Arbitration Tribunal Finds Jurisdiction in Bangladesh-Investor Disputes

Arbitration Tribunal Finds Jurisdiction in Bangladesh-Investor Disputes
Bangladesh

On August 19, 2013, a panel of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled on challenges to its jurisdiction to hear two arbitration cases brought by Niko Resources (Bangladesh) Ltd., a Barbados subsidiary of a Canadian oil and gas exploration company, against the Government of Bangladesh and two of its state-owned corporations. Decision on Jurisdiction, Niko Resources (Bangladesh) Ltd v. People’s Republic of Bangladesh, ICSID Case Nos. ARB/10/11 and ARB/10/18 (Aug. 19, 2013).

Arbitration Tribunal Finds Jurisdiction in Bangladesh-Investor Disputes

In Case No. ARB/10/11, Niko is seeking a declaration that it has no liability arising from two natural gas well blowouts at the Chattak gas field in 2005. The tribunal wrote that “there can be no doubt” that it has jurisdiction over Niko’s claim against the Bangladesh Petroleum & Exploration & Production Company Limited (BAPEX), because Niko and BAPEX were parties to a joint venture agreement that specified that disputes between them would be resolved through ICSID arbitration. The tribunal found that it did not have jurisdiction with regard to Niko’s claims against the Bangladesh Oil Gas & Mineral Corporation (Petrobangla) or the Government of Bangladesh, as neither of them was a party to the joint venture agreement. In addition, the tribunal emphasized that the terms of the joint venture agreement among the parties assigned to BAPEX the responsibilities and obligations of Petrobangla and the Government toward Niko.

In Case No. ARB/10/18, Niko seeks to require Petrobangla to pay it and BAPEX for gas deliveries made under a gas purchase and sale agreement between them. The panel rejected Petrobangla’s arguments contesting jurisdiction and confirmed ICSID’s jurisdiction to determine NRBL’s claim against Petrobangla for payments owing to NRBL for delivered gas.

 

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