Blue Bank International & Trust (Barbados) Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB 12/20
ICSID · Investment (ICSID and treaty) · Venezuela · 26 Apr 2017
Why it matters
This award clarifies that a trustee acting on behalf of a beneficiary cannot claim treaty protection as an investor unless it invests its own assets. It reinforces the requirement that an investor must have made the investment in its own right, not merely as a legal owner without beneficial interest. The decision also addresses the effect of Venezuela's denunciation of the ICSID Convention on pending arbitration offers.
Summary
Blue Bank International & Trust (Barbados) Ltd., a Barbados corporation, initiated ICSID arbitration against Venezuela under the Barbados-Venezuela BIT, alleging expropriation of its investment in tourism and hospitality businesses. Venezuela objected to jurisdiction on several grounds, including that Blue Bank lacked standing because it held the investment as trustee for a beneficiary (Hampton Latin American Holdings, Ltd.) and did not invest its own assets. The Tribunal bifurcated the proceedings to address jurisdiction first. After analyzing the trust structure, the Tribunal found that Blue Bank had no beneficial interest in the trust assets; it acted solely as trustee with no discretion. The Tribunal held that under the BIT, an 'investor' must have made the investment in its own behalf. Since Blue Bank did not, it lacked standing. The Tribunal also rejected Venezuela's argument that its denunciation of the ICSID Convention terminated consent to arbitration, but this did not affect the outcome. The Tribunal dismissed all claims for lack of jurisdiction and ordered Blue Bank to pay Venezuela's legal costs of USD 1,709,295.00 plus interest.
The detail
Parties: Blue Bank International & Trust (Barbados) Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB 12/20
Case number: italaw/cases/1513
Outcome: The Tribunal declined jurisdiction, finding that Blue Bank did not make an investment in its own behalf. The Claimant was ordered to pay the Respondent's legal costs of USD 1,709,295.00 plus interest.
Quantum: USD 1,709,295.00 (costs)
Applicable law: Agreement between the Government of Barbados and the Government of the Republic of Venezuela for the Promotion and Protection of Investments (1994); ICSID Convention
Issues in play: The case involved the definition of 'investment' under the BIT and whether a trustee holding assets for a beneficiary can claim as an investor. The Tribunal held that Blue Bank lacked standing because it did not invest its own assets.
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