Marseille-Kliniken AG v. Equatorial Guinea (II), SCAI Case No. 600413-2015
Swiss Chambers' Arbitration Institution · Investment (ICSID and treaty) · Switzerland · 17 Mar 2017
Why it matters
This case is significant for its detailed analysis of the binding effect of prior arbitral awards on related disputes, the interpretation of management contracts under Swiss law, and the calculation of damages for lost management fees. It also illustrates the procedural complexities of international arbitration involving sovereign states.
Summary
Marseille-Kliniken AG, a Swiss hospital management company, entered into a management contract with the Government of Equatorial Guinea to manage the Polyclinic La Paz in Bata. The contract was for a fixed term from 2010 to 2020. In 2011, Marseille-Kliniken withdrew from Equatorial Guinea due to political instability. A prior arbitration (No. 600257-2011) had already addressed some issues. In this second arbitration, Marseille-Kliniken claimed unpaid management fees of EUR 53,891,600 plus interest. Equatorial Guinea objected to jurisdiction, arguing the dispute was settled by a 2015 agreement, and that the contract was terminated. The Tribunal, seated in Zurich and applying Swiss law, first confirmed its jurisdiction, finding that the 2015 agreement did not cover these claims. On the merits, the Tribunal held that the management contract was not terminated; it was a fixed-term contract that could only be terminated for cause, which was not proven. The Tribunal then calculated the management fee due, deducting savings in expenditures as required by the contract. It awarded the full claimed amount plus 5% interest. The award is notable for its treatment of the binding effect of the first award and its detailed financial analysis.
The detail
Parties: Marseille-Kliniken AG v. Equatorial Guinea (II), SCAI Case No. 600413-2015
Case number: italaw/cases/14422
Outcome: The Tribunal dismissed Respondent's jurisdictional objection and found the Management Contract was not terminated; Respondent was ordered to pay the management fee as claimed, with interest.
Quantum: EUR 53,891,600 plus interest
Applicable law: Swiss Law; Management Contract dated December 14, 2009; Swiss Rules of International Arbitration (2012)
Issues in play: The dispute involved Swiss contract law principles regarding termination of management contracts, particularly the applicability of Article 404 of the Swiss Code of Obligations (mandate termination) versus the fixed-term nature of the contract.
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