GPF GP SARL v The Republic of Poland (Rev 1), Court of Appeal - Commercial Court, March 02, 2018, [2018] EWHC 409 (Comm)

Resolution Date:March 02, 2018
Issuing Organization:Commercial Court
Actores:GPF GP SARL v The Republic of Poland (Rev 1)

- 1 -

Neutral Citation Number: [2018] EWHC 409 (Comm)

Claim No CL-2017-000174








Royal Courts of Justice

Rolls Building, Fetter Lane

London, EC4A 1NL

Date: 02/03/18




- - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - -

Ricky Diwan QC (instructed by Dentons UKMEA LLP) for the Claimant

Stewart Shackleton (instructed by Gateley Plc) for the Defendant

Hearing dates: 14 and 15 February 2018

- - - - - - - - - - - - - - - - - - - - -

Approved JudgmentMR JUSTICE BRYAN

  1. Introduction

    1. The parties appear before the Court on the hearing of an application on the part of GPF GP S.à.r.l (``Griffin'') under section 67 of the Arbitration Act 1996 (the ``1996 Act'') challenging on jurisdictional grounds an Award on Jurisdiction dated 15 February 2017 (the ``Award'') in SCC Arbitration V 2014/168 (the ``Arbitration'') rendered by a three-member Tribunal (Prof. Gabrielle Kaufmann-Kohler, Prof. David Williams QC, Prof. Philippe Sands QC) (the ``Tribunal''), seated in London, pursuant to the Treaty between the Government of the People's Republic of Poland and the Government of the Kingdom of Belgium and the Government of the Grand Duchy of Luxembourg of 19 May 1987, but which became binding on 2 August 1991 (``the ``BIT'').

    2. It is well established that a bilateral investment treaty containing an arbitration agreement confers rights on an investor, which it is entitled to invoke (subject to the terms and scope of the arbitration agreement in the bilateral investment treaty), and that where the arbitration agreement is seated in London it is subject to the 1996 Act, and gives either party the right to challenge an award of the arbitral tribunal as to its substantive jurisdiction under section 67 of the 1996 Act (see Occidental Exploration v The Republic of Ecuador [2005] 2 Lloyd's Rep 707 (CA) at [16] - [20] and Czech Republic v European Media Venture SA [2008] 1 Lloyd's Rep 186).

    3. The Respondent seeks to reserve any right to argue the compatibility of the BIT with EU law, and any rights it may have in the context of the pending decision of the European Court of Justice in Case C-284/16 Achmea v Slovakia. I say nothing about whether the Respondent does or does not have any such rights. I have heard no argument on any such matters, and it is agreed that I should not address the same.

    4. In the present case Article 9.1(b) of the BIT (as translated into English) defines disputes that may be referred to arbitration under Article 9(2) in the following terms:

    ``...disputes relating to expropriation, nationalization or any other similar measures affecting investments, and notably the transfer of an investment into public property, placing it under public supervision as well as any other deprivation or restriction of property rights by state measures that lead to consequences similar to expropriation.''

    5. The Tribunal found (at paragraph 187) of its Award that the Tribunal had jurisdiction to rule upon one aspect of Griffin's claim in the arbitration, namely whether a judgment of the Warsaw Court of Appeal of 19 December 2014, as confirmed by the Polish Supreme Court on 2 June 2016, constituted an ``expropriation, nationalization or any other similar measures affecting investments'' in violation of the BIT, but that it lacked jurisdiction to rule on any other measures allegedly in violation of the BIT.

    6. On this section 67 application, Griffin submits that the Tribunal had jurisdiction in respect of all the claims it advances in the arbitration, and the Court should so find. In this regard Griffin submits that the Award contains two separate errors as to substantive jurisdiction in respect of the matters that had been submitted to arbitration in accordance with the arbitration agreement contained in Article 9.1(b) of the BIT:-

    (1) The Tribunal's determination that on the proper interpretation of the arbitration agreement contained in Article 9.1(b) of the Treaty, the Tribunal's jurisdiction was limited to claims for expropriation falling within Article 4.1 of the Treaty and did not extend to Griffin's claims for breach of the Fair and Equitable Treatment standard (the ``FET standard'') contained in Article 3.1 of the BIT (Award at paras 76-89, 90-91, 187(ii)), and

