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International Arbitration Forum

Aura Energy Limited v. Sweden

Case summary

At a glance

Parties
Aura Energy Limited (Australia) v. the Kingdom of Sweden
Forum and rules
Pre-arbitration stage: notice of dispute and invitation to negotiate under Article 26 ECT; no arbitration shown in the documents
Treaty
Energy Charter Treaty (the claimant also invoked EU law and the European Convention on Human Rights)
Sector
Uranium mining and exploration
Outcome
The published documents show only the notice of dispute and Sweden's rejection of the claims. They do not show whether an arbitration was started.
Amount
Damages estimated by the claimant at some USD 1.8 billion

The dispute

Aura Energy Limited, an Australian company, wholly owns the Swedish company Vanadis Battery Metals AB (formerly Energy Sweden AB). That company held exploration permits for six uranium projects in the county of Jämtland: Kinderåsen, Häggån, Bölåsen, Skallböle, Möckelåsen and Koborgsmyren. In summer 2018 the Swedish Parliament adopted legislation, in force from 1 August 2018, that banned uranium mining in Sweden. The ban also covers the processing of residual uranium in tailings and of uranium extracted together with other minerals. Aura Energy alleged that the ban indirectly expropriated its investment without compensation, in breach of Article 13 ECT. It also alleged breaches of the fair and equitable treatment standard and the impairment clause in Article 10(1) ECT. Sweden rejected the allegations in their entirety. It argued that they lacked legal merit, that Aura Energy lacked jurisdiction under the ECT, and that the change in the uranium legislation was consistent with all applicable law.

Key holdings

  1. Aura Energy claimed that the uranium ban made its projects worthless and could not be sold to third parties. It argued that this amounted to an indirect expropriation under Article 13 ECT, and that no prompt, adequate and effective compensation had been paid. Notice of Dispute ¶¶ 19–21, 25
  2. Aura Energy alleged that the measures breached its legitimate expectations and Sweden's obligation to provide a stable and predictable framework. It described the measures as non-transparent, arbitrary, disproportionate and discriminatory, in breach of the fair and equitable treatment standard in Article 10(1) ECT. It relied on Tecmed v. Mexico. Notice of Dispute ¶¶ 15, 22–24
  3. Aura Energy estimated its damages at some USD 1.8 billion, based on the market value of the Swedish company less its residual value. It invited Sweden to negotiate. Notice of Dispute ¶¶ 28–29
  4. Sweden rejected the allegations in their entirety and said Aura Energy did not have the jurisdiction needed to pursue its claims under the ECT. It also declined Aura Energy's offer to conclude a separate arbitration agreement, and stated that Aura Energy is not entitled to any compensation. Sweden's Response, p. 1

Procedural history

  1. 1 August 2018Swedish legislation banning uranium mining takes effect.
  2. 4 November 2019Aura Energy sends its notice of dispute under the ECT to Sweden's Chancellor of Justice, who receives it on 7 November 2019.
  3. 9 March 2020Counsel for the parties meet in Stockholm to discuss the claims.
  4. 17 March 2020Sweden rejects the claims and the offer of a separate arbitration agreement.

Tribunal, counsel and experts

For the claimant
Walthon Advokater AB · Lindskog Malmström Advokatbyrå KB
For the respondent
Jenner & Block LLP · Roschier Advokatbyrå AB

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Keywords

Summary generated with AI from the published documents — refer to the award for the authoritative text.

Country
Treaty
Energy Charter Treaty (1994)