Investment Treaty Arbitration

Investment Treaty Arbitration: Costa Rica

Overview of investment treaty programme

1. What are the key features of the investment treaties to which this country is a party?

Costa Rica

BIT Contracting Party or MIT

Substantive protections

Procedural rights

Fair and equitable treatment (FET)

Expropriation

Protection
and security

Most-favoured-nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

Argentina (1 May 2001)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Belgium-Luxembourg Economic Union (signed 26 April 2002 but not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Bolivia (signed 7 October 2002 but not in force)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Canada (29 September 1999)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Chile (23 June 2000)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

China (signed 24 October 2007 but not in force)

Text not available.

China (23 November 2000)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Czech Republic (5 March 2001)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Ecuador (signed 6 December 2001 but not in force)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

El Salvador (signed 21 November 2001 but not in force)

Text not available.

Finland (signed 28 November 2001 but not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

France (18 June 1999)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Germany (9 March 1998)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Korea (25 August 2002)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Netherlands (1 July 2001)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Paraguay (25 May 2001)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Qatar (24 September 2013)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Spain (9 June 1999)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Switzerland (19 November 2002)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Taiwan, Province of China (8 October 2004)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

United Kingdom (signed 7 September 1982 but not in force)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Venezuela (2 May 2001)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

FTAs/EPAs

Substantive protections

Procedural rights

Fair and equitable treatment (FET)

Expropriation

Protection and security

Most-favoured-
nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

EFTA-Central America FTA (signed 24 June 2013 but not in force)

No

No

No

No1

No

No

No

No

Costa Rica–Colombia FTA (signed 22 May 2013 but not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Central America–Mexico FTA (1 September 2013)

Yes

Yes

Yes

Yes

No

Yes (although not mandatory and no minimum period specified)

Yes

Yes

Dominican Republic–Central America FTA (3 September 2002)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Costa Rica–Peru FTA (1 June 2013)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Costa Rica - Singapore FTA (1 July 2013)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Costa Rica–China FTA (1 August 2011)

Investment chapter (article 89) reaffirms the parties’ commitments under the 24 October 2007 BIT, which is not yet in force.

Dominican Republic–Central America FTA (1 January 2009) (DR-CAFTA)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

CARICOM–Costa Rica FTA (10 March 2011)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

CACM Agreement on Investment and Trade Services (signed 13 January 2000 but not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

EU–Central America FTA (signed 29 June 2012 but not in force)

Not known

Central America–Panama FTA (21 November 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Canada–Costa Rica FTA (1 November 2002)

One short paragraph on Investment (article VIII.2) states that the parties note the existence of the Canada-Costa Rica BIT, which is in force.

Central America–Chile FTA (19 October 2012)

Incorporates at article 10 the Chile-Costa Rica BIT, which is in force.

Qualifying criteria - any unique or distinguishing features?

2. What are the distinguishing features of the definition of “investor” in this country’s investment treaties?

Costa Rica

Issue

Distinguishing features in relation to the definition of ‘investor’

Nationality of companies

The definition of qualifying companies in most Costa Rican investment treaties requires companies (or other organisations) of both contracting parties to have been duly incorporated, constituted or organised in accordance with the laws of the particular contracting party and to have their seat or domicile in the territory of that contracting party.2

In addition to the requirement in some treaties that qualifying companies have their legal seat in the territory of a contracting party, some treaties include a requirement that the qualifying company be engaged in (substantive) business activities there.3

Most Costa Rican investment treaties also specify that qualifying companies include not for profit organisations.4

The Costa Rica-Netherlands BIT includes a provision providing that nationals of either contracting party shall include legal persons constituted under the laws of one contracting party but which are controlled, either directly or indirectly by natural or legal persons of the other contracting party.

The Costa Rica-Switzerland BIT provides that companies not established under the laws of either contracting party but (i) in which more than 50% of the equity interest is owned by persons of a contracting party or (ii) in relation to which persons of a contracting party have the power to name a majority of directors or otherwise legally direct the actions of the company, will qualify as investors of the relevant contracting party.

