International Arbitration Newsletter - December 2018 | Regional Overview: The Americas

BRAZIL

Action for annulment regarding partial awards

In a recent ruling the Superior Court of Justice of Brazil (“SCJB”) has clarified that it is possible  to seek  annulment of partial arbitration awards.

The SCJB held that there is no legal prohibition on the issuance of partial awards in the course of the arbitration proceedings and that Brazilian arbitration law establishes the possibility of the action for annulment in respect of “arbitral awards” (i.e., both final and partial awards).

BOLIVIA

ICC tribunal allows mining claim against Bolivian state owned entity to continue

An ICC tribunal has allowed Indian Jindal Steel & Power’s US$86 million claim to proceed against Bolivian state-owned mining entity Empresa Siderúrigica del Mutún (ESM) while rejecting claims against the state itself and another state-owned entity, Comibal.The case concerns a mining deposit near Bolivia's eastern border with Paraguay and Brazil. Jindal entered into a joint venture agreement with ESM and Comibol in 2007 to develop the mine. Jindal terminated the contract in 2012 alleging that the government had hindered the project by failing to grant access to lands where the project was to be developed and illegally cashing US$18 million in bank guarantees.

CANADA

Canada faces new NAFTA coal dispute claim

On 20 November 2018, US coal mining company Westmoreland Coal served a statement of claim on the governments of Canada and Alberta in a US$380 million NAFTA claim over alleged discrimination that it faced following a decision by the province of Alberta to phase out the use of coal in the electricity system by 2030.

The underlying dispute relates to the purchase by Westmoreland, who is currently involved in Chapter 11 bankruptcy proceedings in the Southern District of Texas, of five coal mines in Alberta and two in the neighbouring province of Saskatchewan in 2013 for US$350 million, and the cut-off plans announced in 2015 by the Canadian province.The Alberta government agreed to pay around US$1 billion in compensation to the operators other plants, Capital Power, TransAlta and ATCO, between 2016 and 2030. Westmoreland contends that by failing to offer it equivalent compensation, the Alberta government has violated anti-discrimination and fair and equitable treatment provisions of NAFTA.

USA

Texas Court rules that patent dispute in telecoms dispute to be heard by ICC tribunal

In a decision dated 7 November 2018 the US District Court for the Eastern District of Texas ruled that a dispute between Taiwanese smartphone maker HTC and Sweden’s Ericsson concerning royalties for cellular and wireless technology patents must be submitted to ICC arbitration.

The dispute concerns various patents owned by Ericsson and the chipsets in HTC smartphones implement the standards, HTC being a third-party beneficiary of those commitments imposed to Ericsson. The court ruled that those claims should be severed from a lawsuit HTC is pursuing against Ericsson that includes other non-arbitrable claims.

VENEZUELA

Venezuela hit by new Treaty claim from Smurfir Kappa

Irish paper and packaging group Smurfit Kappa has said it is bringing a treaty claim against Venezuela under the 1993 Netherlands-Venezuela BIT via its wholly-owned Netherlands-based subsidiary, Smurfit Holdings BV, alleges that the state’s temporary seizure of and interference in a subsidiary made it “impossible” for it to continue operations in the country. The company says that the deconsolidation of its Venezuelan operations has resulted in a write-down of net assets worth over €60 million.

While Venezuela terminated the Netherlands-Venezuela BIT in 2008, a sunset clause means claims can still be brought for 15 years in relation to investments made prior to termination – until 2023. The BIT provides for arbitration of disputes at ICSID, whose jurisdiction Venezuela sought to exit in 2012. In light of that, the claim may have to be brought under the ICSID Additional Facility Rules.