Bridas S.A.P.I.C., et al, v. Government of Turkmenistan and Turkmenneft, ICC Case No 9058/FMS/KGA
ICC · Investment (ICSID and treaty) · Texas, USA · 21 Oct 1999
Why it matters
This Second Partial Award addresses whether an arbitral tribunal can hear a damages claim based on a repudiation accepted after the arbitration commenced. The majority held that the claim was not a new cause of action because the repudiatory conduct was continuing and the claim was anticipated in the Terms of Reference. The dissent argued the tribunal was functus officio. The case illustrates the tension between finality and flexibility in international arbitration.
Summary
The case arises from a joint venture agreement between Bridas entities and Turkmenistan state entities. In a First Partial Award, the tribunal found that the Respondents had repudiated the agreement but the Claimants had not accepted the repudiation, so the agreement remained in effect. The tribunal also indicated what damages would be payable if the Claimants later accepted the repudiation. After that award, the Claimants accepted the repudiation and sought damages. The Respondents objected, arguing the tribunal lacked jurisdiction because the acceptance created a new cause of action not existing when the arbitration began. The majority rejected this, holding that the repudiatory conduct was continuing and the claim for damages was within the scope of the Terms of Reference, which included claims for termination and damages. The majority also noted that English law does not require an immediate election and that the Claimants could accept the repudiation at any time before final judgment. The dissent argued that the claim was new and that the tribunal was functus officio because it had already decided the damages issue in the First Partial Award. The Second Partial Award thus confirms the tribunal's jurisdiction to proceed with the damages phase.
The detail
Parties: Bridas S.A.P.I.C., et al, v. Government of Turkmenistan and Turkmenneft, ICC Case No 9058/FMS/KGA
Case number: italaw/cases/5897
Outcome: The tribunal declared it has jurisdiction to consider the Claimants' damages claim arising from their acceptance of the Respondents' repudiation.
Applicable law: English law, ICC Rules, Terms of Reference
Issues in play: English contract law on repudiation and election of remedies; arbitral jurisdiction under ICC Rules.
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