Nationality of individuals

The majority of Costa Rican investment treaties provide that a qualifying natural person must possess the nationality of his or her home state, the question of nationality to be determined in accordance with that state’s laws and regulations.5 The Costa Rica–Canada BIT refers instead to ‘citizenship’ as defined by the home state’s laws and regulations and, in the case of Canadian citizens, includes persons permanently residing in Canada in accordance with the laws of Canada.

Dual nationals

In most Costa Rican investment treaties, there is no prohibition on dual nationals. However, the Costa Rica-Canada BIT prohibits natural persons who possess both Costa Rican and Canadian citizenship from qualifying as investors.

The DR-CAFTA and the Costa Rica-Singapore FTA provide that a natural person who possesses dual nationality shall be deemed to be exclusively a national of the State of his or her ‘dominant and effective nationality.’6

3. What are the distinguishing features of the definition of "investment" in this country’s investment treaties?

Costa Rica

Issue

Distinguishing features in relation to the concept of ‘investment’

Eligible assets

The majority of Costa Rican investment treaties contain a broad definition of investment, to include ‘any kind of asset’ or ‘every kind of asset,’ followed by a non-exhaustive list of assets that includes moveable and immoveable property, shares, claims to money and intellectual property rights.7

Most treaties require investments to have been made in accordance with the laws and regulations of the host state,8 and in the case of the Costa Rica-Netherlands BIT this includes a specific reference to laws and regulations on labour and the environment.

A minority of treaties refers to every (or any) kind of asset, defined in accordance with the laws of the host state.9

Indirect ownership or control

There are no specific exclusions for indirectly owned investments. However, only a small number of Costa Rican investment treaties specifically refer to the inclusion of indirectly owned or controlled assets in the definition of qualifying investments.10

Exclusion of certain assets

Very few Costa Rican treaties exclude certain types of assets from the definition of investment. Notably, the Costa Rica–Canada BIT excludes from coverage real estate or other property (tangible or intangible) that was not acquired in the expectation, or used for the purpose of, economic benefit or other business purposes. The EFTA-Central America FTA requires businesses to have been established for the purpose of performing economic activity and both the Costa Rica–Singapore FTA and the DR-CAFTA specify that the assets in question must have the characteristics of an investment, such as the commitment of capital or other resources, the expectation of gain or profit or the assumption of risk. The Costa Rica-Czech Republic BIT stipulates that qualifying assets must have been invested "in connection with economic activities".

Changes in form of investment

Nearly all Costa Rican investment treaties contain an express provision stating that a change in the form of an investment will not affect its character as an investment.11 Notable exceptions include the Costa-Rica Netherlands BIT and the Costa Rica-United Kingdom BIT.

Commencement of coverage

The majority of Costa Rican investment treaties protect all existing investments, including those made prior to the entry into force of the treaty in question.12 Some BITs expressly state that they do not apply to disputes that arose or were settled prior to their entry into force.

Accordance with laws and regulations of host state

Most Costa Rican BITs require that an investment comprise of assets invested in accordance with the laws and regulations of the host state. This includes the Argentina, Bolivia, China, Czech Republic, Ecuador, Finland, France, Paraguay, Qatar, Taiwan, Canada, and Korea BITs. Notable exceptions include the Spain, German, Venezuela and UK BITs.

Territorial coverage

Some Costa Rican BITs are expressed to cover the entire territory over which each state exercises sovereignty under international law.13 Other BITs include specific references to air space and the continental shelf.

Substantive protections - any unique or distinguishing features?

4. What are the distinguishing features of the fair and equitable treatment standard in this country’s investment treaties?

Costa Rica

Issue

Distinguishing features of the fair and equitable treatment standard

Illustrations of the FET standard

Most Costa Rican investment treaties simply provide that each contracting party shall, at all times, accord fair and equitable treatment to investments of investors of the other contracting party.

A number of treaties also prohibit contracting parties from impairing investments of investors of the other contracting party through arbitrary or discriminatory measures.14

Customary international law

A significant number of Costa Rican investment treaties expressly equate the fair and equitable treatment standard with the international law minimum.15 The DR-CAFTA deals with this issue in some detail. Fair and equitable treatment under this treaty includes the obligation not to deny justice in criminal, civil or administrative adjudicatory proceedings, in accordance with the principle of due process as embodied in the "principal legal systems of the world".

