Bacilio Amorrortu v. Republic of Peru (I)
PCA · Investment (ICSID and treaty) · Peru · 5 Aug 2022
Why it matters
This case is significant for its strict application of the waiver requirement under the USPTPA, emphasizing that a defective waiver cannot be cured after the deadline. The majority's decision reinforces the 'frozen record' approach, rejecting the Mavrommatis doctrine in the context of investor-state arbitration. The dissenting opinion highlights a key doctrinal divide on whether jurisdictional defects can be cured, making this award a reference point for future cases involving waiver compliance.
Summary
The dispute arose from Mr. Bacilio Amorrortu's claim that Peru frustrated his legitimate expectations to obtain a contract for oil drilling in Blocks III and IV of the Talara Basin. He alleged that PeruPetro, the state entity, ignored his rights to direct negotiation and instead initiated a rigged public tender favoring another company. Mr. Amorrortu claimed violations of the fair and equitable treatment standard under the USPTPA. Peru raised two preliminary objections: Objection 1 under Article 10.20.4 (claim manifestly without merit) and Objection 4 under Article 10.18.2 (invalid waiver). The Tribunal dismissed Objection 1, finding the claim not manifestly without merit. However, by a majority (Professors Hanotiau and Landau, with Presiding Arbitrator Binnie dissenting), the Tribunal upheld Objection 4. The majority held that Mr. Amorrortu's waiver, submitted with the Notice of Arbitration, did not comply with Article 10.18.2(b) because it failed to waive the right to initiate or continue proceedings before administrative tribunals or courts under Peruvian law. The majority also rejected the Claimant's attempt to cure the defect by submitting a revised waiver later, ruling that the waiver must be valid at the time of filing and cannot be cured after the deadline. The dissenting opinion argued that the Mavrommatis doctrine should apply, allowing the defect to be cured, and that the Tribunal had jurisdiction. The Tribunal dismissed the claims for lack of jurisdiction and reserved costs.
The detail
Parties: Bacilio Amorrortu v. Republic of Peru (I)
Case number: PCA Case No. 2020-11
Outcome: The Tribunal dismissed the claim for lack of jurisdiction due to Claimant's invalid waiver under Article 10.18.2(b) of the USPTPA.
Applicable law: United States-Peru Trade Promotion Agreement (USPTPA), UNCITRAL Rules (2013), Peruvian law (Law No. 26225, Organic Law on Hydrocarbons)
Issues in play: The case involved the interpretation of the waiver requirement under Article 10.18.2(b) of the USPTPA, specifically whether the Claimant's waiver was valid and whether it could be cured after the deadline. The majority held that the waiver was invalid and could not be cured, while the dissenting arbitrator argued for the application of the Mavrommatis doctrine to allow cure.
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