Michael Anthony Lee-Chin v. Dominican Republic, ICSID Case No. UNCT/18/3
ICSID · Investment (ICSID and treaty) · Dominican Republic · 15 Jul 2020
Why it matters
This case is significant because it addresses the scope of investor-state arbitration under a regional trade agreement (CARICOM-Dominican Republic). The tribunal's decision to uphold jurisdiction over indirect investments and to interpret the consent to arbitrate broadly may influence future claims under similar treaties. The dissenting opinion highlights ongoing debates about the clarity of state consent and the protection of indirect investments.
Summary
The dispute arises from a concession agreement for the Duquesa Landfill in the Dominican Republic. Michael Anthony Lee-Chin, a Jamaican national, indirectly owned 90% of Lajun Corporation, the Dominican company operating the landfill, through a chain of Panamanian and Dominican companies. After a series of disputes with the municipality, including termination attempts and a court-ordered intervention, Lee-Chin initiated arbitration under the CARICOM-Dominican Republic Free Trade Agreement's investment chapter and the UNCITRAL Rules. The Dominican Republic objected to jurisdiction on two grounds: first, that the treaty did not contain an offer to arbitrate under UNCITRAL rules; second, that the treaty did not protect indirect investments or indirect investors. The tribunal, by majority, rejected both objections. It interpreted Article XIII of the treaty as providing an unconditional offer to arbitrate, finding that the reference to 'the forum previously agreed upon by the parties' allowed the investor to choose UNCITRAL arbitration if no other forum was agreed. The tribunal also held that the treaty's definition of 'investment' included indirect investments, as it covered 'shares, stocks and debentures of companies or interests in the property of such companies,' which could be held indirectly. The dissenting arbitrator argued that the consent to arbitrate was not clear and that indirect investments were not covered. The tribunal's partial award on jurisdiction allowed the case to proceed to the merits.
The detail
Parties: Michael Anthony Lee-Chin v. Dominican Republic, ICSID Case No. UNCT/18/3
Case number: italaw/cases/6937
Outcome: The Tribunal upheld jurisdiction over the dispute, rejecting the Dominican Republic's objections that the treaty did not contain an offer to arbitrate under UNCITRAL rules and that indirect investments were not protected.
Applicable law: Agreement on Reciprocal Promotion and Protection of Investments between CARICOM and the Dominican Republic (Annex III of the Free Trade Agreement); UNCITRAL Arbitration Rules (1976); Vienna Convention on the Law of Treaties (1986)
Issues in play: The interpretation of the treaty's dispute resolution clause (Article XIII) and the definition of 'investment' and 'investor' under the treaty, specifically whether indirect investments and indirect investors are covered.
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