Țuca Zbârcea & Asociații | NEWS & EVENTS
13 October 2009

Lawyers from Țuca Zbârcea & Asociații and White & Case (US) win second ICSID arbitration for Romania

Țuca Zbârcea & Asociații and White & Case (US) scored a major arbitration victory before the International Center for Settlement of Investment Disputes (ICSID) within the World Bank in Washington D.C.

In the proceeding between Eastern Duty Free (EDF) Services Ltd. and Romania, the arbitration tribunal fully dismissed the action and claims for compensation requested by EDF Services Ltd.

EDF Services Ltd. claimed as much as USD 110,000,000 in damages from Romania, challenging Romania’s treatment of EDF Services Ltd. and its investment in Otopeni International Airport, under the terms of a concession with the Ministry of Transportation as public assets regulated by public law. The constitution of the tribunal dated December 20, 2005 included an Italian arbitrator, Mr. Piero Bernardini, chairman, a U.S. arbitrator, Mr. Arthur W. Rovine, and a French arbitrator, Mr. Yves Derains.

EDF Services Ltd. submitted its claim under the bilateral investment treaty signed between the Government of Great Britain and Northern Ireland and the Government of Romania for the Promotion and Reciprocal Protection of Investments to arbitration under the ICSID Convention in July 2005.

The ICSID award was dispatched to both sides on Thursday, October 08, 2009 in Washington D.c., at 17:48 hours. A three-member ICSID arbitration tribunal unanimously decided that Romania did not breach its obligations under the bilateral investment treaty and that the claims of EDF Services Ltd were to be dismissed with prejudice. Whilst noting that the traditional position in investment arbitration, in contrast to commercial arbitration, has been to follow the public international rule which does not apply the principle that the loser pays the costs of the arbitration and the costs of the prevailing party, in the instant case the arbitration tribunal held that parties should share equally the costs of the arbitration and, by majority, that EDF Services Ltd. should pay the sum of USD 6,000,000 on account of legal fees and other costs borne by Romania.

The successful outcome of the arbitration in Washington D.C. comes after four years of extensive work undertaken by lawyers, legal experts, accounting experts etc. The defense strategy was revealed by a team made up of more than 20 Romanian and American lawyers who used fourteen witnesses from among the Romanian authorities, four Romanian legal experts, as well as other experts specialising in accounting, fiscal expertise and translators.

The case file involved approximately 60,000 pages and covered a 12-year history of the Otopeni International Airport, addressing numerous corporate and contract law, public procurement issues, standard of fair and equitable treatment and investment protection, as well as bribery accusations against Romanian authorities.

“It is the second victory obtained by our team before the international arbitration court in Washington D.C. A complex trial that raised numerous Romanian and international public legal issues, and which, after four years and more than 12,000 hours spent by our lawyers on the case, ended with an award favorable to Romania”, said Levana Zigmund, Partner in Țuca Zbârcea & Asociații and coordinator of the Romanian team of lawyers representing Romania.

Romania was represented by a team of lawyers from Țuca Zbârcea & Asociații in Bucharest and White & Case in Washington D.c., respectively the same lawyers who defended Romania in a similar case won against Noble Ventures Inc., including inter alia: from Țuca Zbârcea & Asociații - Florentin Țuca, Managing Partner, Levana Zigmund, Partner, Cornel Popa, Partner and Anca Pușcașu, Managing Associate and from White & Case (US) - Abby Cohen Smutny, Partner and Darryl Lew, Partner.

Țuca Zbârcea & Asociații now boasts 82 lawyers, including 15 partners and 42 support staff.

The Dispute Resolution Practice Group is one of the largest departments within the firm, comprising over 27 lawyers dedicating 100% of their time to handling all aspects of litigation and arbitration procedures. Our lawyers have an in-depth working knowledge of various arbitration procedural rules, such as ICC, UNCITRAL and ICSID and have dealt with complex substantive law issues in specific litigation circumstances. They have represented clients at all levels of the local judicial system, from the lower courts to the High Court of Justice, as well as in special proceedings in the Constitutional Court. The group also acts successfully in public international law arbitration, having assisted both investors and state bodies in disputes flowing from breaches of bilateral investment protection treaties.

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