Generation Ukraine, Inc. v. Ukraine
ICSID · Investment (ICSID and treaty) · Ukraine · 16 Sep 2003
Why it matters
This case is notable for its detailed analysis of the concept of 'investment' under the ICSID Convention and the BIT, particularly the requirement that an investment must be made in accordance with host state law. It also illustrates the high threshold for establishing indirect expropriation through a series of governmental acts, and the importance of credible evidence in proving damages. The Tribunal's criticism of the claimant's presentation and evidence handling serves as a cautionary tale for parties in investment arbitration.
Summary
Generation Ukraine, Inc., a U.S. company wholly owned by U.S. national Eugene J. Laka, claimed that Ukraine expropriated its investment in a commercial property development in Kyiv (the Parkview Project) in violation of the U.S.-Ukraine Bilateral Investment Treaty (BIT). The claimant alleged that after being encouraged by the Ukrainian government to invest, it established a local subsidiary, Heneratsiya Ltd., in 1993, and obtained various approvals and land rights for the project. However, it claimed that local authorities obstructed the project through a series of acts, including the cancellation of land allocation and lease agreements, which it argued amounted to expropriation. Ukraine denied the claims and raised jurisdictional objections. The Tribunal, after joining jurisdiction to the merits, found that it had jurisdiction over most claims but rejected all expropriation claims on the merits. It held that the alleged expropriatory acts did not deprive the claimant of its investment rights: the land lease agreements remained valid, and the claimant had not proven that it had acquired any legitimate rights to use adjoining property. The Tribunal also criticized the claimant's presentation of evidence, noting that its damages claim lacked credible support and that its legal arguments were convoluted and inconsistent. The award dismissed all claims and ordered the claimant to pay USD 365,000 in costs to Ukraine.
The detail
Parties: Generation Ukraine, Inc. v. Ukraine
Case number: ICSID Case No. ARB/00/9
Outcome: The Tribunal dismissed all claims and ordered Claimant to pay USD 365,000 in costs to Respondent.
Quantum: USD 365,000 (costs)
Applicable law: Treaty Between the United States of America and Ukraine Concerning the Encouragement and Reciprocal Protection of Investment (BIT), signed 4 March 1994, entered into force 16 November 1996; ICSID Convention
Issues in play: The case involved the definition of 'investment' under the BIT and ICSID Convention, and whether Ukraine's conduct amounted to expropriation under Article III of the BIT. The Tribunal also considered jurisdictional issues including ratione materiae, ratione personae, and ratione temporis.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.