Trans-Global Petroleum, Inc. v. The Hashemite Kingdom of Jordan
ICSID · Investment (ICSID and treaty) · Jordan · 8 Apr 2009
Why it matters
This consent award illustrates the early-stage settlement of an ICSID investment treaty claim. It shows how parties can use ICSID Arbitration Rule 41(5) to challenge manifestly unmeritorious claims, and how settlement can terminate proceedings before full merits briefing. The case also highlights the confidentiality of settlement terms and the role of the tribunal in recording an agreed award.
Summary
Trans-Global Petroleum, Inc., a US company, initiated ICSID arbitration against Jordan under the US-Jordan BIT, claiming violations of Articles II(3)(a), II(3)(b), and VIII. The dispute arose from Trans-Global's investment in Jordan's oil and gas sector, including a production sharing agreement and related contracts. Jordan filed an objection under ICSID Arbitration Rule 41(5), arguing the claims were manifestly without legal merit. On May 12, 2008, the Tribunal granted the objection in part and denied it in part, allowing some claims to proceed. The parties then engaged in procedural exchanges, including a dispute over document production. Before the merits hearing, the parties reached a settlement on March 2, 2009. They signed a Settlement Agreement and Release, in which Trans-Global withdrew all claims with prejudice and released Jordan from any related claims. The agreement expressly denied any admission of liability. The parties requested the Tribunal to record the settlement as a consent award under ICSID Arbitration Rule 43(2). The Tribunal did so on April 8, 2009, ordering that each party bear its own legal costs and share equally the fees and expenses of the Tribunal and ICSID. The award includes the full text of the settlement agreement. The case did not proceed to a final award on the merits, so no legal standards were definitively established. However, the Tribunal's earlier Rule 41(5) decision provided guidance on the threshold for dismissing claims as manifestly without legal merit.
The detail
Parties: Trans-Global Petroleum, Inc. v. The Hashemite Kingdom of Jordan
Case number: ICSID Case No. ARB/07/25
Outcome: The parties settled; the Tribunal issued a consent award recording the settlement agreement, with each party bearing its own costs and sharing tribunal costs equally.
Applicable law: Treaty between the United States of America and the Government of the Hashemite Kingdom of Jordan Concerning the Encouragement and Reciprocal Protection of Investment (BIT); ICSID Arbitration Rules
Issues in play: The case involved claims under the US-Jordan BIT for alleged violations of fair and equitable treatment and other protections. The settlement avoided a decision on the merits.
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