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José Alejandro Hernández Contreras v. Republic of Costa Rica (III), ICSID Case No. ARB(AF)/25/3

New
Short Name:

Hernández Contreras v. Costa Rica

Case Type:
International Investment Agreement (Investor–State)
Applicable Procedural Rules:
ICSID Additional Facility Rules (2022)
Seat of Arbitration:
Washington D.C. (United States)
Applicable Treaty:
Costa Rica-Venezuela BIT (1997)
Applicable Legal Instruments:
Costa Rica - Venezuela BIT (1997) (Spanish)
Economic Sector:
Information and Communications Technology

Available documents

1 May 2025
Registration of the Request for Arbitration
Document Details:
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Claimant appointee:
José Carlos Fernández Rozas
Respondent appointee
Tribunal/Panel chair
Chair/President:
Mélanie Riofrio Piché
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Reed Smith
Respondent's counsel
Arnold & Porter Kaye Scholer
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Print reporter
Entities
This summary note is machine-generated. Always consult the original materials.


27 Nov 2025
Procedural Order No. 1 (Spanish)
Document Details:
PARTICIPANTS
Procedural Order No. 1 (Spanish)
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Claimant appointee:
José Carlos Fernández Rozas
Respondent appointee
Respondent appointee:
Luis Alberto González García
Tribunal/Panel chair
Chair/President:
Mélanie Riofrio Piché
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Francisco A. Rodriguez, Gilberto A. Guerrero-Rocca, Ana R. Ulseth, Andrés Eskenazi Bone, Reed Smith
Respondent's counsel
Patricio Grané Labat, Roberto Lupini, Agustín Hubner, Paolo Di Rosa, Sebastian Canon Urrutia, Ernesto M. Hernández, Ana Sofia Pirnia, Arnold & Porter Kaye Scholer, Arianna Arce, Marisol Montero, Gabriel Chaves Corrales
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Print reporter
Entities
Document Summary
Procedural Order No. 1 (Spanish)
This summary note is machine-generated. Always consult the original materials.


27 Nov 2025
Procedural Order No. 2 (Spanish)
Document Details:
PARTICIPANTS
Procedural Order No. 2 (Spanish)
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Claimant appointee:
José Carlos Fernández Rozas
Respondent appointee
Respondent appointee:
Luis Alberto González García
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Francisco A. Rodriguez, Gilberto A. Guerrero-Rocca, Ana R. Ulseth, Andrés Eskenazi Bone, Reed Smith
Respondent's counsel
Patricio Grané Labat, Roberto Lupini, Agustín Hubner, Paolo Di Rosa, Sebastian Canon Urrutia, Ernesto M. Hernández, Ana Sofia Pirnia, Arnold & Porter Kaye Scholer, Arianna Arce, Marisol Montero, Gabriel Chaves Corrales
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Print reporter
Entities
Document Summary
Procedural Order No. 2 (Spanish)
This summary note is machine-generated. Always consult the original materials.


1 May 2026
Procedural Order No. 3 (Decision on Respondent's Request for Security for Costs) (Spanish)
Document Details:
PARTICIPANTS
Procedural Order No. 3 (Decision on Respondent's Request for Security for Costs) (Spanish)
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Chair/President:
Mélanie Riofrio Piché
Arbitrator(s)
José Carlos Fernández Rozas, Luis Alberto González García
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Respondent's counsel
Other counsel
Claimant's expert
Pablo Peña Ortega, Sergio Arturo Rojas Peñaranda
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Anna Toubiana
Tribunal assistant
María Paula Jijón
Country
Print reporter
Entities
Costa Rica, Reed Smith, Arnold & Porter Kaye Scholer
Document Summary
Procedural Order No. 3 (Decision on Respondent's Request for Security for Costs) (Spanish)
This summary note is machine-generated. Always consult the original materials.

Procedural Posture

This document is Procedural Order No. 3 issued by the Tribunal in an ICSID Additional Facility arbitration between José Alejandro Hernández Contreras and the Republic of Costa Rica. The Order addresses the Respondent's application for security for costs pursuant to Rule 63 of the 2022 ICSID Additional Facility Rules, seeking an order for the Claimant to post a guarantee of no less than USD 4 million.

Principal Legal Issues and Parties' Positions

The core issue before the Tribunal was whether the circumstances warranted an order for security for costs, requiring an assessment of the Claimant's financial capacity, his willingness to comply with an adverse costs award, the potential effect of the security on his ability to pursue the claim, and the parties' conduct. The Respondent argued that the Claimant's formal declaration of bankruptcy, lack of assets, and history of non-compliance in two prior related arbitrations (Hernández I and Hernández II) demonstrated a real risk of non-payment. Conversely, the Claimant contended that he possessed sufficient financial capacity, that the bankruptcy proceedings were abusive, and that a USD 4 million security order would be disproportionate and effectively stifle his access to justice.

Tribunal's Analysis and Findings

Applying the autonomous standard under Rule 63 of the 2022 ICSID AF Rules, the Tribunal concluded that there was a real risk the Claimant would be unable to satisfy an adverse costs award. The Tribunal emphasized that the Claimant was subject to an active bankruptcy proceeding, lacked registered assets, and failed to provide reliable independent evidence of sufficient financial capacity. Furthermore, the Tribunal found that the Claimant's procedural history—specifically his failure to timely pay advances and comply with a previous security for costs order in Hernández II—raised reasonable doubts regarding his willingness to comply with future cost obligations.

However, the Tribunal also weighed the potential impact of the requested security on the Claimant's ability to continue the arbitration. Rejecting the Respondent's USD 4 million request as potentially prohibitive, the Tribunal determined that a reduced security of USD 1.2 million struck the appropriate balance. The Tribunal noted that this amount was consistent with the security ordered in Hernández II and other recent arbitrations involving Costa Rica, providing adequate protection for the Respondent without imposing an insurmountable barrier to the Claimant's pursuit of his claims.

