The Czech Republic v Diag Human SE and Anor 2024 708 Comm - 27 March 2024
Country
Year
2024
Summary
Introduction
1. On 8 March 2024 I handed down judgment dealing with various aspects of challenges brought by the Czech Republic under ss.67 and 68 of the Arbitration Act 1996 (the 1996 Act) to the substantial award in an investment treaty arbitration dated 18 May 2022 (the Award).
2. Shortly before the hearing which resulted in that judgment, the Czech Republic had applied for permission to amend its Amended Particulars of Claim to raise a new s 67 challenge, namely that Mr Stava is not a protected investor under the Treaty because his dominant and effective nationality is not Swiss and, if necessary, for an extension of time pursuant to s 80(5) of the 1996 Act to pursue that challenge. There was a dispute between the parties as to whether there was sufficient time (both preparatory and hearing) for that issue fairly to be addressed at that hearing. I directed that the application should be considered at a further hearing, which in the event took the best part of the day.
3. In summary, the Czech Republic contends that new grounds for jurisdictional objection became apparent when, late on 21 December 2023, for the purposes of the existing s.67 challenge, Mr Stava served a witness statement. That statement gave an address in the Turks and Caicos Islands, and in responding to a s.67 ground of challenge which I have since held is not open to the Czech Republic, stated:
"From 1969 until 1996 I was resident in Switzerland. Since 1996, I have lived for around half of each year in Switzerland and have spent (on average) only around 10 or so weeks a year in the Czech Republic. Switzerland is still the centre of my business interests and it is where I have my family office. I have personal Swiss bank accounts but I have not kept any personal bank accounts in the Czech Republic. Until 1996 I was tax resident in Switzerland but I have never paid tax in the Czech Republic. Insofar as the Czech Republic seeks to contend that my dominant and effective nationality is Czech in reliance on some property that I own in the Czech Republic, that seems to me to be irrelevant. I own substantial property in Switzerland".
4. The Czech Republic now seeks permission to add a new paragraph 7A to the Amended Points of Claim setting out its grounds of challenge to advance the case that Mr Stava is not a protected investor under the Investment Treaty because, in order to claim under the Investment Treaty, his dominant and effective nationality needed to be Swiss; and it is not.
5. The amendment application turns on three issues:
i) Subject to s.73(1) of the 1996 Act, does the proposed amendment have a real prospect of success?
ii) Can the court decide now whether the proposed challenge is barred by s.73(1), and if not, does the claim have a realistic prospect of success of overcoming the Claimants' reliance on s.73(1)?
iii) Does the Czech Republic require and, if so, should it be granted an extension of time within which to bring this challenge under s.80(5) of the 1996 Act?
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