Cambodia Power Company v. Kingdom of Cambodia
ICSID · Investment (ICSID and treaty) · Cambodia · 22 Apr 2013
Why it matters
This case is a notable example of an ICSID tribunal dismissing all claims by an investor in a power project, emphasizing that the investor's lack of experience and failure to secure financing were the primary causes of the project's failure, not state interference. It illustrates the high bar for proving state responsibility for contractual breaches and the importance of investor due diligence in complex infrastructure projects.
Summary
Cambodia Power Company (CPC), a Cambodian company wholly owned by a US corporation, entered into a Power Purchase Agreement (PPA), Implementation Agreement (IA), and Deed of Guarantee (DOG) with the Kingdom of Cambodia (KOC) and Electricité du Cambodge (EDC) in 1996 for a power generation project in Phnom Penh. The project never reached financial closing. CPC alleged that KOC and EDC breached the agreements by, among other things, failing to designate EDC as an ICSID entity, entering into a competing power purchase agreement with Vietnam, enacting a new Electricity Law that allegedly hindered the project, and generally failing to cooperate. KOC counterclaimed for rescission based on alleged misrepresentations. The ICSID tribunal, after a lengthy procedural history including a jurisdictional decision that dismissed EDC as a party, held that KOC did not breach any of the agreements. The tribunal found that the project failed primarily due to CPC's inexperience and inability to secure financing, not due to any wrongful acts by KOC. All claims and counterclaims were dismissed, and CPC was ordered to pay substantial costs to KOC.
The detail
Parties: Cambodia Power Company v. Kingdom of Cambodia
Case number: ICSID Case No. ARB/09/18
Outcome: All of Claimant's claims dismissed; Respondent's counterclaim dismissed; Claimant ordered to pay Respondent USD 5,250,000 in legal costs and USD 372,111.29 in costs of proceedings, plus interest.
Applicable law: Power Purchase Agreement (PPA), Implementation Agreement (IA), Deed of Guarantee (DOG); ICSID Convention; Cambodian law; no specific treaty cited.
Issues in play: The dispute involved contractual obligations under the PPA, IA, and DOG, and whether KOC breached these agreements by failing to facilitate financial closing and by entering into a competing power purchase agreement with Vietnam. The tribunal also considered issues of repudiation, force majeure, and the designation of EDC as an agency of the state.
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