5. What are the distinguishing features of the protection against expropriation standard in this country’s investment treaties?

Costa Rica

Issue

Distinguishing features of the ‘expropriation’ standard

Protection against expropriation

All Costa Rican investment treaties (with the exception of the EFTA-Central America FTA) provide protection against expropriation without payment of adequate and effective compensation.

Conditions for lawful expropriation

In genera, expropriation is permitted if it is done in the public interest, on a non-discriminatory basis, in accordance with due process of law and on the basis that provision be made for the prompt payment of adequate and effective compensation. The DR-CAFTA expressly requires the expropriation to accord with ‘customary international law.’

Indirect expropriation

Some Costa Rican investment treaties expressly protect against indirect, as well as direct, expropriation.16 Others refer to direct expropriation or measures having equivalent effect.17 A number of treaties do both.18

Compensation

Typically, adequate and effective compensation is expressed to equate to the fair market value of the expropriated investment immediately before (i) its expropriation or (ii) the date on which the intention to expropriate became public knowledge, whichever is the earlier.

However, the Costa Rica-CARICOM FTA, and the Argentina, Belgium-Luxembourg, and Switzerland BITs refer only to market value, and the Czech Republic and Taiwan BITs use the term ‘fair price’ (in the case of the Czech Republic BIT, to be determined according to the laws and regulations of the host state). The Bolivia BIT uses the term ‘real market value,’ while the France BIT uses the term ‘actual value’ of the investment.

The majority of treaties do not specify how ‘fair market value’ is to be determined. By contrast, the Canada BIT stipulates that any valuation will include the following criteria: going concern value, asset value including declared tax value of tangible property, and ‘other criteria.’ In the case of Costa Rica, this includes its own domestic law on expropriation.

While almost all Costa Rican investment treaties provide for the payment of interest as part of the compensation for expropriation, the Switzerland BIT contains no such express provision.

Right to review by local courts

A large proportion of Costa Rica’s investment treaties expressly provide that the legality of the expropriation and the amount of compensation payable to the investor are promptly reviewable by the courts or other independent authorities of the host state. The Costa Rica-Netherlands BIT and the DR-CAFTA are notable exceptions.

Right to arbitration

All Costa Rican investment treaties (with the exception of the EFTA-Central America FTA) provide for arbitration of all alleged treaty breaches, at the election of the investor.

Interplay with other international treaties

In the Switzerland BIT there is a carve-out provision which exempts the contracting parties from any liability that they would otherwise have incurred as a result of any measure taken, that would amount to expropriation, in connection with an obligation under an international treaty to which both states are parties (such as the imposition of quotas under the WTO Agreements).

The Czech Republic BIT includes a similar but more limited provision, exempting the contracting parties from liability for any matter relating to the access of goods produced in one contracting party to foreign markets (including quantitative export restrictions or their allocation under the WTO Agreements).19

The Taiwan BIT and the Costa Rica-CARICOM FTA provide even narrower exemptions – in respect only of quantitative export restrictions/the ability to assign export quotas. Additionally, the DR-CAFTA specifically exempts the issuance of compulsory licences granted under the TRIPS Agreement in relation to intellectual property rights.20

6. What are the distinguishing features of the national treatment/most-favoured-nation treatment standard in this country’s investment treaties?

Costa Rica

Issue

Distinguishing features of the ‘national treatment’ and/or ‘most favoured nation’ standard

Scope

All of Costa Rica’s investment treaties confer MFN and national treatment on investments of investors (with the exception of the EFTA-Central America FTA which provides for national treatment only). Notably, both the Costa Rica-Singapore FTA and the DR-CAFTA expressly state that MFN and national treatment apply to investors as well as their investments.

All of Costa Rica’s investment treaties (again, with the exception of the EFTA-Central America FTA) provide that the MFN and national treatment standards do not oblige a contracting party to extend to investments of the other contracting party the benefits of membership of a customs or economic union or free trade area, nor to taxation treaties or concessions.21

The Costa Rica-Singapore FTA provides that MFN and national treatment are not to be construed as granting to investors mechanisms or procedures for dispute resolution other than those stipulated in the FTA.

