tribunal considered whether Iraq's failure to implement a CMC order voiding a telecoms transaction constituted expropriation or unfair treatment, and whether court delays and legislative actions amounted to denial of justice.
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