Leading New Zealand law firm Chapman Tripp, acting as co-counsel with international law firm Salans, have secured a successful decision in the first ever bilateral investment treaty arbitration hearing held in New Zealand.
Chapman Tripp Partner Daniel Kalderimis and Salans Partner George Burn were successful in overcoming an attempt by the Republic of Indonesia to terminate a compensation claim brought by a British investor, Mr Rafat Rizvi, before an International Centre for Settlement of Investment Disputes (ICSID) arbitration tribunal. Indonesia’s application was made under Rule 41(5) of the ICSID Arbitration Rules, which allows arbitrators to summarily terminate an arbitration where the claim is manifestly without legal merit.
Mr Rizvi claims that Indonesia failed to ensure fair and equitable treatment of his investment when the country nationalised one of its largest banks, Bank Century (now called Bank Mutiara), in 2008, and that it brought unjustified and ungrounded criminal proceedings against him.
The ICSID tribunal’s decision means Mr Rizvi will be able to present his full arguments over the way in which he was treated before and after the collapse and nationalisation of Bank Century.
Mr Kalderimis, who presented the legal argument on how Rule 41(5) is to be interpreted and applied, says “this case was only the fifth time that an ICSID tribunal has considered Rule 41(5). The tribunal’s decision is carefully considered and has added to the body of international jurisprudence on the summary dismissal power, clarifying that it is only to be used in plain and obvious cases. The hearing was an excellent opportunity for New Zealand to be exposed to the workings of ICSID arbitration.”