The Czech Republic v Diag Human SE & Anor

The Czech Republic v Diag Human SE & Anor

Jurisdictional objections not raised at the earliest opportunity but addressed on the merits by the tribunal without a timeliness objection are not barred under s.73 Arbitration Act 1996. The definition of 'investor' under Article 1(1)(c) of the Switzerland-Czech Republic BIT requires de jure (legal) control, not merely de facto control; thus, after the transfer of Diag SE shares to the Koruna Trust in 2011, Mr Stava did not have the requisite control and Diag SE was not a qualifying investor. The objection that Mr Stava ceased to be an investor after June 2011 is not a matter of substantive jurisdiction under s.30 Arbitration Act 1996 but one of standing/admissibility.

Parties
Appellant/respondent/claimant: The Czech Republic; Appellant/respondent/defendant: Diag Human SE; Appellant/respondent/defendant: Josef Stava
Jurisdiction
England and Wales
Judgment Date
12 April 2025
Procedural Posture
Civil Appeal (arbitration/investment Treaty) / Court of Appeal Judgment on Three Consolidated Appeals From High Court
Outcome
First and second appeals dismissed; third appeal allowed; award in favour of Diag SE set aside.
Legal Topics
Jurisdictional Objections Under Arbitration Act 1996, Interpretation of Bilateral Investment Treaty, Investor Status Under BIT, Loss of Right to Object Under S.73 Arbitration Act 1996, Control of Legal Entities Under BIT, Standing and Admissibility in Investment Arbitration
Arbitration International Investment Law Private International Law Jurisdictional Objections Under Arbitration Act 1996 Interpretation of Bilateral Investment Treaty Investor Status Under BIT Loss of Right to Object Under S.73 Arbitration Act 1996 Control of Legal Entities Under BIT +1 more

Case Brief

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Parties

The Czech Republic

Appellant/respondent/claimant

Diag Human SE

Appellant/respondent/defendant

Josef Stava

Appellant/respondent/defendant

Procedural Posture

Civil Appeal (arbitration/investment Treaty) / Court of Appeal Judgment on Three Consolidated Appeals From High Court

Legal Issues

  1. 1 Whether jurisdictional objections not raised timeously before the arbitral tribunal are barred under s.73 Arbitration Act 1996
  2. 2 Whether the objection that Mr Stava ceased to be an investor after June 2011 is a matter of substantive jurisdiction under s.30 Arbitration Act 1996
  3. 3 Whether Diag SE was controlled by a Swiss national after 2011 for purposes of BIT Article 1(1)(c)

Ratio Decidendi

Jurisdictional objections not raised at the earliest opportunity but addressed on the merits by the tribunal without a timeliness objection are not barred under s.73 Arbitration Act 1996. The definition of 'investor' under Article 1(1)(c) of the Switzerland-Czech Republic BIT requires de jure (legal) control, not merely de facto control; thus, after the transfer of Diag SE shares to the Koruna Trust in 2011, Mr Stava did not have the requisite control and Diag SE was not a qualifying investor. The objection that Mr Stava ceased to be an investor after June 2011 is not a matter of substantive jurisdiction under s.30 Arbitration Act 1996 but one of standing/admissibility.

Court Disposition

First and second appeals dismissed; third appeal allowed; award in favour of Diag SE set aside.

Orders

  • First appeal (timeliness of jurisdictional objections) dismissed.
  • Second appeal (Mr Stava's status as investor post-2011) dismissed.