GBM Global et al. v. Kingdom of Spain

At a glance

Parties

GBM Global, S.A. de C.V., Fondo de Inversión de Renta Variable, and others (35 Mexican individuals and 11 Mexican entities, all shareholders or bondholders of Banco Popular Español, S.A.) v. Kingdom of Spain

Case no.

ICSID (number not stated in the published document)

Forum and rules

ICSID Convention; ICSID Institution Rules and Arbitration Rules (proposed seat: Washington, D.C.)

Treaty

Mexico–Spain BIT of 10 October 2006

Tribunal

Not constituted at the date of the Request. The claimants nominated Professor William Park.

Sector

Banking; bank resolution

Outcome

Only the Request for Arbitration is published. The documents do not show any decision or the outcome.

Amount

Damages to be determined, plus compound interest and costs. The claimants say that they and the claimants in a parallel UNCITRAL case invested more than € 470 million and lost all of it.

The dispute

The claimants are 35 Mexican individuals and 11 Mexican entities that held shares and Additional Tier 1 bonds in Banco Popular Español, S.A. They invested through a € 450 million capital raise in December 2013 and through the 2016 capital raise. Banco Popular was placed into resolution under the EU Single Resolution Mechanism on 7 June 2017. On the same day it was sold to Santander for € 1, and its shares and Additional Tier 1 instruments were written down to zero. The claimants say that Spain caused the liquidity crisis: Spanish public entities withdrew billions of euros in deposits, officials made damaging public statements, the Banco de España refused meaningful emergency liquidity assistance, and the FROB ran a non-competitive "fire sale". They claim breaches of fair and equitable treatment and full protection and security (Article IV), national and most-favoured-nation treatment (Article III), and the expropriation clause (Article V) of the Mexico–Spain BIT. They state that they do not challenge the EU resolution decision itself, which they have challenged before the Court of Justice of the European Union.

Key holdings

1. No decision is published. The Request for Arbitration sets out only the claimants' case. It asks for declarations of jurisdiction and of breach of Articles III, IV and V of the Treaty, damages to be determined with compound interest, and costs. Request ¶ 166

Procedural history

1. 7 June 2017The Single Resolution Board places Banco Popular into resolution. The FROB implements the resolution and transfers the bank to Santander for € 1.
2. 22 January 2018The claimants send Spain a notice of dispute under the Treaty and invite settlement talks.
3. 23 August 2018Request for Arbitration filed with ICSID. The claimants nominate Professor William Park, propose English as the language and Washington, D.C. as the seat, and propose consolidation with a parallel UNCITRAL arbitration brought by Mexican–Spanish dual nationals. The published copy was filed as an exhibit in US District Court Case 1:18-mc-00085-ER.

Tribunal, counsel and experts

For the claimant

Kirkland & Ellis LLP

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Keywords

• Banco Popular
• Santander
• bank resolution
• Single Resolution Mechanism
• Single Resolution Board
• FROB
• emergency liquidity assistance
• Banco de España
• Mexico–Spain BIT
• fair and equitable treatment
• full protection and security
• most-favoured-nation treatment
• national treatment
• indirect expropriation
• shareholders
• Additional Tier 1 bonds
• parallel UNCITRAL arbitration
• consolidation

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