Dunkeld International Investment Ltd. v. Government of Belize (I)
PCA · Investment (ICSID and treaty) · Belize · 28 Jun 2016
Why it matters
This award is significant for its detailed analysis of valuation in expropriation cases, particularly the inclusion of a contractual claim (the Accommodation Agreement) in the valuation of the expropriated asset. It also addresses the interaction between domestic anti-arbitration injunctions and international arbitration, and the allocation of costs in a settlement context.
Summary
Dunkeld International Investment Ltd., a company incorporated in the Turks and Caicos Islands, initiated arbitration against the Government of Belize under the UK-Belize BIT after Belize compulsorily acquired Dunkeld's interest in Belize Telemedia Limited (Telemedia), a telecommunications company. The dispute centered on the valuation of Telemedia as of the date of expropriation (25 August 2009). The Tribunal had to determine the fair market value of Telemedia, including the value of an Accommodation Agreement between Telemedia and the Government, which had been the subject of a prior LCIA award. The parties reached a settlement agreement in September 2015, but the Tribunal proceeded to issue an award on quantum. The Tribunal applied a discounted cash flow (DCF) method to value Telemedia, including the Accommodation Agreement claim with a 5% supplemental discount. It valued Telemedia at BZ$5.654749 per share, with Dunkeld's interest worth US$96,935,233, plus pre-Award interest of US$72,017,410. The Tribunal also ordered Belize to pay costs related to a parallel arbitration (Dunkeld II) and litigation in Belize courts, but each party bore its own legal costs. The award is notable for its detailed valuation analysis and its treatment of the interplay between domestic court injunctions and international arbitration.
The detail
Parties: Dunkeld International Investment Ltd. v. Government of Belize (I)
Case number: PCA Case No. 2010-13
Outcome: The Tribunal declared the value of Telemedia and ordered the Respondent to pay US$96,935,233 plus pre-Award interest of US$72,017,410, and costs related to Dunkeld II and Belize court proceedings, with post-Award interest.
Quantum: US$96,935,233 plus US$72,017,410 pre-Award interest
Applicable law: UK-Belize BIT (1982), UNCITRAL Rules (1976)
Issues in play: The case involved the expropriation of an investment and the valuation of a telecommunications company, including the treatment of an accommodation agreement and the application of the fair market value standard.
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