Disputes between an investor of one Contracting Party and the other Contracting Party concerning an obligation of the latter under Articles 2 (3), 4, 5 and 6 of this Agreement in relation to an investment of the former which have not been amicably settled shall, after a period of four months from written notification of a claim, be submitted to arbitration under paragraph (2) below if either party to the dispute so wishes.

 

William Nagel brought an action before an arbitral tribunal requesting that the arbitral tribunal declare him entitled to compensation from the Czech Republic in accordance with the principles that follow from article 5 (1) of the Agreement. In his claim he asserted that through its actions the Republic had deprived him of his right to compensation or to everything else that followed from the Agreement, which referred to an investment in accordance with the provisions of the Agreement (article 1). In support of his action he alleged that the Czech Republic had breached articles 2 (2), 2 (3), 3 (1), 3 (2) and 5 (1) of the Agreement. In support of his action he referred to articles [articles 2 (2), 3 (1) and 3 (2)] not mentioned in article 8 (1) with the explanation that as soon as arbitration has been duly requested all obligations that a state has under the Agreement may form the grounds for an action for compensation according to the Agreement.

 

The Czech Republic requested in the first place that William Nagel’s action be dismissed, as he had not made any investment in the Czech Republic; this was a prerequisite for the jurisdiction of the arbitral tribunal. The Czech Republic also requested that the parts of William Nagel’s action based on articles not mentioned in article 8 (1) be dismissed.

 

The arbitral tribunal rejected William Nagel’s action in an arbitral award issued on 9 September 2003. Under the heading Preliminary Issues the arbitral tribunal states first that the issue of whether or not William Nagel was an investor making an investment in the sense referred to in article 1 of the Agreement would be determined as a part of the matter itself and not as a preliminary issue of jurisdiction and second that the part of his action based on articles 2 (2), 3 (1) and 3 (2) was not covered by article 8 (1) and must therefore be dismissed. Under the heading Conclusion the arbitral tribunal concluded that William Nagel’s rights did not constitute an investment and that his action based on article 2 (3) and article 5 (1) must therefore be denied.

 

William Nagel has applied for a summons on the Czech Republic and requested in the first place that the Court of Appeal, pursuant to Section 36 of the Arbitration Act, affirm that his rights constituted an investment under article 1 of the Agreement and that he therefore has the right to a substantial determination of his demands on the Czech Republic regarding breaches of the Agreement in accordance with article 8 of the Agreement and that the disputes concerning the Czech Republic’s obligations under articles 2 (2), 3 (1) and 3 (2) are covered by his right to arbitration under article 8.

 

In the second place he has requested that the Court of Appeal set aside the arbitral award. He has requested that the Court of Appeal vary the decision on the costs of the arbitration in such a way that the Czech Republic will be required to reimburse him for costs of the arbitration and that the Court of Appeal rule that between the parties the Czech Republic shall pay the fee and costs of the arbitration tribunal and the fees and costs of the Arbitration Institute of the Stockholm Chamber of Commerce.

 

The Czech Republic has, as far as is now relevant, requested that William Nagel’s action be dismissed and requested reimbursement for its litigation costs in the Court of Appeal.

 

William Nagel has opposed dismissal.

 

The case is presented as to the question whether William Nagel’s action shall be dismissed after which the Court of Appeal makes the following