Case Report on Saipem v. Bangladesh

Abstract

IN ICSID Case No. ARB/05/7, Saipem v. Bangladesh , decision on the merits dated 30 June 2009, the tribunal (composed of Gabrielle Kaufmann Kohler, President, Christoph Schreuer and Sir Phill Otton) held Bangladesh liable under a bilateral investment treaty for unlawfully expropriating Saipem’s right to ICC arbitration through the interference of Bangladesh’s courts. The tribunal also found that Bangladesh violated the New York Convention and committed an abuse of rights under general principles of international law. The tribunal awarded Saipem the amount that the ICC tribunal had awarded, with simple interest. It refused to award Saipem legal costs. The Saipem award provides a rich platform for discussion of several contentious issues currently brewing in the international investment arbitration community. One of those issues is the line tribunals are drawing between contract rights and treaty rights. The question of whether purely contract-based, commercial arbitration claims are being ‘dressed up’ as investment treaty claims was the subject of discussion at the American Society of International Law Annual Meeting in 2009 at the roundtable panel on ‘Mapping the Future of Investment Treaty Arbitration’. The panel discussed, inter alia , the differences between international commercial arbitration and international investment treaty arbitration. One of the panelists warned that arbitrators must be wary of wearing a commercial arbitration ‘hat’ when determining distinct issues of international law and state responsibility under investment treaties.1 The Saipem award, without entering into a discussion of where a line should or should not be drawn between commercial and international investment treaty arbitration, nevertheless sheds some important light on the debate. The Saipem award focuses on the point at which a state’s behaviour during an international commercial arbitration dispute governed by the ICC Rules triggers new obligations under an investment treaty, the ICSID Convention, the New York Convention and under general …