Jindal Steel Bolivia S.A. v. Plurinational State of Bolivia, Corporación Minera de Bolivia and Empresa Siderúrgica del Mutún
ICC · Investment (ICSID and treaty) · Bolivia · 5 Nov 2018
Why it matters
This award clarifies the limits of arbitration agreements with state-owned entities under Bolivian law, particularly the requirement of express consent for non-signatories. It also illustrates the bifurcation of jurisdictional and merits phases in ICC arbitration, and the treatment of res judicata from prior related arbitration. The decision on costs highlights the principle that the losing party bears the costs of successful jurisdictional objections.
Summary
Jindal Steel Bolivia S.A. (JSB), a subsidiary of Indian company Jindal Steel & Power Limited, entered into a shared-risk contract (Mutún-RC) with Empresa Siderúrgica del Mutún (ESM) in 2007 for the exploration and exploitation of iron ore in Bolivia. The contract included an ICC arbitration clause. JSB claimed that Bolivia, COMIBOL, and ESM breached the contract, Bolivian law, and the Investment Law, seeking damages. The respondents objected to jurisdiction. The tribunal bifurcated the proceedings. In this award, the tribunal held that Bolivia and COMIBOL were not parties to the contract or its arbitration clause, and had not otherwise consented to arbitration, so claims against them were dismissed. Against ESM, the tribunal retained jurisdiction over breach of contract and bad faith claims related to the contract area and gas supply, but not over claims based on changes to the legal framework, tort, or the Investment Law. The tribunal deferred the res judicata objection (based on a prior ICC award between JSB and ESM) to the merits phase. JSB was ordered to pay the costs of Bolivia and COMIBOL.
The detail
Parties: Jindal Steel Bolivia S.A. v. Plurinational State of Bolivia, Corporación Minera de Bolivia and Empresa Siderúrgica del Mutún
Case number: ICC Case No. 20086/ASM/JPA
Outcome: The tribunal upheld Bolivia's and COMIBOL's jurisdictional objections, dismissing claims against them for lack of personal jurisdiction. It partially upheld ESM's objection, retaining jurisdiction only over certain contractual claims and deferring the res judicata objection. Jindal was ordered to pay costs to Bolivia and COMIBOL.
Applicable law: ICC Rules of Arbitration (2012); Bolivian law (Civil Code, Commercial Code, Investment Law); Contract de Riesgo Compartido Mutún-RC
Issues in play: The case involved the interpretation of the arbitration clause in the shared-risk contract, determining whether non-signatory state entities (Bolivia and COMIBOL) were bound by the clause. Also at issue was the scope of the arbitration agreement ratione materiae, including whether claims under Bolivian investment law and tort claims fell within the clause.
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