Spyridon Roussalis v. Romania
ICSID · Investment (ICSID and treaty) · Romania · 7 Dec 2011
Why it matters
Roussalis v. Romania is a landmark case on the issue of counterclaims in investment treaty arbitration. The tribunal's majority decision that the BIT's dispute resolution clause did not confer jurisdiction over the State's counterclaim, because the BIT only imposes obligations on States, has been widely cited in subsequent cases. It highlights the importance of clear drafting in BITs regarding the scope of consent to arbitration, particularly whether counterclaims are included. The case also illustrates the limits of umbrella clauses in creating reciprocal obligations.
Summary
Spyridon Roussalis, a Greek investor, brought an ICSID claim against Romania under the Greece-Romania BIT, alleging that various actions by Romanian state entities (AVAS, tax authorities, courts, and prosecutors) violated the BIT's protections, including expropriation, fair and equitable treatment, full protection and security, and non-impairment. The dispute arose from Roussalis's investment in a Romanian company, Continent SA, through a privatization agreement. Roussalis claimed that AVAS wrongfully sought to enforce a share pledge, that the General Prosecutor's intervention and Supreme Court decision quashing earlier judgments were unfair, that tax audits and sequestration orders were disproportionate, that a travel ban (interdiction) was unjustified, and that food safety orders disrupted his business. Romania denied all claims and filed a counterclaim alleging that Roussalis had failed to make the required capital contribution and had committed fraud. The tribunal, by a majority (President Hanotiau and Arbitrator Giardina; Arbitrator Reisman dissenting on the counterclaim issue), held that it had jurisdiction over Roussalis's claims but not over Romania's counterclaim, because the BIT's dispute resolution clause only covers disputes concerning obligations of the host State, not obligations of the investor. On the merits, the tribunal rejected all of Roussalis's claims, finding that Romania's actions were lawful and did not violate the BIT. The tribunal ordered Roussalis to pay 60% of the arbitration costs and Romania's legal fees. The case is notable for its detailed analysis of the counterclaim issue and the limits of BIT jurisdiction.
The detail
Parties: Spyridon Roussalis v. Romania
Case number: ICSID Case No. ARB/06/1
Outcome: All of Claimant's claims dismissed; Respondent's counterclaim dismissed for lack of jurisdiction; Claimant ordered to pay 60% of arbitration costs and Respondent's legal fees.
Quantum: USD 217,290 and EUR 6,053,443.78 (costs and fees)
Applicable law: Greece-Romania BIT (1997); ICSID Convention; Romanian law; international law
Issues in play: The case involved the interpretation of the BIT's dispute resolution clause (Article 9) and whether it permitted counterclaims by the host State against the investor. The majority held that the BIT only allows investor claims against the State, not State counterclaims, because the BIT imposes obligations only on States.
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