Arbitral Tribunal in Vienna rules: All CEAC claims against Montenegro rejected
Podgorica, Montenegro (13 January 2017) -- All of CEAC claims in the arbitration proceedings against the State of Montenegro have been rejected, the UNCITRAL Arbitration Tribunal in Vienna notes in its final ruling.
This decision of the arbitral tribunal finally confirms that Montenegro has not breached the Settlement Agreement towards the CEAC and En+ Group, but on the contrary, it is precisely the CEAC that has violated its obligations under the contract. Inter alia, the arbitral tribunal's ruling states that the CEAC is obliged to pay EUR 259,000 to Montenegro on behalf of the contractual penalty for breaching investment obligations and another EUR 29.000 on behalf of the contractual penalty for breaching the obligation to submit an annual investment report.
The ruling also reads that default interest starting from 30 January 2015 until the date of payment will be accrued to both of these amounts,
CEAC and En+ Group began the arbitration proceedings against Montenegro, the Investment and Development Fund, Pension Fund, Employment Agency, Aluminium Plant Podgorica (KAP) and the Bauxite Mines in November 2013.
An ad hoc arbitration panel, composed of three arbitrators, was responsible for the arbitration proceedings, which was conducted in English. The applicable procedural rules were those of the UNCITRAL Arbitration Rules of 1976.
As a reminder, CEAC has already lost the case against Montenegro before the Arbitration Tribunal of the International Centre for Settlement of Investment Disputes (ICSID) in July 2016. ICSID Arbitration Tribunal found that the CEAC does not have a seat on the territory of Cyprus, and therefore does not represent foreign investors in line with the terms of the applicable international agreements for the protection of foreign investments, which is the feature the CEAC is required to have in order to be authorised to initiate this type of arbitration proceedings against Montenegro.
CEAC should bear all the costs of the arbitration proceedings in Paris and legal representation amounting to approx. EUR 900.000 EUR, including the cost Montenegro had already borne in connection with these proceedings.
Furthermore, in May 2016, the International Centre for Settlement of International Disputes in Paris also decided in favour of Montenegro regarding the arbitration proceedings launched by MNSS and Recupero, the former owners of Nikšić Steel Plant, seeking damages of over EUR 100 million.
In the arbitration proceedings, the State and other defendants were represented by the Schoenherr law firm.