* This document was reproduced and reformatted from the text appearing at the ICSID website (visited October 6, 2000) http://www.worldbank.org/icsid/. The text found herein incorporates the text corrections made in the Tribunal's Rectification of the Award of June 8, 2000.

1 The parties did provide the Tribunal with copies of these documents but no objection to the jurisdiction of the Tribunal was ever made by Respondent.

2 The matter of a possible site visit was considered a number of times by the Tribunal during the course of the arbitration proceedings. The Tribunal eventually concluded that a site visit would not be necessary, and no such visit took place.

3 Memorial, pp. 5 et seq:, Counter-Memorial, pp. 3 et seq.

4 Reply, p. 16, footnote 14.

5 Memorial, pp. 1,7 et seq.

6 Counter-Memorial, p. 23. The compensation offered by Costa Rica was in fact equivalent to U.S. $1,919,492 (elsewhere in its submissions, Respondent uses the figure U.S. $1,919,487). For the purposes of this Award, this amount is approximated to U.S. $1,900,000.

7 Memorial, p. 12, Claimant's Exhibit 14.

8 Memorial, pp. 12-13. The valuation proposed by Claimant in 1978 was in fact equivalent to U.S. $6,389,991, which is approximated to U.S. $6,400,000 for the purposes of this Award.

9 See generally Memorial, pp. 2-3, 87-90 and 101-107, and Reply, p. 230.

10 Memorial, p. 2 and footnote 2.

11 Ibid., pp. 88,102,106.

12 Ibid., pp. 2, 88.

13 Ibid., p. 107.

14 See Counter-Memorial, p. 28, footnote 159. The Tribunal takes note of the following statement contained in a letter dated 13 August 1999, addressed to counsel for Costa Rica by counsel for CDSE: “We emphasize that CDSE does not intend to retain titled ownership rights, or any rights of possession, to any of the areas encompassed within Farm No. 24, 165A. CDSE is prepared to convey to the Government all right, title, interest and possession it enjoys with respect to all areas encompassed within Farm No. 24, 165A upon full payment of the award. Still, it is obvious that CDSE has not represented, and cannot represent, that it is in a position to convey possession of the tracts within the registered title for Farm No. 24,165A for which compensation is not sought, namely, the approximately 5,400 hectares of land in the northwest section of the Property within what is now Murcielago National Park or the several small tracts occupied by squatters or sold by CDSE.“

15 Counter-Memorial, pp. 24-25 and accompanying footnotes.

16 Counter-Memorial, p. 27 and footnote 153.

17 22 USC sec. 2378 a. (30 April 1994). See the discussion in Respondent's Counter-Memorial, pp. 37 to 39 and accompanying footnotes.

18 In the following paragraphs we summarise in very brief form the parties’ principal submissions. Because these summaries draw on an overall appreciation of each party's case, no citations are necessary. Later in this Award, where particular allegations, arguments and evidence are considered, specific references to the parties’ pleadings are provided.

19 After the issuance of the Tribunal's 8 April 1998 Order, and indeed throughout the written and oral phases of these proceedings, the Tribunal was called upon to deal with a series of procedural applications at the behest of both parties. The Tribunal thus issued a number of procedural orders and many more decisions and directions. Since none of these procedural orders or other decisions of the Tribunal have any impact on the present Award, it is not necessary to review and summarise them here.

20 The date for the filing by Claimant of its Reply Memorial had originally been fixed for 31 July 1998. That date was vacated and changed by the Tribunal to 21 August 1998, following representations by Claimant.

21 The date for the filing by Respondent of its Rejoinder had originally been fixed for 15 September 1998. That date was vacated and changed by the Tribunal to 23 October 1998 following representations by the parties. The date for the commencement of the oral hearing on the merits was also changed from 9 November 1998 to 19 January 1999.

22 See paragraphs 29 and 38 of this Award.

23 This Agreement was subsequently modified by a 17 June 1999 amendment between the parties, the terms of which were confirmed by the Tribunal in a letter to the parties dated 5 July 1999.

24 See paragraph 21 of this Award.

25 Reply, pp. 221 et seq.

26 Claimant's Closing Statement, p. 34.

27 Rejoinder, p. 81.

28 Memorial, p. 58. See also Claimant's Reply Memorial, pp. 61-62, 75 and Closing Statement, pp. 2-3.

29 See paragraph 24, supra.

30 Counter-Memorial, pp. 34-39 and accompanying notes; Rejoinder, pp. 18-26; Smutny oral argument, p. 1.

31 See paragraph 24 of the present Award.

32 For this reason, the Tribunal does not analyse the detailed evidence submitted regarding what Respondent refers to as its international legal obligation to preserve the unique ecological site that is the Santa Elena Property.

