[2025] EWCA Civ 998

On 7^th May 2025 we handed down judgment in three appeals dealing with challenges by the Czech Republic (‘CZR’) under s.67 and s.68 of the Arbitration Act 1996 (‘AA 1996’) to an arbitration award by which Mr Josef Stava and Diag Human SE (‘Diag SE’) were awarded sums approximately equivalent to US$350 million plus interest against CZR. The award (‘the BIT Award’) was made pursuant to a bilateral investment treaty (‘the BIT’) between Switzerland and CZR which protected investments in one contracting state (here CZR) by investors of the other contracting state (here Switzerland).

The result of our judgment, taken together with the decisions of Mr Justice Foxton on issues from which there was no appeal, was that CZR’s challenges to the BIT Award in favour of Mr Stava failed, but its challenge to the award in favour of Diag SE succeeded on the basis that Diag SE was not a qualified investor for the purpose of the BIT, so that the arbitral tribunal had no substantive jurisdiction over the dispute between Diag SE and CZR within the meaning of s.30 AA 1996. As we said at para 195 of our judgment, this means that the award in favour of Diag SE must be set aside.

The parties have been unable to agree the terms of an order to give effect to our judgment. Exchanges of written submissions revealed a fundamental dispute as to the effect on the award in favour of Mr Stava of our decision that the award in favour of Diag SE must be set aside. Accordingly we held an oral hearing on 15^th July 2025 so that the rival positions could be explored.

In short, CZR contends that the award in favour of Mr Stava is dependent on, and not severable from, the award in favour of Diag SE, so that the setting aside of the award in favour of Diag SE means that the award in favour of Mr Stava must also be set aside. Mr Stava’s position is that the setting aside of the award in favour of Diag SE does not affect the award in his favour, which should be confirmed.

In addition there are issues as to the effect of our decision on the costs of the arbitration and as to undertakings given by Mr Stava and Diag SE to prevent double recovery as a result of potential enforcement of the award dated 4^th August 2008 of the Commercial Arbitration tribunal (‘the 2008 Award’).