Notice: We are currently performing maintenance to improve the italaw platform. The site remains fully accessible. Thank you for your patience.

Hernández Contreras v. Costa Rica, Procedural Order No. 4 (Decision on the Terms of the Security for Costs Requested by the Respondent), June 25, 2026

25 Jun 2026
José Alejandro Hernández Contreras v. Republic of Costa Rica (III), ICSID Case No. ARB(AF)/25/3
View case details
Procedural Order No. 4 (Decision on the Terms of the Security for Costs Requested by the Respondent) (Spanish)
Document Details:
LISTED 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
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
Claimant's law firm
Respondent's counsel
Respondent's law firm
Other counsel
Claimant's expert
Claimant's expert firm
Respondent's expert
Respondent's expert firm
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Anna Toubiana
Tribunal assistant
María Paula Jijón
Third-party funder
Entities
Costa Rica
Country
Print reporter
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.