Ahron G. Frenkel v. Republic of Croatia
ICSID · Investment (ICSID and treaty) · Croatia · 29 Jan 2025
Why it matters
This award clarifies the preclusive effect of a prior investment treaty award on subsequent claims by an indirect shareholder under a different BIT. The tribunal held that res judicata and abuse of process bar claims that are substantially identical to those already adjudicated, even if brought by a different legal entity in the same corporate group. The decision underscores the importance of consolidating related claims and the limits of MFN clauses to avoid relitigation.
Summary
Ahron G. Frenkel, an Israeli national, initiated ICSID arbitration against Croatia under the Israel-Croatia BIT, alleging that Croatia had mistreated his investment in a golf course and hotel project on Mt. Srđ. The same investment had previously been the subject of an arbitration brought by Elitech B.V., a Dutch company that indirectly owned the investment, under the Netherlands-Croatia BIT (Elitech v. Croatia, ICSID Case No. ARB/17/32). The Elitech tribunal issued an award on 23 May 2023, dismissing all claims. Croatia then argued that Frenkel's claims were barred by res judicata and abuse of process because they were essentially the same as those in Elitech. The Tribunal agreed. It found that the parties were in privity (Frenkel was the ultimate owner of Elitech), the legal grounds (causa petendi) were identical (both BITs contained similar protections, and the MFN clause did not create a different cause of action), and the relief sought was the same. The Tribunal also rejected Frenkel's attempt to rely on new evidence or facts, holding that these could have been raised in the Elitech proceedings or through revision. The Tribunal concluded that allowing Frenkel to proceed would undermine the finality of the Elitech award and constitute an abuse of process. The award includes a dissenting opinion by Prof. Stanimir Alexandrov, who argued that the claims were not identical and that there was no abuse of process.
The detail
Parties: Ahron G. Frenkel v. Republic of Croatia
Case number: ICSID Case No. ARB/20/49
Outcome: The Tribunal dismissed all claims on the basis of res judicata and abuse of process, and ordered the Claimant to pay the Respondent's costs.
Applicable law: Israel-Croatia BIT (2003), ICSID Convention, ICSID Arbitration Rules (2006)
Issues in play: The doctrines of res judicata and abuse of process were applied to bar claims that had already been decided or could have been brought in a prior arbitration (Elitech v. Croatia) concerning the same investment.
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