AmCham Slovakia

Squire Patton Boggs Secures Another Victory for Slovakia in International Arbitration

The Slovak Republic, represented in the dispute by the international law firm Squire Patton Boggs, has won an international arbitration case against Discovery Global LLC, the sole shareholder of Alpine Oil & Gas, s.r.o., which sought compensation of up to USD 133.1 million for alleged losses related to oil and gas exploration. 

The tribunal ruled that the Slovak authorities' actions did not constitute expropriation or discriminatory treatment, and the suspension of the project was caused by the claimant's own inaction. Discovery Global was also ordered to pay 75% of the Slovak Republic’s legal costs, totaling EUR 2.3 million. This victory ensures that Slovakia remains one of the few countries never to lose an international investment arbitration.

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On January 17, 2025, the tribunal, consisting of Professor Gabrielle Kaufmann-Kohler (president of the tribunal), Mr. Stephen L. Drymer (appointed by the claimant), and Professor Philippe Sands (appointed by the Slovak Republic), issued a ruling dismissing all claims by the American company Discovery Global LLC, the sole shareholder of the Slovak company Alpine Oil & Gas, s.r.o., against the Slovak Republic. The Slovak Republic was represented in the dispute by the international law firm Squire Patton Boggs, which has more than 40 offices worldwide and specializes in international disputes related to investment protection, as well as claims arising from international trade, transportation and logistics.

The arbitration tribunal awarded no damages to the claimant and ordered the claimant to pay 75% of the Slovak Republic’s total costs, amounting to EUR 2.3 million. The Slovak Republic thus remains one of the few countries that has never lost an international investment arbitration and has not been required to pay any damages to claimants.

The dispute concerned the efforts of Alpine Oil & Gas, s.r.o., the claimant’s subsidiary, to carry out geological surveys for future oil and gas extraction in the exploration areas of Svidník, Medzilaborce, Snina, and Pakostov based on licenses obtained in 2006. The claimant argued that the actions or inactions of Slovak authorities had prevented it from conducting geological surveys and subsequent oil and gas extraction in these areas, and thus sought compensation from the Slovak Republic in the amount of up to USD 133.1 million. Initially, the claimant demanded over USD 2 billion.

The arbitration tribunal confirmed that the actions of Slovak authorities did not constitute expropriation of the investor’s rights, discriminatory treatment, or a violation of the fair and equitable treatment standard, nor did it breach the claimant’s legitimate expectations, investment protection and security, or any other obligations of the Slovak Republic in relation to investments under the Agreement between the Czechoslovak Federative Republic and the United States of America on the reciprocal promotion and protection of investments. On the contrary, the suspension of the oil and gas exploration project was caused by the claimant itself due to a lack of legal assessment of the steps in its investment, as well as further inaction concerning public authorities in Slovakia, activists, or landowners on whose property the geological survey was to take place. Claims of alleged violations of the international Agreement between the Czechoslovak Federative Republic and the United States of America on the reciprocal promotion and protection of investments, presented by the claimant, did not constitute breaches of the Slovak Republic’s international obligations under this agreement.
 

Squire Patton Boggs s.r.o.