Eurofinsa v. Gabon
ICC · Investment (ICSID and treaty) · Gabon · 15 Oct 2020
Why it matters
This ICC award is significant for its detailed analysis of the applicable law in a mixed contract chain (Spanish law initial contract, Gabonese law supplementary contract) and its treatment of unilateral termination by the contractor. It also addresses the calculation of interest on unpaid invoices and the allocation of arbitration costs based on partial success. The case illustrates how tribunals handle disputes arising from large infrastructure projects in Africa involving foreign contractors and sovereign states.
Summary
Eurofinsa S.A., a Spanish construction company, entered into a contract with the Gabonese Republic to renovate the President Omar Bongo Ondimba Stadium in Libreville for the 2012 Africa Cup of Nations. The initial contract (2009) was governed by Spanish law, but a supplementary contract (2015) was governed by Gabonese law, with French law as subsidiary. Disputes arose over delays, non-payment, and alleged defects. Eurofinsa terminated the contract in March 2017 and initiated ICC arbitration in Paris. The tribunal had to decide the applicable law, the validity of termination, and various claims for unpaid work, additional costs, lost profits, and counterclaims for defects. It held that the supplementary contract was a public works contract subject to Gabonese administrative law and the Public Procurement Code. The tribunal found that Eurofinsa was entitled to terminate due to Gabon's failure to pay, and awarded most of the claimed sums for work done, plus interest. However, it reduced some claims and ordered Eurofinsa to pay for certain non-conformities. The award also addressed the allocation of arbitration costs, ordering Gabon to reimburse part of Eurofinsa's costs. The case is a comprehensive example of a construction arbitration involving a sovereign state, with detailed reasoning on law, quantum, and costs.
The detail
Parties: Eurofinsa v. Gabon
Case number: ICC Case No. 22899/DDA
Outcome: The tribunal granted Eurofinsa €11,234,374 for unpaid invoices, €70,336 for additional site costs, and €720,263.21 for lost profits, with interest. It ordered Eurofinsa to pay Gabon €437,400 for non-conformities. The contract was terminated as of 17 March 2017.
Quantum: €11,234,374 (unpaid invoices) + €70,336 (additional costs) + €720,263.21 (lost profits) = €12,024,973.21; minus €437,400 (non-conformities) = net €11,587,573.21 plus interest and costs
Applicable law: Supplementary Contract governed by Gabonese law, subsidiarily French law; Initial Contract governed by Spanish law; ICC Arbitration Rules (2017); Gabonese Public Procurement Code
Issues in play: The tribunal determined that the Supplementary Contract was a public works contract subject to Gabonese administrative law and the Gabonese Public Procurement Code, while the Initial Contract remained under Spanish law. The key collision was between the parties' contractual terms and Gabon's mandatory public procurement regulations.
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