Bulgaria has won an arbitration case against Plama Consortium Limited at the International Center for Settlement of Investment Disputes (ICSD) in Washington, D.C., the Bulgarian Finance Ministry said on Monday. In its award, the tribunal ruled that the claims of the company against Bulgaria are unfounded and rejected them in toto, ordering Plama Consortium Limited to pay a substantial portion of the costs for the jurisdictional phase of the arbitration.

The Case of Plama Consortium Limited v. Republic of Bulgaria was registered at the ICSD on August 19, 2003. The Cyprus-registered company, which bought the oil refinery in Pleven (North Central Bulgaria) in 1998, claimed compensation of 280 million US dollars with interest for an alleged violation by Bulgaria of the foreign investment protection standards set in the Energy Charter Treaty and the Agreement between Bulgaria and Cyprus on Mutual Encouragement and Protection of Investments, which allegedly led to a destruction or expropriation of the claimant's investment in this country.

In its award, the tribunal ruled that Plama Consortium Limited (PCL) does not enjoy the protection provided for in the Energy Charter Treaty because it fraudulently acquired its shares in Plama AD. The company deceived the Privatization Agency, which had to authorize the transfer of the shares, that the shares would be acquired through PCL by a consortium consisting of a Swiss company, Andre & Cie, and of a Norwegian company, Norwegian Oil Trading (NOT), but in reality Plama Consortium Limited was owned by French national Jean-Christophe Vautrin.

The tribunal moreover found that even if Plama Consortium Limited's investment is presumed to be lawfully acquired and protected by international law, the claims of the company against Bulgaria are completely unfounded.

"Concerning the amount at issue and the factual and legal complexity, this case is the most significant international legal dispute in Bulgaria's history. This is the first arbitration case to be heard by an ICSD Arbitral Tribunal in which an award has been made on the merits in pursuance of the Energy Charter Treaty.

The award conclusively dismisses the years-old unfounded and malicious allegations against Bulgaria and confirms its good name and reputation in the international community," the Finance Ministry press release reads.

Source: BTA