Commercial Court: PAO Tatneft v. Ukraine [2018] EWHC 1797

Mr Justice Butcher handed down on 13 July 2018 a judgment rejecting Ukraine’s State immunity objections in relation to the enforcement of an investment arbitral award rendered against it. (http://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Comm/2018/1797.html&query=(arbitration)).

Ukraine argued that there was no arbitration agreement because the arbitral tribunal imported the Fair and Equitable (FET) standard (absent from the applicable BIT) through a Most-Favoured Nation (MFN) clause and the tribunal also lacked jurisdiction ratione materiaeand ratione temporae. Ukraine argued that it “has not lost the state immunity to which it is otherwise entitled under s. 1 of the State Immunity Act 1978 (“the SIA”) by virtue of s. 9 of the SIA, because it did not agree to submit the disputes (alternatively, all the disputes) in respect of which the Merits Award has been made, to arbitration“.

Mr Justice Butcher held, inter alia, that “the FET point is not one which goes to the jurisdiction of the Tribunal and thus to whether Ukraine had submitted the dispute to arbitration under s. 9 of the SIA, but is instead a point on the merits which was for the Tribunal to decide”.