The ICSID Tribunal in Addiko Bank AG v. Montenegro (ICSID Case No. ARB/17/35) rejected Addiko Bank AG’s claim that the 2015 and 2016 Laws on the Conversion of CHF Denominated Loans into EUR Denominated Loans was a breach of Montenegro’s international law obligations under the Bilateral Investment Treaty between the Republic of Austria and the Former Republic of Yugoslavia (to which Montenegro is a successor). The Law on Conversion compelled banks to convert Swiss franc-denominated loans issued in Montenegro to euros, and was enacted in response to the Swiss National Bank’s sudden decision to unpeg the Swiss franc from the Euro, resulting in a significant increase in the value of the Swiss franc and in amounts due under the Swiss franc-demoninated loans.
Having confirmed that it had jurisdiction to determine the claims brought by Addiko Bank AG, the Tribunal comprehensively rejected all of the bank’s claims, and ordered the bank to reimburse Montenegro a substantial proportion of its costs.
The Government of Montenegro was represented by Angeline Welsh instructed by Cherie Blair CBE QC, James Palmer, Catriona Paterson, Pietro Bombonato of Omnia Strategy LLP and Sophia Louw formerly of Omnia Strategy LLP.
