Bridgestone Licensing Services, Inc. and Bridgestone Americas, Inc. v. Republic of Panama
ICSID · Investment (ICSID and treaty) · Panama · 14 Aug 2020
Why it matters
This award is significant for its detailed analysis of denial of justice claims in investment arbitration, particularly regarding the high threshold required to establish that a domestic court decision is so egregious as to violate international law. The Tribunal clarified that mere errors of law or fact by a national court do not constitute denial of justice; there must be a clear and malicious misapplication of law or a fundamental breach of due process. The case also addressed the limits of investor claims for losses suffered outside the host state.
Summary
The dispute arose from a trademark opposition and subsequent civil damages action in Panama. Bridgestone's subsidiaries (BSLS and BSAM) claimed that Panama's courts violated the TPA by awarding damages against them for filing a trademark opposition in bad faith. The claimants argued that the Panamanian Supreme Court's judgment was arbitrary, manifestly unjust, and amounted to a denial of justice. The Tribunal, after a detailed review of the domestic proceedings, found that the Supreme Court's decision was not arbitrary or manifestly unjust. The Tribunal noted that the majority judgment was reasoned and based on evidence, and that the dissenting opinion did not demonstrate a breach of international law. The Tribunal also held that BSAM lacked standing to bring a denial of justice claim because it was not a party to the domestic proceedings, and that BSLS's claim for damages suffered outside Panama was not covered by the TPA. Ultimately, the Tribunal dismissed all claims and counterclaims, finding no violation of the TPA.
The detail
Parties: Bridgestone Licensing Services, Inc. and Bridgestone Americas, Inc. v. Republic of Panama
Case number: ICSID Case No. ARB/16/34
Outcome: The Tribunal dismissed all claims and counterclaims, ordering each party to bear its own costs and share the costs of the proceeding equally.
Applicable law: United States-Panama Trade Promotion Agreement (TPA), ICSID Convention, and Panamanian law
Issues in play: The case involved the standard for denial of justice under the TPA, particularly whether a domestic court's judgment can amount to a denial of justice if it is arbitrary or manifestly unjust, and the scope of fair and equitable treatment.
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