AIG Capital Partners Inc. v. Republic of Kazakhstan
International Centre for Settlement of Investment Disputes
ICSID Case No. ARB/01/6, 11 ICSID Reports 3 (2003)

- Written by Rich Walter, JD
Facts
Two American companies, AIG Capital Partners, Inc. (AIG) and CJSC Tema Real Estate Company (Tema) (plaintiffs), obtained a municipal permit for a construction project in the Republic of Kazakhstan (Kazakhstan) (defendant). After AIG and Tema had invested money and begun project construction, municipal officials rescinded the permit and canceled the project. The officials said they had mistakenly issued the permit, not knowing that national authorities had already decided to locate the national arboretum on the project site. The American ambassador intervened with national officials on behalf of AIG and Tema. Kazakhstan’s government referred the matter to a study group, which found inconclusive evidence of corrupt motives for cancelling the project and clear evidence that municipal officials failed to follow proper cancellation procedures. The study group recommended either reinstating the construction project or compensating AIG and Tema. When Kazakhstan’s government failed to adopt this recommendation, AIG and Tema filed complaints with the International Centre for Settlement of Investment Disputes (ICSID), which assigned the case to an ICSID arbitration panel. Kazakhstan was signatory to treaties that adopted international laws pertaining to expropriation.
Rule of Law
Issue
Holding and Reasoning ()
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