1983

ICSID

Amco Asia Corporation, Pan American Development Limited and P.T. Amco Indonesia v Republic of Indonesia 1 ICSID 377 & 389

Amco Asia Corporation (US corporation), planed to construct a hotel in Indonesia. P.T. Amco Indonesia was established as a vehicle for the investment (conditions for obtaining tax concessions). PT Amco Indonesia was set up with the approval of the government, as a foreign business, the approval contained submission to ICSID arbitration art IX. With the approval of the Indonesian government a portion of Amco’s shares in the Indonesian company were transferred to Pan American (Hong Kong corporation). Subsequently P.T. Amco’s investment licence was cancelled. 1981 Amco, Pan American and P.T. Amco request ICSID arbitration. 1984 Merits 1986 Award challenge in the ICSID Committee successfully for minor defects (not to state sufficiently pertinent reasons), so resubmission 1988, 1991 jurisdiction & merits by the new tribunal 1992 2nd award challenge and application rejected in part

1993 Tribunal. Indonesia contended that PT Amco could not be considered a national of another state: (14) What is needed for 25,2,b to be applicable is 1. that the juridical person, party to the dispute be legally a national of the contracting state which is the other party and 2. that this juridical person being under foreign control , to the knowledge of the contracting state, the parties agree to treat it as a foreign juridical person. In the tribunal view these two requirements were fulfilled at the date on which the parties consented to submit possible future disputes to arbitration. Art IX of the approval Indonesia argued that it had not consented ICSID arbitration with Amco, neither Pan American but just with P.T. Amco. Applicants argued that Indonesia approved the share transfer to Pan American and that the transfer was carried with it a right to ICSID arbitration. 1993 tribunal (31) The right acquired by Amco Asia to invoke the arbitration clause [because ‘foreign control clause’ (Art 25 ICSID Convention)] is attached to its investment, represented by its shares in PT Amco, and may be transferred with those shares. To be sure, for such a transfer to be effective, the government of the host country must approve it, which approval has as its consequence that said government agrees to the transfer acquiring all rights attached to the shares, including the right to arbitrate, unless this latter right would be expressly excluded in the approval decision ICSID Committee 1986 (20) the convention authorizes and ICSID tribunal to apply rules of IL only to fill up lacunae in the applicable domestic law and to ensure precedence to international law norms, where the rules of the applicable domestic law are in collision with such norms… supplemental and corrective role of IL in relation to the law of the host state as substantive applicable law