Desert Line Projects v. Yemen

Desert Line Projects, LLC (DLP) (plaintiff) was a construction company that contracted with the government of Yemen (defendant) for the construction of asphalt roads beginning in 1997. Several years later, in 2004, the parties disagreed about the amount of work completed. DLP demanded that Yemen pay DLP the amounts due and threatened to suspend all work pending payment. Thereafter, armed individuals appeared at DLP’s worksites and threatened DLP’s personnel with automatic weapons. DLP and Yemen agreed to submit their dispute before an arbitral tribunal. The arbitral tribunal issued an award in favor of DLP. However, Yemen failed to pay the award and interfered with its enforcement. DLP alleged that its executives were being harassed and threatened, and that DLP was experiencing intimidation by armed individuals purportedly under the control of the Yemen government. Yemen proposed a settlement, which was much lower than the arbitral award that had been awarded to DLP. DLP initiated arbitration proceedings seeking, among other things, a total of 40 million Omani rials for moral damages including damages for loss of reputation. Specifically, DLP claimed that its executives suffered stress and anxiety over being harassed, threatened, and detained by Yemen, and that DLP’s credit and business reputation had been damaged.