EDF (Services) Limited v. Romania
ICSID · Investment (ICSID and treaty) · Romania · 8 Oct 2009
Why it matters
This award is notable for its detailed analysis of the fair and equitable treatment standard, including the requirement of a 'legitimate expectation' based on specific assurances. It also addresses the umbrella clause, holding that attribution of conduct to the state does not make the state a party to the contract. The dissenting opinion on costs highlights the evolving approach to cost allocation in investment arbitration.
Summary
EDF (Services) Limited, a Jersey company, invested in Romania through two joint ventures: ASRO (duty-free shops) and SKY (catering services). EDF claimed that Romania breached the UK-Romania BIT through various measures, including failure to extend ASRO's license, alleged bribe solicitation, and actions by state entities AIBO and TAROM. The Tribunal dismissed all claims. It found no breach of fair and equitable treatment, as EDF had no legitimate expectation of license renewal without specific assurances. The expropriation claim failed because the measures were not a substantial deprivation. The umbrella clause did not apply because Romania was not a party to the contracts, and attribution of conduct to the state did not change that. The Tribunal ordered EDF to pay USD 6 million of Romania's legal costs, with a dissent on costs by arbitrator Rovine.
The detail
Parties: EDF (Services) Limited v. Romania
Case number: ICSID Case No. ARB/05/13
Outcome: All claims dismissed. Claimant ordered to pay USD 6,000,000 to Respondent for legal costs.
Quantum: USD 6,000,000 (costs only)
Applicable law: UK-Romania BIT (1995); ICSID Convention; Romanian law
Issues in play: Fair and equitable treatment (FET) standard, expropriation, umbrella clause, and attribution of state entity conduct under international law.
Read the full decision at italaw ↗
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