Exeteco International Company S.L. v. Republic of Peru
PCA · Investment (ICSID and treaty) · France · 8 Oct 2018
Why it matters
This case illustrates the consequences of a claimant's failure to advance proceedings and pay costs in investment arbitration. It confirms that tribunals may terminate proceedings under the UNCITRAL Rules when a claimant, despite expressing willingness to continue, does not take concrete steps or pay required deposits, thereby prejudicing the respondent.
Summary
Exeteco International Company S.L., a Spanish company, initiated arbitration against Peru under the Spain-Peru bilateral investment treaty and the UNCITRAL Rules in 2013. After the tribunal was constituted and a preliminary hearing scheduled, both parties agreed to suspend proceedings in October 2015 to explore settlement. The suspension lasted nearly three years, during which the claimant repeatedly expressed desire to continue but took no procedural steps and failed to pay its share of arbitration costs despite multiple requests. Peru twice requested termination due to inactivity and prejudice. The tribunal, noting the claimant's non-payment and lack of progress, terminated the proceedings under Article 43.4 of the UNCITRAL Rules, which permits termination for failure to pay deposits. The seat of arbitration was Paris, France.
The detail
Parties: Exeteco International Company S.L. v. Republic of Peru
Case number: PCA Case No. AA535
Outcome: The tribunal terminated the arbitration proceedings due to the claimant's failure to pay its share of costs and lack of procedural activity.
Applicable law: UNCITRAL Arbitration Rules (2010); Agreement for the Promotion and Reciprocal Protection of Investments between Peru and Spain (1994)
Issues in play: The tribunal applied Article 43.4 of the UNCITRAL Rules, which allows termination for non-payment of deposits, and considered the claimant's inactivity over nearly three years.
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