In the Costa Rica-CARICOM FTA and the Switzerland, Czech Republic, Korea and United Kingdom BITs, ‘returns’ also qualify for MFN and national treatment. ‘Returns’ are generally defined as any amounts yielded by an investment, including, inter alia, profit, interest and dividends.

Prospective investors

In relation to the establishment of a new business enterprise or the acquisition of an existing business enterprise, or a share of such enterprise, the Costa Rica-Canada BIT affords MFN treatment to investors and prospective investors of the other contracting party. For these purposes, a prospective investor is defined as a natural person or enterprise that has actually ‘carried out concrete steps’ towards making an investment in the other contracting party’s territory.

7. What are the distinguishing features of the obligation to provide protection and security to qualifying investments in this country’s investment treaties?

Costa Rica

Issue

Distinguishing features of the ‘protection and security’ standard

Extent of obligation

Most Costa Rican investment treaties provide for protection and security, with the exception of the Costa Rica-Chile and Costa-Rica Ecuador BITs. The Canada, Czech Republic and Switzerland BITs, the Costa Rica-Singapore FTA and the DR-CAFTA all provide for ‘full’ protection and security, while the Netherlands BIT provides for ‘physical security and protection’ and the Costa Rica-CARICOM FTA provides for ‘full legal protection and security in accordance with international law.’

The international law requirements pertaining to protection and security are explained in greatest detail in the DR-CAFTA, where full protection and security requires the parties to provide the level of police protection required under ‘customary international law.’ This phrase is explained as the ‘general and consistent practice of States that they follow from a sense of legal obligation’ and in particular those principles that protect the economic rights and interests of foreigners.

8. What are the distinguishing features of the umbrella clauses contained within this country’s investment treaties?

Costa Rica

Issue

Distinguishing features of any ‘umbrella clause’

Scope

More than half of Costa Rica’s investment treaties do not contain an umbrella clause. For those treaties that do,22 the wording is very similar and includes, for example, the following: ‘Either Contracting Party shall observe any other obligation it may have entered into with regard to investments in its territory by investors of the other Contracting Party;’23 and ‘Each Contracting Party shall observe any obligation it has assumed with regard to investments in its territory by investors of the other Contracting Party.’

9. What are the other most important substantive rights provided to qualifying investors in this country?

Costa Rica

Issue

Other substantive protections

Armed conflict

With the exception of the EFTA-Central America FTA, all Costa Rican investment treaties protect investors against losses suffered by their investments owing to war, armed conflict, revolution, national emergency, riot and other such events by providing that qualifying investors shall be afforded national and MFN treatment with regard to compensation paid to other investors.

Free transfer of
payments

Although the wording is not uniform, all Costa Rica’s investment treaties contain a provision requiring contracting parties to permit the free transfer of investments and investment returns, in a freely convertible currency. Almost all of the treaties provide for such transfers to be made without restriction or delay, although the Costa Rica–Venezuela BIT does provide for temporary limitations on transfers in exceptional circumstances.

In addition to this, the DR-CAFTA permits contracting parties to prevent a transfer through the ‘equitable, non-discriminatory, and good faith application of its laws,’ as they relate to, amongst other things, bankruptcy, dealing in securities, criminal offences, financial reporting, and ensuring compliance with judicial proceedings. Notably, the Taiwan BIT departs from the typical language by imposing a time limit of three months from the date on which the investor applies for the transfer, in which the transfer must be effected.

Non-impairment

Most of Costa Rica’s BITs impose on the contracting parties an obligation not to impair the management, maintenance, use, enjoyment or disposal of investment through arbitrary or discriminatory measures.

More favourable international
agreements

A number of Costa Rica’s investment treaties contain a provision stipulating that where an investment matter is governed simultaneously by the treaty and other international agreements to which both contracting states are party, the present treaty will not preclude an investor taking advantage of whichever rules are more favourable to it.24

Additionally, the Taiwan and Switzerland BITs and the Costa Rica–CARICOM FTA extend the scope of this right to the contracting parties’ domestic legislation.

Procedural rights in this country’s investment treaties

10. Are there any relevant issues related to procedural rights in this country’s investment treaties?

Costa Rica

Issue

Procedural rights

Fork in the road

The majority of Costa Rica’s investment treaties contain fork in the road provisions. A notable exception is the Korea BIT.

