Our International Arbitration Damages Insights summarizes recent decisions from around the globe that provide an overview of current issues and methodologies in valuation and damages.
This edition provides an overview of the following three recent cases:
1. ConocoPhillips Petrozuata B.V., et al. v. The Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/30
An ICSID Tribunal awarded over USD 8.36 billion plus interest to ConocoPhillips for Venezuela’s unlawful expropriation of three oil field investments. The award provides insights into the consideration of discounted cash flow valuation methodologies in energy arbitration.
2. Tethyan Copper Company Pty Limited v. Islamic Republic of Pakistan, ICSID Case No. ARB/12/1
An ICSID Tribunal awarded mining company Tethyan Copper Company Pty Limited USD 4.09 billion in damages plus interest and costs against the Islamic Republic of Pakistan, being the second largest ICSID award ever rendered. We take a look at the valuation concept referred to as the ‘modern DCF’ accepted by the Tribunal to quantify damages and how it compares to the traditional discounted cash flow methodology.
3. NextEra Energy, et al. v. Kingdom of Spain, ICSID Case No. ARB/14/11
An ICSID Tribunal accepted jurisdiction to hear an intra-EU dispute under the Energy Charter Treaty (“ECT”) and found that Spain had breached the fair and equitable treatment standard in article 10(1) of the ECT. In quantifying damages, the Tribunal accepted an alternative valuation methodology based on a reasonable rate of return, rather than the discounted cash flow methodology that was also put forward by the Claimants.