Large awards and costly treaties

Here is a sampling of large awards by investor-state arbitrators against countries and the treaties that made them possible.

Trade and investment treaties allow only foreign investors to sue countries, not vice versa. This is why there are no damages awards against foreign investors in favour of countries.

Ecuador: concluded a bilateral investment treaty (BIT) with the U.S. in 1997.

  • ordered to pay $75 million and then $2.36 billion to Occidental Petroleum in 2004 and 2012. Oxy is the third-largest U.S. oil and gas company, by market capitalization.
  • ordered to pay $28 million to Duke Energy in 2008. Duke is the largest U.S. electric power holding company.
  • ordered to pay $96 million to Chevron in 2011. Chevron is one of the world’s six “super-major” oil companies.

The Czech Republic concluded a BIT with the Netherlands in 1992.

  • ordered to pay $395 million to CME in 2003. CME was owned by U.S. tycoon Ronald Lauder.
  • ordered to pay $25 million to Eastern Sugar in 2007. Eastern Sugar was owned by large sugar producers Tate & Lyle and St Louis Sugar.

Argentina concluded BITs with France, Germany, the UK, and the US in 1993 and 1994.

  • ordered to pay $186 million to Azurix Corporation in 2006. Azurix is an x-large water company.
  • ordered to pay $169 million to Vivendi Universal in 2007. Vivendi is an x-large media and telecommunications company.
  • ordered to pay $278 million to Siemens in 2007. Siemens is the largest Europe-based electronics and engineering company.
  • ordered to pay $219 million to BG Group in 2007. BG Group is an x-large oil and gas company.
  • ordered to pay $57 million to LG&E in 2007. LG&E is an x-large oil and gas company.
  • ordered to pay $54 million to National Grid in 2008. National Grid is an x-large electricity and gas utility company.
  • ordered to pay $66 million to El Paso in 2011. El Paso is an x-large natural gas pipelines company.
  • ordered to pay $205 million to EDF and SAUR in 2012. EDF is the largest global electric utility company.
  • ordered to pay $60 million to SAUR International in 2014. SAUR is a large water company.

Kazakhstan concluded a BIT with Turkey in 1995.

  • ordered to pay $165 million to Rumeli Telekom and Telsim Mobil in 2008. Rumeli is a large telecommunications company; Telsim is a subsidiary of the telecommunications giant Vodaphone.

Mexico signed NAFTA in 1992.

  • ordered to pay $17 million to Metalclad in 2000. Metalclad is a privately-held waste management and asbestos company.
  • ordered to pay $17 million to Marvin Feldman in 2002. Feldman is a U.S. national.
  • ordered to pay $37 million to Archers Daniel Midland and Tale & Lyle in 2007. ADM is an x-large food processing and commodities trading company; Tate & Lyle is a large agribusiness company.
  • ordered to pay $86 million to Cargill in 2009. Cargill is the largest privately-held U.S. company, by revenue.

Canada signed NAFTA in 1992.

  • reportedly agreed to pay $13 million to Ethyl Corporation in 1998. Ethyl is a large fuel additive company.
  • ordered to pay $8 million to S.D. Myers in 2002. S.D. Myers is a medium electric power maintenance company.
  • reportedly agreed to pay CAD$130 million to AbitibiBowater Inc. in 2010. AbitibiBowater was the third-largest pulp and paper company in North America.
  • apparently agreed (through the province of Ontario) to pay CAD$15 million to St Marys Cement in 2013. St Marys was owned by Votorantim Cimentos, a Brazilian company and one of the largest cement companies in the world.

Romania concluded a BIT with Sweden in 2003.

  • ordered to pay $156 million to Ioan and Violrel Micula in 2013. The Micula brothers’ net wealth was approx. $220 million in 2011.

Hungary concluded a BIT with Cyprus in 1990.

  • ordered to pay $76 million to ADC in 2006. ADC is a company of unknown size in the airports industry.

Sri Lanka concluded a BIT with Germany in 2000.

  • ordered to pay $70 million to Deutsche Bank in 2012. Deutsche Bank is a global bank.

Paraguay concluded a BIT with Switzerland in 1992.

  • ordered to pay $64 million to SGS in 2012. SGS is a large customs inspection company.

The explosion of arbitration lawsuits by foreign investors against countries started around 2000, after many treaties allowing the lawsuits were signed with little public attention. There are now more than 500 known investor lawsuits, many ongoing.

Most compensation has been ordered for companies that are large (over $1 billion in annual revenue) or extra-large ($10 billion) or to tycoons (individuals with over $100 million in net wealth), all of whom qualified as foreign investors. An award to a company’s subsidiary or affiliate has been reported as an award to the parent company.

The list is non-exhaustive but includes most large awards up to May 2014. It does not include the more recent award of $50 billion against Russia under the Energy Charter Treaty. Amounts include pre-award but (not post-award) interest as well as principal amounts. Unless otherwise indicated, amounts have been converted to USD based on exchange rates at the time of award, have been rounded off, and are approximate.