1975

ICSID

Kaiser Bauxite Company v The government of Jamaica 1 ICSID 296

1952 Kaiser, a US company, commenced operation in Jamaica. 1957 Kaiser entered into an agreement with government of Jamaica, relating to the ownership and operation of its bauxite mining facilities in Jamaica. The agreement contained a ‘non further tax’ clause by which Jamaica undertook not to impose any additional royalty or taxes other than those provided in the agreement. 1968 Jamaica ratified ICSID convention The agreement was modified in 1969, and 1972 containing the ‘non further tax’ and referring to ICSID arbitration. 1974 Jamaica enacted the Buxite Production Levy Act, with additional tax to be paid on all bauxite extraction. Jamaica filed a notification to ICSID according to 25.4, removing disputes arising directly out of investments relating to minerals. Kaiser initiated ICSID proceedings Jamaica refused to appoint an arbitration and the tribunal was established by the Chairman.

The convention had entered into force for both the US and Jamaica at the time of the 1969 and 1972 agreements and accordingly Jamaica was a contracting state and Kaiser a national of another contracting state for the purposes of the application of the convention. The arbitration clasues contained in the 1969 and 1972 agreements constituted the parties written consent to ICSID arbitration. The Jamaican notification did not affect the prior agreement to arbitrate which was contained in the 1969 and 1972 agreements. This agreement could not be unilaterally withdrawn by either party. The notification given by Jamaica could only operate in respect of potential future investors. To find otherwise would be to deprive the convention of any practical value for contracting states and investor alike