Human Rights Defenders Inc., as assignee of Natale Palazzo, Rodolfo Scodeller and Antonio Basile v. Swiss Confederation

At a glance

Parties

Human Rights Defenders Inc., as assignee of Natale Palazzo, Rodolfo Scodeller and Antonio Basile, v. the Swiss Confederation

Case no.

ICSID Case No. ARB/20/29

Forum and rules

ICSID Convention arbitration; ICSID Arbitration Rules and Administrative and Financial Regulations

Tribunal

Sir Daniel Bethlehem (President), Gabriel Bottini, Toby Landau

Sector

Construction; real estate development

Outcome

Proceeding discontinued on 18 January 2022 because the claimant did not pay its share of the first advance on costs.

Amount

The claimant's unpaid share of the first advance was USD 125,000.00. No costs award was made.

The dispute

Human Rights Defenders Inc. (HRDI) started ICSID proceedings against the Swiss Confederation as assignee of Natale Palazzo, Rodolfo Scodeller and Antonio Basile. The only published document is the order discontinuing the case, and it does not describe the merits of the claims. Switzerland applied under ICSID Arbitration Rule 41(5) to have the claims dismissed as manifestly without legal merit and manifestly outside ICSID jurisdiction under Article 25 of the ICSID Convention. HRDI never paid its USD 125,000.00 share of the first advance on costs. HRDI also became the subject of bankruptcy proceedings in Seychelles. The Tribunal stayed the case and then discontinued it under Administrative and Financial Regulation 14(3)(d) before it ruled on the Rule 41(5) application.

Key holdings

1. Provisional measures protect rights. They cannot be used by a claimant that is unable to pay its share of the advance on costs, so the Tribunal refused to order Switzerland to pay HRDI's share. The Tribunal saw no basis for departing from the standard rule that each party pays half of each advance. ¶¶ 18, 42 (Procedural Order No. 1, ¶ 17)
2. Tribunals cannot operate beyond their financial means and so incur liabilities for the Centre. Parties must make the advance payments a tribunal requests. On this basis the proceeding was stayed for the claimant's default. ¶ 42 (Procedural Order No. 1, ¶¶ 22–23)
3. The stay had lasted more than six months with no payment from either party, and the Acting Secretary-General moved for discontinuance. The Tribunal granted the motion. It noted that it had given the claimant every latitude to pay, including time beyond the six-month period. ¶¶ 43–47
4. The proceeding is discontinued under ICSID Administrative and Financial Regulation 14(3)(d). Switzerland had withdrawn its request for leave to apply for a costs award, so the order makes no costs award. ¶¶ 41, 48

Procedural history

1. 29 May 2020ICSID receives the Request for Arbitration.
2. 17 August 2020The Secretary-General registers the Request.
3. 13 January 2021The Tribunal is constituted. The Chairman of the ICSID Administrative Council appointed the President and Mr Bottini under Article 38 of the ICSID Convention.
4. 29 January 2021Switzerland files its Rule 41(5) application for dismissal of the claims as manifestly without legal merit.
5. 1 March 2021The Tribunal vacates the First Session set for 11 March 2021, suspends the proceeding pending the claimant's payment, and refuses HRDI's request for provisional measures.
6. 22 March 2021Procedural Order No. 1: the proceeding is stayed for non-payment under Regulation 14(3)(d).
7. 3 September 2021A person appointed as liquidator of HRDI by a Seychellois bankruptcy court contacts ICSID. HRDI later asks for 12 more months to pay, citing its pending bankruptcy appeal.
8. 17 December 2021The ICSID Acting Secretary-General moves the Tribunal to discontinue the proceeding.
9. 18 January 2022Order of Discontinuance under Regulation 14(3)(d).

Tribunal, counsel and experts

Decided by

• Daniel Bethlehem President — appointed by the institution
• Gabriel Bottini Co-arbitrator — appointed by the institution
• Toby Landau Co-arbitrator — appointed by the respondent

For the claimant

Human Rights Defenders Inc.

For the respondent

State Secretariat for Economic Affairs · LALIVE

For other participants

Danilo Ruggero Di Bella · Jonathan Xavier Santos Delgado

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Keywords

• discontinuance
• non-payment of advance on costs
• Administrative and Financial Regulation 14(3)(d)
• stay of proceedings
• Rule 41(5)
• manifest lack of legal merit
• provisional measures
• assignment of claims
• liquidation
• Seychelles bankruptcy
• Switzerland
• real estate development
• construction
• costs

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