Procedural Context and Key Issues

This Partial Final Award addresses jurisdictional and admissibility objections raised by the Respondent, Georgia, in an SCC arbitration initiated by Mr. Zaza Okuashvili. The proceedings, seated in Stockholm, were bifurcated to resolve these preliminary questions. The claims are brought under the Agreement between the Government of the United Kingdom and the Government of Georgia for the Promotion and Protection of Investments (the "UK-Georgia BIT").

The Tribunal considered five principal objections: (i) lack of jurisdiction ratione personae due to the Claimant's dual Georgian-British nationality; (ii) lack of jurisdiction on the basis that the Claimant could not rely on the Most-Favoured-Nation (MFN) clause in the UK-Georgia BIT to access SCC arbitration provided for in the Georgia-Belgo-Luxembourg Economic Union BIT (the "Georgia-BLEU BIT"); (iii) invalidity of the arbitration agreement under EU law; (iv) inadmissibility for failure to comply with pre-arbitration requirements; and (v) inadmissibility on grounds of abuse of right or process.

The Tribunal's Analysis and Findings

The Tribunal, by a majority on the MFN issue, dismissed all of Georgia's objections. On jurisdiction ratione personae, the Tribunal held that the UK-Georgia BIT does not exclude dual nationals from its scope of protection. It further found no evidence that the Claimant's acquisition of British nationality was tainted by manifest fraud or serious error. Assuming, without deciding, that the "dominant and effective" nationality test applies in the context of investment treaties, the Tribunal concluded on the facts that the Claimant's British nationality was predominant over his Georgian nationality at the relevant times.

Regarding the MFN clause, the majority found that Article 3(3) of the UK-Georgia BIT unambiguously extends MFN treatment to the dispute settlement provisions contained in Article 8. Consequently, the Claimant was entitled to import the more favourable dispute resolution options from the Georgia-BLEU BIT, which include SCC arbitration. The Tribunal reasoned that access to an available arbitral forum (SCC) when the primary forum (ICSID) was unavailable to the Claimant due to his dual nationality constituted more favourable "treatment" of the same class (ejusdem generis).

The Tribunal rejected the objection based on EU law, finding that the principles established in Achmea and Komstroy concerning the autonomy of the EU legal order apply to intra-EU investment agreements, not to extra-EU BITs such as the UK-Georgia and Georgia-BLEU BITs. It noted that EU Regulation 1219/2012 expressly provides for the maintenance in force of such extra-EU BITs. Finally, the Tribunal dismissed the admissibility objections, holding that the Claimant had substantially complied with pre-arbitration notice requirements and that the claim did not constitute an abuse of right, as there was no evidence of treaty shopping or that the Claimant acquired his British nationality for the instrumental purpose of bringing the claim.

Decision

The Tribunal dismissed the Respondent's objections to its jurisdiction and the admissibility of the Claimant's claims. It reserved its decision on costs and directed the parties to agree on a procedural schedule for the merits phase of the arbitration.