Enel Fortuna S.A. v. Republic of Panama
ICSID · Investment (ICSID and treaty) · Panama · 18 Aug 2021
Why it matters
This case is an example of an investment treaty dispute that was resolved by settlement and recorded as a consent award under ICSID Arbitration Rule 43(2). It highlights the role of settlement in international investment arbitration and the procedural mechanism for embodying settlements in awards, which provides finality and enforceability.
Summary
Enel Fortuna S.A., a Panamanian company controlled by Italian entities Enel S.p.A. and Enel Green Power S.p.A., initiated ICSID arbitration against the Republic of Panama under the Panama-Italy Bilateral Investment Treaty (BIT). The dispute arose from an investment in Panama's energy sector. After the tribunal was constituted and procedural steps were taken, including document production and the filing of a memorial by the claimant, the parties notified the tribunal of their intent to suspend proceedings. They subsequently reached a settlement agreement. On 25 June 2021, the parties filed the full and signed settlement agreement with ICSID and requested that the tribunal embody it in an award, as permitted by ICSID Arbitration Rule 43(2). The tribunal noted a minor clerical error in the settlement's recitals, which the parties corrected. On 18 August 2021, the tribunal issued an award incorporating the settlement agreement as Annex A, thereby formally discontinuing the proceedings. The award does not address the merits of the dispute, as the parties resolved their differences amicably. The case demonstrates the use of consent awards to record settlements in investment arbitration, providing a binding and enforceable resolution without a contested decision on the merits.
The detail
Parties: Enel Fortuna S.A. v. Republic of Panama
Case number: ICSID Case No. ARB/19/5
Outcome: The Tribunal embodied the parties' settlement agreement in an award, resulting in discontinuance of the proceedings.
Applicable law: Panama-Italy BIT (Article IX), ICSID Convention
Issues in play: The dispute involved investment treaty protections under the Panama-Italy BIT, but the case was settled before any substantive legal issues were adjudicated.
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