33 Memorial, pp. 74-77; Counter-Memorial, pp. 42-43.

34 Memorial, pp. 59-60, 81-82.

35 Counter-Memorial, pp. 39-42.

36 Tippetts, Abbett, McCarthy, Stratton v. Tams-Affa, Award No. 141-7-2 (June 22, 1984), reprinted in 6 Iran-U.S. Cl.Trib. Rep.219, 226 (1986), citing 8 Whiteman, Digest of International Law 1006-20; Christie, What Constitutes a Taking Under International Law? 38 Brit. Y.B. Int'l. Law 307 (1962); Cf. also the Mariposa Development Company case decided by the U.S.-Panama General Claims Commission (6 Unriaa 390), where the tribunal observes that legislation may sometimes be of such a character that”… its mere enactment would destroy the marketability of private property, render it valueless and give rise forthwith to an international claim.“ See also Claimant's Closing Statement, pp. 13-14.

37 As maintained by Claimant. See Reply, p. 76, footnote 120.

38 Supra, para. 71. See also World Bank Guidelines, in 2ICSID Rev. — FILJ, 303 (1992).

39 Memorial, p. 79. See also Claimant's Closing Statement, p. 13, referring to the date on which “the Government's regulatory action essentially renders the foreigner's property rights useless” because “a taking has occurred”.

40 Memorial, pp. 78-82.

41 Reply, p. 19.

42 U.S. Senate, Committee on Foreign Relations, Republican Staff Report (March 1994), annexed to Respondent's Exhibit 9, p. 27. The following statements in the evidentiary record are also relevant to this issue. According to a letter dated 18 August 1997, from counsel for CDSE to counsel for Costa Rica:”… the owners of Santa Elena, while being deprived of the ability to use their property for any effective commercial purpose have been responsible for maintaining the Property throughout the many years that the Government of Costa Rica has failed to address the issue of adequate and just compensation”. (Respondent's Exhibit 42, p.3.) According to a letter of 14 October 1997 from counsel for CDSE to counsel for Costa Rica:”… during the last 19 [years] of which Santa Elena has been denied the opportunity to make any economic use of the property due to the actions of the Government of Costa Rica”. (Respondent's Exhibit 45).

43 Supra, para. 16. Memorial, pp. 1,7 et seq.

44 Respondent's Exhibit 6,1978 Government Appraisal, pp. 3-4. See also Reply, pp. 9-10.

45 Respondent's Exhibit 8,1993 Government Appraisal, pp. 12-15.

46 In Respondent's words (Rejoinder, p. 79, note 464): ”… it is impractical, if not impossible, to appraise a property today for its value 20 years earlier.“

47 Reply, pp. 89-90.

48 See generally Westberg, John A., “Applicable Law, Expropriatory Takings and Compensation in Cases of Expropriation; ICSID and Iran-United States Claims Tribunal Case Law Compared” in 1 CSID Review—FILJ, 24 (1993).Google Scholar See also American International Group, Inc. and American Life Insurance Company v. The Islamic Republic of Iran and Central Insurance of Iran (Bimeh Markazi Iran), Award No. 93-2-3,4 Iran-U.S. C.T.R. 96 (Dec. 19,1983) [hereinafter “AIG“].

49 AIG, supra, at 109.

50 Phillips Petroleum Company Iran v. The Islamic Republic of Iran, The National Iranian Oil Company, Award No. 425-39-2, 21 Iran- U.S. C.T.R. 79 (June 29,1989) [hereinafter, “Phillips Petroleum“].

51 Ibid., at 122,123, citing Starrett Housing Corporation, Starrett Systems, Inc., Starrett Housing International, Inc. v.The Government of the Islamic Republic of Iran, Bank Omran, BankMellat, Bank Markazi, Award No. ITL 32-24-1,4 Iran-U.S. C.T.R. 122, 157 (Dec. 19,1983) [hereinafter, “Starrett“].

52 See paragraph 17, supra, of this Award and accompanying footnote.

53 See paragraph 19, supra, of this Award and accompanying footnote.

54 See Flexi-Van v. Iran, 9 Iran-US CTR 206 (“Most awards allocate only simple interest, but occasionally compound interest has been awarded“).

55 Fabiani's case (Moore's Digest of International Law 4878-4915 (1905)); the Affaire des Chemins de Fer Zeltweg-Wolfsberg (UN Reports of International Arbitral Awards, vol. 3, 1795, at 1808 (1934)); Kuwait v. Aminoil (66 International Law Reports 518, 613 (1982)).

56 Norwegian Shipowners’ Claims (UN Reports of International Arbitral Awards, vol. 1,307, at 341 (1922)); and the observations of Max Huber in Great Britain v. Spain (Spanish Zone of Morocco) (UN Reports of International Arbitral Awards, vol. 2, 615, 650 (1924)).

57 Iran-US Claims Tribunal Reports, vol. 8,298.

58 Iran-US Claims Tribunal Reports, 13,199.

59 “Compound Interest as an Item of Damage in International Law”, Further Studies in International Law (1990), 380.

60 Ibid., p. 385.

61 Yearbook of the International Law Commission, 1989, Vol. II, Part 1, p. 30.