King & Spalding Wins $250 Million Arbitration Award for Micula Against Government of Romania

PARIS, FRANCE--(Marketwired - Dec 17, 2013) - In one of the largest arbitration awards on record at the International Centre for the Settlement of Investment Disputes (ICSID) -- and one that could have an impact on the evolution of international law -- King & Spalding secured a $250 million victory for Micula in a long-running investment treaty arbitration against the Republic of Romania. 

After the fall of Romania's communist regime in 1989, twin brothers Ioan and Viorel Micula built large-scale, state-of-the-art food and beverage production facilities in a remote and underdeveloped part of the country, in response to a variety of incentive programs that Romania enacted to entice investment and to transition to a market economy. In 2005, after the Miculas effectively doubled their investments, Romania revoked the customs duties exemptions, ending that part of the incentive program five years early. On behalf of Ioan Micula and three of his companies, King & Spalding prosecuted an ICSID arbitration under the Sweden-Romania Bilateral Investment Treaty, which is designed to protect Swedish investors from unfair treatment by the Romanian government. 

Romania's primary defense in the arbitration was that the incentive program was incompatible with European Union law, and that Romania was forced to revoke the program in order to join the EU. Romania's position was strongly supported by the EU Commission, which intervened in the case on behalf of Romania and conclusively established that it did, in fact, require Romania to prematurely terminate the program. The Micula et al. v. Romania award is an important milestone in investment treaty law, because it rejects the notion that a State can rely on its EU obligations to escape liability when it has violated specific legal protections owed to foreign investors. 

The King & Spalding cross-office team involved in this matter consisted of international arbitration partners Eric Schwartz (New York, Paris), Reggie Smith (Houston), Ken Fleuriet (Paris), Craig Miles (Houston), counsel Ric Toher (Houston), senior associate Amy Frey (Paris) and associate Jamie Miller (Houston).

About King & Spalding
Celebrating more than 125 years of service, King & Spalding is an international law firm that represents a broad array of clients, including half of the Fortune Global 100, with 800 lawyers in 17 offices in the United States, Europe, the Middle East and Asia. The firm has handled matters in over 160 countries on six continents and is consistently recognized for the results it obtains, uncompromising commitment to quality and dedication to understanding the business and culture of its clients. More information is available at www.kslaw.com.