Cable Television of Nevis, Ltd. and Cable Television of Nevis Holdings, Ltd. v. Federation of St. Kitts and Nevis
ICSID · Investment (ICSID and treaty) · St. Kitts and Nevis · 13 Jan 1997
Why it matters
This case is a landmark ICSID decision on the requirement that a constituent subdivision or agency of a Contracting State must be designated to ICSID to be a party to arbitration. It clarifies that a state cannot be substituted for its subdivision without proper designation, and that consent to ICSID jurisdiction must be clearly established. The case also addresses the treatment of locally incorporated companies owned by foreign nationals under Article 25(2)(b) of the ICSID Convention.
Summary
Cable Television of Nevis, Ltd. and its holding company, both incorporated in Nevis but owned by US nationals, entered into an Investment Agreement with the Government of Nevis (the Nevis Island Administration, NIA) in 1986 to operate a cable television system. The agreement contained an ICSID arbitration clause. After disputes over rate increases, the Federation obtained an injunction preventing Cable from raising rates. Cable initiated ICSID arbitration against the Federation, arguing that the Federation was the proper party. The Federation objected to jurisdiction on several grounds. The Tribunal found that the proper party to the agreement was NIA, not the Federation, and that NIA was a constituent subdivision of the Federation that had not been designated to ICSID as required by Article 25(1) of the ICSID Convention. Therefore, the Tribunal lacked jurisdiction. The Tribunal also rejected the argument that the Federation's participation in High Court proceedings constituted consent to ICSID jurisdiction. Regarding the operating company, which was not incorporated at the time of the agreement, the Tribunal held that its consent to ICSID jurisdiction had not been established because the conditions for jurisdiction were not met. The holding company, though an offshore company, could potentially be a proper party if jurisdiction were otherwise established. The Tribunal dismissed the arbitration for lack of jurisdiction and ordered each party to bear its own costs.
The detail
Parties: Cable Television of Nevis, Ltd. and Cable Television of Nevis Holdings, Ltd. v. Federation of St. Kitts and Nevis
Case number: ICSID Case No. ARB/95/2
Outcome: The Tribunal dismissed the request for arbitration for lack of jurisdiction, finding that the proper party to the agreement was the Nevis Island Administration (NIA), not the Federation, and that NIA had not been designated to ICSID as required. Each party bore its own costs.
Applicable law: ICSID Convention, Investment Agreement dated September 18, 1986, Constitution of Saint Christopher and Nevis, Nevis Business Corporation Ordinance 1984, Companies Act Cap 335
Issues in play: The case involved the question of whether the Federation of St. Kitts and Nevis could be substituted for the Nevis Island Administration (NIA) as a party to the arbitration agreement, and whether NIA, as a constituent subdivision, had been properly designated to ICSID. The Tribunal also considered the effect of the late incorporation of the operating company and the status of the offshore holding company.
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