Rockhopper Exploration plc and Italy must work together over the €247m Ombrina Mare award, before the oil and gas explorer is allowed to take legal action.
PROVISIONAL STAY
The ICSID award relates to compensation from Italy’s ban on oil and gas exploration within 12 miles of the Italian coastline, which affected Rockhopper’s activities.
In October 2022, Italy submitted an application to the ICSID to annul the award, and also requested a provisional stay of the enforcement of the award.
The provisional stay prevents Rockhopper from taking legal action to enforce the award in any jurisdiction, said the company in its statement.
On 6 March 2023, the ad hoc committee convened by ICSID to rule on the annulment issued two orders regarding the provisional stay of enforcement.
The first is that Italy and Rockhopper should confer “in good faith and using their best efforts to co-operate and find an effective arrangement” to mitigate the risk of non-recoupment.
Both parties should use a first-class international bank outside the European Union before termination of the provisional stay of enforcement of the award.
This mitigates the “perceived risk” that, in the event the award is annulled, Italy may not be able to recover Italian assets seized or frozen by Rockhopper in enforcement proceedings.
Secondly, Rockhopper shall, within 30 days of the date of the decision, inform the committee of arrangements agreed with Italy or that negotiations have failed.
In the latter, Rockhopper should propose concrete arrangements in accordance with the decision for the mitigation of the risk of non-recoupment.
Italy has permission to comment on Rockhopper’s proposal within 10 days.
The provisional stay remains in force during this time, pending further order from the committee.
PRAGMATIC
Rockhopper added that the decision to lift the provisional stay of enforcement was unrelated to the merits of Italy’s annulment request.
Chief executive Sam Moody said:” We welcome the pragmatic approach adopted by the ad hoc committee and look forward to working with Italy to find a suitable outcome which will allow us to commence enforcement with no risk to Italy of non-recoupment pending the outcome of the annulment.”
A final hearing in relation to Italy’s request to annul the award is scheduled for Q1 2024.
*International Centre for Settlement of Investment Disputes