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Partial Final Award

I. THE PARTIES

CLAIMANTS:

1.
Juvel Ltd. ("Juvel") is a limited company constituted and incorporated in accordance with the laws of the Republic of Cyprus, with its registered office at Chrysanthou Mylona, 3 P.C. 3030 Limassol, the Republic of Cyprus.
2.
Bithell Holdings Ltd. ("Bithell") is a limited company constituted and incorporated in accordance with the laws of the Republic of Cyprus, with its registered office at Kostaki Pantelidi 1, Kolokasides Building, 3rd floor, P.C. 1010 Nicosia, the Republic of Cyprus.
3.
Juvel and Bithell shall be referred to in this arbitration jointly as "Claimants".
4.
Claimants are represented in this arbitration by their duly authorized attorneys and counsel mentioned at page 6 above.

RESPONDENT

5.
Respondent is the Republic of Poland ("Poland" or "Respondent").
6.
Respondent is represented in this arbitration by its duly authorized attorneys and counsel mentioned at page 6 above.
7.
Claimants and Respondent are jointly referred to as "Parties" and individually as a "Party".

II. THE ARBITRAL TRIBUNAL

8.
On 26 October 2015, pursuant to Article 13(2) of the Rules of Arbitration of the International Chamber of Commerce in force as of 1 January 2012 (the "ICC Arbitration Rules"), the Secretary General of the ICC International Court of Arbitration (the "ICC Court") confirmed Mr. Gary Born, nominated jointly by Claimants, and Prof. Brigitte Stern, nominated by Respondent, as co-arbitrators. The Parties agreed that they would jointly nominate the President of the Arbitral Tribunal. The joint nomination was made timely. On 26 April 2016, in accordance with Article 13(2) of the ICC Arbitration Rules, the Secretary General confirmed Professor Bernard Hanotiau as President of the Arbitral Tribunal.1
9.

The Arbitral Tribunal has thus been constituted as follows:

(i) Professor Bernard Hanotiau
(President)
Hanotiau & van den Berg
IT Tower
Avenue Louise 480, Box 9 1050 Brussels
Belgium

(ii) Mr. Gary Born
(nominated by Claimants)
Wilmer Cutler Pickering Hale and Dorr LLP
49 Park Lane
London W1K 1PS
United Kingdom

(iii) Professor Brigitte Stem
(nominated by Respondent)
[Redacted]
[Redacted]
France

III. PROCEDURAL HISTORY

10.
On 9 May 2013, Claimants filed a Request for Arbitration (with enclosures) (the "Request") on the basis of Article 9 of the Agreement between the Republic of Poland and the Republic of Cyprus for the promotion and reciprocal protection of investments of 4 June 1992 (the "Treaty" or the "BIT"),2 and Article 4(1) of the ICC Arbitration Rules.
11.

Article 9 of the Treaty provides for arbitration as a means of settling disputes between investors and the host State of their investment, and reads as follows:

"Disputes between an Investor and a Contracting Party.

1. Any dispute between either Contracting Party and the investor of the other Contracting Party concerning expropriation of an investment shall, as far as possible, be settled by the disputing parties in an amicable way.

2. If such disputes cannot be settled within six months from the date either party requested amicable settlement, it shall, upon request of the investor, be submitted to one of the following:

(a) the Arbitration Institute of the Arbitral Tribunal of the Chamber of Commerce in Stockholm;

(b) the Arbitral Tribunal of the International Chamber of Commerce in Paris;

(c) the International Centre for the Settlement of Investment Disputes in case both Contracting Parties have become members of the Convention of 18 March 1965 on the Settlement of Investment Disputes between States and Nationals of Other States."

