- Arbitral Award
- Ad hoc Arbitration, Brussels
- EUREKO B.V. v. Republic of Poland
STATE CONTRACTS - SHARE PURCHASE AGREEMENT - BETWEEN A DUTCH COMPANY AND THE POLISH GOVERNMENT - TO BE DECIDED ON THE BASIS OF THE BILATERAL TREATY FOR THE PROTECTION OF INVESTMENTS AND "THE UNIVERSALLY ACKNOWLEDGED RULES AND PRINCIPLES OF INTERNATIONAL LAW" - REFERENCE TO THE UNIDROIT PRINCIPLES
In the privatisation process of a wholly State-owned Polish insurance company, a Dutch company acquired 30% of the shares and at the same time entered into an agreement with the State Treasury as the owner of the Polish company according to which the State Treasury was committed to sell subsequently another lot of shares so as to permit the Dutch company to become the majority shareholder. Immediately thereafter the two parties began to dispute a number of matters related to the deal but eventually made a settlement agreement whereby they re-affirmed the original schedule of privatisation and waived any previous claims between them. After the State Treasury’s continuing not to sell the additional lot of shares to the Dutch company, the latter commenced arbitration against the Republic of Poland invoking the violation by the Republic of Poland of the Dutch/Polish Treaty for the protection of investments (hereinafter the “Treaty”).
According to the Treaty the Arbitral Tribunal shall decide “on the basis of respect for the law, including particularly this Agreement and other relevant agreements existing between the two Contracting Parties and the universally acknowledged rules and principles of international law”.
One of the objections raised by Defendant was that Claimant was barred from raising in the present proceedings claims which had been waived by the settlement agreement between Claimant and the State Treasury. On its part Claimant argued that, since the State Treasury had not performed the other terms of the settlement, it was justified in raising again even the pre-agreement claims in conformity with the so-called exception of non-performance (exceptio non adimpleti contractus). In deciding on this matter in favour of Defendant, the Arbitral Tribunal pointed out that the exception of non-performance essentially applies only to cases of simultaneous performance and in support of this argument referred to Article 7.1.3(1) of the UNIDROIT Principles providing that “where the parties are to perform simultaneously, either party may withhold performance until the other party tenders its performance”. In the case at hand both parties had to, and actual did, perform simultaneously only their obligation mutually to waive and release all pending claims while the sale of the remaining shares by the State Treasury was clearly a distinct obligation to be performed at a later stage
Full text available at http://www.investmentclaims.com/decisions/Eureko-Poland-LiabilityAward.pdf}}