Case Report (free download)
Case Report by Lisa M. Bohmer, Editor Diego Luis Alonso Massa
On 25 April 2017, the Paris Court of Appeals partially annulled a decision on jurisdiction rendered by the arbitral tribunal ("the Tribunal") in the Serafín García Armas & Karina García Gruber v. The Bolivarian Republic of Venezuela, UNCITRAL, PCA No. 2013-3 case. In a decision rendered in 2014 ("the Decision on Jurisdiction"), the Tribunal had decided that it had jurisdiction over a dispute concerning the alleged expropriation of Mr. Serafín García Armas' and Ms. Karina García Gruber's ("the Respondents") shares in two Venezuelan companies on the basis of the Spain-Venezuela BIT ("the BIT"), despite the Spanish-Venezuelan dual nationality of the Respondents. The Paris Court of Appeals partially annulled the Decision on Jurisdiction for lack of jurisdiction ratione materiae since the Tribunal had concluded that the disputed assets were investments within the meaning of the BIT without giving any consideration to the nationality of the investors at the time when the investments were made. It rejected all other grounds for annulment. In particular, it held that the Tribunal had jurisdiction ratione personaeover the dispute since neither the BIT nor the applicable UNCITRAL arbitration rules prevent Spanish-Venezuelan bi-nationals from bringing an action against one of their States of origin under the BIT. The Court also considered that an alleged fraud related to the evidence of the transfer of shares in the local companies to the two claimants in the arbitration proceedings did not warrant an annulment for violation of international public policy since such fraud would not have had a material impact on the outcome of the Decision on Jurisdiction. The Court further considered that the French conception of international public policy does not include a rule prohibiting a citizen from bringing an action against his/her State of origin before international dispute resolution bodies. The Court finally rejected the argument that the Tribunal violated the adversarial principle (and therefore Venezuela's due process) when quoting a number of bilateral investment treaties concluded by Venezuela and by Spain which had not been discussed by the parties. The Court considered that the review of these treaties merely allowed the arbitral tribunal to corroborate its findings and could therefore not be sanctioned.
Annulment - Partial Annulment - UNCITRAL Arbitration Rules - Jurisdiction ratione personae - Dual Citizenship - Fraud - Customary International Law - Jurisdiction ratione materiae - Definition of Investment - Nationality of the Investor at the time when the Investment was made - Non-compliance with the Mandate conferred upon the Tribunal - International Public Policy - Due Process - Adversarial Principle
Case report provided by International Arbitration Case Law (IACL)
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