12.
In their Request, Claimants indicated their preference that the language of the arbitration be English. Claimants also specified that, in light of the Treaty’s silence with respect to the composition of the Arbitral Tribunal and the place of the arbitration, their preference would be that the dispute be decided by a three-member arbitral tribunal seated in Geneva, Switzerland, as a "neutral forum".
13.
On 13 May 2013, the Secretariat acknowledged receipt of the Request. It notified the Request to Respondent on 5 June 2013, indicating that the Answer to the Request (the "Answer") was due within 30 days following the receipt of the Secretariat’s letter. It further invited Respondent to comment on the number of arbitrators and on Claimants’ proposal in this respect. The Secretariat indicated that in case of disagreement of the Parties, the ICC Court would determine the number of arbitrators. The Secretariat also invited Respondent’s comments on the place of arbitration and on the language of the arbitration.
14.
On 5 June 2013, by way of a letter to Claimants, the Secretariat noted that Claimants had indicated their preference for a three-member arbitral tribunal without nominating a coarbitrator. The Secretariat invited Claimants to nominate a co-arbitrator within 15 days of receipt of the letter.
15.
On 20 June 2013, Claimants nominated Mr. Gary Born as their arbitrator.
16.
On 8 July 2013, by way of a letter to Claimants and the Secretariat, Respondent indicated its agreement with Claimants’ proposal to have an arbitral tribunal composed of three arbitrators and requested an extension of time until 26 July 2013 to nominate a co-arbitrator and submit the Answer.
17.
On 9 July 2013, the Secretariat took note of Respondent’s agreement to have three arbitrators and granted its request for an extension of time to nominate a co-arbitrator and submit the Answer. The Secretariat reiterated its invitation that Respondent comment on the place of arbitration and the language of the arbitration by 15 July 2013.
18.
On 15 July 2013, Respondent indicated that it did not agree to Geneva, Switzerland, as the place of arbitration and proposed that London be the place of arbitration. Respondent in turn agreed that English be the language of the arbitration proceedings.
19.
On 16 July 2013, the Secretariat informed the Parties that, unless they agreed on the place of arbitration by 22 July 2013, the ICC Court would fix the place of arbitration pursuant to Article 18(1) of the ICC Arbitration Rules. The Secretariat took note of the Parties’ agreement and confirmed that English would be the language of the arbitration.
20.
On 26 July 2013, Respondent submitted its Answer, wherein it reiterated its agreement to have a three-member arbitral tribunal and nominated Prof. Brigitte Stern as co-arbitrator. Respondent also indicated that the Parties were discussing the procedure for the appointment of the President and had agreed that Paris, France would be the place of arbitration. Respondent also raised pleas pursuant to Article 6(3) of the ICC Arbitration Rules.
21.
On 1 August 2013, the Secretariat took note of Prof. Stern’s nomination and Respondent’s representation concerning the Parties’ ongoing discussions on a procedure for the appointment of the President. The Secretariat invited Claimants to confirm their agreement that the place of arbitration be Paris, France, by 7 August 2013.
22.
On 6 August 2013, Claimants informed the Secretariat that, on 16 July 2013, the Parties had concluded a conditional settlement agreement, which provided for the suspension of the arbitration proceedings until 31 December 2013. The Parties requested that the Secretariat therefore suspend the arbitration proceedings until that date.
23.
On 9 August 2013, Respondent confirmed the above to the Secretariat.
24.
On 12 August 2013, the Secretariat took note of the Parties’ agreement and suspended the proceedings.
25.
On 21 August 2013, the Secretariat invited the Parties to comment by 2 September 2013 on Prof. Stern’s disclosure made within her Statement of Acceptance, Availability, Impartiality and Independence.
26.
On 6 January 2014, the Secretariat inquired with the Parties whether the arbitration should go forward or should continue to be held in abeyance.
27.
On 31 January 2014, by separate emails, Claimants and Respondent informed the Secretariat that the arbitration should continue to be held in abeyance until 31 December 2014.
28.
On 3 February 2014, the Secretariat took note of the Parties’ agreement.
29.
On 6 January 2015, the Secretariat invited the Parties to indicate whether the arbitration could proceed or should continue to be held in abeyance. Having received no answer from the Parties, the Secretariat reiterated its request on 9 April 2015.
30.
On 14 April 2015, Claimants requested that the Secretariat continue to hold the arbitration in abeyance.
31.
On 16 April 2015, on the basis of this request, the Secretariat decided to continue holding the arbitration in abeyance until further notice.
32.
On 21 September 2015, Claimants requested that the proceedings be taken out of abeyance.
33.
On 25 September 2015, the Secretariat took the matter out of abeyance. The Secretariat invited the Parties to indicate whether they had come to an agreement concerning the procedure for the appointment of the President and whether Claimants could confirm their agreement to having Paris, France, as the place of the arbitration by 2 October 2015. The Secretariat invited the Parties to provide any further comments they may have concerning the constitution of the arbitral tribunal by the same deadline.
34.
On 29 September 2015, by separate emails, the Parties requested the extension of the deadline until 16 October 2015.
35.
On 8 October 2015, the Secretariat granted this request.
36.
On 16 October 2015, by separate emails, the Parties requested a further extension of the deadline until 23 October 2015.
37.
On 20 October 2015, the Secretariat granted their request.
38.
On 23 October 2015, Claimants confirmed their agreement to have Paris, France, as the place of arbitration. Claimants also indicated to the Secretariat that the Parties had agreed to jointly nominate the President of the arbitral tribunal by 30 November 2015. Respondent confirmed this agreement by separate email of the same day.
39.
On 26 October 2015, the Secretariat informed the Parties that, on the same day, pursuant to Article 13(2) of the ICC Arbitration Rules, the Secretary General confirmed Mr. Gary Born as co-arbitrator upon Claimants’ joint nomination and Prof. Brigitte Stern, as co-arbitrator upon Respondent’s nomination.
40.
On 30 November 2015, by separate emails, the Parties informed the Secretariat that they had agreed to extend the deadline for the nomination of the President until 21 December 2015, which the Secretariat noted.
41.
On 18 December 2015, by separate emails, the Parties informed the Secretariat that they had agreed to a further extension of this deadline until 29 January 2016, which the Secretariat noted.
42.
On 29 January 2016, the Parties indicated by separate emails that they required a further extension of time, until 29 February 2016, which the Secretariat noted.
43.

