Carnegie Minerals (Gambia) Limited v. Republic of The Gambia

Case summary

At a glance

Parties: Carnegie Minerals (Gambia) Limited (a Gambian company under Australian control) v. Republic of The Gambia
Case no.: ICSID Case No. ARB/09/19 (Annulment Proceeding)
Forum and rules: ICSID Convention; ICSID Arbitration Rules in force as of January 2003; place of proceeding London
Treaty: Contract: Clause 22 of the Mining Licence of 29 December 2005 (consent under ICSID Article 25(2)(b))
Committee: Prof. Donald M. McRae (President), Prof. Bernardo M. Cremades, Ms. Dorothy Ufot (replaced Prof. Zhidong Chen, who resigned)
Sector: Mining
Outcome: Annulment application rejected in its entirety (7 July 2020); stay of enforcement lifted.
Amount: Award of about USD 22 million upheld: USD 18,658,358 damages, USD 993,683 interest, plus USD 445,860 (less refunds) and GBP 2,250,000 in costs. Committee costs of USD 443,984.37 shared equally; Carnegie to reimburse The Gambia USD 221,992.19. Each party bears its own legal costs.

The dispute

Carnegie Minerals (Gambia) Limited, a company incorporated in The Gambia, held a Mining Licence of 29 December 2005. The parties agreed that, because of its Australian control, the company would be treated as a foreign national under Article 25(2)(b) of the ICSID Convention. The Gambia terminated the Licence. In a decision of 29 September 2014 the Tribunal found the termination unlawful, and in its Award of 14 July 2015 it ordered The Gambia to pay about USD 22 million. The Gambia then sought annulment. In the end it pursued only one ground, Article 52(1)(a): that the Tribunal was not properly constituted. It argued that delays in ICSID's communications had deprived it of its right to appoint an arbitrator, because the ICSID Secretary-General appointed Ms. Jean Kalicki on its behalf. Carnegie answered that the default appointment complied with Clause 22(4)(b) of the Mining Licence. The annulment proceeding also produced rulings on whether Carnegie's counsel could still represent it after a Gambian court placed the company in liquidation, on The Gambia's request for disclosure of trust documents, and on the stay of enforcement.

Key holdings

Representation is governed by the ICSID Convention and Arbitration Rule 18, not by the respondent State's domestic law. The appointment of a Gambian liquidator therefore did not displace Clyde & Co.'s authority, which came from Carnegie's Board of Directors. Clyde & Co. remains Carnegie's representative. Decision on Representation ¶¶ 43–47
The Gambia's request for documents on the alleged assignment of the Award to a trust for Astron Limited was rejected. Questions of beneficial entitlement and of enforcement are not matters for an annulment committee. Procedural Order No. 2 ¶¶ 36–39
The stay of enforcement was continued for one year without any requirement of security. The Committee found no evidence that The Gambia was likely not to comply and no real prejudice to Carnegie; on balance, The Gambia's economic situation favoured continuing the stay. Stay Decision ¶¶ 46–55
The Committee was not bound by the two co-arbitrators' Disqualification Decision under Article 57 or by Ms. Kalicki's decision not to resign. The Azurix/EDF standard of review does not apply, because the complaint concerns ICSID's conduct and not the arbitrator. Decision on Annulment ¶¶ 130–132
The Tribunal was properly constituted. The Gambia did not appoint an arbitrator within 45 days of Carnegie's request, and ICSID then appointed Ms. Kalicki within 45 days, as Clause 22(4)(b) provides. The Gambia lost its right to appoint through its own inaction, not through the late receipt of ICSID's letter. Time limits run under the notice scheme of Clause 20, not from receipt. Decision on Annulment ¶¶ 146, 165–174
Even if the constitution had been defective, the Committee would have seriously considered using its discretion not to annul. The Award itself was not challenged, and the integrity of the process was not affected. Decision on Annulment ¶ 170
Costs: each party bears its own legal costs, and the costs of the annulment proceeding are shared equally. Carnegie had anticipated an annulment claim and could have avoided it by joining the request that Ms. Kalicki resign. Carnegie must reimburse USD 221,992.19. Decision on Annulment ¶¶ 183–189

Procedural history

14 September 2009Request for Arbitration filed under Clause 22 of the Mining Licence. ICSID registered it on 23 October 2009.
12–13 January 2010The ICSID Secretary-General appointed Jean Kalicki for The Gambia, which had made no appointment, and she accepted. The Tribunal was constituted on 3 March 2010 with Donald Francis Donovan as president.
17 May 2011The two other members of the Tribunal rejected The Gambia's proposal to disqualify Ms. Kalicki. She had declined to resign on 6 July 2010.
14 July 2015Award ordering The Gambia to pay about USD 22 million. It followed the Decision on Jurisdiction and Merits of 29 September 2014.
11 November 2015The Gambia applied for annulment. The application was registered on 19 November 2015, and the ad hoc Committee was constituted on 22 January 2016.
7 October 2016Decision on Representation: Clyde & Co. represents Carnegie.
23 January 2017Procedural Order No. 1.
20 August 2018Procedural Order No. 2 rejected The Gambia's disclosure request. Ms. Ufot had replaced Prof. Chen on 21 May 2018.
18 October 2018Stay of enforcement continued for one year.
7 July 2020Decision on Annulment: application rejected and stay lifted. The hearing had been held in London on 30 January 2020.

Tribunal, counsel and experts

Decided by: Donald M. McRae Committee president — appointed by the institution
Bernardo M. Cremades Committee member — appointed by the institution
Zhidong Chen Committee member — appointed by the institution (resigned; replaced by Dorothy Ufot on 21 May 2018)
Dorothy Udeme Ufot Committee member (replaced Zhidong Chen on 21 May 2018)
For the claimant: Clyde & Co · Brick Court Chambers
For the respondent: Mayer Brown · Attorney General's Chambers and Ministry of Justice, The Gambia