1. This Separate Opinion is issued by arbitrator Dr. Wolfgang Kühn with respect to the Tribunal's Award in the matter PCA Case No. 2018-18 (the "Award"). Dr. Wolfgang Kühn (the "Arbitrator") supports and agrees with the Award in all aspects except for the Tribunal's analysis according to which the legality of the Claimant's investment is a jurisdictional issue, being the basis for the Tribunal's decision to deny jurisdiction in this matter.
2. In contrast to the majority of the Tribunal, the Arbitrator is of the view that the legality of the Claimant's investment in the Czech Republic is not a jurisdictional issue but is a matter of substance which must be decided in the merits phase of these proceedings. The Arbitrator is concerned, in particular, that the denial of jurisdiction as decided by the majority of the Tribunal is outdated since the days of the well-known Judge Lagergren Decision (see paragraph 6 below).
The denial of jurisdiction by the majority of the Tribunal in the given circumstances is problematic in the context of international investment treaty arbitration. The Arbitrator is of the view that by that denial of jurisdiction, the Claimant is foreclosed from exercising its basic right with respect to procedure and substance, which basic right is access to justice.
3. The Arbitrator understands that in international arbitration the demand of judicial economy is an important issue. This is in particular the case in commercial arbitration where there must be a reasonable balance between the amount in dispute and the costs of the arbitration proceedings. With respect to investment arbitration, additional a spects must be considered. In investment arbitration, public funds are involved on the side of the defendants, which fact must be considered by the tribunal with due care. However, investment proceedings are public proceedings including the principles of international public policy. Jurisdiction under investment treaty arbitration is granted to protect the rights of individual investors versus the host State, which involves per se the public in terest. The issue of j udicial economy therefore m ust be balanced out a gainst the public interest in granting justice.
4. The Tribunal must carefully consider this conflict and decide that as a matter of principle, jurisdiction must not be foreclosed for an investor unless it is "manifest" that the alleged claims are at the face ungrounded and blatant (see Fraport AG Frankfurt Airport Services Worldwide v. Philippines (II), ICSID Case No. ARB/11/12, Award, 10 December 2014). This is obviously not the cas e in this a rbitration, c onsidering t hat the Claimant's damage claims in the a mount of roughly CSK 3 billion are based on loans granted to individuals in the Czech Republic, which loans as such are not disputed between the Parties. Irrespective of whether those claims are justified in substance, the Tribunal therefore must not foreclose jurisdiction on the basis of a demand of judicial economy, i.e. efficient management of the Tribunal's resources.
5. It is undisputed that a host State cannot be presumed to have accepted protecting investments made contrary to its own legal system. The decision on w hether an investment was contrary to the host State's legal system and, therefore, must not be protected under the BIT, is a matter of substance, not of jurisdiction. This is true in particular in the present case, as it is undisputed that the Claimant (directly and indirectly) made investments in the Czech Republic.
45. The Tribunal should not have denied jurisdiction, which denial is a violation of the Claimant's basic right, access to justice. The Tribunal should have decided to accept jurisdiction and decided on the dispute in the merits phase of this arbitration.
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