FREQUENTLY ASKED QUESTIONSJurisdiction for the Claimant

1. What is the meaning of “in accordance with the laws and Regulations?”

ANSWER: In the case of Fraport v Philippines it was held that the phrase “in accordance with the laws and regulations” means the treaty must comply with the municipal law of the host state. In this case, the non-compliance with national laws has been recently interpreted as a jurisdictional requirement. There is no evidence that the Claimant violated any law

[SHORT FACTS: Fraport has a 30 per cent equity stake in the Philippine International Airport Terminal Co. (Piatco) that won a 1997 contract to build and operate a new airport passenger terminal in Manila. Arroyo revoked the contract in November 2002, saying the projected was attended by irregularities and corruption. The Supreme Court in May 2003 declared the contract null and void for violating bidding procedures and the build-operate-transfer (BOT) law.]

2. Can this Tribunal decide on its own jurisdiction based on Kompetenz-Kompetenz?

ANSWER: Yes. Article 23 of the UNCITRAL Rules of Arbitration allows this Tribunal to decide in its own jurisdiction.

3. The shares were transferred for a meager amount by Contifica Spirits, does this contradict the purpose of “intensifying economic development” under the BIT?

No. It has been held by the Tribunal in Tokios Tokeles vs. Ukraine that “arguments of an economic nature are irrelevant” where “the parties have specifically identified” the country of legal establishment “as the criterion to be applied.”

Similarly, in this case, the BIT provides in Article 1.1 that “The term "Investment" means every asset which is directly or indirectly invested in accordance with laws and regulations of the Contracting State in which territory the Investment is made by Investors of the other Contracting State”

The definition clearly provides in identifying what “Investment” is, the qualification is the country of legal establishment. There is no mention of “price requirement.”

[SHORT FACTS: A firm incorporated in Lithuania but with the majority of its shares owned by Ukrainian nationals, initiated arbitration against Ukraine, alleging the Ukrainian government breached the Ukraine-Lithuania BIT.]

4. Can we use the Preamble in interpreting the BIT?

ANSWER: No. Although Article 31 (2) of the VCLT provides that context for the purpose of the interpretation of a treaty shall comprise its text and its preamble, such can only be used if there is ambiguity ain the provision of the contract (Scheucer). Here, there is no ambiguity.