Libya Is Bound by a BIT that Took Effect When Notified to the National Transitional Council (Libya v Ustay Yapi)
This analysis was first published on Lexis+ on 29 February 2024 and can be found here (subscription required). Also published on Linkedin.
Libya v Ustay Yapi – CA Paris 23.01.2024 – RG No. 21/01507
Libya sought annulment before French courts of an ICC Paris seated partial award dated 30 November 2020 on jurisdiction made in a construction dispute between the Turkish company Üstay Yapi Taahüt Ve Ticaret AS (Üstay) and the State of Lybia. The dispute relates to three construction projects in Libya that gave rise to a series of disputes, legal actions, and court decisions in Libya, as well as failed settlement attempts. Üstay ultimately initiated arbitration based on article 8 of the 2009 BIT between Türkiye and Libya to get compensation for alleged violations of the BIT, customary international law and the Agreement on the Promotion, Protection and Guarantee of Investments between the member states of the Organization of the Islamic Conference (OIC Treaty). Libya raised objections on jurisdiction before the arbitral tribunal and the issue was put before the Paris Court of Appeal in annulment proceedings that had to decide on the entry into force of the BIT, the notions of investment and investor under the treaty and did also provide some insight on the method to be followed by French courts in the annulment proceedings.
The Court of Appeal sets out the principles that should guide the annulment judge when asked to rule on the question of the arbitral tribunal's jurisdiction based on Article 1520-1 of the French Code of Civil Procedure "the arbitral tribunal wrongly maintained or declined jurisdiction" and specifies its application in the context of a BIT.
Three points are worth highlighting:
1 / The review cannot extend to the merits of the case.
It is not the role of the annulment judge to rule on the admissibility of claims or their merits, which would amount to a review of the arbitration award on the merits.
2/ The scope of review is unlimited.
In its review of the decision of the arbitral tribunal on its jurisdiction (whether it has declared itself competent or incompetent), the annulment judge will verify all the legal and factual elements that make it possible to assess the scope of the arbitration agreement.
3/ In applying the review of consent to arbitration under a BIT, as well as in determining the scope of the treaty's provisions on the concepts of investment or investor in particular, the annulment judge bases its decision on a detailed analysis of the provisions of the text of the treaty in question as well as of the conduct of the state in question.
