Global Telecom Holding S.A.E. v. Canada

Case summary

At a glance

Parties: Global Telecom Holding S.A.E. (Egypt), formerly Orascom Telecom Holding, v. Canada
Case no.: ICSID Case No. ARB/16/16
Forum and rules: ICSID Convention; ICSID Arbitration Rules 2006; place of proceeding Paris
Treaty: Canada–Egypt Agreement for the Promotion and Protection of Investments (BIT/FIPA)
Tribunal: Prof. Georges Affaki (President), Prof. Gary Born, Prof. Vaughan Lowe
ad hoc Committee: Prof. Mónica Pinto (President), Prof. Lawrence Boo, Ms. Dyalá Jiménez
Sector: Wireless telecommunications; spectrum licensing
Outcome: Award of 27 March 2020: the majority declined to hear the national treatment claim, and the fair and equitable treatment claim on the Transfer Framework and the free transfer claim were dismissed; Gary Born dissented on national treatment. Both sides' partial annulment applications were dismissed on 30 September 2022. The published excerpts do not show the full operative part of the Award.
Amount: GTH paid CAD 442 million for 30 spectrum licences and says it invested more than CAD 1.3 billion. It sold Wind Mobile in 2014 for CAD 295 million. Annulment: each party bears its own costs, and the parties share equally the costs of the proceeding (US$ 416,271.49).

The dispute

GTH, an Egyptian mobile operator, entered the Canadian market through Wind Mobile, a joint venture with Globalive. In the 2008 AWS spectrum auction Wind Mobile won 30 set-aside licences for new entrants, for CAD 442 million. Canada's ownership and control rules limited GTH's voting stake, so the investment was structured to let GTH take voting control if the rules were relaxed. GTH challenged several Canadian measures: the CRTC's ownership and control review; the slow roll-out of mandatory roaming and tower sharing; the national security review of its 2012 application for voting control of Wind Mobile; and the 2013 Transfer Framework, which in effect stopped the sale of set-aside spectrum to the incumbent carriers after the five-year moratorium. GTH says this forced it to sell Wind Mobile in September 2014 for CAD 295 million. It claimed breaches of fair and equitable treatment, full protection and security, national treatment and the free transfer of investments. Canada objected that GTH was not a qualifying investor, that Article II(4)(b) excluded the voting control claims, that Article IV(2)(d) and the Annex excluded the national treatment claim, that some claims were time-barred, and that GTH lacked standing for harm suffered by Wind Mobile.

Key holdings

By majority, the national treatment claim falls outside the BIT. Under Article IV(2)(d) and the Annex, Canada may adopt measures in 'services in any other sector', which includes telecommunications, without any further notice or procedural step. Canada still owes fair and equitable treatment in these sectors. Award ¶¶ 365–379 (as quoted in Decision on Annulment ¶¶ 299–305)
Gary Born dissented. In his view, the Annex only reserved a right to make future exceptions, which Canada never exercised. 'Services in any other sector' does not cover the regulation of telecommunications ownership and control, so the national treatment claim should have been upheld. Born Dissent ¶¶ 10–11, 46–67
The Transfer Framework did not breach fair and equitable treatment. Canada never represented that set-aside licences could be transferred freely to incumbents after five years, because transfers always needed ministerial approval. The 2013 framework was a consistent, non-arbitrary response to changes in the market. Award ¶¶ 539–571 (as summarised in Decision on Annulment ¶¶ 276–286)
The free transfer claim was dismissed. Article IX protects cross-border movements of funds and returns. It does not guarantee the right to transfer ownership of an investment to an incumbent. Award ¶¶ 702–705 (as summarised in Decision on Annulment ¶¶ 295–296)
Annulment: the Committee dismissed both Canada's and GTH's applications for partial annulment. It found no manifest excess of powers, no failure to state reasons and no serious departure from a fundamental rule of procedure. In particular, the Tribunal's use of the French and Arabic texts of the BIT confirmed its reading and did not decide the outcome. Decision on Annulment ¶¶ 306, 318–320, 328
Annulment costs: as the parties agreed, each bears its own costs and they share equally the costs of the proceeding, which totalled US$ 416,271.49. Decision on Annulment ¶¶ 325–328

Procedural history

21 February 2017Tribunal constituted.
13 June 2017Procedural Order No. 1 sets the procedural rules; Paris is the place of proceeding.
14 December 2017Procedural Order No. 2: Canada's request for bifurcation is denied and its objections are joined to the merits.
November 2018 – March 2019Procedural Orders Nos. 4–6 and 8 decide privilege disputes. In PO8 the Tribunal adopts the determinations of an independent expert, Dr. Patricia Shaughnessy.
1–12 April 2019Hearing on jurisdiction, merits and quantum in Paris.
8 December 2019Procedural Order No. 10 admits nine documents that Canada produced late.
27 March 2020Award, with Gary Born's dissenting opinion on the national treatment claim.
27 July 2020GTH and Canada each apply for partial annulment. ICSID registers both applications on 11 August 2020, and the ad hoc Committee is constituted on 24 September 2020.
4 February 2021Committee's Procedural Order No. 2 rejects Canada's request to file new evidence on Ontario law.
30 September 2022Decision on Annulment: both applications dismissed.

Tribunal, counsel and experts

Decided by: Georges Affaki President
Gary B. Born Co-arbitrator (dissented on the national treatment claim)
Vaughan Lowe Co-arbitrator
Mónica Pinto Committee president — appointed by the institution
Lawrence Boo Committee member — appointed by the institution
Dyalá Jiménez Committee member — appointed by the institution
For the claimant: Gibson, Dunn & Crutcher LLP
For the respondent: Trade Law Bureau, Global Affairs Canada
Experts: Santiago Dellepiane (claimant) · Pablo T. Spiller (claimant) · Mohamed S. Abdel Wahab (respondent) · Patricia Shaughnessy (tribunal)