Asian Agricultural Products Limited v. Republic of Sri Lanka

Abstract

Jurisdiction — icsid Convention — Bank guarantee for benefit of joint venture company — Loss of investment — Whether tribunal empowered to interpret scope of ongoing liability

Damages — For destruction of property — Measure of damages — Valuation of equity — Methods of assessment — Test of reasonable price which a willing investor would offer — Going concern value — Short operating history — Lack of goodwill — No reasonable anticipation of future profits

Interest — Requirement of reasonable rate of interest — Date from which interest payable

Treaties — Bilateral investment treaty — Interpretation — Renvoi technique — Most Favoured Nation/National Treatment clause — Whether rule of customary international law to pay compensation for breach of due diligence obligation incorporated into treaty

State responsibility — For destruction of property — Insurgents — Counter insurgency action by government forces — Lack of conclusive l’vidence as to party causing damage — Bilateral investment treaty — Obligation to provide “full protection and security” for foreign investment — Whether imposing standard of strict liability — Conduct of armed forces during civil disturbances — Specific treaty provision of due diligence — Whether excluding further application of due diligence — Whether excluding further application of due diligence under other provisions of treaty — Whether State has a duty to attempt peaceful removal of suspected insurgents from alien property prior to military operations

Treaties — Interpretation — icsid Convention, Article 42(1) — United Kingdom/Sri Lanka Agreement for the Promotion and Protection of Investments, 1980, Article 8(1)– Submission of dispute under treaty to icsid arbitration — Scope of obligations under treaty — applicable law in the absence of prior agreement — Whether agreement as to applicable law can be inferred from conduct of parties

Treaties — Interpretation — Principles of interpretation — Vienna Convention on the Law of Treaties, 1969, Article 31 — Natural and fair meaning Objectives and spirit — Travaux preparatoires — Principle of effectiveness Whether maxim generalia specialibus non derogant applicable — United Kingdom/Sri Lanka agreement for the Promotion and Protection of Investments, 1980

Treaties — Interpretation — United Kingdom/Sri Lanka Agreement for the Promotion and Protection of Investments, 1980 — Insurgent — “combat action” — Definition — Whether counter insurgency operation constitutes “combat action”