Swedish Arbitration Portal: Court of Appeal finds investment tribunal lacked jurisdiction
In a decision recently posted on the Swedish Arbitration Portal, the Svea Court of Appeal found that the tribunal in an investment arbitration had lacked jurisdiction to decide the dispute between the parties.
The plea for negative declaratory relief was granted by Svea Court of Appeal in a review proceeding concerning the tribunal’s juridiction in an investment arbitration.
The dispute resolution clause in the underlying bilateral investment treaty provided arbitral jurisdiction over investor-state disputes relating to the amount of compensation paid when the state decides to expropriate an investment. The arbitral tribunal found that this also included disputes as to whether or not an expropriation had occurred, and the District Court agreed. The Court of Appeal, however, found that when interpreted in accordance with article 31 of the Vienna Convention on the Law of Treaties, the dispute-resolution clause in the treaty did not cover such disputes. Therefore, the Court found that the tribunal had lacked jurisdiction to hear the claims brought by the investor. The Court also dismissed the investors’ arguments that a most-favored-nation clause in the treaty meant that dispute resolution clauses in other Russian bilateral investment treaties gave the tribunal the authority to examine the dispute.
The Swedish Arbitration Portal is facilitated by the Arbitration Institute of the Stockholm Chamber of Commerce (the SCC). The project’s mission is to increase transparency in arbitration by making Swedish case law more accessible to the international community.