The arbitration related to claims brought against Costa Rica under a bilateral investment treaty by two Swiss holding companies, which are part of a Mexican-owned group in the liquefied petroleum gas (LPG) sector. The initial dispute concerned proposed regulatory reforms to the LPG industry in Costa Rica. After a preliminary phase in the proceeding, the tribunal narrowed the dispute to the lawfulness of certain tariff determinations under the investment treaty. The time period for challenging the award lapsed last week.
“We are delighted to secure this favourable award from a distinguished ICSID tribunal. Our firm is one of the leading practices in major public international law matters, representing both States and investors. Our work for Costa Rica confirms the crucial role that our global arbitration team plays in resolving such international disputes,” said Alejandro Escobar, partner and lead counsel for Costa Rica.
The ICSID tribunal ruled in favour of Costa Rica in this $75 million dispute brought by the Swiss shareholders of a gas company claiming that the country's public utility regulator arbitrarily fixed prices for the distribution of LPG. The tribunal determined that the Costa Rican government did not cause any damage to the local distributor Gas Nacional Zeta. In addition to dismissing all claims for compensation, the award granted Costa Rica a substantial portion of its arbitration and legal costs.Costa Rica was represented by Baker Botts L.L.P. and government attorneys.
The case is Cervin Investissements S.A. & Rhone Investissements S.A. v. La República de Costa Rica, ICSID case number ARB/13/2. The tribunal members were Alexis Mourre (president), Ricardo Ramírez and Andrés Jana. The proceeding was conducted entirely in Spanish.
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