GEA Group Aktiengesellschaft v. Ukraine
ICSID · Investment (ICSID and treaty) · Ukraine · 31 Mar 2011
Why it matters
This case is notable for its detailed analysis of the temporal scope of BIT protection, particularly regarding when an investment is made and whether pre-investment conduct can give rise to treaty claims. The tribunal also addressed the requirement for a 'clear and unambiguous promise' to establish a violation of the umbrella clause, setting a high bar for such claims.
Summary
GEA Group, a German company, brought an ICSID claim against Ukraine under the Germany-Ukraine BIT. GEA alleged that Ukraine violated the BIT in connection with loans made to a Ukrainian state-owned entity, Oriana, and an ICC arbitration award obtained against Oriana. The tribunal first addressed jurisdiction, finding that GEA had standing only for claims arising from the Conversion Contract until 30 June 2004, and that the loans constituted an investment. However, on the merits, the tribunal rejected all claims. It found no expropriation because Ukraine did not take any measure depriving GEA of its investment. The full protection and security claim failed because the alleged harm (a shooting and product misappropriation) was not attributable to Ukraine. The fair and equitable treatment claim was dismissed as Ukraine did not make any specific promises to GEA, and the tribunal found no arbitrary or discriminatory measures. The umbrella clause claim also failed because the alleged promises by Ukraine were not clear and unambiguous. Consequently, the tribunal ordered GEA to pay Ukraine's costs.
The detail
Parties: GEA Group Aktiengesellschaft v. Ukraine
Case number: ICSID Case No. ARB/08/16
Outcome: All of Claimant's claims rejected; Claimant ordered to reimburse Respondent's costs of USD 1,595,337.47 and UAH 4,300.
Applicable law: Germany-Ukraine BIT (1993); ICSID Convention
Issues in play: The tribunal examined whether GEA had standing as an investor, whether its loans constituted an investment, and whether Ukraine violated BIT standards including expropriation, fair and equitable treatment, full protection and security, and arbitrary measures.
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