Nykomb Synergetics Technology Holding AB, Stockholm v. The Republic of Latvia, Riga - Chapter 2 - Investment Arbitration Decisions

Noah Rubins is a Partner in the Paris office of Freshfields, where he is a member of the international arbitration and public international law groups. Mr. Rubins is a U.S. qualified lawyer and has advised and represented clients in arbitrations under ICSID, ICC, ICDR, SCC and UNCITRAL rules. He specializes in disputes in the former Soviet Union and investment treaty arbitration. In addition to advising clients, Mr. Rubins has served as arbitrator in a range of disputes, conducted under the ICC, ICSID, LCIA, SCC and UNCITRAL rules.

Observations by:

Richard Happ, Dr. iur., Rechtsanwalt (German attorney). Dr Happ is partner of Luther lawfirm in Hamburg, Germany, and specializes in investment arbitration. This comment reflects only the author’s personal opinion and is slightly revised version of the initial comments submitted in 2005.

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Originally from Investment Arbitration Decisions

NYKOMB SYNERGETICS TECHNOLOGY HOLDING AB, STOCKHOLM V. THE REPUBLIC OF LATVIA, RIGA FINAL AWARD IN SCC CASE 118/2001 RENDERED ON 16 DECEMBER 2003

Subject Matter:
Whether the Republic of Latvia was in breach of its obligations under the Energy Charter Treaty (ECT) towards the claimant due to the fact that the republic’s state-owned company allegedly did not pay the claimant’s subsidiary in accordance with the contract between company and subsidiary.

Finding:
The tribunal held that the state owned company was in breach of the contract and that the republic must be found responsible for that breach. Since other local competitors of the subsidiary were paid by the stateowned company in accordance with their contracts (after they had sued in courts), the tribunal found that such breach of contract constituted discriminatory measures and, consequently, a breach of the obligations under the ECT.