The arbitral tribunal of the International Center for Settlement of Investment Disputes (ICSID) decided to discontinue the proceedings in the case S&T Oil Equipment and Machinery Ltd. v. Romania in which the claimant sought compensations worth more than USD 150,000,000. It is the third favorable outcome obtained by the lawyers in Ţuca Zbârcea & Asociaţii in front of ICSID, in Washington D.C.
In May 2007, S&T Oil Equipment and Machinery submitted its request for arbitration against Romania alleging that the State would have unlawfully deprived it of its investment in Romania based on the provisions of the privatization agreement concluded in connection with Nitramonia SA Făgăraş.
Following the constitution of the arbitral tribunal in November 2007, the parties have then completed the written stage of the proceedings, by submitting two sets of written memorials each, supporting documents as well as several technical expert reports and valuation reports.
In June 2009, the ICSID arbitral tribunal requested an advance payment of USD 300,000 under ICSID Administrative and Financial Regulation to meet the costs to be incurred in the forthcoming proceedings. According to ICSID rules, each of the parties had to make half the requested advance payment within 30 days from the date of the request. Although Romania paid its part in the required advances within the deadline set by the tribunal, the required advance payment from S&T Oil Equipment and Machinery remained outstanding for a period in excess of 6 months. Noting that the proceedings have been stayed since October 2009, the arbitral tribunal issued an Order of Discontinuance of the Proceeding that was dispatched to the parties on the 16th of July 2010.
„Romania has obtained, for the third time, a favorable decision in an ICSID arbitration case. Although proceedings have been closed for non-payment by S&T Oil Equipment and Machinery of the required advances on the arbitral costs, this decision marks, beyond any doubt, yet another victory for Romania. All in all, we stayed optimistic of our chances in this case and diligently completed all the procedural stages required by the Washington court in an international arbitration case”, stated Florentin Ţuca, Managing Partner at Ţuca Zbârcea & Asociaţii and one of the lawyers representing Romania for the third time in an ICSID case.
The attorney added that Romania’s defence team has identified solid arguments in favour of their client as well as some irregularities surrounding the privatization of Nitramonia SA Făgăraş which were imputable to S&T Oil Equipment and Machinery. “It is likely that the arguments we built have determined the claimant to give up fight by failing to pay the required funds”, concluded Florentin Ţuca.
Romania’s defence was ensured by teams from Ţuca Zbârcea & Asociaţii and White & Case US, with a wealthy experience in similar arbitral proceedings, basically the same team that secured Romania's success against Noble Ventures Inc. and EDF Services Ltd. Among the lawyers that represented Romania are Florentin Ţuca – Managing Partner, Levana Zigmund – Partner, Cristina Metea – Partner, Cornel Popa – Partner and Anca Puşcaşu, Managing Associate. The White & Case US team was coordinated by Abby Cohen Smutny – Partner and Derryl Lew – Partner.