Judgment in the Court of Appeal, 18 January 2016, Case No. T 9128-14

Summary: A plea for negative declaratory relief has been granted by Svea Court of Appeal in a review proceeding concerning the tribunal’s juridiction in an investment arbitration.

The respondent state moved the Court of Appeal to review the judgement of the Stockholm District Court (Case No. T 15045-09) which previously had upheld the tribunal’s jurisdiction.

The dispute resolution clause in the underlying bilateral investment treaty provided arbitral jurisdiction over investor-state disputes relating to the amount of compensation paid by the state in the event of expropriation of an investment. The arbitral tribunal had found this also included disputes as to whether or not an expropriation had occurred. A motion to declare lack of the tribunal’s jurisdiction was filed with Stockholm District Court resulting in a judgement declining the motion. The Court of Appeal, however, reviewed the first instance judgement and found that when interpreted in accordance with article 31 of the Vienna Convention, the dispute-resolution clause in the treaty did not cover the issue as to whether expropriation occurred or not. Therefore, the Appeal Court found that the tribunal had lacked jurisdiction. 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.