The Rompetrol Group N.V. v. Romania
ICSID · Investment (ICSID and treaty) · Romania · 6 May 2013
Why it matters
This case is notable for its detailed analysis of the standard of proof in investment arbitration, particularly regarding allegations of state misconduct in criminal investigations. The Tribunal clarified that a claimant must provide concrete evidence of loss, not just assert damage. It also addressed the admissibility of claims based on ongoing criminal proceedings and the limits of moral damages as a proxy for economic loss.
Summary
The Rompetrol Group N.V. (TRG), a Dutch company, invested in the Romanian oil sector by acquiring shares in Rompetrol Rafinare S.A. (RRC). TRG alleged that Romania violated the Netherlands-Romania BIT by conducting extraordinary and unreasonable criminal investigations against RRC and its management, which TRG claimed were discriminatory and arbitrary. TRG sought damages for economic loss and reputational harm. The Tribunal, after a lengthy procedure including a jurisdictional phase, found that most of TRG's allegations were not proven. It held that Romania breached the BIT only in a limited respect (related to certain press releases and procedural irregularities), but TRG failed to prove any resulting economic loss. The Tribunal rejected the claim for moral damages, stating that moral damages cannot substitute for unproven economic loss. It also declined to award declaratory relief in broad terms. The Tribunal ordered each party to bear its own costs, noting that while the Respondent largely prevailed, it had caused delays with unsuccessful preliminary objections and a counsel challenge. The case illustrates the high evidentiary burden on claimants in investment treaty arbitration, especially when alleging state misconduct in criminal investigations.
The detail
Parties: The Rompetrol Group N.V. v. Romania
Case number: ICSID Case No. ARB/06/3
Outcome: The Tribunal dismissed most of Claimant's claims, found a limited breach of the BIT but awarded no damages, and ordered each party to bear its own costs.
Applicable law: Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and Romania (BIT); ICSID Convention
Issues in play: The case involved the interaction between the BIT's fair and equitable treatment standard and Romania's sovereign right to conduct criminal investigations. The Tribunal had to determine whether the investigations were arbitrary or discriminatory, and whether they violated the BIT.
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