Data

Date:
16-06-2010
Country:
International Centre for Settlement of Investment Disputes (ICSID)
Number:
Court:
International Centre for Settlement of Investment Disputes (ICSID)
Parties:
Gemplus&Talsud v Mexico

Keywords

STATE CONTRACTS - LONG-TERM CONTRACTS - CONCESSION CONTRACT - BETWEEN FRENCH AND ARGENTINIAN COMPANIES AND THE MEXICAN GOVERNMENT – BIT AND GENERAL INTERNATIONAL LAW APPLICABLE - REFERENCE TO UNIDROIT PRINCIPLES IN SUPPORT OF GENERAL PRINCIPLE OF INTERNATIONAL LAW

DAMAGES – COMPENSATION DUE ONLY FOR HARM, INCLUDING FUTURE HARM, ESTABLISHED WITH REASONABLE DEGREE OF CERTAINTY – REFERENCE TO ART. 36 ILC DRAFT ARTICLES ON RESPONSIBILITY OF STATES FOR INTERNATIONALLY WRONGFUL ACTS OF 2001 AND TO ART. 7.4.3 UNIDROIT PRINCIPLES

Abstract

Claimants, two companies (a French and an Argentine company) had been awarded by Defendant, the Mexican Government, a concession to develop and operate in Mexico a national vehicle registry. When subsequently a new legislation was adopted in Mexico prohibiting the operation of a national vehicle registry by private parties, the Mexican Government revoked the concession granted to Claimants, prompting the latter to bring an action against Defendant for unlawful expropriation of their investment under the applicable BITs.
According to both the BITs between France and Mexico and between Argentina and Mexico, the Arbitral Tribunal shall decide in accordance with the respective BIT and the relevant rules and principles of international law.
After determining that Defendant had breached its expropriation obligations under both BITs, the Arbitral Tribunal addressed in particular the issue of compensation for lost profits and with respect to the evidentiary standard for awarding lost profits under international law cited Art. 36 of the ILC Draft Articles on Responsibility of States for Internationally Wrongful Acts of 2001 stating the principle that there must be a relative and reasonable level of certainty about future income streams. However, to support and corroborate this principle, the Tribunal cited also Art. 7.4.3(1) of the UNIDROIT Principles which likewise requires a ‘reasonable degree of certainty’ for establishing compensation for future harm. , thereby further confirming that the requirement for certainty in proving a claimant’s claim for compensation is relative and not incompatible with an award of compensation for loss of opportunity, nor is the latter necessarily linked to an arbitrator’s power to decide ex aequo et bono. In justifying its reference to the UNIDROIT Principles the Arbitral Tribunal pointed out that “[i]t would be possible to illustrate these general principles from several other national legal systems (both common law and civilian), but it is unnecessary to do so here because […] such principles are broadly re-stated in the UNIDROIT Principles […]”.

Fulltext

http://italaw.com/cases/documents/481}}

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