RENDERED IN 2005 IN SCC CASE 126/2003 PETROBART LTD. v. THE KYRGYZ REPUBLIC

 

Subject Matters:

(1) Is the Energy Charter Treaty (ECT) applicable to a company registered in Gibraltar?

(2) Are the conditions for application of Article 17(1) of the ECT present?

(3) The potential res judicata effect after the domestic litigation and the UNCITRAL Arbitration.

(4) Doctrine of collateral estoppel

(5) Whether Petrobart qualifies as an investor under the ECT?

(6) Did Petrobart make an investment in the Kyrgyz Republic?

(7) Whether the Kyrgyz Republic violated its obligations under Articles 10(1), 10(12), 13(1) and 22(1) of the ECT.

 

Findings:

(1) The Entergy Charter Treaty (ECT) is applicable on a provisional basis to investors in and from Gibraltar, despite the fact that the United Kingdom’s ratification does not cover Gibraltar.

(2) The Tribunal attached weight to the information provided by Petrobart confirming that it is a company owned or controlled by citizens or nationals of a state other than the United Kingdom and that Petrobart has substantial business in the United Kingdom. The conditions for application of Article 17(1) of the ECT were not present in this case.

(3) Domestic litigation and a previous UNCITRAL arbitration did not have res judicata effect preventing Petrobart from raising ECT claims.

(4) There is no estoppel in the present case since domestic litigation was not initiated by Petrobart and, therefore, did not reflect a choice of procedure by the claimant. The UNCITRAL Arbitration was Petrobart’s choice, but its aim was to have only domestic issues decided, and the proceeding did not result in an examination of the merits of the claim.

(5) A right conferred by contract to undertake an economic activity concerning the sale of gas condensate is an investment qualifying for protection pursuant to the ECT.