Renta 4 S.V.S.A, Ahorro Corporación Emergentes F.I., Ahorro Corporación Eurofondo F.I., Rovime Inversiones SICAV S.A., Quasar de Valors SICAV S.A., Orgor de Valores SICAV S.A., GBI 9000 SICAV S.A. v. The Russian Federation
Arbitration Institute of the Stockholm Chamber of Commerce · Investment (ICSID and treaty) · Sweden · 20 Mar 2009
Why it matters
This award is significant for its interpretation of BIT arbitration clauses that limit jurisdiction to disputes over compensation amount or method. The Tribunal held that such clauses encompass disputes over whether compensation is due, rejecting a narrow reading. It also addressed standing of ADR holders as investors, confirming that ADRs can qualify as investments under broad BIT definitions. The case is part of the Yukos-related arbitration wave.
Summary
Seven Spanish entities (investment funds and variable stock companies) brought arbitration against Russia under the Spain-USSR BIT, alleging unlawful expropriation of their Yukos Oil Company ADRs. Russia challenged jurisdiction, arguing that Article 10 of the BIT only permits arbitration of disputes concerning the amount or method of payment of compensation, not whether expropriation occurred. The Tribunal rejected this, holding that 'compensation due' includes disputes over entitlement. It also found that ADRs are investments under the BIT's broad definition. However, the Tribunal dismissed claims by three entities (Renta 4 and two Ahorro funds) for lack of standing as investors. The remaining four claimants (SICAVs) were allowed to proceed. The award is a preliminary decision on jurisdiction and admissibility; the merits were not addressed.
The detail
Parties: Renta 4 S.V.S.A, Ahorro Corporación Emergentes F.I., Ahorro Corporación Eurofondo F.I., Rovime Inversiones SICAV S.A., Quasar de Valors SICAV S.A., Orgor de Valores SICAV S.A., GBI 9000 SICAV S.A. v. The Russian Federation
Case number: SCC No
Outcome: The Tribunal upheld jurisdiction over expropriation claims under Article 10 of the Spanish BIT for four of the seven claimants, dismissed jurisdiction under Article 5, and found the claims admissible.
Applicable law: Agreement for Reciprocal Promotion and Protection of Investments between Spain and the USSR (Spanish BIT), SCC Arbitration Rules, Vienna Convention on the Law of Treaties
Issues in play: The scope of Article 10 of the Spanish BIT, which limits arbitration to disputes 'relating to the amount or method of payment of the compensation due under Article 6', was contested. The Tribunal interpreted 'compensation due' to include disputes over whether compensation is owed at all, not just quantum.
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