On 22 March 2016, by separate emails, the Parties indicated to the Secretariat that they had agreed to nominate Mr. [Person 9] as President of the Arbitral Tribunal.

44.
On 30 March 2016, following Mr. [Person 9]’s unavailability, the Parties indicated by separate emails that they had agreed to nominate Prof. Bernard Hanotiau as President of the Arbitral Tribunal.
45.
On 5 April 2016, Prof. Hanotiau indicated his availability to act as President of the Arbitral Tribunal.
46.
On 6 April 2016, the Secretariat transmitted to the Parties a copy of Prof. Hanotiau’s Statement of Acceptance, Availability, Impartiality and Independence and curriculum vitae, inviting them to provide their comments, if any, on the disclosure made, by 13 April 2016.
47.
On 26 April 2016, the Secretariat informed the Parties that, on the same day, the Secretary General had confirmed Prof. Bernard Hanotiau as President of the Arbitral Tribunal upon joint nomination of the Parties pursuant to Article 13(2) of the ICC Arbitration Rules.
48.
On 16 June 2016, the Arbitral Tribunal held the case management conference with the Parties by means of a telephone conference.
49.
On 8 July 2016, Respondent informed the Secretariat that it was represented in this arbitration by Domański Zakrzewski Palinka and the State Treasury Solicitors’ Office.
50.
On 14 July 2016, following the telephone conference and exchanges of correspondence, the Parties and the Arbitral Tribunal signed the Terms of Reference, reflecting the Parties’ positions, their choice of English as the language of the arbitration and Paris as the place of arbitration. Among other matters, the Terms of Reference also included the appointment of Ms. [Person 1] as Administrative Secretary. On the same day, the Arbitral Tribunal issued Procedural Order No. 1 setting out the timetable and the procedural rules governing this arbitration. Pursuant to Article 1.1 of Procedural Order No. 1, the proceedings were bifurcated into Phase No. 1 (jurisdiction and liability) and Phase No. 2 (quantum). The present Partial Final Award is issued at the conclusion of Phase No. 1.
51.
On 22 July 2016, the Secretariat informed the Parties that the Terms of Reference signed on 14 July 2016 were transmitted to the ICC Court at its session of 21 July 2016 and invited the Parties to pay the balance of the advance on costs.
52.
On 29 July 2016, Respondent submitted an application that Claimants be ordered to pay the entirety of the advance on costs or, alternatively, that the Arbitral Tribunal grant it a fourteen-day period from the date of its decision in order to submit a request for security for costs.
53.
On 3 August 2016, Ms. [Person 1] circulated her curriculum vitae, as well as a Declaration of Independence and Impartiality and Undertaking to act in accordance with the ICC Note on the Appointment, Duties and Remuneration of Administrative Secretaries.
54.
On 8 August 2016, Claimants objected to Respondent’s application of 29 July 2016.
55.
On 12 August 2016, the Arbitral Tribunal dismissed Respondent’s application of 29 July 2016.
56.
On 26 August 2016, Respondent submitted a Request for Interim Measure seeking an order requiring Claimants to post security for costs ("Request for Security for Costs") in an amount equal to Respondent’s advance on costs.
57.
On 1 September 2016, the Secretariat notified the Arbitral Tribunal and the Parties that the ICC Court, at its session of 25 August 2016, pursuant to Article 30(1) of the ICC Arbitration Rules, had fixed the date 30 March 2018 as the time limit for rendering the final award.
58.
On 8 September 2016, Claimants submitted their Response to the Request for Security for Costs.
59.
On 16 September 2016, Respondent submitted its Reply to Claimants’ Response to the Request for Security for Costs.
60.
On 23 September 2016, Claimants filed their Rejoinder on the Request for Security for Costs.
61.
On 26 September 2016, the Arbitral Tribunal issued Procedural Order No. 2, dismissing Respondent’s Request for Security for Costs.
62.
On 13 October 2016, Respondent informed the Arbitral Tribunal that Domański Zakrzewski Palinka no longer represented it in this arbitration.
63.

On 17 October 2016, Claimants submitted their Statement of Claim (the "SoC"), accompanied by:

- the witness testimonies of Mr. [Person 3] ("[Person 3] First Witness Statement"), Mr. [Person 4] ("[Person 4] First Witness Statement"), Mr. [Person 5] ("[Person 5]" Witness Statement), and Ms. [Person 6] ("[Person 6] First Witness Statement");
- the expert testimony provided by Solon Management Consulting ("Solon First Expert Report");
- an Annex A, containing a summary of legal issues;
- an Annex B, containing excerpts of court judgements;
- factual exhibits C-1 through C-146; and
- legal authorities CL-1 through CL-62.

64.

On 16 February 2017, Respondent submitted its Statement of Defense (the "SoD"), which was accompanied by:

- the witness testimonies of Ms. [Person 7] ("[Person 7] Witness Statement"), Ms. [Person 8] ("[Person 8] First Witness Statement"), Mr. [Person 2] ("[Person 2] First Witness Statement"), and Ms. [Person 10] ("[Person 10] Witness Statement");
- the expert testimonies provided by CAPITALIA sp. zoo Sp. K. ("Capitalia Expert Report") and Prof. [Person 11] ("[Person 11] First Expert Report");
- factual exhibits R-1 through R-125; and
- legal authorities RL-1 through RL-86.

65.
On 2 March 2017, the Parties exchanged their respective requests for document production. On 16 March 2017 and on 14 April 2017, they exchanged their comments and objections on the requests for document production. In parallel, each Party produced the documents it had agreed to disclose.
66.
On 24 April 2017, the Parties informed the Arbitral Tribunal of their agreement that the hearing would take place in Paris, France.
67.
On 4 May 2017, the Arbitral Tribunal issued Procedural Order No. 3, ruling on the Parties’ respective requests for document production.
68.

On 6 July 2017, Claimants submitted their Statement of Reply (the "Reply") accompanied by:

- the witness testimonies of Mr. [Person 3] ("[Person 3] Second Witness Statement"), Mr. [Person 4] ("[Person 4] Second Witness Statement"), Ms. [Person 6] ("[Person 6] Second Witness Statement"), Mr. [Person 12] ("[Person 12] Witness Statement") and Mr. [Person 13] ("[Person 13] Witness Statement");
- the expert testimonies provided by Solon Management Consulting ("Solon Second Expert Report") and by Professor [Person 14] ("[Person 14] Expert Report");
- an Annex C, containing additional excerpts from court judgements;
- factual exhibits C-147 through C-337, along with corrected translations of Exhibits C-21a and C-90a; and
- legal authorities CL-63 through CL-113.

69.

