On 21 November 2016, ICSID registered an application from RSM Production Corporation (RSM) to annul an award rendered on 15 July 2016 in favour of Saint Lucia. In a first for ICSID arbitration, the award had dismissed RSM’s case “with prejudice” due to RSM’s failure to comply with a security for costs order.
On 2 April 2012, RSM, a US company, filed a request for arbitration against Saint Lucia. The dispute related to the alleged termination of an oil exploration licence off the coast of Saint Lucia.
Following a request for provisional measures by Saint Lucia, the tribunal in December 2013 ordered RSM to bear all further advances in the arbitration and to refund the respondent the advances it had already paid.
Saint Lucia also sought an order obliging RSM to post security for costs. Saint Lucia acknowledged that no ICSID tribunal had previously ordered security for costs. However, referring, inter alia, to “prior arbitrations under the auspices of ICSID, in which Claimant failed to honor its obligations under costs awards or requests for payment of advances”, Saint Lucia argued that such an order was justified. On 13 August 2014, a majority of the tribunal ordered RSM to post security for costs in the amount of US$750,000. They held that “it has been established to the satisfaction of the Tribunal that Claimant does not have sufficient financial resources” and that “Claimant’s consistent procedural history in other ICSID and non-ICSID proceedings provide compelling grounds for granting Respondent’s request”.
On 15 July 2016, having initially suspended proceedings on 8 April 2015 due to RSM’s failure to comply with the security for costs order, the tribunal dismissed the case “with prejudice”.
For the 2014 decision ordering RSM to post security for costs, click here; for procedural details of the case, click here.