Indrek Kuivallik v. Latvia
PCA · Investment (ICSID and treaty) · Latvia · 21 Nov 2017
Why it matters
This case is notable for the rare outcome where the claimant withdrew all claims and was ordered to pay the respondent's full litigation costs, which were subsequently enforced through domestic courts in Estonia. It demonstrates the effectiveness of cost orders in investor-state arbitration and the importance of state representation in recovering expenses.
Summary
In 2014, Estonian investor Indrek Kuivallik initiated arbitration against Latvia under the Estonia-Latvia Bilateral Investment Treaty, claiming that Latvia had violated the treaty by affecting his investments in wind power generation. The arbitration was administered by the Permanent Court of Arbitration under UNCITRAL Rules. During the proceedings in late 2015, Kuivallik withdrew all claims and agreed to pay Latvia's litigation costs. In February 2016, the tribunal issued an award ordering Kuivallik to reimburse Latvia 1.28 million euros. When Kuivallik failed to pay, Latvia sought enforcement in Estonian courts, which ruled in Latvia's favor in August 2016. Latvia ultimately recovered the full amount. The case highlights the possibility of cost recovery in investor-state arbitration and the enforcement of arbitral awards through domestic courts.
The detail
Parties: Indrek Kuivallik v. Latvia
Case number: PCA Case No. AA555
Outcome: Claimant withdrew all claims and was ordered to pay Latvia's litigation costs of 1.28 million euros.
Quantum: 1,280,000 EUR
Applicable law: Estonia-Latvia BIT (1996); UNCITRAL Arbitration Rules
Issues in play: The BIT's fair and equitable treatment and protection of investments were invoked by the claimant, but the tribunal did not reach the merits as the claim was withdrawn.
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.