On 5 October 2017, Respondent submitted its Statement of Rejoinder (the "Rejoinder"), which included a request that Claimants disclose the persons and/or entities financing their participation in the arbitration, the conditions of such financing, as well as a second Request for Security for Costs (the "Second Request for Security for Costs"). The Rejoinder was accompanied by:

- the witness testimonies of Ms. [Person 8] ("[Person 8] Second Witness Statement") and Mr. [Person 2] ("[Person 2] Second Witness Statement");
- the expert testimony of Prof. [Person 11] ("[Person 11] Second Expert Report") and Dr. [Person 15] ("[Person 15] Expert Report");
- an Annex A, regarding Sferia’s and NetNet’s ownership;
- factual exhibits R-126 through R-208; and
- legal authorities RL-87 through RL-152.

70.
By letters of 30 October 2017, the Parties notified each other and the Arbitral Tribunal of the witnesses and experts whom they intended to cross-examine at the hearing.
71.
On 8 November 2017, the Parties jointly submitted their positions concerning the organization of the hearing, their proposals regarding the hearing schedule, as well as a confirmation of their availability for a pre-hearing conference call on 20 November 2017.
72.

[Redacted]3

 

73.
Claimants attached to their application factual exhibits C-338 through to C-343.
74.
On the same day, the Arbitral Tribunal invited Respondent to submit its comments on Claimants’ application by 22 November 2017.
75.
By letter of 15 November 2017, Respondent reiterated and updated its second application for security for costs, so that the amount sought was updated to USD 465,000.
76.
On the same day, the Arbitral Tribunal invited Claimants to submit by 23 November 2017 their comments on Respondent’s application for disclosure of the sources of Claimants’ funding, and on Respondent’s Second Request for Security for Costs.
77.
On 16 November 2017, in light of the Parties’ agreement on the majority of the points pertaining to the organization of the hearing, the Arbitral Tribunal cancelled the pre-hearing conference call.
78.
On 21 November 2017, the President of the Arbitral Tribunal sought the Parties’ agreement regarding the attendance of Mr. [Person 16], an intern in the President’s law firm, during the first two days of the hearing.
79.
On 22 November 2017, Respondent filed its answer to Claimants’ application for a protective order and sought the exclusion from the record of Exhibits C-338 to C-343.
80.
On the same day, the Arbitral Tribunal invited Claimants to respond to Respondent’s request for exclusion from the record of Exhibits C-338 to C-343 by 24 November 2017.
81.
On the same day, the Parties represented that they had no objections to Mr. [Person 16]’s attendance during the first two days of the hearing.
82.
On 23 November 2017, the Administrative Secretary circulated to the Parties Mr. [Person 16]’s Confidentiality Undertaking.
83.
On the same day, Claimants filed their answer to Respondent’s application for disclosure of the sources of Claimants’ funding, and to Respondent’s Second Request for Security for Costs.
84.
By email of 24 November 2017, Respondent objected to Claimants’ answer of the previous day. Respondent requested that Claimants be ordered to submit evidence that would demonstrate the source of Claimants’ financing of the arbitration.
85.
By letter dated 24 November 2017, Claimants submitted their answer to Respondent’s letter of 22 November 2017 and to Respondent’s request for the exclusion from the record of Exhibits C-338 to C-343.
86.
On 27 November 2017, the Arbitral Tribunal issued Procedural Order No. 4, concerning the organization of the hearing.
87.
By letter of the same day, Claimants reiterated the position set out in their letter of 23 November 2017 and requested that the Arbitral Tribunal dismiss Respondent’s Second Request for Security for Costs (as amended by Respondent’s email of 24 November 2017).
88.
On 1 December 2017, the Arbitral Tribunal issued Procedural Order No. 5 dismissing (i) Respondent’s request that Claimants be ordered to disclose the source of their funding; (ii) Respondent’s Second Request for Security for Costs; and (iii) Respondent’s request for the exclusion of Exhibits C-338 to C-343 from the record; and (iv) Claimants’ application for a protective order.
89.

