The Renco Group, Inc. v. Republic of Peru [I], ICSID Case No. UNCT/13/1
ICSID · Investment (ICSID and treaty) · Peru · 15 Jul 2016
Why it matters
This case is a landmark on the strict interpretation of waiver requirements in investment treaties. The tribunal held that a reservation of rights in the waiver rendered it invalid, and that the defect could not be cured or severed. It underscores the 'no U-turn' principle, preventing investors from pursuing parallel proceedings. The decision also addressed potential abuse of rights by the state in raising the objection late, but found no abuse here.
Summary
The Renco Group, a US company, initiated arbitration against Peru under the US-Peru Trade Promotion Agreement, claiming breaches of the treaty. As required by Article 10.18(2)(b), Renco submitted a waiver of its right to initiate or continue other proceedings regarding the same measures. However, Renco's waiver included a reservation: if the tribunal declined jurisdiction, Renco reserved the right to bring claims in another forum. Peru objected, arguing the reservation violated the waiver requirement. The tribunal agreed, finding that the reservation was not permitted by the treaty's express terms, undermined its object and purpose (to avoid parallel proceedings), and was incompatible with the 'no U-turn' structure. The tribunal also held that Renco could not cure the defect by withdrawing the reservation, and that the tribunal had no power to sever the reservation. Consequently, the tribunal dismissed Renco's claims for lack of jurisdiction. The tribunal noted that Peru had raised the objection late but found no abuse of rights, though it cautioned Peru against arguing time-bar in any future arbitration.
The detail
Parties: The Renco Group, Inc. v. Republic of Peru [I], ICSID Case No. UNCT/13/1
Case number: italaw/cases/906
Outcome: Tribunal dismissed Renco's claims for lack of jurisdiction due to invalid waiver.
Applicable law: United States–Peru Trade Promotion Agreement (Treaty), UNCITRAL Arbitration Rules (2010)
Issues in play: The waiver requirement under Article 10.18(2)(b) of the Treaty versus Renco's reservation of rights to bring claims in another forum if the tribunal declined jurisdiction.
Read the full decision at italaw ↗
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