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Stockholm Arbitration Report (SAR) - (Individual Back Volumes)
Stockholm Arbitration Report (SAR) - (Individual Back Issue)
Preview Page SAR 2003 - 2
Invest dispute. Enforcement of an award rendered under an investment agreement
between Latvia and Sweden before Swedish courts and challenge of the same award
before Danish courts.
SUMMARY
The dispute that was the subject of arbitration proceedings concerned a
Swedish company, SwemBalt’s claim for compensation for the loss of a
vessel, SJFW/SwedeBalt, that was registered in Sweden and leased to
SwemBalt’s Latvian subsidiary, Swede Balt SIA. The vessel was positioned
in the Port of Riga Latvia in April 1993, allegedly with permission from the
relevant Latvian authorities. The vessel was to serve as an exhibition area
and a conference centre. On 24 March 1994, Swede Balt established a
contract of several years’ duration with the Kurzeme Region of Riga
regarding the lease of a berth and an area of land. On 28 March 1994, a
representative of the Port of Riga removed the vessel. No representatives of
the owner were present. The vessel was towed to a berth two nautical miles
from the leased berth. Numerous objections were made on the part of the
owner and other parties. On 18 April 1994, Riga’s mayor informed
SwemBalt that the lease, in accordance with a new Law with retroactive
effect, had become invalid. In 1994 and 1995, there were numerous
discussions, etc. between the Swedish embassy in Riga and various Latvian
authorities, but these did not achieve anything.
On 3 May 1996, the Latvian Maritime Authority announced that the
vessel should be sold at a public auction. The vessel was designated a
wreck, and the Maritime Authority had decided that the vessel, owing to its
being positioned in the place to where it was towed from the Port of Riga,
constituted a danger to maritime traffic. In spite of objections from the
Swedish side, the vessel was sold at auction in July 1996 for scrap value.
The vessel brought in approximately USD 150 000.
