Consortium Groupement L.E.S.I.- DIPENTA v. République algérienne démocratique et populaire
ICSID · Investment (ICSID and treaty) · Algeria · 10 Jan 2005
Why it matters
This case is a landmark on the standing of consortia under ICSID. The Tribunal held that a consortium, even if recognized as a legal entity under Italian law, cannot bring an ICSID claim unless it is the actual holder of the investment rights. The decision clarifies that the 'investor' must be the party that owns the rights and obligations under the investment contract, not an entity formed for convenience. It sets an important precedent for treaty interpretation regarding the definition of 'investor' and the requirement of consent.
Summary
The case arose from a contract for the construction of the Koudiat Acerdoune dam in Algeria. The claimant, an Italian consortium formed by LESI and DIPENTA, signed the contract with the Algerian National Agency for Dams (ANB) in 1993. After delays and a suspension of works, the contract was terminated in 2001. The consortium filed an ICSID claim under the Italy-Algeria BIT, seeking approximately €115 million in damages. Algeria objected to jurisdiction, arguing that the consortium was not the proper investor because the contract was signed by the 'Groupement LESI-DIPENTA' (a joint venture without legal personality) and not by the consortium itself. The Tribunal agreed. It found that the consortium, although a legal entity under Italian law, was not a party to the contract and therefore did not own the investment. The rights and obligations belonged to the member companies. The Tribunal distinguished between the consortium's internal structure and the external contractual relationship. It held that the consortium lacked standing to bring the claim, making the request inadmissible and the Tribunal incompetent. The decision did not prejudice the member companies' right to file a new claim in their own names. The Tribunal also ordered each party to bear half the arbitration costs, with Algeria reimbursing the claimant USD 45,050 for advances.
The detail
Parties: Consortium Groupement L.E.S.I.- DIPENTA v. République algérienne démocratique et populaire
Case number: ICSID Case No. ARB/03/08
Outcome: The Tribunal declined jurisdiction, finding the claim inadmissible because the consortium lacked standing to bring the claim in its own name.
Applicable law: ICSID Convention; Italy-Algeria BIT (1993); Italian Civil Code (consortium law); Algerian Civil Code
Issues in play: The key issue was whether an Italian consortium with external activity (consorzio con attività esterna) could be an 'investor' under the ICSID Convention and the BIT, or whether only its member companies could bring a claim.
Read the full decision at italaw ↗
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