Peter A.  Allard v. The Government of Barbados

Abhishek Dwivedi

The Tribunal constituted under the Canada-Barbados BIT (BIT) to decide on the claims brought by Peter A Allard (Investor) against Barbados (State) regarding the disputes arising out of the investments made by him in a Sanctuary in Barbados has refused to hold the state liable for any breach of the standards under the BIT. The investor had claimed breach of Fair & Equitable Treatment standard, Full Protection & Security Standard and had argued that Barbados had expropriated the investment.

  1. Fair and Equitable Treatment (F&ET)

The Tribunal refused to accept that Barbados was in breach of its obligation to treat the investment in a fair and equitable manner. The entire F&ET claim was based on the notion of legitimate expectation i.e. that the state, through its actions, had defeated the legitimate expectation of the investor. After a fact-intensive approach to the claim, the Tribunal held that the investor had failed to prove that any specific representation was made by the host state to the investor prior to the investment. It also held that there was no evidence that the investor had relied on any representations, if any.

Interestingly, the Tribunal refused to go into the question whether F&ET corresponds to the minimum standard treatment or creates an autonomous treaty standard.

  1. Full Protection & Security (FPS)

The debate on FPS was limited to whether the state had taken all the reasonable steps to protect the investment against injury by third (private) parties. In short, the investor argued that FPS standard obligates the host State to act with due diligence to protect investments against injury by private parties which include against environmental damage by third parties. On the other hand, the State argued that the FPS only contains protection against direct physical harm to an investor or its property by a State, its agents or as the result of the State’s gross negligence in protecting the investment against physical harm. It further argued that, in any case, it had taken all reasonable steps to address the environmental damage.   

The Tribunal, firstly, held that the state had to take only reasonable steps to address the environmental damage. It was not required to take all the specific steps as the investor desired or requested the state for. Secondly, the tribunal held that even if it is agreed that the notion of FPS contains the obligation to protect the investment against environmental damage by third parties, the State had met the reasonable steps requirement under the BIT and nothing more can be expected of it on account of other international treaties such as Convention on Biological Diversity and Ramsar Convention.

  1. Expropriation

The Claimant, in this frivolously contested claim, argued that Barbados had indirectly expropriated its investments. However, the Tribunal refused to accept the argument and held that the claimant had failed decisively to show that there had been any substantial deprivation. The investor was still the owner of the Sanctuary, operated a café and had conceded that there was still “some business” left at the Sanctuary.

Concluding Remarks

The award appears to be highly fact intensive, limited and balanced. It also shows that the tribunals have learnt to rein themselves while dealing with frivolous claims regarding breach of F&ET and FPS standards. One can only hope that the Tribunals will prefer to restrict their mandate to issues at hand and will refrain from adding new elements to such expansive standards of protections.


The full award is available at the ITA website here.

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