The Czech Republic BIT provides that while submission of a claim to arbitration is definitive, it is open to an investor to withdraw its claim from the local courts and submit that claim to arbitration, provided no final decision has been rendered.

The Netherlands BIT specifies that, in the case of an investment in Costa Rica, any choice by the investor to submit its claim to the local courts is final. However, in respect of investments in the Netherlands, the investor can choose to submit its claim to arbitration at any time.

Cooling-off period

All Costa Rica’s investment treaties (with the exception of the EFTA-Central America FTA) contain a cooling-off period. In most cases, this is six months. In the case of the Costa Rica-United Kingdom BIT however, there is a three month cooling-off period and although the Central America-Mexico FTA provides for the parties to attempt to resolve any disputes amicably before submitting a claim, this is not a mandatory obligation and there is no minimum cooling-off period specified.

ICSID or ad hoc arbitration

Most Costa Rican investment treaties provide for ICSID or UNCITRAL arbitration. One notable exception is the Korea BIT, which provides for ICSID arbitration only.

The Czech Republic and Switzerland BITs, the Costa Rica-Singapore FTA and the DR-CAFTA provide for ICSID or UNCITRAL arbitration at the election of the investor.

The Netherlands BIT and the Costa Rica-CARICOM FTA provide for ICSID arbitration, unless neither contracting party is a member of the ICSID Convention, in which case the arbitration must proceed under the UNCITRAL Rules.

The Canada-Costa Rica BIT provides for UNCITRAL arbitration in the event that neither contracting party is a member of the ICSID Convention or ICSID declines jurisdiction over the investor’s claim.

Time limits for claims

Most Costa Rican investment treaties do not set a time limit on the submission of a claim to arbitration or other dispute resolution procedure. The China–Singapore FTA and the DR-CAFTA, however, set a limit of three years from when the claimant investor became, or ought to have become, aware of the alleged breach resulting in loss or damage to its investment. The Canada BIT sets a three year limit from when the claimant investor knew, or ought reasonably to have known, of the existence of the alleged breach and the loss or damage resulting from that breach.

Applicable law

A number of Costa Rica’s BITs are silent on the law applicable to disputes between investors of one contracting party and the other contracting party.25

Other BITs provide that the applicable law shall be the BIT itself, the applicable rules of international law and the domestic laws of the host state – to the extent they are not inconsistent with the BIT or the applicable principles of international law.26

The Costa Rica- Singapore FTA stipulates that the law applicable to any investor-state dispute shall be the provisions of the FTA, the laws of the host state and the applicable rules of international law. The Costa Rica-CARICOM FTA goes one step further and includes the provisions of any other agreement between the contracting parties to the FTA.

The DR-CAFTA provides that the applicable law shall be the provisions of the DR-CAFTA, the applicable rules of international law and, where a breach of an investment agreement is alleged, the terms of that agreement.

The Switzerland BIT provides that any investor-state disputes are to be decided on the basis of the BIT, any other agreements between the contracting parties to the BIT, the terms of any agreement relating to the investment, the laws of the host state and such principles of international law as may be applicable.

Transparency of proceedings

Most Costa Rican investment treaties are silent on the question of transparency of arbitral proceedings. One notable exception is the DR-CAFTA, which contains detailed provisions for the parties to make available to the public copies of submissions and other documents submitted in the arbitration and for the hearings to be open to the public.

11. What is the status of this country’s investment treaties?

Costa Rica

Costa Rica continues to negotiate further treaties and to participate in the international investment-treaty system. Attracting foreign investment is considered desirable for the continued growth of the Costa Rican economy. Costa Rica’s Ministry of Foreign Trade (COMEX) notes on its website that the following treaties are at various stages of negotiation: The Pacific Alliance, The Agreement on Trade in Environmental Goods, The Agreement on Trade in Services and Central America-Republic of Korea FTA (negotiations launched on 18 June 12015).

Practicalities of commencing an investment treaty claim against this country

12. To which governmental entity should notice of a dispute against this country under an investment treaty be sent? Is there a particular person or office to whom a dispute notice against this country should be addressed?

