In two recently unveiled decisions (Interim Award of March 15, 2005, and Final Award of January 15,2008), an ad hoc arbitral tribunal resolved an interstate dispute between Italy and Cuba arising out of "the interpretation and application" of the 1993 Bilateral Investment Treaty (BIT) in force between the two countries. This case marks the rare occurrence when a BIT's interstate (rather than investor-state) dispute settlement provision has been invoked with a view to resolving disputes between certain home state nationals and the host state. The tribunal rejected all of the Italian claims, either on jurisdictional grounds or on the merits. The dispute originated in injuries that a group of sixteen Italian companies, operating in a range of industry sectors (among them pharmaceuticals, tourism, and food production), claimed to have suffered as a consequence of a series of acts attributable to Cuba. In May 2003, Italy espoused these claims and, exercising diplomatic protection of these companies, invoked Article 10 of the Italy-Cuba BIT, which provides for ad hoc arbitration for the settlement of "disputes between the Contracting Parties concerning the interpretation and application" of the treaty. Italy claimed that, through the conduct either of its organs or of certain state-owned entities, Cuba had breached its obligations arising under the BIT; specifically, to encourage investments in its territory (Art. 2(1)); to grant the necessary authorizations to prospective investors (id.); to provide fair and equitable treatment (Art. 2(2)); to abstain from arbitrary and discriminatory measures (id.); to provide national treatment (Art. 3(2)); to provide full protection and security (Art. 5(1)); to refrain from expropriating investments (Art. 5(2)); and to guarantee the repatriation of invested capital (Art. 6).
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