Riverside Coffee, LLC v. Republic of Nicaragua

Case summary

At a glance

Parties: Riverside Coffee, LLC (Kansas, United States) v. Republic of Nicaragua
Case no.: ICSID Case No. ARB/21/16
Forum and rules: ICSID Convention arbitration; ICSID Arbitration Rules 2006, as modified by Section B of Chapter Ten of DR-CAFTA; place of proceeding Washington, D.C.
Treaty: Dominican Republic–Central America Free Trade Agreement (DR-CAFTA), signed 5 August 2004, in force between the United States and Nicaragua since 1 April 2006
Tribunal: Dr Veijo Heiskanen (President), Mr Philippe Couvreur, Ms Lucy Greenwood
Sector: Agriculture: avocado plantation and forestry (Hacienda Santa Fé, Jinotega)
Outcome: All claims dismissed on the merits. The award was signed on 15 October 2025 and dispatched to the parties on 17 October 2025.
Amount: Claimed: first USD 644,098,011, later reduced to USD 240,995,140 plus interest, and moral damages of USD 45 million. Awarded: nothing. The Claimant must pay Nicaragua's legal and other costs of USD 8,240,445.86, which include USD 342,827.40 for securing the property. The tribunal and ICSID costs of USD 1,212,373.83 are shared equally.

The dispute

Riverside Coffee, LLC, a Kansas company, held its investment in Hacienda Santa Fé, an avocado and forestry plantation in San Rafael del Norte, Jinotega, through the Nicaraguan company Inagrosa. In June–July 2018, during nationwide civil unrest, armed groups invaded and occupied the property. They were evicted on 11 August 2018, returned on 17–18 August 2018, and were finally removed in August 2021. In December 2021 a Nicaraguan court, on the Attorney General's application, appointed the State as judicial depositary of the property. Riverside claimed that the invasion was attributable to Nicaragua, that the police failed to protect the property, and that the Court Order was a judicial seizure, in breach of DR-CAFTA Articles 10.3, 10.4, 10.5 and 10.7; it relied on the MFN clause to import standards from the Russia and Switzerland BITs. Nicaragua denied attribution and expropriation, and invoked the essential security exception (Article 21.2(b)), the civil strife clause (Article 10.6) and an objection to claims for reflective loss.

Key holdings

The invasion and occupation of June–July 2018 is not attributable to Nicaragua. The Claimant did not prove that the invaders were State organs such as voluntary police (ILC Article 4), that the State directed or controlled them (Article 8), or that it adopted their conduct (Article 11). The witness evidence was largely hearsay, and the historian expert could not prove concrete facts. Award ¶¶ 185, 189–190, 197, 201–202
The essential security exception in Article 21.2(b) covers President Ortega's shelter order of late May 2018, which kept the police in barracks, until it was lifted at the end of July 2018. The televised order was sufficient notice of the invocation. Nicaragua's measures after July 2018 are not covered. The Article 10.6 civil strife defence fails because that provision sets a non-discrimination standard, is not an exception, and no discrimination claim was made. Award ¶¶ 277–280, 292–294, 305
The MFN clause could in principle import more favourable standards from the Russia–Nicaragua BIT. Nicaragua's Annex II law-enforcement reservation did not apply, because it is limited to the social services sector. But the Claimant did not show that Russian investors in like circumstances were treated more favourably, so the DR-CAFTA standards apply. The standalone MFN and national treatment claims fail because they concerned only the period covered by Article 21.2(b). Award ¶¶ 333–338, 496–498, 538–540
No breach of full protection and security or fair and equitable treatment after July 2018. The authorities' delay in finally evicting the occupants had to be weighed against the complete inaction of Inagrosa and the Claimant from August 2018 to August 2020, and the occupants were removed in August 2021. The Court Order was an urgent precautionary measure, not a breach of due process, and was not based on fabricated evidence. The legitimate-expectations claim was unsupported. Award ¶¶ 350, 402, 407–409
No expropriation. The Court Order appointed a judicial depositary for two years and did not transfer ownership. The registry certificates still record Inagrosa as 100% owner, so there was no substantial deprivation. A late claim of partial expropriation for a community forest nursery was rejected for lack of evidence. Award ¶¶ 458–462, 466
Because no breach was found, the Tribunal did not reach quantum or Nicaragua's reflective-loss admissibility objection, which it had joined to the merits. Award ¶¶ 146, 541
Costs. The parties share the tribunal and ICSID costs equally, because they arise from the arbitration agreement. Legal costs follow the event: the Claimant pays Nicaragua's costs of USD 8,240,445.86, including the costs of securing the property. Interest on costs is refused for lack of argument. Award ¶¶ 568–574