    (2) The Tribunal's determination that on the proper interpretation of the arbitration agreement contained in Article 9.1(b) and applying principles of international law, so far as Griffin's claim for indirect expropriation was concerned, the Tribunal's jurisdiction was limited to considering whether the decision of the Warsaw Court of Appeal of 19 December 2014 had effects similar to an expropriation and that the Tribunal did not have jurisdiction to consider any of the Prior Measures (as defined further below) relied upon by Griffin in support of its claim for indirect expropriation. The Tribunal reached this conclusion on the basis, which Griffin challenges (so far as necessary) that:

    (i) A claim for creeping expropriation (a form of indirect expropriation) could not as a matter of international law be put forward given that there was a specific event (the Court of Appeal decision) that was said to be ``similar'' to an expropriation;

    (ii) the Prior Measures did not have effects ``similar'' to expropriation within the meaning of Article 9.1(b);

    (iii) the Tribunal should assume that Griffin would establish in law that the Warsaw Court of Appeal decision was ``similar'' to expropriation applying a pro tem test.

    (Award paras 90-96 and 187 (i) and (ii)).

    7. An issue has arisen between the parties as to the nature of a section 67 hearing, and what arguments may be advanced, and evidence adduced, by the applicant on such a hearing which I address at Section F below. Suffice it to say at this point that I am satisfied that it is well established that the hearing is in the nature of a rehearing, and to the extent that Griffin advances any particular arguments not argued before the Tribunal, or adduces any new evidence, I am satisfied that Griffin may do so, and to the extent that permission is required to do so, I am satisfied that this is an appropriate case for permission to be granted, the Respondent not having adduced any evidence of prejudice in dealing with the same, and indeed having itself addressed such matters at length in its submissions and evidence.

    8. The parties have served evidence in the form of witness statements in support of their respective positions on the section 67 application. In the case of Griffin in the form of the first and second witness statements of Jean-Christophe Honlet (a partner of Dentons Europe LLP, Paris office the firm having conduct of the Arbitration on Griffin's behalf) dated 13 March 2017 and 14 November 2017. In the case of the Respondent in the form of the first and second witness statements of Katarzyna Próchnicka (general counsel to the Respondent) dated 24 October 2017 and 25 January 2018.

    9. Those statements identify (and argue) the respective positions of the parties on the application and exhibit associated documentation as well as numerous authorities and arbitral decisions said to be of relevance to the issues that arise. I confirm that I have had regard to such statements and the exhibits thereto. Ultimately, however, and as is common ground, it is for me to interpret the arbitration agreement in the BIT in accordance with international law, and the principles of interpretation contained in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (1969) (the ``Vienna Convention'') which codifies customary international law - see Occidental Exploration v The Republic of Equador, supra, at [33]-[34].

  2. The provisions of the BIT

    10. The BIT was signed in French, Dutch and Polish with each text being authentic. I set out below what were previously agreed translations from the French text into English. Whilst it had previously appeared that no issues arose between the parties as to appropriate translations (whether from the French or Polish) into English, and the words used in such English translations, it became apparent shortly before the hearing that that was no longer so. I will address such matters (to the extent relevant) when considering the particular provisions under consideration. What is set out below are the translations that were previously agreed between the parties.

    11. Article 1 of the BIT (originally agreed translation) defines ``investment'' as follows:

    ``The term `investments' shall mean every part of an asset and every contribution both direct or indirect, in all companies or mixed enterprises in any sector of economic activity, and notably, but not exclusively:

    (a) personal and real property as well as any other rights in rem;

    (b) shares and other forms of participation in enterprises;

    (c) debts and rights to any performance having economic value;

    (d) copyrights, trademarks, patents, technical processes, trade names and any other industrial property right and goodwill.

    Any change to the legal form in which the assets and capital have been invested or reinvested shall not affect their designation as `investments' within the meaning of this Agreement.''

    12. Article 3.1 of the BIT (originally agreed translation) sets out a fair and equitable treatment (``FET'') standard:

    ``Each Contracting Party shall accord in its territory to investments by investors of the other Party fair and equitable treatment excluding any unjustified or discriminatory measure that could impede the management, maintenance, use or enjoyment or liquidation thereof.''

    13. Article 4.1 of the BIT (Griffin's translation, only differing from the Respondent's in the first sentence and not suggested to be a...

To continue reading