The hearing on jurisdiction and liability was held at the ICC Hearing Centre in Paris from 18 to 22 December 2017. Present at the hearing were:

Arbitral Tribunal:
Prof. Bernard Hanotiau (President)
Mr. Gary Born
Prof. Brigitte Stern

Administrative Secretary :
Ms. [Person 1]

Claimants:
Dr. [Person 17], Sołtysiński Kawecki & Szlęzak
Mr. [Person 18], Sołtysiński Kawecki & Szlęzak
Ms. [Person 19], Sołtysiński Kawecki & Szlęzak
Ms. [Person 20], Sołtysiński Kawecki & Szlęzak
Ms. [Person 21], Sołtysiński Kawecki & Szlęzak

Experts and Witnesses for Claimants :
Mr. [Person 13]
Mr. [Person 3]
Mr. [Person 5]
Ms. [Person 6]
Mr. [Person 12]
Mr. [Person 4]
Professor [Person 14]

Respondent :
Mr. [Person 22], State Treasury Solicitors’ Office, the Republic of Poland
Dr. [Person 23], State Treasury Solicitors’ Office, the Republic of Poland
Ms. [Person 24], State Treasury Solicitors’ Office, the Republic of Poland
Mr. [Person 25], State Treasury Solicitors’ Office, the Republic of Poland
Ms. [Person 26], State Treasury Solicitors’ Office, the Republic of Poland
Ms. [Person 27], State Treasury Solicitors’ Office, the Republic of Poland
Ms. [Person 28], The Ministry of Digitization, the Republic of Poland
Mr. [Person 2], the Office for Telecommunications and Post Regulation (subject to Section 2.4 of Procedural Order No. 4)

Experts and Witnesses for Respondent :
Ms. [Person 10]
Ms. [Person 8]
Ms. [Person 7]
Mr. [Person 2]
Prof. [Person 11]
Dr. [Person 15]

Interpreters :
Messrs. [Person 29] and [Person 30]

Observer :
Mr. [Person 16]

90.
A full transcript by official court reporter Opus 2 International ("Opus 2") was made available to the Arbitral Tribunal and the Parties.
91.
On 21 December 2017, following the Arbitral Tribunal’s request, Claimants submitted Exhibits C-344 and C-345, evidencing the payments made by Juvel and Bithell in respect of their shares in Sferia.
92.
Between 2 and 26 February 2018, Opus 2 circulated amended transcripts of the hearing.
93.
On 8 February 2018, upon the Parties’ joint request, the Arbitral Tribunal confirmed that the Parties could submit their post-hearing briefs on 9 March 2018.
94.
On 7 March 2018, the Arbitral Tribunal invited the Parties to comment on the recently published Court of Justice of the European Union (the "CJEU") judgment in Case C-284/16 Slowakische Republik v. Achmea BV ("Achmea") in their post-hearing briefs. Upon the Parties’ request of the same day, the Arbitral Tribunal extended the deadline to 16 March 2018.
95.
On 9 March 2018, the Parties submitted their post-hearing briefs ("C-PHB" and "R-PHB", respectively).
96.
On 16 March 2018, the Parties submitted their comments on the Achmea judgment ("C-Ach" and "R-Ach", respectively). Both Parties’ submissions were accompanied by legal authorities (Exhibit CL-114 and Exhibits RL-153 through RL-162, respectively). C-Ach was also accompanied by Exhibits C-346 through C-366. With their cover letter, Claimants requested leave from the Arbitral Tribunal to place Exhibits C-346 through C-366 and CL-114 onto to the record.
97.
On the same day, the Arbitral Tribunal invited both Parties to indicate whether they had any objections to the introduction into the record of the factual exhibits and legal authorities that accompanied their submissions on the Achmea judgment.
98.
On 21 March 2018, Respondent represented that it had no objections with respect to the introduction into the record of the factual exhibits and legal authorities referenced by Claimants in their C-Ach.
99.
On the same day, Claimants likewise represented that they did not object to the introduction into the record of legal authorities RL-153 through to RL-162. Claimants requested that Respondent number two legal authorities it referenced in its submissions and that it quote in its entirety an article authored by Claimants’ counsel and referenced in R-Ach.
100.
On 26 March 2018, following Claimants’ request and leave from the Arbitral Tribunal, Respondent submitted as legal authority R-209 the full translation of an article authored by Claimants’ counsel.
101.
On 30 March 2018, the Secretariat notified the Arbitral Tribunal and the Parties that the ICC Court, at its session of 22 March 2018, pursuant to Article 30(2) of the ICC Arbitration Rules, had extended the deadline for rendering the final award until 29 June 2018.
102.
On 29 June 2018, the Secretariat notified the Arbitral Tribunal and the Parties that the ICC Court, at its session of 27 June 2018, pursuant to Article 30(2) of the ICC Arbitration Rules, had extended the deadline for rendering the final award until 31 July 2018.
103.
On 31 July 2018, the Secretariat notified the Arbitral Tribunal and the Parties that the ICC Court, at its session of 26 July 2018, pursuant to Article 30(2) of the ICC Arbitration Rules, had extended the deadline for rendering the final award until 30 November 2018.
104.
On 29 November 2018, the Secretariat notified the Arbitral Tribunal and the Parties that the ICC Court, at its session of 28 November 2018, pursuant to Article 30(2) of the ICC Arbitration Rules, had extended the deadline for rendering the final award until 31 January 2019.
105.
On 31 January 2019, the Secretariat notified the Arbitral Tribunal and the Parties that the ICC Court, at its session of the same day, pursuant to Article 30(2) of the ICC Arbitration Rules, had extended the deadline for rendering the final award until 31 March 2019.
106.
On 19 February 2019, pursuant to Article 27 of the ICC Arbitration Rules, the Arbitral Tribunal closed the proceedings.

