Chile: ICSID Tribunal Declares Chile As Winner On The Clarin Case Arbitration

Last Updated: 26 October 2016
Article by Carey (Chile)

Nineteen years after the dispute began, a second ICSID tribunal has refused to grant monetary compensation to Spanish publisher Victor Pey Casado, now aged 101, for the loss of his publishing business under the Pinochet regime – with the arbitrators expressing their hope that the case will now be at a "final end".

In an award on 13 September the tribunal composed of Franklin Berman QC, VV Veeder QC and Alexis Mourre ruled that Pey Casado, and a foundation named after Pinochet's ousted predecessor Salvador Allende, had failed to demonstrate any loss for which they should receive monetary compensation.

The tribunal's statement about the case reaching its "final end" highlights the fact that it has apparently done so a number of times before.

Pey Casado first filed for arbitration against Chile in 1997, when he was in his early 80s. The case has since gone through an arbitration, a revision, an annulment, a supplementary decision proceeding, and the resubmitted arbitration which concluded this week.

Pey Casado ran a newspaper in Chile, El Clarin, during Allende's presidency, but in the wake of the 1973 coup in which Augusto Pinochet seized power, the paper was branded Marxist and his business and assets seized.

In 2008, a tribunal rejected Pey Casado's claim for expropriation on jurisdictional grounds, on the basis that the seizure took place before the 1991 Chile-Spain bilateral investment treaty entered into force.

But the tribunal ruled that Chile had breached the fair and equitable treatment standard of the BIT and denied Pey Casado justice by taking years to conclude a restitution claim he filed in the Chilean courts in 1995, after the BIT entered force.

The courts had gone on to award compensation to parties that were not, according to the tribunal, the owners of the newspaper.

For these breaches, the tribunal awarded Pey Casado US$10 million in damages.

Chile challenged the award and, in 2012, an annulment committee struck down the damages portion, saying the tribunal had contradicted its own reasoning in reaching that figure.

But the committee left intact the tribunal's findings that Chile had breached the BIT and that the claimants had a right to compensation.

Pey Casado and his foundation filed their second claim in 2013, seeking US$330 million in compensation and US$10 million in moral damages.

As in the first proceeding, they used counsel from Madrid law firm Garcés y Prada and Gide Loyrette & Nouel, while Chile was represented by Arnold & Porter LLP and Carey in Santiago.

Rejecting the second claim, the tribunal chaired by Berman ruled that the first tribunal's finding of a denial of justice "constitutes in itself a satisfaction under international law".

It said Pey Casado and the foundation had not proved "any further quantifiable injury to themselves" for which they could be awarded compensation. But it had no doubt that, once the ICSID arbitration was concluded, Chile would "remain conscious of that obligation, and [...] weigh its consequences appropriately."

The claimants argued that, had the Chilean courts not taken so long to reach a decision on his rectification claim – which they rejected based on a lack of standing months after the first award came out – he would have been able to characterise the expropriation as a continuing act in the original arbitration.

This, they argued, would have allowed the first tribunal to uphold jurisdiction for the expropriation claim.

They also argued that the denial of justice prevented them from seeking other potential remedies under Chilean law.

However, the second tribunal regarded this as an attempt to resurrect the original expropriation claim "in the guise of a breach of fair and equitable treatment suffered many years later".

It said that although the first tribunal had ruled the claimants had a "right to compensation", they had not drawn a chain of causation between the state's breach and any losses.

Indeed, the tribunal suggested they had not even "set out to do so", focusing their submissions on the evaluation of damages "without undertaking the prior step of showing the precise nature of the injury, causation and damage itself."

The tribunal said that there was "much merit" in Chile's argument that the claimants had suffered no material damage at all that was admissible under the treaty. However, it turned out to be unnecessary in light of their failure to demonstrate damage.

Given Chile's "unambiguous and repeated arguments on want of proof" and the "skill and experience of claimants' counsel and their long familiarity with the case", it said the omission could not have been inadvertent.

The tribunal also rejected the moral damages claim, saying that it could not be sustained in the absence of a finding of material damage.

In a further finding, the tribunal said Pey Casado had not effectively transferred his standing as claimant in the case to his daughter, Coral Pey Grebe, when he initiated the second arbitration in 2013.

Pey Casado, had sought to assign his rights on the basis of his advanced age. The tribunal accepted that Pey Casado had acted in good faith but said the resubmitted claim was merely a continuation of the previous arbitration, with the same title, case reference and parties.

It accepted that Pey Grebe had in practice acted as the "legal representative of her aged father" and said there had been nothing improper about his counsel taking instructions from her on his behalf.

Chile's lead counsel, Paolo Di Rosa, took the case with him from White & Case LLP to Winston & Strawn in 2004 and then to Arnold & Porter three years later. He says, "The tribunal had no choice but to dismiss the claims, given the way the claimants pleaded their claims in the resubmission proceeding and the limitations imposed by the original award of 2008 and the annulment decision of 2012."

"While the new award provides a measure of satisfaction and vindication to Chile's defence team – including those of us who have been working on the case for 15 years – those sentiments are tempered by our strong belief that, for all its complexity and duration, this case should never have been brought to international arbitration in the first place."

Victor Pey Casado and Foundation Presidente Allende v Chile (ICSID Case No. ARB98/2)

Counsel to Victor Pey Casado and Fountation Presidente Allende

Garcés y Prada

Partner Juan Garcés in Madrid

Gide Loyrette Nouel

Partner Carole Malinvaud and counsel Alexandra Munoz in Paris

Buckley Sandler

Partner Samuel Buffone in Washington, DC

Counsel to Chile

Arnold & Porter LLP

Partners Paolo Di Rosa and Gaela Gehring Flores and associate Mallory Silberman in Washington, DC


Partners Jorge Carey and Gonzalo Fernández, and associate Juan Carlos Riesco in Santiago

Originally published by Latin Lawyer

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions