Procedural Background and Request for Relief

This Emergency Award on Interim Measures, issued under Appendix II of the 2017 SCC Arbitration Rules, addresses a second application by the Claimant, Mr. Zaza Okuashvili, for emergency relief against the Republic of Georgia. The Claimant sought to renew interim measures previously granted in an award dated 2 April 2019, which had since expired. The requested relief aimed to prohibit Georgia from transferring or selling assets owned by the Claimant and his companies to satisfy outstanding tax liabilities, pending the constitution of an arbitral tribunal.

Jurisdictional Analysis

The Emergency Arbitrator first examined his prima facie jurisdiction. The Claimant asserted jurisdiction based on the Georgia-UK BIT, arguing that the Most-Favoured-Nation (MFN) clause therein allowed for the importation of the more favourable dispute resolution provisions of the Belux-Georgia BIT, which includes an option for SCC arbitration. Georgia contested jurisdiction, arguing that the Georgia-UK BIT exclusively provides for ICSID arbitration, does not apply to dual UK-Georgian nationals, and that the MFN clause cannot be used to import procedural provisions. The Emergency Arbitrator, noting the low threshold for a prima facie finding, concluded that despite the complexity of the issues, the Claimant had established prima facie jurisdiction for the purposes of the emergency proceedings, particularly given the BIT's lack of an explicit exclusion for dual nationals.

Analysis of the Request for Interim Measures

The Emergency Arbitrator denied the Claimant's request for interim measures, finding that the Claimant failed to demonstrate the requisite urgency. The Arbitrator's analysis focused on two key factors. First, he noted the Claimant's delay of nearly seven weeks in seeking recognition and enforcement of the prior 2 April 2019 award in Georgia, which undermined the assertion that immediate relief was necessary to prevent irreparable harm. Second, the Arbitrator was not convinced by the Claimant's failure to pursue available domestic remedies, specifically the possibility of seeking a deferral of enforcement measures under Georgian law. The Arbitrator found the Claimant's arguments that such remedies would be ineffective to be unpersuasive.

As additional grounds for denial, the Emergency Arbitrator expressed hesitation to interfere with a state's sovereign authority in tax collection matters. He also raised concerns about the potential for abuse of emergency proceedings if they were used merely to renew expired measures, particularly when such measures impinge on fundamental sovereign rights.

Decision and Costs

The Emergency Arbitrator denied all requests for interim relief. Regarding costs, despite the Respondent being the prevailing party, the Arbitrator found the Claimant's position to be reasonable, especially in light of his success in the prior emergency proceeding. Accordingly, he ordered the parties to split the costs of the emergency arbitration equally and to bear their own legal costs.