Vamed Management & Services GmbH v. Gabon
ICC · Investment (ICSID and treaty) · Switzerland · 21 Mar 2022
Why it matters
This case illustrates how arbitral tribunals apply good faith principles under Swiss law to cap contractual interest claims, even when a state party defaults. It shows the tension between strict contract terms and equitable considerations, particularly in sovereign debt disputes. The award also addresses cost allocation in multi-contract ICC arbitrations and the effect of a settlement agreement (Protocole) on ongoing proceedings.
Summary
Vamed, an Austrian hospital management company, entered into nine agreements with Gabon to manage hospitals. Gabon fell behind on payments, leading Vamed to initiate three ICC arbitrations, later consolidated. In September 2019, the parties signed a Protocole d'Accord settling the debt at EUR 34,904,083, with interest at 8% per annum on late payments. Gabon made irregular payments, stopping completely between August 2020 and June 2021, but eventually paid the principal. Vamed then claimed additional interest on the full original debt (EUR 43 million) and on late payments. The tribunal, applying Swiss law, held that Vamed's claim for interest on the higher amount was manifestly excessive and violated good faith under Article 2 of the Swiss Code of Obligations. It limited interest to the agreed debt of EUR 34,904,083, calculating EUR 2,581,870.64 in accrued interest. Gabon's unsubstantiated counterclaim for EUR 50 million was rejected. The tribunal allocated costs 90% to Gabon and 10% to Vamed, ordering Gabon to pay EUR 33,453.18 of Vamed's legal costs and Vamed to pay EUR 5,000 of Gabon's costs. The award was rendered in Zurich, Switzerland, on March 21, 2022.
The detail
Parties: Vamed Management & Services GmbH v. Gabon
Case number: ICC Case No. 23975/FS
Outcome: Respondent ordered to pay EUR 2,581,870.64 with interest at 8% yearly from 14 October 2021; counterclaim rejected; costs allocated 90% to Respondent, 10% to Claimant.
Quantum: EUR 2,581,870.64
Applicable law: ICC Rules; Swiss law (CO); nine Hospital Management Agreements and a Protocole d'Accord governed by Swiss law.
Issues in play: Swiss Code of Obligations Article 2 (good faith) vs. strict contractual interest rate of 8% under the Protocole; the tribunal limited interest to the agreed debt amount of EUR 34,904,083, not the higher total debt.
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