Bosh International, Inc and B&P Ltd Foreign Investments Enterprise v. Ukraine
ICSID · Investment (ICSID and treaty) · Ukraine · 25 Oct 2012
Why it matters
This award clarifies the limits of state responsibility for acts of state-owned entities, holding that a university's contractual breaches are not attributable to the state absent a specific delegation of governmental authority. It also confirms that domestic court decisions applying local law in a non-discriminatory manner do not breach fair and equitable treatment, even if the outcome is unfavorable to the investor.
Summary
Bosh International, a US company, and its Ukrainian subsidiary B&P invested in a hotel and conference center at Taras Shevchenko National University of Kyiv under a 2003 contract. After disputes over rent and renovations, the University terminated the contract and evicted B&P. The CRO (state audit office) also found irregularities. B&P challenged the termination in Ukrainian courts but lost on res judicata grounds. The investors brought an ICSID claim under the US-Ukraine BIT, alleging expropriation, unfair treatment, and breach of the umbrella clause. The Tribunal found that the University's conduct was not attributable to Ukraine because it acted as a commercial party, not a state organ. The CRO's audit was lawful and non-discriminatory. The Ukrainian courts provided due process, and their application of res judicata did not violate international standards. The umbrella clause claim was admissible but failed because the University's breach was not a sovereign act. All claims were dismissed, and the Tribunal ordered the Claimants to pay USD 150,000 toward Ukraine's costs.
The detail
Parties: Bosh International, Inc and B&P Ltd Foreign Investments Enterprise v. Ukraine
Case number: ICSID Case No. ARB/08/11
Outcome: All claims dismissed. Claimants ordered to pay USD 150,000 to Respondent as contribution to costs.
Applicable law: Treaty between the United States of America and Ukraine concerning the Encouragement and Reciprocal Protection of Investment (1994); ICSID Convention; Ukrainian law
Issues in play: Attribution of conduct of a state university to the state under international law; fair and equitable treatment standard; umbrella clause; res judicata under Ukrainian law.
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