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Clyde & Co secures landmark ICSID win

  • Press Releases 17 March 2020 17 March 2020
  • UK & Europe

Clyde & Co has secured a landmark win on behalf of Sri Lanka in a International Centre for Settlement of Investment Disputes (ICSID) claim brought by a hotel investor relating to a plot of land near the capital Colombo.

Clyde & Co secures landmark ICSID win

Clyde & Co has secured a landmark win on behalf of Sri Lanka in a International Centre for Settlement of Investment Disputes (ICSID) claim brought by a hotel investor relating to a plot of land near the capital Colombo.

Raymond Eyre and his Sri Lankan company Montrose Developments brought a claim under the UK-Sri Lanka bilateral investment treaty in 2016, seeking around US $20 million in compensation from the Sri Lankan government. Eyre claimed that he was compensated inadequately after the government dredged along the adjacent shoreline to his planned hotel development and then acquired the land under a compulsory acquisition order in 2013.

The tribunal, comprising presiding arbitrator Lucy Reed with co-arbitrators Julian DM Lew QC and Brigitte Stern, noted that Eyre and his company had already been awarded compensation from the government for the undeveloped land. The Tribunal accepted, in line with previous investment treaty jurisprudence, the criteria for a concept of a protected investment as being "a contribution to an economic venture of a certain duration implying an operation risk". In applying that criteria to the facts, the tribunal determined that substantive commitments and arrangements had not been entered into and that the hotel project was "at best aspirational" at the time the land was acquired by the government.

The ICSID tribunal therefore concluded that it lacked jurisdiction over the dispute as the project was not a protected investment under the UK-Sri Lanka bilateral investment treaty.

The Clyde & Co team was led by Partner John Whittaker, Legal Director Grace Asemota and Senior Associate Catriona McCarthy.

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