Swisslion DOO Skopje v. The Former Yugoslav Republic of Macedonia
ICSID · Investment (ICSID and treaty) · North Macedonia · 6 Jul 2012
Why it matters
This case is notable for its application of the fair and equitable treatment standard in the context of a shareholders' dispute that became entangled with state actions. The Tribunal clarified that while states are not responsible for private disputes, they must not use regulatory powers to unfairly target an investor. The award also illustrates the difficulty of quantifying damages for non-expropriatory breaches and the use of LIBOR interest.
Summary
Swisslion DOO Skopje, a Macedonian company owned by Swiss and Serbian nationals, invested in Agroplod, a Macedonian fruit processing company, by purchasing shares from the state. A dispute arose with a minority shareholder, Mr. Kitinov, who allegedly had political connections. The Ministry of Economy initiated proceedings to terminate the share sale agreement, claiming Swisslion failed to meet investment obligations. Simultaneously, the Securities and Exchange Commission (SEC) investigated Swisslion for alleged securities law violations, and criminal charges were filed against its managers (later dropped). Swisslion faced heightened inspections and controls. The Tribunal found that while the state had legitimate concerns, the Ministry's failure to engage with Swisslion before initiating control proceedings and the SEC's actions (which were later found baseless) breached the fair and equitable treatment standard. However, the Tribunal rejected claims of expropriation, unreasonable impairment, and failure to observe commitments. Damages were limited to €350,000 for legal fees, management diversion, and lost sales, reflecting the partial success of the claim.
The detail
Parties: Swisslion DOO Skopje v. The Former Yugoslav Republic of Macedonia
Case number: ICSID Case No. ARB/09/16
Outcome: The Tribunal found that Macedonia breached the fair and equitable treatment standard and awarded Swisslion €350,000 in damages plus interest and €350,000 in legal costs.
Quantum: €350,000
Applicable law: Agreement between the Macedonian Government and the Swiss Federal Council on the Promotion and Reciprocal Protection of Investments (1996); ICSID Convention
Issues in play: The case involved the fair and equitable treatment standard under the Switzerland-Macedonia BIT, and whether state measures (SEC proceedings, criminal investigations, heightened controls) breached that standard. The Tribunal distinguished between legitimate regulatory actions and those that frustrated the investor's legitimate expectations.
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.