This is an application by the Claimant, to which I will refer as "the Republic", to set aside an award dated 5 June 2018, made by Professor Bernard Hanotiau (President), Mr Philippe Pinsolle and Dr Gavan Griffith QC ("the Tribunal"), pursuant to s. 67 Arbitration Act 1996, on the grounds that the Tribunal lacked substantive jurisdiction over the claims made by the Defendants (to whom I will refer collectively as such or as "the Dayyanis") in the arbitration.
The claims were made pursuant to a bilateral investment treaty, the Agreement Between the Government of the Republic of Korea and the Government of the Islamic Republic of Iran for the Promotion and Protection of Investments dated 31 October 1998 (to which I will refer as the "BIT"). The BIT contained, amongst others, the provisions which I have set out in Appendix 1 to this judgment, and to many of which it will be necessary to refer.
The dispute arose out of the failed acquisition of Daewoo Electronics ("Daewoo") by a Singapore company called D&A Holding Co Pte Ltd ("D&A").
16. On 10 September 2015, the Dayyanis commenced arbitration proceedings against the Republic pursuant to Article 12 of the BIT. After the Tribunal was constituted, the Dayyanis submitted their Statement of Claim. The broad nature of the Dayyanis’ claim, as far as material, was as follows:
(1) That KAMCO directed and controlled the sale of Daewoo. KAMCO’s acts could be attributed to the Republic, or KAMCO acted under the instruction, leadership and control of the Republic.
(2) That the Republic breached the Fair and Equitable Treatment (“FET”) standard in Article 4 of the BIT by:
a) Enacting a set of sanctions against Iran that went beyond those imposed by the United Nations, which prevented the transaction from closing;
b) Failing to assist them in any meaningful way, and withdrawing its financial support due to the change in policy towards Iran; and
c) Failing to negotiate in good faith and provide the Defendants with a real opportunity to cure defects in the letters of confirmation, and instead by itself “or acting via the Sellers and/or KAMCO” relying on pretextual reasons to terminate the SPA when it was the Republic’s change in policy towards Iran which represented the true cause of the termination of the SPA.
(3) That the Republic expropriated the Dayyanis’ investment, contrary to Article 6 of the BIT or breached other obligations under the BIT.
(4) That the Dayyanis had suffered damages in the amount of the Contract Deposit and the sums expended during the project, which they claimed together with interest.
17. The Republic resisted the claims in the arbitration on a number of grounds. These included the following:
(1) That the Tribunal had no jurisdiction over the claims submitted by the Dayyanis because they did not have an “investment” for the purposes of the BIT;
(2) That the Tribunal had no jurisdiction over the claims because the Dayyanis were not “investors” for the purposes of the BIT;
(3) That the acts impugned by the Dayyanis were not attributable to the Republic as a matter of international law and accordingly the Tribunal had no jurisdiction over the claims or alternatively the claims were inadmissible; MR JUSTICE BUTCHER
(4) That the Republic was not guilty of any expropriation of the Dayyanis’ investment, and was not in breach of any other obligation under the BIT.
18. The Tribunal received and heard very detailed submissions on the various issues. The hearing on the merits took place in May 2017. There were post-hearing briefs and applications. As I have said, the award is dated 5 June 2018 (“the Award”). It states the seat of the arbitration as being London, England.
19. In the Award, the Tribunal:
(1) Unanimously found that the Tribunal had jurisdiction over the claims submitted by the Dayyanis and that the claims were admissible;
(2) Unanimously found that the Republic had breached its obligation arising under Article 4 of the BIT to accord FET to the Dayyanis and their investment;
(3) By a majority decided that the Republic should pay the Dayyanis the amount of the Contract Deposit (KRW 57,777,500,000) together with simple interest;
(4) By a majority decided that the Republic should pay the Dayyanis the costs of the arbitration;
(5) Unanimously dismissed all other claims.