Enforcement of ICSID Award Against Elusive Developing State

Image title

Task

We were tasked by an international mining firm, which had concluded arbitration proceedings against a state, in advance of an award of hundreds of millions of dollars. The client felt that the period immediately subsequent to the issuance of the award was critical and working alongside their counsel asked Orbis to support their efforts to ensure the payment was made. The state in question had a track record of non-payment and the client anticipated difficulties.

Approach

Given the anticipated difficulties and the client’s urgency, Orbis pursued a simultaneous dual-track strategy of enforcement and settlement. Orbis representatives joined the client’s negotiation team as part of the settlement discussions, supported by our intelligence and research into: the other side’s agenda; relevant individuals, organisations, business influence groups; and other levers and pressure points for the government. At the same time, we compiled an enforcement strategy based on: key assets and products flowing in/out of the country by state-owned enterprises and private investors; import/export logistics and routing; identification of key external jurisdictions in which banking and other trading activity was conducted by SOEs; as well as a summary of international bond issuances.

Outcome

The state claimed to be willing but unable to afford the award. Orbis were able to present options for payment based on the financial analysis of the state’s assets as part of the enforcement strategy. Further, Orbis’ intelligence suggested the Prime Minister of the state had agreed provisional financial arrangements with another head of state, in order to pay the award in the event that non-payment negatively impacted on FDI and domestic pressure meant he compromised in negotiations. This intelligence proved key to the state agreeing to pay the award and announcing so publicly.

Get in touch

For more information, please telephone Orbis on +44 (0)2036 409 939 or