23 October 2006
Freshfields Bruckhaus Deringer has won a significant decision from an International Centre for Settlement for Investment Disputes (ICSID) tribunal in the case of World Duty Free v The Republic of Kenya, with the tribunal dismissing in its entirety a $500m claim against Freshfields' governmental client. The claim was brought by an investor after the cancellation of his contract to run the duty free shops at Nairobi and Mombasa airports. In agreeing with the investor that he had gained his contract by bribing then-President Moi, the tribunal then ruled that the contract was gained illegally and that the Government was right to end it.
The award was rendered earlier this month by a tribunal constituted under the World Bank Rules and chaired by a former President of the International Court of Justice. The award is a landmark decision, both procedurally and substantively. Procedurally, the decision may be the first successful strike out of an ICSID claim on non-jurisdictional grounds. Arbitration partner Constantine Partasides, a member of the Freshfields team, also comments:
'This constitutes the first ever arbitral award, to our knowledge, that contains a finding of a payment of a cash bribe to a head of state.' Jan Paulsson, fellow arbitration partner defending the Republic of Kenya, noted: 'It is likely to become an enduring precedent.'
Freshfields Bruckhaus Deringer is a leading international law firm providing a comprehensive worldwide service to national and multinational corporations, financial institutions and governments.
Constantine Partasides, partner
T +33 1 44 56 54 24
E constantine.partasides@freshfields.com
Andrew Freeman, PR manager
T +44 20 7427 3984
E andrew.freeman@freshfields.com