International Centre for the Settlement of Investment Disputes
June 27, 1990
In the Matter of Arbitration between
ASIAN AGRICULTURAL PRODUCTS LTD. (AAPL) v.
REPUBLIC OF SRI LANKA CASE No. ARB/87/3 FINAL AWARD President Members g r h e T~bunal
: Dr. Ahmed Sadek EL-KOSHERI : Professor Berthold GOLDMAN, and : Dr. Samuel K.B. ASANTE
Senetaty ofthe Tribunal
Bertrand P. MARCHAIS
In Case No. ARB/87/3, Between Asian Agricultural Products Ltd. (AAPL), represented by: Dr. Heribert Golsong, as Counsel [of the law firm of Fulbright & Jawonki] And The Republic ofSri Lanka represented by: [Messa. William Rand, Robert Homick, Paul Friedland and Evan Gray of the law firm of Coudert Brothers, as Counsel; and Messrs. M.S Aziz and A. Rohan Perera, as Agents]
THE TRIBUNAL Composed as above, After deliberation, Made thefollowing Award:
1. OnJuly 8, 1987, the Inten~ationalCentre for thc Settienlent of lnvestment Disputes (hcreinafcer called "thc Centre" of "ICSID") rccelvcd a Request for Arbrtration €tom Aslan Agriculturdk Products Ltd. (Herernatier called "AAPI." or "the claimant"), a Hong Kong corporation.
The Request statcd that AAPL wished to institute arbitration proceedings against the Democratic Socialist Republic ofSri Lanka (hereinafter called "Sri Lanka" or "the Respondent") under the terms of the ICSID Conventiorl to which Sri La& is a contractlng Party, and in reliance upon Arucle 8.(1) of the Agreemer~tbetween the Govm n l e n t of the United Klngdom of Great Bntaxn and Northern-Ireland and the Government of Sri Lanka for the Promoaon and Protectron of Investrnena of February 13, 1980 (heremafter called "the B~iateralInvestment Treaty") whzch entered Into fwce o n December 18, and was extended to Hong Kong by vntue ofan Exchange of Notes with effect as ofJanuary 14, 1981. 2. Article 8.(1) of the Bilateral Investment Treaty, invoked as expressing Sri LankaS consent to ICSlD Arbitration, reads as follows Each contnctrng Party hereby consents to submt to the lnternanonal Centre for the Settlement of Invcctment Dtsputes (...) for settlement by conc~lrauonor arbitration undcr the Conwnt~onon the settkment of lnvestment Dspute between States and Nar~onalsof the Othcr Starcs opened for signature at Washington on 18 March, 1965 any legal d~sputcsarinng between that Contracting Party and natlonal or company ofthe other Contractrng Party concemlng an lnvestnient of the latter In the terntory of the former.
3. The Clamant rndicated in the Request for Arb~tratronthat a dispute arose drrectly out ofan officially approved investment by AAPL in Sri Lanka that took place in 1983 under the form of participating in the equity capital of SERENDlB SEAFOODS LTD. (hereinafter called "the Company" or "Serendib") a Sn Lankan public company established for the purpose of undertaking shrimp culture in Sri h n k a . According to the Claimant, the Company's tam, which was i a main producing center, was destroyed on January 28, 1987, during a military operation conducted by the security forces of Sri Lanka against installations reported to be used by local rebels. As a direct consequence of said action, AAPL alleged having suffered a total loss of its investment, and claimed &om the Govcmment of Sri Lanka compensation for the damages incurred as a mult thereof. The claims submitted on March 9, 1987, remained outstanding without reply for more than the three months period provided for in Article 8.(3) ofthe Bilateral Investment Treaty to reach an amicable settlement, and hence AAPL became entitled to institute the ICSID arbitration proceedings. 4. O n July 9,1987, the Secretary General of ICSID sent an acknowledgment of the Requat to AAPL and transmitted a copy of the Request to Sri Lnka. O n July 20, 1987, the Secretary General registered the Request in the Arbitration Register and notified the Pames accordingly. 5. O n September 30. 1987, the Centre received a comm