Vamed Management & Services GmbH v. Gabon

Case summary

At a glance

Parties: Vamed Management und Service GmbH (Austria) v. the Gabonese Republic
Case no.: ICC Case No. 23975/FS (consolidated with 23976/FS and 23977/FS)
Forum and rules: ICC International Court of Arbitration; ICC Rules of Arbitration (2017); seat Zurich, Switzerland; Swiss law governs
Treaty: None. Contract claims under nine Hospital Management Agreements (2001–2013) and the 2019 Protocole d'Accord on settlement of the debt
Tribunal: Charles Poncet (President), Domitille Baizeau, Pierre-Yves Gunter
Sector: Hospital management services
Outcome: Final Award of 21 March 2022: claim upheld in part. Gabon was ordered to pay EUR 2,581,870.64 plus 8% interest; the counterclaim was rejected; costs were split by majority.
Amount: Original principal claims EUR 33,929,609; counterclaim EUR 50,000,000. The final claim was reduced to EUR 13,017,570.07. Awarded: EUR 2,581,870.64 with 8% interest from 14 October 2021. ICC costs of USD 405,000 borne by Gabon under the Protocole. Legal costs: Gabon pays EUR 33,453.18 and Vamed pays EUR 5,000, each with 5% interest.

The dispute

Between 2001 and 2013, Vamed agreed under nine Hospital Management Agreements to manage and operate regional and university hospitals in Gabon. Gabon did not pay for the services, and Vamed began three ICC arbitrations in October 2018, which were later consolidated. In the Protocole d'Accord of September 2019, Gabon acknowledged a total debt of EUR 43,349,658. Under Article 4.1 it could discharge that debt by paying a reduced EUR 34,904,083 on a fixed schedule. Under Article 4.2 the full debt, plus 8% interest, would become payable if it missed the schedule. Gabon paid the reduced sum in full but late, and made no payments between August 2020 and June 2021. Vamed then claimed the balance under Article 4.2. Gabon argued that Article 4.2 was a penalty, relied on force majeure and on unforeseeability (clausula rebus sic stantibus) caused by the Covid-19 pandemic, and argued that enforcing the clause strictly would be an abuse of rights under Article 2 of the Swiss Civil Code.

Key holdings

No award by consent. Under Article 33 of the ICC Rules, a consent award must be requested by all parties. Article 12 of the Protocole did not allow one party alone to obtain it. The Tribunal therefore issued a regular final award. ¶¶ 89–93
The Tribunal has jurisdiction under both the Hospital Management Agreements and the Protocole. It may rule on the Protocole even though Vamed Engineering GmbH, a non-party, also signed it. Neither party objected to jurisdiction. ¶¶ 94–98
Neither force majeure nor clausula rebus sic stantibus applies. The pandemic made payment harder, but it did not make it impossible or excessively onerous. Gabon had funds and chose to spend them on other priorities. ¶¶ 112–119
Under Article 2(1) and (2) of the Swiss Civil Code, it was manifestly excessive for Vamed to claim EUR 13,017,570 by returning to the full debt of EUR 43,349,657 with interest. Gabon had paid the full reduced sum of EUR 34,904,083 despite the pandemic and the financial crisis. ¶¶ 120–136
Gabon paid late even before the pandemic and ignored Vamed's notices, so Vamed may claim 8% contractual interest. That interest runs only on the reduced debt of EUR 34,904,083. On that basis Vamed was awarded EUR 2,581,870.64 plus 8% interest from 14 October 2021. ¶¶ 137–139
Gabon's EUR 50 million counterclaim was rejected for lack of substantiation. Gabon never pursued it, and Article 12 of the Protocole records that Gabon has no claims against Vamed. ¶¶ 140–141
Costs, decided by majority, were allocated 90%/10%. Gabon pays EUR 33,453.18 and Vamed pays EUR 5,000 towards legal costs, each with 5% interest. The ICC costs of USD 405,000 fall on Gabon under the Protocole. The minority would have ordered Gabon to bear all of Vamed's costs and would have awarded Gabon nothing. ¶¶ 142–150

Procedural history

8 October 2018Vamed filed three requests for arbitration (Geneva, Zurich and The Hague clauses).
27 November 2018The ICC Secretariat confirmed that the parties had agreed to consolidate the three arbitrations, with the seat in Zurich.
8 February 2019Charles Poncet was confirmed as President. The co-arbitrators had been confirmed on 11 December 2018.
9 July 2019Gabon filed its Statement of Defense with a EUR 50 million counterclaim.
September 2019The parties signed the Protocole d'Accord settling the debt. It was signed on 19, 23 and 25 September.
8 January 2020Procedural Order No. 2 suspended the proceedings at the parties' joint request.
31 December 2020Vamed applied to resume the proceedings and for a consent award. The Tribunal reactivated the case by PO 3 on 6 January 2021.
30 August 2021PO 4 held that a consent award could not issue without both parties' agreement, and reopened the proceedings.
21 March 2022Final Award: Vamed was awarded EUR 2,581,870.64 plus interest, and the counterclaim was rejected.
15 December 2022The published copy of the award is an exhibit (Document 1-2) to court filing Case 1:22-cv-03737, filed 15 December 2022. The documents do not show the outcome of that proceeding.