Grupo Francisco Hernando Contreras v. Republic of Equatorial Guinea
ICSID · Investment (ICSID and treaty) · Equatorial Guinea · 4 Dec 2015
Why it matters
This case is significant for its detailed analysis of the definition of 'investment' under the Spain-Equatorial Guinea BIT, applying the Salini criteria. The Tribunal's decision to uphold jurisdiction despite the respondent's objections clarifies the scope of protected investments, particularly in the context of preliminary expenses and contractual arrangements with the host state. It also addresses the burden of proof and the standard for establishing jurisdiction at the preliminary stage.
Summary
The dispute arose from a Spanish company's investment in construction projects in Equatorial Guinea. The claimant alleged that the respondent violated the BIT by imposing unjustified obstacles. The respondent objected to jurisdiction, arguing that the claimant was not an 'investor' and had not made an 'investment' as defined in the BIT. The Tribunal, by majority, rejected these objections. It found that the claimant had made contributions in cash, kind, and services, including the incorporation of local companies and preparation of technical projects, which constituted an investment under the BIT. The Tribunal applied the Salini test (contribution, duration, risk, and contribution to the host state's development) and concluded that the claimant's activities met these criteria. The Tribunal also held that the claimant had standing as an investor under the BIT. The dissenting arbitrator argued that the majority's decision was too restrictive and that the claimant should have been allowed to proceed to the merits. The award on jurisdiction was issued on 4 December 2015.
The detail
Parties: Grupo Francisco Hernando Contreras v. Republic of Equatorial Guinea
Case number: ICSID Case No. ARB(AF)/12/2
Outcome: The Tribunal upheld its jurisdiction over the dispute, rejecting all of Respondent's objections to jurisdiction.
Applicable law: Agreement between the Kingdom of Spain and the Republic of Equatorial Guinea for the Promotion and Reciprocal Protection of Investments (APPRI) signed 22 November 2003; ICSID Additional Facility Rules
Issues in play: The definition of 'investment' under Article 1(2) of the APPRI and whether the claimant's activities constituted an investment. The Tribunal applied the Salini test and found that the claimant's contributions, including the creation of companies and preparation of technical projects, met the criteria of an investment.
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