Notice: We are currently performing maintenance to improve the italaw platform. The site remains fully accessible. Thank you for your patience.

Okuashvili v. Georgia, Judgment of the Svea Court of Appeal

12 Nov 2024
Zaza Okuashvili v. Georgia, SCC Case No. EA 2019/038
View case details
Judgment of the Svea Court of Appeal (Swedish)
Document Details:
LISTED PARTICIPANTS
Judgment of the Svea Court of Appeal (Swedish)
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Per Carlson, Eva Edwardsson, Carin Häckter
Claimant's counsel
Anders Junker-Nilsson, Ashish Mitter
Claimant's law firm
Respondent's counsel
Maria Fogdestam Agius, Therese Isaksson, Victoria Ribbnäs
Respondent's law firm
Other counsel
Claimant's expert
Claimant's expert firm
Respondent's expert
Respondent's expert firm
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Third-party funder
Entities
GBS Disptues, Westerberg & Partners, Georgia
Country
Sweden
Print reporter
Document Summary
Judgment of the Svea Court of Appeal (Swedish)
This summary note is machine-generated. Always consult the original materials.

Procedural Background

This judgment was rendered by the Svea Court of Appeal in Stockholm, addressing an application by Georgia to challenge the jurisdiction of an arbitral tribunal constituted under the rules of the Stockholm Chamber of Commerce (SCC). The underlying arbitration (SCC V 2019/058) was initiated by Mr. Zaza Okuashvili, a dual Georgian-British national, against Georgia under the 1995 Georgia-United Kingdom Bilateral Investment Treaty (BIT). A majority of the arbitral tribunal, in a Partial Final Award on Jurisdiction and Admissibility dated 31 August 2022, had affirmed its jurisdiction. Georgia sought a declaration from the Swedish court that the tribunal lacked the authority to hear the dispute.

Key Jurisdictional Issues

The central legal question before the Court of Appeal was whether the arbitral tribunal's jurisdiction was validly established. This turned primarily on the interpretation of the Most-Favoured-Nation (MFN) clause in the Georgia-UK BIT. Mr. Okuashvili contended that the MFN clause permitted him to import the more favourable dispute settlement provisions from the Georgia-Belgium-Luxembourg Economic Union (BLEU) BIT, which offers investors a choice of arbitral fora, including the SCC. Georgia argued that its consent to arbitration in the UK BIT was strictly limited to the International Centre for Settlement of Investment Disputes (ICSID) and that the MFN clause did not extend to procedural matters such as the choice of arbitral institution. Secondary issues included whether Mr. Okuashvili, as a dual national, qualified for protection under the BIT and whether the arbitration clause was compatible with EU law.

The Court's Analysis and Decision

The Court of Appeal conducted an independent review of the tribunal's jurisdiction, applying principles of treaty interpretation under the Vienna Convention on the Law of Treaties. The court's analysis focused on whether Georgia had consented to SCC arbitration. It found that Article 8 of the Georgia-UK BIT contained an explicit and exclusive consent to submit disputes to ICSID. The court held that the MFN clause (Article 3), which guarantees treatment no less favourable with respect to the "management, maintenance, use, enjoyment or disposal of their investments," could not be interpreted to override the specific and limited consent to jurisdiction in Article 8. The court reasoned that substituting the agreed-upon dispute resolution forum (ICSID) with another (SCC) was a fundamental alteration of the state's consent, not merely a matter of more favourable "treatment." This interpretation was reinforced by the fact that the UK's model BIT at the time offered an alternative, broader dispute resolution clause with multiple fora, which the contracting parties had explicitly chosen not to adopt in the Georgia-UK BIT. Consequently, the court concluded that the MFN clause did not permit the importation of the dispute resolution mechanism from the Georgia-BLEU BIT.

Operative Part

The Svea Court of Appeal granted Georgia's application, ruling that the SCC arbitral tribunal lacked jurisdiction to adjudicate the dispute between Mr. Zaza Okuashvili and Georgia. The court accordingly set aside the tribunal's partial award on jurisdiction. Mr. Okuashvili was ordered to reimburse Georgia for its legal costs incurred in the court proceedings.