No damages awarded despite breach of BIT

In Biwater Gauff (Tanzania) Limited v United Republic of Tanzania (ICSID Case No ARB/05/22) the tribunal found that Tanzania's conduct amounted to an expropriation and violated various obilgations in the UK-Tanzania bilateral investment treaty (the BIT).

The claimant (BGT) entered into a contract with Tanzania to provide water and sewerage services for ten years in Dar es Salaam. The project encountered numerous difficulties, culminating in the termination of the contract, the deportation of staff, and seizure of assets. The majority of the tribunal concluded that Tanzania's violations of the BIT were not the "actual or proximate cause" of the diminution in, or elimination of, the value of BGT's investment. By the time the expropriatory acts took place, the investment was of no economic value. BGT's damages claims were therefore dismissed. The only appropriate remedy was a declaration that Tanzania had violated its obligations under the BIT in certain respects. In a "concurring and dissenting opinion" Gary Born concluded that Tanzania's actions clearly had caused injury to BGT. The damages claim should fail, not for lack of causation, but because the injury that was caused by BGT had no monetary value.

As well as providing an analysis of the causation issue, the award also addresses how an ICSID tribunal should approach contractual matters, whether a project qualifies as an investment under the ICSID Convention and the standard required to demonstrate a breach of a treaty obligation.