Summary

Source: icsid.worldbank.org

AWARD

Members of the Tribunal
Professor Gabrielle Kaufmann-Kohler, President of the Tribunal
Mr. Stephen L. Drymer, Arbitrator
Professor Philippe Sands KC, Arbitrator

TABLE OF CONTENTS

TABLE OF ABBREVIATIONS

I. INTRODUCTION
A. The Parties
1. The Claimant
2. The Respondent
B. The Tribunal
II. PROCEDURAL HISTORY
III. THE MAIN FACTS
A. The Slovak Legislative Framework for Oil and Gas Exploration
B. The Oil and Gas Endowment of Slovakia
C. AOG's Activities Prior to the Acquisition by Discovery in 2014
D. Exploration Activities prior to 2014
E. Acquisition by Discovery in 2014
F. License Extensions in 2014 and 2016
G. Exploration Activities since 2014
H. Efforts to Drill Exploration Wells at Smilno, Krivá Oka and Ruská Poruba
1. Smilno
2. Krivá Oka
3. Ruská Poruba
I. Preliminary EIA Proceedings
J. Withdrawal of the JV Partners and Relinquishment of the Exploration Licenses
IV. OVERVIEW OF THE PARTIES' POSITIONS
A. Preliminary Objections
1. Respondent's position
2. Claimant's position
B. Substantive Claims
1. Claimant's position
2. Respondent's position
V. REQUESTS FOR RELIEF
A. The Claimant's requests for relief
B. The Respondent's requests for relief
VI. ANALYSIS
A. Preliminary matters
1. Applicable procedural law and transparency
2. Law governing jurisdiction
3. Law governing the merits
4. Iura novit curia
5. Relevance of previous decisions or awards
6. Adverse inferences
B. Preliminary Objections
1. Is Discovery a qualifying investor?
2. Did Discovery make a qualifying investment under the BIT?
3. Did Discovery make a qualifying investment under the ICSID Convention?
4. Did Discovery make a good faith investment?
5. Does Discovery have clean hands?
6. Did Discovery satisfy the procedural preconditions to arbitration?
7. Do the claims relate to measures taken to maintain public order under Article X(1) of the BIT?
8. Are the discrimination claims outside the Tribunal's jurisdiction or otherwise inadmissible under the carve-out in the Annex of the BIT?
C. Liability
1. Introductory remarks
2. Attribution
3. Fair and equitable treatment
4. Arbitrary and discriminatory treatment
5. Effective means
6. Expropriation
VII. TRANSPARENCY
VIII. COSTS
A. Parties' positions
1. Claimant's position
2. Respondent's position
B. Analysis
IX. OPERATIVE PART

I. INTRODUCTION

1. The present dispute arises under the Treaty between the Czech and Slovak Federal Republic and the United States of America concerning the Reciprocal Encouragement and Protection of Investments, signed on 22 October 1991 (the "Treaty" or the "BIT")1 and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the "ICSID Convention"). It relates to oil and gas exploration rights in north-eastern Slovakia.

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IX. OPERATIVE PART

713. For the reasons set forth above, the Tribunal:

(i) DECLARES that it has jurisdiction over the dispute;

(ii) DECLARES that the Respondent has not breached the US-Slovakia BIT;

(iii) DISMISSES the claims on the merits;

(iv) ORDERS the Claimant to pay to the Respondent one half of the total arbitration costs as reflected in ICSID's final account statement;

(v) ORDERS the Claimant to pay to the Respondent EUR 2,310,718.90 for its legal fees and other costs incurred in connection with this arbitration;

(vi) ORDERS the Claimant to pay simple interest on the sums awarded in (iv) and (v) above, at the rate equivalent to the yield of 2-year Slovak government bonds, from the date of the Award until payment;

(vii) ORDERS either Party to notify the Tribunal within 30 days from the date of dispatch of the Award if it seeks protection for confidential information, after which the other Party may raise reasoned objections within 30 days; the Parties shall then seek to resolve any objections within 15 days; and

(viii) DISMISSES all other claims and requests.

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