Jean-Marc Parienti v. Autoridad de Transito y Transporte Terrestre
CESCON · Investment (ICSID and treaty) · Panama · 23 Nov 2006
Why it matters
This is one of the earliest known investment treaty awards rendered under the France-Panama BIT. It illustrates how a host state's revocation of a concession and grant to a third party can constitute indirect expropriation. The award also demonstrates the application of UNCITRAL rules in a treaty arbitration seated in Panama, and the use of equity (arbitraje en equidad) to supplement legal gaps.
Summary
Laurent Jean-Marc Parienti, a French national, invested in a Panamanian company that was granted a concession to build and operate a bus terminal in Colón Province. The concession was awarded by the Autoridad de Tránsito y Transporte Terrestre (ATTT) in June 2002. The company fulfilled all requirements, but the ATTT later refused to approve the terminal's location and instead granted a new concession to a different company in December 2003. Parienti claimed this amounted to an indirect expropriation of his investment, violating the France-Panama BIT. The arbitration was conducted under the UNCITRAL Rules, seated in Panama, with the tribunal applying the BIT and Panamanian law. The tribunal found that the ATTT's actions constituted a measure of desposesión (dispossession) under Article V of the BIT, which requires compensation. It rejected the state's argument that the concession was not a protected investment, holding that shares and concessions fall within the BIT's definition. The tribunal awarded Parienti US$32,521,683.00 for lost profits and other damages, plus interest at 5% per annum if not paid within 30 days. The award was later confirmed by Panamanian courts and enforced.
The detail
Parties: Jean-Marc Parienti v. Autoridad de Transito y Transporte Terrestre
Case number: italaw/cases/6671
Outcome: The tribunal found in favor of the claimant, holding that Panama had indirectly expropriated his investment by revoking a concession and awarding it to another company. It ordered the respondents to pay US$32,521,683.00 in damages for lost profits and other losses.
Quantum: US$32,521,683.00
Applicable law: France-Panama Bilateral Investment Treaty (1982); UNCITRAL Arbitration Rules; Panamanian law (Ley No. 5 of 1999, Ley No. 14 of 1993, Ley No. 34 of 1999); CESCON Rules
Issues in play: The collision was between the investor's rights under the France-Panama BIT (protection against expropriation without compensation) and Panama's sovereign right to regulate public transport concessions. The tribunal balanced the BIT's fair and equitable treatment and expropriation provisions against the state's regulatory powers.
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.