Costa Rica

Government entity to which claim notices are sent

Most of Costa Rica’s investment treaties do not specify a governmental body for the service of a claim notice. The DR-CAFTA, however, does specify that claim notices are to be sent to the Ministry of Foreign Trade (COMEX).

13. Which government department or departments manage investment treaty arbitrations on behalf of this country?

Costa Rica

Government department which manages investment treaty arbitrations

Costa Rica has limited history of handling investment disputes, however the Ministry of Foreign Trade (COMEX) is generally known to oversee investment treaty arbitrations.

14. Are internal or external counsel used, or expected to be used, by the state in investment treaty arbitrations? If external counsel are used, does the state normally go through a formal public procurement process when hiring them?

Costa Rica

Internal/external counsel

Internal or external counsel may be used in an investment dispute. More likely, external counsel will be engaged and a public bidding process will take place, in which law firms will be invited to participate following an initial screening process

Practicalities of enforcing an investment treaty claim against this country

15. Has the country signed and ratified the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965)? Please identify any legislation implementing the Washington Convention.

Costa Rica

Washington Convention implementing legislation

Costa Rica ratified the Washington Convention by Law No. 7332 of 1993. The Washington Convention entered into force on 27 May 1993. Costa Rica has not made any notifications or reservations under the Washington Convention.

16. Has the country signed and ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention)? Please identify any legislation implementing the New York Convention.

Costa Rica

New York Convention implementing legislation

Costa Rica ratified the New York Convention by Law No. 6157 of 1997. The New York Convention entered into force on 15 November 1977.

17. Does the country have legislation governing non-ICSID investment arbitrations seated within its territory?

Costa Rica

Legislation governing non-ICSID arbitrations

On 25 May 2011, Costa Rica passed the International Commercial Arbitration Act (Law No. 8937 of 2011). The Act is based on the UNCITRAL Model Law and applies to foreign legal persons and to commercial activity conducted, in whole or in part, abroad.

18. Does the state have a history of voluntary compliance with adverse investment treaty awards; or have additional proceedings been necessary to enforce these against the state?

Costa Rica

Compliance with adverse awards

No instances of non-compliance with adverse awards have been recorded.

19. Describe the national government’s attitude towards investment treaty arbitration

Costa Rica

Attitude of government towards investment treaty arbitration

The Costa Rican government’s attitude towards investment treaty arbitration is not known. On the whole, however, Costa Rica is seen to have a generally open foreign investment system and to seek to attract foreign investment through a stable investment environment.

20. To what extent have local courts been supportive and respectful of investment treaty arbitration, including the enforcement of awards?

Costa Rica

Attitude of local courts towards investment treaty arbitration

Not known.

National legislation protecting inward investments

21. Is there any national legislation that protects inward foreign investment enacted in this country? Describe the content.

Costa Rica

Costa Rica does not have a special legal regime governing inward foreign investment. Instead, foreign investors are protected through Costa Rica’s various bilateral investment treaties and free trade agreements. Article 10 of the Political Constitution provides that foreign nationals are subject to the same individual and social duties and rights as Costa Rican nationals, except in some limited situations. Article 45 of the Political Constitution contains a regulatory framework for expropriation. Law No. 7495 of June 1995 (the Expropriation Law) provides the principle which determines the compensation payable by the state in the event of an expropriation, using the fair price concept. Additionally, Costa Rican law does not impose restrictions on foreign persons establishing or registering companies or owning stock. This is consistent with Costa Rica’s policy of providing an attractive investment environment.

National legislation protecting outgoing foreign investment

22. Does the country have an investment guarantee scheme or offer political risk insurance that protects local investors when investing abroad? If so, what are the qualifying criteria, substantive protections provided and the means by which an investor can invoke the protections?

Costa Rica

Relevant guarantee scheme

Qualifying criteria, substantive protections provided and practical considerations

Multilateral Investment Guarantee Agency

Costa Rica has signed and ratified the Convention establishing the Multilateral Investment Guarantee Agency (MIGA). Under the terms of MIGA, Costa Rican nationals may acquire political risk insurance in exchange for the payment of a premium. The political risk insurance covers investments made in certain developing countries as long as certain conditions are met. To be eligible for assistance, the investment must be medium to long term in nature, support the host country’s development goals, comply with MIGA’s Policy on Social and Environmental Sustainability and anti-corruption and fraud standards, and also be financially viable.

