27 août 2011

Permanent Court of Arbitration downgrades international organisations in contractual relations, Polis Fondi, 2010-8

Polis fondi immobiliari di Banche popolare SGR.p.A. won an arbitration case against UN agency International Fund for Agricultural Development. The UN agency was refusing to pay the rent of € 265 734.47 for its Roma headquarters, since the Italian Government approved for reimburse only 80% of this sum. Therefore, according to the UN agency, the rent amount was modified under the Headquarters Agreement concluded between the UN agency and the Government - especially from the perspective of good faith principles. The UN agency argued that the Polis fondi had to be aware of the latter Agreement.

However the Permanent Court of Arbitration found that this would be "an exceptionally onerous burden on private parties" requiring "an unreasonable level of familiarity regarding the intricacies of international organizations as subject of private law".

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