Riverside Coffee, LLC v. Republic of Nicaragua
ICSID · Investment (ICSID and treaty) · Nicaragua · 17 Sep 2025
Why it matters
This award is significant for its detailed analysis of the national security exception under DR-CAFTA Article 21.2(b), distinguishing between the period of civil strife (where the exception applied) and the post-strife period (where it did not). It also clarifies the standard for attribution of conduct by private invaders to the state, and the scope of the full protection and security obligation in the context of widespread civil unrest.
Summary
Riverside Coffee, LLC, a US company, owned Hacienda Santa Fé, a large avocado and forestry plantation in Nicaragua, through its Nicaraguan subsidiary Inagrosa. In June-July 2018, during a period of widespread civil strife in Nicaragua, the plantation was invaded and occupied by former members of the Nicaraguan resistance (Contras). Riverside alleged that the Nicaraguan government orchestrated the invasion, failed to provide full protection and security, and ultimately expropriated the property through a judicial order. Nicaragua denied responsibility, arguing that the invasion was a spontaneous act by private individuals during civil strife, and invoked the national security exception (Article 21.2(b)) and the civil strife defense (Article 10.6) of DR-CAFTA. The Tribunal found that it had jurisdiction. On the merits, it rejected all of Riverside's claims. Regarding attribution, the Tribunal held that the invaders' conduct was not attributable to Nicaragua because there was insufficient evidence that the state directed or controlled the invasion. On the national security exception, the Tribunal found that Nicaragua had invoked it in good faith for the period of the civil strife (June-July 2018), but not for the post-July 2018 period when the occupation continued. However, the Tribunal found that Nicaragua did not breach its full protection and security obligation because its response was reasonable given the circumstances of widespread unrest. The fair and equitable treatment claim failed because Nicaragua did not make any specific promises or representations to Riverside. The expropriation claim failed because the judicial order relied on by Riverside did not transfer title to the state, and the invasion was not attributable to Nicaragua. The MFN and national treatment claims were also rejected. The Tribunal ordered Riverside to pay Nicaragua's legal costs of USD 8,240,445.86.
The detail
Parties: Riverside Coffee, LLC v. Republic of Nicaragua
Case number: ICSID Case No. ARB/21/16
Outcome: All of Claimant's claims rejected; Claimant ordered to pay Respondent USD 8,240,445.86 in costs.
Applicable law: DR-CAFTA (Dominican Republic-Central America Free Trade Agreement), ICSID Convention, ICSID Arbitration Rules
Issues in play: The case involved the collision between investor protection standards (full protection and security, fair and equitable treatment, expropriation) and the host state's national security exception and civil strife defense under DR-CAFTA.
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