Awards

23. Please provide a list of any available arbitration awards or cases initiated involving this country’s investment treaties.

Costa Rica

Awards

Alasdair Ross Anderson et al v Republic of Costa Rica, ICSID Case No. ARB(AF)/07/3, Final Award (19 May 2010) (Canada-Costa Rica BIT)

Compañía del Desarrollo de Santa Elena SA v Republic of Costa Rica, ICSID Case No. ARB/96/1, Final Award (17 February 2000)

Marion Unglaube v Republic of Costa Rica, ICSID Case No. ARB/08/1, Award (16 May 2012) (Germany-Costa Rica BIT)

Reinhard Unglaube v Republic of Costa Rica, ICSID Case No. ARB/09/20, Award (16 May 2012) (Germany-Costa Rica BIT)

Quadrant Pacific Growth Fund LP and Canasco Holdings Inc v Republic of Costa Rica, ICSID Case No. ARB(AF)/08/1, Order of the Tribunal Taking Note of the Discontinuance of the Proceedings and Allocation of Costs, (27 October 2010) (Canada-Costa Rica BIT)

Pending proceedings

Cervin Investissements SA and Rhone Investissements SA v Republic of Costa Rica, ICSID Case No. ARB/13/2 (Switzerland-Costa Rica BIT)

David R Aven, Samuel D Aven, Carolyn J Park, Eric A Park, Jeffrey S Shioleno, Giacomo A Buscemi, David A Janney, and Roger Raguso v Republic of Costa Rica, UNCITRAL, (CAFTA-DR)

Infinito Gold Ltd v Costa Rica, ICSID Case No. ARB/14/5 (Canada-Costa Rica BIT)

Spence International Investments, LLC, Bob F Spence, Joseph M Holsten, Brenda K Copher, Ronald E Copher, Brette E Berkowitz, Trevor B Berkowitz, Aaron C Berkowitz and Glen Gremillion v The Government of the Republic of Costa Rica, UNCITRAL, (CAFTA-DR)

Supervision y Control SA v Republic of Costa Rica, ICSID Case No. ARB/12/4 (Spain-Costa Rica BIT)

Reading List

24. Please provide a list of any articles or books that discuss this country’s investment treaties.

Costa Rica

D. Jiménez-Figueres and J. Cherro, ‘Investment Arbitration in Costa Rica’, Journal of International Arbitration, Volume 29, Issue 4 (2012).

Notes

1 The Investment Chapter (Chapter 5) includes a provision (at article 5.3) requiring the contracting parties to accord national treatment to juridical and natural persons of another contracting party and to the commercial presence of such persons.

2 See eg the Czech Republic-Costa Rica BIT, the Korea-Costa Rica BIT, the Netherlands-Costa Rica BIT, the Switzerland-Costa Rica BIT and the Taiwan-Costa Rica BIT.

3 See eg the EFTA-Central America FTA, the Costa Rica-Singapore FTA and the DR-CAFTA.

4 See eg the Costa Rica-Canada BIT, the Czech Republic-Costa Rica BIT, the Korea-Costa Rica BIT, the Taiwan-Costa Rica BIT, the EFTA-Central America FTA, the Costa Rica-Singapore FTA and the CARICOM-Costa Rica FTA.

5 See eg the Costa Rica-Czech Republic BIT, the Costa Rica-Korea BIT, the Costa Rica-Netherlands BIT, the Switzerland-Costa Rica BIT, the Costa Rica-Taiwan BIT, the EFTA-Central America FTA, the Costa Rica-Singapore FTA, the DR-CAFTA and the CARICOM-Costa Rica FTA.

6 See The Nottebohm Case (Liechtenstein v Guatemala), 4 ICJ Rep. [1955] for a discussion of what it means to have ‘dominant and effective nationality'.

7 See, eg, the Costa Rica-Canada BIT, the Costa Rica-Czech Republic BIT, the Costa Rica-Korea BIT, the Costa Rica-Netherlands BIT, the Costa Rica-Taiwan BIT and the CARICOM-Costa Rica FTA.

