The Czech Republic v Diag Human SE & Anor

The Czech Republic v Diag Human SE & Anor

The court held that the arbitral tribunal had substantive jurisdiction under s.67 of the Arbitration Act 1996 because the claimants had made a qualifying investment in the Czech Republic under the BIT, including through shareholding, know-how, goodwill, and contractual/cooperation agreements. The court found that Diag Human SE remained a protected investor after the transfer of shares to the Koruna Trust because Mr Stava retained de facto control, which satisfied the BIT's requirements. The dispute arose after the BIT entered into force, so the ratione temporis objection failed. The court rejected the Czech Republic's procedural and evidential challenges and found no substantial injustice...

Parties
Claimant/applicant: The Czech Republic; Defendant/respondent: Diag Human SE; Defendant/respondent: Mr Josef Stava
Jurisdiction
England and Wales
Judgment Date
08 September 2024
Procedural Posture
Arbitration Act 1996 S.67 and S.68 Challenge to Arbitral Award / Final Judgment on Surviving Jurisdictional and Procedural Challenges
Outcome
All surviving challenges by the Czech Republic under s.67 and s.68 of the Arbitration Act 1996 are dismissed.
Legal Topics
Jurisdictional Challenge Under Arbitration Act 1996 S.67, Investment Treaty Arbitration, Definition of 'investment' Under Bits, Nationality and Control of Investor, Issue Estoppel in Arbitration, Treaty Interpretation (vclt), Ratione Temporis Objections, Trust Law and Beneficial Ownership
Arbitration International Investment Law Public International Law Jurisdictional Challenge Under Arbitration Act 1996 S.67 Investment Treaty Arbitration Definition of 'investment' Under Bits Nationality and Control of Investor Issue Estoppel in Arbitration +3 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 14 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

The Czech Republic

Claimant/applicant

Diag Human SE

Defendant/respondent

Mr Josef Stava

Defendant/respondent

Procedural Posture

Arbitration Act 1996 S.67 and S.68 Challenge to Arbitral Award / Final Judgment on Surviving Jurisdictional and Procedural Challenges

Legal Issues

  1. 1 Whether the arbitral tribunal had substantive jurisdiction under s.67 Arbitration Act 1996 to make the award under the BIT
  2. 2 Whether the claimants had made a qualifying 'investment' under the BIT
  3. 3 Whether Diag Human SE was a protected investor under the BIT after transfer of shares to the Koruna Trust

Ratio Decidendi

The court held that the arbitral tribunal had substantive jurisdiction under s.67 of the Arbitration Act 1996 because the claimants had made a qualifying investment in the Czech Republic under the BIT, including through shareholding, know-how, goodwill, and contractual/cooperation agreements. The court found that Diag Human SE remained a protected investor after the transfer of shares to the Koruna Trust because Mr Stava retained de facto control, which satisfied the BIT's requirements. The dispute arose after the BIT entered into force, so the ratione temporis objection failed. The court rejected the Czech Republic's procedural and evidential challenges and found no substantial injustice...

Court Disposition

All surviving challenges by the Czech Republic under s.67 and s.68 of the Arbitration Act 1996 are dismissed.

Orders

  • The Czech Republic's application to set aside or remit the arbitral award is dismissed.
  • The third s.68(2) challenge is dismissed, subject to possible revival if appeals succeed on related points.