Operative Directions

The Tribunal partially granted the Respondent's application, ordering the Claimant to provide and maintain security for costs in the amount of USD 1.2 million in the form of a bank guarantee or equivalent financial instrument. The Claimant was directed to constitute the security within 60 days, subject to the suspension of the proceedings in the event of non-compliance.
25 Jun 2026
Procedural Order No. 4 (Decision on the Terms of the Security for Costs Requested by the Respondent) (Spanish)
Document Details:
PARTICIPANTS
Procedural Order No. 4 (Decision on the Terms of the Security for Costs Requested by the Respondent) (Spanish)
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Chair/President:
Mélanie Riofrio Piché
Arbitrator(s)
José Carlos Fernández Rozas, Luis Alberto González García
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Respondent's counsel
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Anna Toubiana
Tribunal assistant
María Paula Jijón
Country
Print reporter
Entities
Costa Rica
Document Summary
Procedural Order No. 4 (Decision on the Terms of the Security for Costs Requested by the Respondent) (Spanish)
This summary note is machine-generated. Always consult the original materials.

Procedural Background

Following Procedural Order No. 3, which ordered the Claimant to post security for costs in the amount of USD 1.2 million, the Parties failed to reach an agreement on the specific terms of the required bank guarantee. Consequently, the Tribunal issued Procedural Order No. 4 to resolve the outstanding disagreements regarding the conditions of the proposed standby letter of credit (CDC) to be issued by the Canadian Imperial Bank of Commerce (CIBC).

Tribunal's Analysis and Findings

The Tribunal first noted the agreed terms, including the instrument type, the beneficiary (Costa Rica), the principal amount, and the governing law (Illinois). It then systematically addressed the disputed elements. The Tribunal rejected the Respondent's request to predetermine specific cost categories in the CDC, ruling that the instrument must be executable upon the mere presentation of a cost award, which would inherently define the payable amounts. Furthermore, the Tribunal dismissed the Respondent's demand for an express waiver of the benefit of excussion, clarifying that a CDC constitutes an autonomous and primary obligation of the issuing bank, rendering such a waiver legally inapplicable and unnecessary.

The Tribunal also declined to require a clause explicitly stating that annulment proceedings would not suspend the payment obligation, nor did it mandate a non-annulability clause, emphasizing the irrevocable and independent nature of the CDC. However, the Tribunal granted the Respondent's request to prohibit the transfer or assignment of the CDC without prior consent, recognizing that the guarantee's efficacy relies on the specific creditworthiness of the issuing bank. Additionally, the Tribunal ordered the inclusion of a direct notification obligation to the Respondent regarding any circumstances affecting the CDC's validity, enforceability, or effectiveness.

Operative Directions

In its dispositive section, the Tribunal granted the Parties a 20-day period to finalize the CDC text in accordance with the Order's parameters. The Claimant was directed to constitute the guarantee within 60 days and to submit a written declaration waiving any right to initiate legal actions aimed at frustrating the enforceability or execution of the CDC during the arbitration. The Tribunal reserved its decision on the costs of the present application.
Case Summary
This summary note is machine-generated. Always consult the original materials.

No major procedural or substantive document has been issued in this case to date; this summary is based on Procedural Orders No. 1 and No. 2 available in the case file. In José Alejandro Hernández Contreras v. Costa Rica (III), a dispute was initiated by a Venezuelan national against the Republic of Costa Rica under the terms of the 1997 Costa Rica-Venezuela Bilateral Investment Treaty. The arbitration is administered by the International Centre for Settlement of Investment Disputes (ICSID) and is governed by the ICSID Additional Facility Arbitration Rules (2022). The arbitral tribunal was formally constituted on October 9, 2025, and is composed of Mélanie Riofrio Piché of Ecuador and France as President, with José Carlos Fernández Rozas of Spain and Luis Alberto González García of Mexico serving as co-arbitrators. The Claimant is represented by the law firm Reed Smith, while the Respondent, Costa Rica, is represented by Arnold & Porter Kaye Scholer as well as counsel from its Ministry of Foreign Trade. Procedural Order No. 1, issued on November 27, 2025, memorializes the agreements reached and decisions made during the tribunal's first session, which was held via videoconference on November 24, 2025. The Order establishes the foundational framework for the arbitration. It confirms that the seat of the arbitration shall be Washington D.C., and that the language of the proceeding will be Spanish. The Order sets forth detailed protocols for all communications, the submission of documents, and the handling of evidence. It also addresses the potential for third-party funding, imposing a continuing obligation on the parties to disclose the name and address of any non-party from which they receive funds for the prosecution or defense of the case. The Order appoints María Paula Jijón as assistant to the tribunal President. The tribunal also established a comprehensive procedural calendar, setting forth the deadlines for the parties' written submissions and subsequent phases of the arbitration, including a phase for document production. The Order further notes that the IBA Rules on the Taking of Evidence in International Arbitration (2020) will serve as a non-binding guide for the tribunal on evidentiary matters. Procedural Order No. 2, issued on the same day, further elaborates on the procedural framework by establishing detailed rules for the document production phase. The Order sets out the specific format for requests and objections, adopting a schedule based on the model commonly known as a 'Redfern Schedule'. It outlines the permissible grounds for objecting to a document request, including legal privilege, excessive burden, commercial or technical confidentiality, and political or institutional sensitivity. The Order confirms that the IBA Rules on the Taking of Evidence in International Arbitration (2020) will govern the process and details the procedure for the Tribunal to rule on contested requests.