Jurisdictional decision sees light of day in dispute between a Greek claimant and Serbia-Montenegro

By Damon Vis-Dunbar
24 October 2008

A previously unpublished 2006 partial award on jurisdiction in an arbitration between a Greek industrial group and the government of Serbia  and Montenegro was released in October 2008, providing a fuller description of the little-publicized dispute.

The row relates to a series of contracts between Mytilineos Holdings SA and RTB-BOR, a state-owned company involved in mineral extraction and metallurgy. Under the contracts, Mytilineos provided financing and spare parts to RTB-BOR, in exchange for the sale of copper. Mytilineos was also to be given a priority to buy a stake in RTB-BOR in the case that it was privatized.

The cooperation failed, however, as RTB-BOR struggled to pay back its debts. Mytilineos registered a claim under the Greek-Serbia and Montenegro bilateral investment treaty in 2005, seeking some US$ 31 million in damages.

The tribunal’s jurisdiction was challenged, in part, on the grounds that the contracts between Mytilineos and RTB-BOR did not constitute an “investment” as imagined by the BIT. Notably, the tribunal diverged on this question, with two members (Prof. August Reinisch and Prof. Stelios Koussoulis ) arguing in favour of jurisdiction, while the third arbitrator (Professor Dobrasav Mitrovic) declined jurisdiction on the grounds that Mytilineos has not complied with national legislation on foreign investment.

With the majority of the tribunal deciding in favour of jurisdiction, the path was cleared for a ruling on the merits. But progress has been hampered, first with the resignation of Prof. Mitrovic, then later with the passing away of Prof. Koussoulis , according to counsel for Mytilineos, the Greek law firm Moussas & Tsibris. A tribunal has been reconstituted, however, and written pleadings on the merits have been filed.

Sources:

The partial award on jurisdiction and dissenting opinion in Mytilineos Holdings SA v. The State Union of Serbia & Montenegro and Republic of Serbia are available at: http://ita.law.uvic.ca/

“Greek investor sues over mining operation in first known BIT case against Serbia”, By Damon Vis-Dunbar, Investment Treaty News, December 19, 2006