IV. THE PARTIES’ REQUESTS FOR RELIEF

107.

Claimants request the following relief:4

"Claimants... respectfully request the Tribunal to issue an award:

(a) declaring that the Republic of Poland has breached the Treaty, in particular Articles 2, 3 and 4 thereof;

(b) ordering the Republic of Poland to fully and fairly compensate the injury suffered by Claimants due to the Republic of Poland’s wrongful actions and omissions, in particular by way of;

(c) payment by the Republic of Poland to Claimants compensation [sic] in value required under the Treaty, which would be particularized in detail at a further stage of the proceedings, [Redacted];

(d) ordering the Republic of Poland to pay to Claimants so-called delay interest [Redacted];

(e) [Redacted];

(f) [Redacted].

- - [Redacted]."5

108.

[Redacted]6 

V. [REDACTED]

109.

[Redacted].

A. [Redacted]

110.

[Redacted]

111.
Sferia is a Polish telecommunications company with its registered seat in Warsaw. It provides fixed and mobile telephony services using frequency bands under concession. Sferia was initially established in 1996 as a limited liability company called "Ogólnopolski System Przywoławczy Polpager" ("Polpager").9 In late 2005, Polpager was transformed into a joint stock company and renamed Sferia S.A.10 For ease of reference, the Arbitral Tribunal has chosen to refer to Polpager as Sferia throughout this Award.
112.

The Polish telecommunications sector in which Sferia operated is highly regulated.11 The relevant authority in this regard is the Office of Electronic Communication ("UKE"). The President of the UKE is the national regulatory authority ("Regulator") with respect to that market.12 The UKE was established in January 2006, to replace the Office of Telecommunications and Post Regulation ("URTiP"), the equivalent body operating between March 2002 and January 2006.13

B. The making of the investment

113.
Claimants invested in Poland’s telecommunications sector through the progressive acquisition of shares in Sferia. In making their investment, they intended to develop a telecommunication business through the commercial operation of the frequency reservation held by Sferia.14
114-120.

[Redacted]

121.
At the time of filing of their SoC, Claimants’ participation in Sferia consisted of an 18.3% of shareholding held by Juvel and a 30.6 % of shareholding held by Bithell.24

C. The legal framework governing the Polish telecommunications sector

122.
The Polish telecommunications sector is made up of regulations at both the international and the domestic levels.25
123.
Poland signed and ratified the International Telecommunications Union (the "ITU") Constitution and Convention in 1995.26 In addition to these two documents, the ITU also implements the Administrative Regulations, as well as the ITU Radio Regulations, regarding the allocation and use of frequencies.27 These are revised every 3-4 years and are binding on the Member States.28
124.
The EU’s Telecom Package consisting of five different Directives (the Framework Directive (2002/21/EC), the Access Directive (2002/19/EC), the Authorisation Directive (2002/20/EC), the Universal Service Directive (2002/22/EC) and the E-Privacy Directive (2002/58/EC)29 is also applicable in Poland.
125.
The European Conference of Postal and Telecommunications Administrations ("CEPT") is responsible for the long-term planning of the frequency spectrum. Its regulations are often referred to in bilateral/trilateral agreements between States.30
126.
At the domestic level, the law governing the telecommunication sector is the Polish Telecommunications Law (the "Telecommunications Law"). The subject of spectrum management is dealt with in Part IV, