HICEE B.V. v. Slovak Republic
PCA · Investment (ICSID and treaty) · Slovak Republic · 23 May 2011
Why it matters
This case is a landmark on the definition of 'investment' under the Netherlands-Slovakia BIT, particularly regarding indirect ownership structures. The Tribunal held that the BIT's most-favored-nation clause did not incorporate broader definitions from other treaties, and that the claimant's indirect investment through a Slovak holding company was not protected because the BIT required direct investment by a Dutch national. The decision clarifies the limits of treaty protection for corporate structures.
Summary
HICEE B.V., a Dutch company, owned 100% of Dovera Holding, a Slovak company that in turn owned two Slovak health insurance companies, Dovera and Apollo. In 2007, Slovakia enacted a law prohibiting health insurance companies from distributing profits and capping administrative expenses. HICEE claimed this breached the Netherlands-Slovakia BIT (Articles 3, 4, 5). The dispute was arbitrated under UNCITRAL Rules with the PCA as administering authority. The Tribunal first addressed a preliminary issue: whether HICEE's indirect investment (through Dovera Holding) qualified as an 'investment' under Article 1 of the BIT. The BIT defined 'investment' as 'every kind of asset invested by a national of one Contracting Party in the territory of the other.' The Tribunal interpreted this strictly, applying the Vienna Convention on the Law of Treaties. It found that the BIT required a direct investment by a Dutch national in Slovak territory. Since HICEE's investment was in Dovera Holding (a Slovak company), which then invested in the insurers, the Tribunal held that HICEE's interest was not a protected investment under the BIT. The Tribunal also rejected HICEE's argument that the most-favored-nation clause in Article 3 could import broader definitions from other BITs. Consequently, the Tribunal dismissed all claims for lack of jurisdiction ratione materiae. The award was made on 23 May 2011 in London. The Tribunal ordered each party to bear its own legal costs and share the arbitration costs equally.
The detail
Parties: HICEE B.V. v. Slovak Republic
Case number: PCA Case No. 2009-11
Outcome: The Tribunal dismissed the Claimant's claims; each party to bear its own costs, and the costs of arbitration to be borne equally.
Applicable law: Agreement on Encouragement and Reciprocal Protection of Investments between the Netherlands and the Czech and Slovak Federal Republic (1991); UNCITRAL Rules; Vienna Convention on the Law of Treaties
Issues in play: The interpretation of the BIT's Article 1 (definition of 'investments') and whether indirect investments through a Slovak holding company were protected. The Tribunal applied the Vienna Convention rules on treaty interpretation.
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