Antonio del Valle Ruiz and others v. Kingdom of Spain
PCA · Investment (ICSID and treaty) · Spain · 13 Mar 2023
Why it matters
This award is significant for its detailed analysis of dual nationality under the ICSID Convention and the Mexico-Spain BIT, holding that dual nationals of the host state and another state party cannot bring claims against the host state. It also addressed the 'clean hands' doctrine and the fair and equitable treatment standard in the context of bank resolution measures, providing guidance on the limits of investor protection in financial crises.
Summary
The case arose from the resolution of Banco Popular Español, S.A. in June 2017, which resulted in the total loss of the Claimants' investments. The Claimants, a group of 54 Mexican and dual Mexican-Spanish nationals, brought claims under the Mexico-Spain BIT alleging that Spain breached its obligations of fair and equitable treatment, national treatment, and expropriation through various measures, including the sale of Banco Popular to Santander, failure to grant emergency liquidity assistance, and public statements. The Tribunal, after a complex procedural history including a challenge to an arbitrator and consolidation of UNCITRAL and ICSID proceedings, issued a final award on 13 March 2023. On jurisdiction, the Tribunal upheld jurisdiction over most claimants but declined jurisdiction over four dual nationals (the Rojas sisters) on the basis that they were Spanish nationals and thus could not bring claims against Spain under the BIT. It also declined jurisdiction over certain deposit withdrawals that were not sovereign acts or predated the investments. On the merits, the Tribunal found that Spain did not breach the BIT. It held that the fair and equitable treatment standard was not violated because Spain's actions were reasonable, non-discriminatory, and consistent with due process, particularly given the financial crisis context. The national treatment claim failed because the Claimants did not identify a proper comparator. The expropriation claim failed because the measures were a valid exercise of police powers and not discriminatory. The Tribunal ordered the Claimants to bear 60% of Spain's legal fees and all arbitration costs, with interest.
The detail
Parties: Antonio del Valle Ruiz and others v. Kingdom of Spain
Case number: PCA Case No. 2019-17
Outcome: Spain prevailed on liability; the Tribunal found no breach of the Mexico-Spain BIT. Claimants ordered to pay €717,339.93 in arbitration costs and €7,213,136.44 in legal fees to Spain.
Applicable law: Agreement on the Promotion and Reciprocal Protection of Investments between Mexico and Spain (2006); UNCITRAL Arbitration Rules (2013); place of arbitration The Hague, Netherlands.
Issues in play: The case involved the interplay between the Mexico-Spain BIT and EU law, particularly regarding the treatment of dual nationals and the scope of Spain's consent to arbitration under the fork-in-the-road and waiver clauses.
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