Olin Holdings Limited (Cyprus) v. State of Libya, ICC Case No. 20355/MCP - Journal of Damages in International Arbitration, Vol.5, No.2
Originally from Journal of Damages in International Arbitration
Olin Holdings Limited (the “Claimant” or “Olin”), The State of Libya (the “Respondent” or “Libya”)
Food and Beverages
Agreement on the Promotion and the Reciprocal Protection of Investments between the Government of the Republic of Cyprus and the Great Socialist Libyan Jamahiriya dated 30 June 2004 (the “Cyprus-Libya BIT”).
Members of the Tribunal
Mrs. Nayla Comair-Obeid (President), Mr. Roland Ziadé (Claimant’s appointee), and Mr. Ibrahim Fadlallah (Respondent’s appointee)
In 1997, Libya enacted Law No. 5 for the Promotion of Investment of Foreign Capital (the “Libyan Foreign Investment Law”). Following the enactment of the Libyan Foreign Investment Law, Olin decided to invest in a dairy and juice factory near Tripoli, and obtained all necessary permits and licenses. To carry out its investment, Olin partnered with PROLAC, a major French milk powder producer and exporter, and with ACTINI, a French manufacturer of sterilizing equipment. Olin completed the construction of its factory toward the end of 2006. After Olin had completed construction of its factory and was ready to begin production, Tripoli’s People Committee for Housing & Utilities issued an eviction order informing Olin that its factory was being “dispossessed” and asking Olin to vacate the factory within three days. The Committee’s order was issued pursuant to Decision No. 241 of 2006, which in turn was issued by the General People’s Committee on October 19, 2006, whereby the General People’s Committee expropriated a swath of land including Olin’s factory.
Despite the eviction notice, Olin’s license to operate was renewed on November 26, 2006. Throughout the following three years (i.e., from 2006 to 2009), Olin sought an exemption from Decision No. 241. During this time, two of Olin’s direct competitors, namely, Al-Aseel Juice Plant and OKBA Dairy Factory, received exemptions from Decision No. 241. On April 13, 2010, the Tripoli Court of Appeal cancelled Decision No. 241, declaring it unlawful under Libyan law because it did not follow the process for expropriation set forth in the Libyan Foreign Investment Law. Olin sought redress before the South Tripoli Court for all damages suffered as a result of Decision No. 241, but the South Tripoli Court decided no indemnification was due.3 On July 3, 2014, Claimant filed a request for arbitration before the ICC under the Cyprus-Libya BIT, claiming USD 147,882,000 as compensation for the harm it suffered as a result of Libya’s alleged breaches of the Cyprus-Libya BIT and the Libyan Foreign Investment Law.4 In the Award, dated May 25, 2018, the Tribunal found Libya had breached its obligations under Articles 2(2), 3, and 7 of the Cyprus-Libya BIT. The Tribunal dismissed Libya’s counterclaims.