Sociedad Anónima Eduardo Vieira v. República de Chile
ICSID · Investment (ICSID and treaty) · Chile · 21 Aug 2007
Why it matters
This case is a landmark on the temporal application of bilateral investment treaties. It clarifies that if the core dispute arises before the treaty's entry into force, the tribunal lacks jurisdiction even if later events are connected. The decision reinforces the principle that BITs do not apply retroactively to disputes that crystallized before their effective date.
Summary
The case involves a Spanish investor, Sociedad Anónima Eduardo Vieira, which acquired shares in a Chilean fishing company, CONCAR, in 1990. CONCAR had obtained a fishing permit in 1989 limited to internal waters. In 1990, CONCAR requested to extend the permit to external waters, but the Chilean fisheries authority denied this request. After the Chile-Spain BIT entered into force in 1994, CONCAR continued to seek reconsideration, but the permit was eventually revoked in 1996. Vieira initiated ICSID arbitration in 2003, claiming that Chile's actions violated the BIT. Chile objected to jurisdiction, arguing that the dispute arose before the BIT's entry into force. The tribunal agreed, finding that the central dispute, the denial of permission to fish in external waters, occurred in 1990, before the BIT took effect. The tribunal held that under Article 2 of the BIT, which applies to investments made before or after entry into force, the dispute must arise after the treaty's effective date. Since the dispute had already crystallized in 1990, the tribunal lacked jurisdiction ratione temporis. The case was dismissed, and each party bore its own costs.
The detail
Parties: Sociedad Anónima Eduardo Vieira v. República de Chile
Case number: ICSID Case No. ARB/04/7
Outcome: The tribunal upheld Chile's objection to jurisdiction ratione temporis, finding that the dispute arose before the treaty entered into force, and dismissed the case for lack of jurisdiction.
Applicable law: Chile-Spain BIT (1991), ICSID Convention
Issues in play: The dispute centered on whether the tribunal had jurisdiction over claims arising from a fishing permit denial that occurred before the BIT's entry into force. The key issue was the temporal scope of the BIT's dispute resolution clause.
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