
International Centre for Settlement of Investment Disputes IOAN MICULA, VIOREL MICULA, S.C. EUROPEAN FOOD S.A., S.C. STARMILL S.R.L. AND S.C. MULTIPACK S.R.L. CLAIMANTS v. ROMANIA RESPONDENT ICSID Case No. ARB/05/20 ___________________________________________________________ AWARD ____________________________________________________________________________ Rendered by an Arbitral Tribunal composed of: Dr. Laurent Lévy, President Dr. Stanimir A. Alexandrov, Arbitrator Prof. Georges Abi-Saab, Arbitrator Secretary of the Tribunal Ms. Martina Polasek Assistant to the Tribunal Ms. Sabina Sacco Date of Dispatch to the Parties: 11 December 2013 TABLE OF CONTENTS I. INTRODUCTION ................................................................................................................................... 9 A. OVERVIEW OF THE DISPUTE .............................................................................................................. 9 B. THE PARTIES ................................................................................................................................... 9 1. The Claimants ......................................................................................................................................... 9 2. The Respondent.................................................................................................................................... 10 II. PROCEDURAL HISTORY .................................................................................................................. 11 A. INITIAL PHASE ................................................................................................................................ 11 B. THE JURISDICTIONAL PHASE .......................................................................................................... 12 C. THE MERITS PHASE ........................................................................................................................ 12 1. Initial procedural steps .......................................................................................................................... 12 2. The written phase on the merits ............................................................................................................ 13 3. Procedural steps predating the hearing on the merits ........................................................................... 24 4. The hearing on the merits and quantum ............................................................................................... 25 5. Procedural matters following the hearing .............................................................................................. 28 a. The Claimants’ Applications for Provisional Measures and the Respondent’s Application for Revocation of Provisional Measures ............................................................................................... 28 b. The Claimants’ Renewed Application for a Site Visit ....................................................................... 35 c. The Claimants’ Revised Request for Relief ..................................................................................... 36 d. Post-hearing briefs and oral closing arguments .............................................................................. 36 e. Closure of the Proceeding and Submissions on Costs .................................................................... 38 III. FACTUAL BACKGROUND ................................................................................................................ 40 A. OVERVIEW ..................................................................................................................................... 40 B. LEGAL FRAMEWORK FOR THE DISFAVORED REGIONS ...................................................................... 41 1. Romania’s efforts to attract investment in the early 1990s .................................................................... 41 2. EGO 24/1998 ........................................................................................................................................ 42 3. Government Decision 194/1999 and the 1999 Methodological Norms ................................................. 45 C. THE CLAIMANTS’ INVESTMENTS ...................................................................................................... 47 1. The Claimants’ initial investments in reliance on previous incentive regimes ....................................... 47 2. The Claimants’ investments in reliance on the EGO 24 incentives ....................................................... 49 3. Permanent Investor Certificates ............................................................................................................ 51 D. ROMANIA’S ACCESSION PROCESS .................................................................................................. 52 1. Early steps: the Europe Agreement and Romania’s application for EU membership ............................ 52 2. Romania’s initial efforts to align its state aid laws ................................................................................. 57 3. Romania and the EU begin formal accession negotiations ................................................................... 62 4. The Decision of the Romanian Competition Council and amendments to the EGO 24 regime ............. 62 5. Romania’s progress towards accession in the period 2000-2001 ......................................................... 64 6. Further amendments to the EGO 24 Regime (2000-2001) ................................................................... 69 7. Parallel developments in the EU and EGO 24 fronts (2002) ................................................................. 70 8. Events leading up to the revocation of EGO 24 .................................................................................... 72 9. Subsequent events ............................................................................................................................... 76 IV. SUMMARY OF THE PARTIES’ POSITIONS ...................................................................................... 77 2 A. THE CLAIMANTS’ POSITION ............................................................................................................. 77 B. THE RESPONDENT’S POSITION ........................................................................................................ 82 V. PRELIMINARY MATTERS .................................................................................................................. 86 A. THE TRIBUNAL’S JURISDICTION....................................................................................................... 86 B. APPLICABLE LAW........................................................................................................................... 87 1. The Claimants' position ......................................................................................................................... 88 a. There is no conflict of treaties, and even if there were, the BIT should prevail ................................ 88 b. Romania’s interpretation of the provisions of the BIT is flawed ....................................................... 89 c. EU law requirements would not justify or excuse breaches of the BIT or international law ............. 89 2. The Respondent's position .................................................................................................................... 91 a. The BIT must be interpreted consistently with EU law..................................................................... 91 b. In any event, the Contracting Parties to the BIT intended European law to prevail ......................... 92 c. EU law is relevant to the determination of wrongfulness ................................................................. 93 3. The Commission’s position ................................................................................................................... 93 4. The Tribunal's analysis.......................................................................................................................... 93 C. THE ENFORCEMENT OF THE ARBITRAL AWARD AND EU LAW ........................................................... 95 1. The Respondent's position .................................................................................................................... 96 2. The European Commission's position ................................................................................................... 96 3. The Claimants' position ......................................................................................................................... 97 4. The Tribunal’s analysis ......................................................................................................................... 97 VI. ANALYSIS OF THE CLAIMANTS’ TREATY CLAIMS ....................................................................... 99 A. UMBRELLA CLAUSE ....................................................................................................................... 99 1. The Claimants’ position ......................................................................................................................... 99 a. Nature and scope of the BIT’s umbrella clause ............................................................................... 99 b. The EGO 24 regime gave rise to a specific obligation vis-à-vis the Claimants .............................
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