Procedural Posture and Decision

This judgment of the Joint Court of Justice of Aruba Curaçao Sint Maarten and of Bonaire Sint Eustatius and Saba dismisses an appeal brought by Etrak Insaat Taahhut ve Ticaret A.S. ('Etrak') against a first-instance decision. The lower court had refused to recognize and enforce an ICC arbitral award rendered against the State of Libya and had lifted pre-judgment attachments placed by Etrak on shares held by three Libyan state-owned entities: Libyan Foreign Investment Company (Lafico) the National Oil Corporation (LNOC) and Libyan Foreign Bank (LFB) (collectively 'Lafico c.s.'). The Joint Court upholds the lower court's decision and rejects the appeal on three independent grounds.

The Court's Analysis

First the Court held that the arbitral award was not eligible for recognition. The Court found that the ICC tribunal had incorrectly assumed jurisdiction over the dispute under the Libya-Turkey Bilateral Investment Treaty (BIT). It reasoned that the underlying dispute arose from construction activities that pre-dated the BIT's entry into force and a subsequent settlement agreement did not qualify as a new 'investment' protected by the treaty. In this finding the Court aligned its reasoning with prior decisions from German and French courts concerning the same award.

Second and assuming the award were recognizable the Court found that Etrak had failed to establish that Lafico c.s. were alter egos of the State of Libya. The Court affirmed that Lafico c.s. are distinct legal persons under both Libyan and Curaçao law. It concluded that Etrak had not proven the existence of exceptional circumstances such as abuse of legal personality that would warrant piercing the corporate veil to hold the state-owned entities liable for the state's debt.

Third the Court determined that even if the award were recognizable and the entities were alter egos of Libya the attached assets would be protected by state immunity from execution. The Court applied the principles of restrictive immunity as reflected in Article 19(c) of the 2004 UN Convention on Jurisdictional Immunities of States which it considered to be customary international law applicable in Curaçao. It affirmed the presumption of immunity for state property and placed the burden of proof on the creditor Etrak to demonstrate that the assets were specifically used or intended for use for non-governmental commercial purposes. The Court found that Etrak failed to meet this burden reasoning that the commercial nature of the underlying company (Oilinvest) whose shares were attached did not prove that the shares themselves had a non-public commercial destination. A state may hold commercial assets for sovereign public purposes and Etrak did not provide sufficient evidence to rebut this presumption.

Disposition

The Court rejected the appeal in its entirety and ordered Etrak to bear the costs of the proceedings.