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Baker Botts Secures Major Victory for the Republic of Iraq in Early Dismissal of $1 Billion ICSID Claim

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Baker Botts has secured an early exit for the Republic of Iraq from an $1 billion investment treaty arbitration brought by German-based transport company AHG Industry GmbH & Co. KG. (“AHG”). The arbitral tribunal, sitting under the auspices of the International Centre for Settlement of Investment Disputes (“ICSID”), rejected AHG’s claims in their entirety for a manifest lack of jurisdiction. 

The ICSID tribunal, having assessed a number of treaties, agreements and domestic laws advanced by the claimant as allegedly establishing the tribunal’s jurisdiction, agreed “unhesitatingly” with the Republic of Iraq in its award that none of those instruments established jurisdiction over the dispute. The tribunal accordingly dismissed all of AHG’s claims as “manifestly without legal merit” pursuant to Rule 41(5) of the ICSID Arbitration Rules.

The tribunal’s award represents a landmark example of a successful application for summary dismissal under Rule 41(5). “The award sets an important precedent of upholding the fundamental principles of international law on treaty interpretation and state consent,” observes Dorine Farah, International Disputes partner at Baker Botts. “The decision also demonstrates the increasing importance of ICSID’s Rule 41(5) mechanism as an effective tool to filter out manifestly unmeritorious claims and promote the efficiency of the ICSID arbitration process.”

The Baker Botts team acting for the Republic of Iraq consisted of partners Dorine Farah and Alejandro Escobar and senior associate David Turner in London, working with co-counsel Noor Kadhim of Kadhims Ltd. 

ABOUT BAKER BOTTS’ INTERNATIONAL DISPUTES GROUP

Our International Disputes group, centered in London and supported by lawyers in New York, Washington D.C., Houston and Dubai, handles all types of international arbitration, national and transnational litigation and public international law work, with particular expertise in energy disputes, telecoms disputes, infrastructure disputes and investor–State arbitration. Our International Disputes team acts for clients in jurisdictions around the world, including Europe and the CIS, the Middle East, the US, Latin America and Africa. 

For more information about the International Disputes group, please contact co-chairs Dr. Johannes Koepp in London ([email protected]) and Andrew Behrman in New York ([email protected]).
 

ABOUT BAKER BOTTS L.L.P.
Baker Botts is an international law firm whose lawyers practice throughout a network of offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit bakerbotts.com.

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