Medusa Oil and Gas Limited v. Montenegro

Case summary

At a glance

Parties: Medusa Oil and Gas Limited v. Montenegro (the press release calls the claimant "Medusa (Montenegro) Limited")
Case no.: PCA Case No. 2015-39
Forum and rules: Investment treaty arbitration administered by the Permanent Court of Arbitration. The published document does not state the rules or the seat.
Treaty: FR Yugoslavia–United Kingdom BIT, FR Yugoslavia–Austria BIT and Montenegro–Finland BIT
Tribunal: Van Vechten Veeder (President), J. Christopher Thomas, Charles N. Brower
Sector: Offshore oil and gas exploration
Outcome: By majority, the Tribunal held that it had no jurisdiction over any of the claims (award of 17 July 2019). This is according to Montenegro's press release.
Amount: The claimant announced a claim of at least EUR 100 million. Nothing was awarded. The claimant was ordered to bear the greater part of the costs of the arbitration.

The dispute

Medusa started this investment arbitration against Montenegro in August 2015. The dispute concerned oil and gas exploration in part of Montenegro's seabed. Medusa claimed that Montenegro had breached several obligations under three investment treaties: the treaties of the Federal Republic of Yugoslavia with the United Kingdom and with Austria, and the Montenegro–Finland treaty. Medusa did not fix the value of the dispute but announced a damages claim of at least EUR 100 million. Montenegro objected to jurisdiction. It argued, in substance, that the claimant could not bring the arbitration under these treaties. The only published document is a press release issued by Montenegro's Ministry of Economy on 26 July 2019, in Montenegrin. The award itself is not published here.

Key holdings

At Montenegro's request, the proceeding was bifurcated. The Tribunal decided jurisdiction first and did not examine the merits of the claims. Press release, p. 1
By majority, the Tribunal held that it lacked jurisdiction entirely. The claimant had no right to bring the arbitration under any of the three treaties: FRY–UK, FRY–Austria and Montenegro–Finland. The press release does not give the Tribunal's reasoning or say which arbitrator dissented. Press release, p. 1
Costs: the claimant bears the greater part of the costs of the arbitration. The Tribunal considered all the circumstances, including that Medusa had started a proceeding in which it could not show that the treaties it relied on applied. Press release, p. 1

Procedural history

August 2015Medusa starts the arbitration under the three investment treaties.
17 July 2019The Tribunal renders its award declining jurisdiction, by majority. The award is delivered to the parties on 25 July 2019.
26 July 2019Montenegro's Ministry of Economy issues a press release announcing the outcome.