8 See, eg, the Costa Rica-Canada BIT, the Costa Rica-Czech Republic BIT, the Costa Rica-Korea BIT, the Costa Rica-Netherlands BIT, the Costa Rica-Taiwan BIT and the CARICOM-Costa Rica FTA.

9 See, eg, the Costa Rica-Taiwan BIT and the CARICOM-Costa Rica FTA.

10 See, eg, the Costa Rica-Canada BIT and the Costa Rica-Singapore FTA.

11 See, eg, the Costa Rica-Canada BIT, the Costa Rica-Czech Republic BIT, the Costa Rica-Korea BIT, the Costa Rica-Switzerland BIT, the Costa Rica-Taiwan BIT, the Costa Rica-Singapore FT and the CARICOM-Costa Rica FTA.

12 See, eg, the Costa Rica-Canada BIT, the Costa Rica-Czech Republic BIT, the Costa Rica-Korea BIT, the Costa Rica-Netherlands BIT, the Costa Rica-Switzerland BIT and the Costa Rica-Taiwan BIT.

13 See, eg, the Costa Rica-Canada BIT, the Costa Rica Czech Republic BIT, the Costa Rica-Korea BIT, the Costa Rica-Netherlands BIT, the Costa Rica-Switzerland BIT and the Costa Rica-Taiwan BIT.

14 See, eg, the Costa Rica-Argentina BIT, the Costa Rica-Bolivia BIT, the Costa-Rica China BIT (23 November 2000), the Costa Rica-Ecuador BIT, the Costa Rica-Finland BIT, the Costa Rica-Paraguay BIT, the Costa Rica-Netherlands BIT, the Costa Rica-Spain BIT, the Costa Rica-Switzerland Bit and the Costa Rica-Venezuela BIT.

15 See, eg, the Costa Rica-China BIT (23 November 2000), the Costa Rica-France BIT, the Costa Rica-Germany BIT, the Costa Rica-Paraguay BIT, the Costa Rica-Qatar BIT, the Costa Rica-Spain BIT, the Costa Rica-Taiwan BIT, the Costa Rica-Canada BIT, the Costa Rica-CARICOM FTA, the DR-CAFTA, the Costa Rica-Colombia FTA, the Central America-Mexico FTA, the Costa Rica-Peru FTA, the CACM Agreement on Investment and Trade Services and the Central America-Panama FTA.

16 See, eg, the Costa Rica-Netherlands BIT, the Costa Rica-Switzerland BIT, the Costa Rica-Singapore FTA and the DR-CAFTA.

17 See, eg, the Costa Rica-Canada BIT, the the Costa Rica-Czech Republic BIT, the Costa Rica-Korea BIT, the Costa Rica-Taiwan BIT and the Costa Rica-CARICOM FTA.

18 See, eg, the Costa Rica-Netherlands BIT, the Costa Rica-Switzerland BIT, the Costa Rica-Singapore FTA and the DR-CAFTA.

19 This article concerns the Non-discriminatory Administration of Quantitative Restrictions.

20 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

21 See eg the Costa Rica-China, Costa Rica-Paraguay, Costa Rica-Qatar, Costa Rica-Korea, Costa Rica-Taiwan, Costa Rica-Switzerland, Costa Rica-Spain, Costa Rica-Venezuela, Costa Rica-Czech Republic, Costa Rica-Belgium-Luxembourg, Costa Rica-Bolivia, Costa Rica-Finland, Costa Rica-France, Costa Rica-Qatar, Costa Rica-Netherlands, and Costa Rica-Canada BITs and the Costa Rica-CARICOM and Central America-Mexcio FTAs.

22 See the Bolivia, China, Germany, Korea, Netherlands, Paraguay, Spain, Switzerland, Taiwan and United Kingdom BITs and the Dominican Republic-Central America and Costa Rica-CARICOM FTAs.

23 Korea BIT.

25 See, eg, the Taiwan, Korea, Switzerland and Czech Republic BITs and the Costa Rica-CARICOM FTA.

25 See, eg, the Korea and the Netherlands BITs.

26 See, eg, the Canada and Czech Republic BITs.

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