White & Case LLP - News - White & Case Obtains Complete Victory in Energy Charter Treaty Dispute

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White & Case Obtains Complete Victory in Energy Charter Treaty Dispute

Washington, DC, September 15, 2008 ... An international arbitral tribunal, in a unanimous final award, dismissed all claims against the Republic of Bulgaria and awarded the Republic costs in the first case to reach an award on the merits under the Energy Charter Treaty (ECT) before the International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC. Bulgaria was represented by global law firm White & Case LLP.

Claimant Plama Consortium Limited (PCL), a Cypriot company, acquired shares of Plama AD, a privatized Bulgarian oil refinery located in the city of Pleven. Four years later, in late 2002, PCL filed claims for approximately US$300 million against Bulgaria pursuant to the Bulgaria-Cyprus bilateral investment treaty and the Energy Charter Treaty (ECT), a multilateral treaty with more than 50 signatories that aims to strengthen the rule of law on energy issues. Bulgaria achieved dismissal of jurisdiction over claims arising under the Bulgaria-Cyprus bilateral investment treaty in a frequently cited decision on the jurisdictional implications of a most-favored-nation (MFN) clause. The case then proceeded to the merits under the ECT.

In the award, the tribunal found that the claimant was not entitled to any of the substantive protections afforded by the ECT because PCL's alleged investment was premised on a fraudulent misrepresentation of the identity and qualification of its shareholders.

White & Case partner Abby Cohen Smutny said: "This case is another in an important series of decisions demonstrating that the conduct of investors matters in the investment treaty context. An investor whose investment is premised on the investor's own fraud cannot present claims to an international tribunal about alleged State misconduct."

The tribunal also concluded that each of PCL's substantive claims was lacking merit. The claimant's claims centered on allegations relating to environmental liability of privatized entities, the actions of bankruptcy trustees, an alleged riot at the oil refinery, the taxation of entities exiting from bankruptcy, the privatization of a Bulgarian port facility, the privatization of a formerly state-owned bank, and various alleged conduct of Bulgarian authorities and state-owned entities. The tribunal considered the claims in view of the ECT obligations with respect to fair and equitable treatment, constant protection and security, unreasonable and discriminatory measures, expropriation and other obligations and concluded that even if the claimant had been entitled to the substantive protections of the ECT, the claims were entirely lacking in merit.

Jonathan C. Hamilton, partner of White & Case, said: "The Republic of Bulgaria was completely vindicated. The tribunal found that key allegations in the case in fact demonstrated Bulgaria's affirmative efforts pursuant to the Energy Charter Treaty to create favorable conditions for foreign investors."

In its award, the tribunal also ordered the claimant to pay a significant portion of Bulgaria's legal costs in light of the outcome of the case and the claimant's conduct during the proceeding. In addition to its successes on jurisdiction and the merits, Bulgaria defeated a request for urgent provisional measures to discontinue bankruptcy and other proceedings in Bulgaria.

The case was decided by a three-member tribunal that included Carl F. Salans of the United States (president), Albert Jan van den Berg of the Netherlands and V.V. Veeder of England. Ivan Kondov of the Bulgarian Ministry of Finance led the defense for the Bulgarian state, and Lazar Tomov of Tomov & Tomov in Sofia acted as outside Bulgaria counsel. The White & Case team included partners Abby Cohen Smutny, Jonathan C. Hamilton, Carolyn B. Lamm, Paul D. Friedland and Francis A. Vasquez, Jr.

The case is Plama Consortium Limited v. Republic of Bulgaria (ICSID Case No. ARB/03/24).

White & Case's International Arbitration Practice comprises more than 170 practitioners and has arbitration centers in Hong Kong, London, New York, Paris, Stockholm and Washington, DC, with significant practices in Brussels, Mexico City, Miami, Moscow, Prague, Tokyo and elsewhere. The group was named "International Arbitration Team of the Year" at the Chambers USA Awards 2007 and has been ranked at the top of its field by Chambers USA, Chambers Global, Global Arbitration Review, Legal 500, American Lawyer, the International Who's Who of Commercial Arbitration and Benchmark: The Definitive Guide to America's Leading Lawyers.

About White & Case
White & Case LLP is a leading global law firm with more than 2,300 lawyers in 37 offices in 25 countries. Our clients value the breadth and depth of our US, English and local law capabilities and rely on us for their complex cross-border commercial and financial transactions and for international arbitration and litigation. Whether in established or emerging markets, the hallmark of White & Case is our complete dedication to the business priorities and legal needs of our clients.

