Mr. Vladimir Berschader and Mr. Moise Berschader v. The Russian Federation - Chapter 8 - Investment Arbitration Decisions

Noah Rubins is a Partner in the Paris office of Freshfields, where he is a member of the international arbitration and public international law groups. Mr. Rubins is a U.S. qualified lawyer and has advised and represented clients in arbitrations under ICSID, ICC, ICDR, SCC and UNCITRAL rules. He specializes in disputes in the former Soviet Union and investment treaty arbitration. In addition to advising clients, Mr. Rubins has served as arbitrator in a range of disputes, conducted under the ICC, ICSID, LCIA, SCC and UNCITRAL rules.

Observations by:

Domenico Di Pietro, Avvocato (Italy) and Solicitor (England and Wales) International Law and Arbitration Department, Chiomenti Studio Legale, Rome. Any comments contained in this article are the author’s only and should not be attributed to Chiomenti Studio Legale.

PDF417.42 KB

$40.00

Description:

Originally from Investment Arbitration Decisions

MR. VLADIMIR BERSCHADER AND MR. MOISE BERSCHADER v. THE RUSSIAN FEDERATION SCC ARBITRATION V (080/2004) ARBITRAL AWARD RENDERED ON 21 APRIL 2006

Subject Matters:
a) Do the Claimants (two Belgian physical individuals) who own shares in a company incorporated in Belgium, BI, which owns assets in the territory of the Russian Federation qualify as investors within the meaning of the Luxembourg/Belgium-Russia BIT (the Treaty)?
b) Have the Claimants carried out an investment within the meaning of the Treaty?
c) To what extent can the Claimants rely on the most favoured nation (MFN) clause contained in the basic Treaty to import a more favourable dispute settlement mechanism contained in a third party treaty concluded by the Russian Federation to establish the jurisdiction of the Arbitral Tribunal?

Findings:
a) The Claimants qualified as investors within the meaning of Article 1.1 of the Treaty.
b) The Claimants did not carry out an investment within the meaning of Article 1.2 of the Treaty: (i) the Claimants’ shares in the Belgian company, BI, did not constitute an investment within the meaning of the Treaty; (ii) in the absence of any express protection in the Treaty for indirect investments, the Tribunal found that the types of indirect investments relied upon by the Claimants (i.e., the Contract, the Claimants’ property rights in the Building and the Agreed Debt) did not constitute an investment within the meaning of the Treaty.
c) The MFN argument was dismissed. The MFN clause contained in the basic Treaty could not incorporate by reference a more favourable dispute settlement mechanism contained in a third party Russian treaty on the grounds that (i) the terms of such MFN clause did not clearly and unambiguously so provided and (ii) it could not be clearly inferred that this was the intention of the Contracting Parties.

Table of Contents:

VIII. Mr. Vladimir Berschader and Mr. Moise Berschader v. The Russian Federation 665 SCC Arbitration V (080/2004) Arbitral Award Rendered in Stockholm on 21 April 2006 SUBJECT- MATTERS: 1) Do the Claimants (two Belgian physical individuals) who own shares in a company incorporated in Belgium, BI, which owns assets in the territory of the Russian Federation qualify as investors within the meaning of the Luxembourg/Belgium-Russia BIT (the Treaty)? 2) Have the Claimants carried out an investment within the meaning of the Treaty?

3) To what extent can the Claimants rely on the most favoured nation (MFN) clause contained in the basic Treaty to import a more favourable dispute settlement mechanism contained in a third party treaty concluded by the Russian Federation to establish the jurisdiction of the Arbitral Tribunal? Observations by Domenico Di Pietro