Samsung Engineering, ICSID Arbitration on Yanbu Power Project Dismissed

[Asia Economy Reporter Minwoo Lee] Samsung Engineering announced on the 6th that the arbitration filed with the International Centre for Settlement of Investment Disputes (ICSID) regarding the 'Power Plant Installation EPC Contract (Yanbu)' with the Saudi Water Conversion Corporation (SWCC) in 2017 has been dismissed. At the time, Samsung Engineering claimed that the Saudi Arabian government violated the Bilateral Investment Treaty between the Republic of Korea and Saudi Arabia and unjustly infringed upon Samsung Engineering's investment.

However, the arbitral tribunal did not recognize this claim. While acknowledging that the Saudi Water Conversion Corporation is part of the Saudi Arabian government, the tribunal stated that the dispute in question is a contractual dispute between Samsung Engineering and SWCC, and therefore, the Saudi government did not violate its investor protection obligations under the Bilateral Investment Treaty.

Samsung Engineering stated, "This arbitration result pertains to whether the Saudi Arabian government’s violation of the investment protection agreement is recognized, and does not determine which party holds legitimacy in the contractual dispute." They added, "Negotiations and legal dispute resolution procedures related to the contract dispute with SWCC are expected to proceed in the future, and we will continuously communicate with the market regarding the progress of this process."