With Schoenherr, Moldova averts lion's share of US investors' claims in ICSID arbitration

02 July 2018 | deal news

On 28 June 2018, an ICSID Tribunal composed of Prof Philippe Sands, QC (President), The Hon Yves Fortier CC, QC (Claimants' appointee), and Prof Dr Rolf Knieper (Moldova's appointee) dismissed the bulk of damages claimed by a group of US investors against the Republic of Moldova under the state's bilateral investment treaty with the USA.

The dispute arose out of the investors' acquisition and subsequent loss of agricultural lease rights in Moldova's northern Florești District. The third-party funded investors claimed around USD 15 million in lost profits, interest, and other damages; and over USD 3 million in costs. The arbitration commenced in February 2016. An evidentiary hearing - the first in Austria - was held at Schoenherr's Vienna office in December 2017.

Leon Kopecký (Counsel, Vienna) and Victoria Pernt (Associate, Vienna) acted as Moldova's lead advocates.

In its award, the Tribunal dismissed one investor's claim for lack of jurisdiction, and awarded "only a small fraction of the amount claimed" at around USD 400.000. Since the State made no contribution to the costs of the proceedings, the investors were also awarded a portion of their arbitration costs and legal fees. Their other claims were all dismissed.

This marks another successful Schoenherr state representation, after four wins for Montenegro in ICSID and UNCITRAL arbitrations, including a successfully averted annulment of an ICSID award.

The Schoenherr team was led by Leon Kopecký, along with Victoria Pernt, and supported by Vladimir Iurkovski (Attorney at law, Chișinău), and Anna Cuşnir (Associate, Chișinău). The investors were represented by a US firm.