RSM Production Corporation v. Saint Lucia
ICSID · Investment (ICSID and treaty) · Saint Lucia · 29 Apr 2019
Why it matters
This decision clarifies the limits of ICSID tribunals' power to dismiss claims with prejudice for failure to post security for costs. The ad hoc Committee held that such dismissal is a substantive determination on the merits, not a procedural measure, and thus exceeds the tribunal's authority under Article 44 of the ICSID Convention. It underscores that claimants should not be permanently barred from re-litigating claims after paying costs and providing security in new proceedings.
Summary
RSM Production Corporation, a US company, initiated ICSID arbitration against Saint Lucia under a 2000 agreement for an oil exploration license. A boundary dispute with neighboring states prevented exploration. The tribunal ordered RSM to post USD 750,000 security for costs. RSM failed to comply, and the tribunal dismissed all claims with prejudice. RSM sought annulment, arguing the tribunal was improperly constituted due to arbitrator bias, manifestly exceeded its powers by ordering security and dismissing with prejudice, and violated procedural rules. The ad hoc Committee rejected the bias claim and upheld the security order and discontinuance of proceedings. However, it partially annulled the award, finding that dismissing claims with prejudice (res judicata) was a substantive decision beyond the tribunal's procedural powers under Article 44. The Committee noted that dismissal without prejudice would allow RSM to re-file after paying costs and providing security. Costs were split: RSM bears two-thirds of ICSID costs and one-third of Saint Lucia's legal fees.
The detail
Parties: RSM Production Corporation v. Saint Lucia
Case number: ICSID Case No. ARB/12/10
Outcome: The ad hoc Committee partially annulled the Award to the extent that it dismissed RSM's claims with prejudice, but upheld the dismissal of the claims and the security for costs order. Costs were divided: RSM bears two-thirds of ICSID costs and one-third of Saint Lucia's legal costs.
Applicable law: ICSID Convention, Agreement between Saint Lucia and RSM Production Corporation (2000)
Issues in play: The case involved the tribunal's power to order security for costs and dismiss claims with prejudice under the ICSID Convention, versus the claimant's right to have its merits heard. The Committee found that dismissal with prejudice was a substantive matter exceeding the tribunal's procedural powers under Article 44.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.