Metal-Tech v Uzbekistan (ICSID Case No. ARB/10/3)
- Forum
- ICSID 1
- Case number
- ARB/10/3 1
- Parties
- Metal-Tech Ltd. (Israeli) and the Republic of Uzbekistan 1
- Treaty
- Israel Uzbekistan BIT of 1994 2
- Tribunal
- Gabrielle Kaufmann-Kohler (President), John M. Townsend, Claus von Wobeser 1
- Claim amount
- About US$174 million, as summarised by IISD Investment Treaty News 4
- Post-award proceedings
- None listed on the ICSID case page 1
The case
The ICSID Secretary-General registered the request for arbitration on 4 February 2010 1. The tribunal was constituted on 28 June 2010 1. Uzbekistan filed objections on jurisdiction and admissibility on 11 November 2010 1.
The tribunal heard jurisdiction and merits together in Washington, D.C. from 23 to 28 January 2012, with a further hearing on 29 May 2012 1. Covington and Burling acted for Metal-Tech. White and Case and the Ministry of Justice of Uzbekistan acted for the state 3.
The corruption allegation
The tribunal examined whether the investment was tainted by corruption 4. As summarised by Stefanie Schacherer in IISD Investment Treaty News, the evidence concerned three consulting agreements totalling US$4.4 million with individuals closely connected to the Uzbek government 4.
The tribunal found corruption in two of the three consulting agreements 4. italaw records the outcome as in favour of the respondent 2.
What the tribunal decided
Article 1(1) of the Israel Uzbekistan treaty defines an investment as assets implemented in accordance with the laws and regulations of the host state 4. The tribunal found the investment was not implemented in accordance with Uzbek law, as corruption affected its establishment 4.
It held that Uzbekistan's consent to ICSID arbitration is restricted to disputes concerning an investment as defined in Article 1(1) of the treaty, and so it declined jurisdiction 4.
On costs, the tribunal ordered each party to bear its own costs 4. It reasoned that, given Uzbekistan's participation in the corrupt conduct, it appeared fair that the parties share in the costs, according to the IISD summary 4.
Positions of the parties
Status
The ICSID case page records the award of 4 October 2013 and no annulment or other post-award proceeding 1. italaw lists the award as the only document in the case 2.
Common questions
Why were Metal-Tech's claims against Uzbekistan dismissed?
The tribunal found corruption in consulting agreements and held the investment was not made in accordance with Uzbek law, so it lacked jurisdiction 4.
How much did Metal-Tech claim?
About US$174 million, as summarised by IISD Investment Treaty News 4.
Who paid the costs in Metal-Tech v Uzbekistan?
Each party bore its own costs 4.
Rules and fees change. Check the official site linked above before you apply or pay. Spotted an error? Email hello@arbitrationoutcomes.org with the official link.
Sources
- ICSID: case details, Metal-Tech Ltd. v. Republic of Uzbekistan, ARB/10/3
- italaw: case page, Metal-Tech v. Uzbekistan
- italaw: Award, Metal-Tech v. Uzbekistan (4 October 2013)
- IISD Investment Treaty News, Stefanie Schacherer: Metal-Tech v. Uzbekistan (18 October 2018)
Related
- The corruption defence in arbitration
How states raise bribery against investor claims and awards, with what tribunals and courts decided in World Duty Free, Metal-Tech and Nigeria v P&ID.
- World Duty Free v Kenya (ICSID Case No. ARB/00/7)
ICSID award of 4 October 2006 that dismissed World Duty Free's claims against Kenya after finding a US$2 million payment to President Moi was a bribe.
- Niko v Bapex and Petrobangla (ICSID Case No. ARB/10/11)
The ICSID tribunal's 2019 decision that Niko's gas agreements with Bangladesh were not procured through corruption, and the case through to the 2025 award.
- Investor-state arbitration explained
How foreign investors bring claims against states, where consent comes from, what law applies and how ICSID cases have ended, with official figures.