East Cement for Investment Company v. Poland, ICC
ICC · Investment (ICSID and treaty) · Poland · 26 Aug 2011
Why it matters
This partial award is notable for its detailed analysis of cost allocation in investment treaty arbitration when a claimant abandons or fails to prosecute its case. It confirms that a claimant's failure to meet procedural obligations, including non-payment of advances on costs, can result in an award of full costs against it, even without a merits determination. The award draws on ICC and other international case law to support the principle that a party's conduct, including dilatory tactics, justifies shifting costs.
Summary
The East Cement for Investment Company (ECIC), a Jordanian company, initiated ICC arbitration against Poland under the Poland-Jordan Bilateral Investment Treaty (BIT) in 2009, claiming damages of over US$150 million. After the tribunal was constituted and procedural timetables set, ECIC faced repeated difficulties: its first counsel resigned, then its second counsel also withdrew. ECIC requested multiple extensions, which the tribunal granted, but it failed to meet deadlines, including for document production and filing its second submission. Crucially, ECIC did not pay its share of the advance on costs (US$305,000) despite several extensions. Poland objected to further delays and sought an award on costs, arguing ECIC had abandoned its case. The tribunal, in this partial award, addressed only the issue of costs. It found that ECIC had failed to prosecute its case, citing its non-compliance with procedural orders, failure to pay the advance, and lack of progress. Applying ICC Rules (Articles 31(1) and (3)) and principles from ICC and other international cases (e.g., Melvin J. Howard v. Canada, Quadrant Pacific v. Costa Rica), the tribunal held that costs should follow the event and that a party's conduct is a key factor. It ordered ECIC to pay Poland's reasonable legal costs and other costs, plus interest at 5% per annum from the date of the award. The tribunal did not determine the merits of the underlying investment dispute.
The detail
Parties: East Cement for Investment Company v. Poland, ICC
Case number: italaw/cases/366
Outcome: The Tribunal ordered Claimant to pay Respondent's costs of legal representation and other costs, plus interest, due to Claimant's failure to prosecute its case.
Applicable law: Poland-Jordan BIT (1997); ICC Rules (1998); Polish law; international law
Issues in play: The case involved the allocation of costs in investment arbitration when a claimant fails to prosecute its case, applying the principle that costs follow the event and considering a party's conduct.
Read the full decision at italaw ↗
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