Contact:
Reilly Starr
Media Relations Manager
White & Case LLP
1 212 819 8315

	Press Releases
Expertise International Arbitration Lawyers Paul Friedland Jonathan C. Hamilton Carolyn B. Lamm Abby Cohen Smutny Francis A. Vasquez Jr. Locations Washington, DC	White & Case Obtains Complete Victory in Energy Charter Treaty Dispute Washington, DC, September 15, 2008 ... An international arbitral tribunal, in a unanimous final award, dismissed all claims against the Republic of Bulgaria and awarded the Republic costs in the first case to reach an award on the merits under the Energy Charter Treaty (ECT) before the International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC. Bulgaria was represented by global law firm White & Case LLP. Claimant Plama Consortium Limited (PCL), a Cypriot company, acquired shares of Plama AD, a privatized Bulgarian oil refinery located in the city of Pleven. Four years later, in late 2002, PCL filed claims for approximately US$300 million against Bulgaria pursuant to the Bulgaria-Cyprus bilateral investment treaty and the Energy Charter Treaty (ECT), a multilateral treaty with more than 50 signatories that aims to strengthen the rule of law on energy issues. Bulgaria achieved dismissal of jurisdiction over claims arising under the Bulgaria-Cyprus bilateral investment treaty in a frequently cited decision on the jurisdictional implications of a most-favored-nation (MFN) clause. The case then proceeded to the merits under the ECT. In the award, the tribunal found that the claimant was not entitled to any of the substantive protections afforded by the ECT because PCL's alleged investment was premised on a fraudulent misrepresentation of the identity and qualification of its shareholders. White & Case partner Abby Cohen Smutny said: "This case is another in an important series of decisions demonstrating that the conduct of investors matters in the investment treaty context. An investor whose investment is premised on the investor's own fraud cannot present claims to an international tribunal about alleged State misconduct." The tribunal also concluded that each of PCL's substantive claims was lacking merit. The claimant's claims centered on allegations relating to environmental liability of privatized entities, the actions of bankruptcy trustees, an alleged riot at the oil refinery, the taxation of entities exiting from bankruptcy, the privatization of a Bulgarian port facility, the privatization of a formerly state-owned bank, and various alleged conduct of Bulgarian authorities and state-owned entities. The tribunal considered the claims in view of the ECT obligations with respect to fair and equitable treatment, constant protection and security, unreasonable and discriminatory measures, expropriation and other obligations and concluded that even if the claimant had been entitled to the substantive protections of the ECT, the claims were entirely lacking in merit. Jonathan C. Hamilton, partner of White & Case, said: "The Republic of Bulgaria was completely vindicated. The tribunal found that key allegations in the case in fact demonstrated Bulgaria's affirmative efforts pursuant to the Energy Charter Treaty to create favorable conditions for foreign investors." In its award, the tribunal also ordered the claimant to pay a significant portion of Bulgaria's legal costs in light of the outcome of the case and the claimant's conduct during the proceeding. In addition to its successes on jurisdiction and the merits, Bulgaria defeated a request for urgent provisional measures to discontinue bankruptcy and other proceedings in Bulgaria. The case was decided by a three-member tribunal that included Carl F. Salans of the United States (president), Albert Jan van den Berg of the Netherlands and V.V. Veeder of England. Ivan Kondov of the Bulgarian Ministry of Finance led the defense for the Bulgarian state, and Lazar Tomov of Tomov & Tomov in Sofia acted as outside Bulgaria counsel. The White & Case team included partners Abby Cohen Smutny, Jonathan C. Hamilton, Carolyn B. Lamm, Paul D. Friedland and Francis A. Vasquez, Jr. The case is Plama Consortium Limited v. Republic of Bulgaria (ICSID Case No. ARB/03/24). White & Case's International Arbitration Practice comprises more than 170 practitioners and has arbitration centers in Hong Kong, London, New York, Paris, Stockholm and Washington, DC, with significant practices in Brussels, Mexico City, Miami, Moscow, Prague, Tokyo and elsewhere. The group was named "International Arbitration Team of the Year" at the Chambers USA Awards 2007 and has been ranked at the top of its field by Chambers USA, Chambers Global, Global Arbitration Review, Legal 500, American Lawyer, the International Who's Who of Commercial Arbitration and Benchmark: The Definitive Guide to America's Leading Lawyers. About White & Case White & Case LLP is a leading global law firm with more than 2,300 lawyers in 37 offices in 25 countries. Our clients value the breadth and depth of our US, English and local law capabilities and rely on us for their complex cross-border commercial and financial transactions and for international arbitration and litigation. Whether in established or emerging markets, the hallmark of White & Case is our complete dedication to the business priorities and legal needs of our clients. Contact: Reilly Starr Media Relations Manager White & Case LLP 1 212 819 8315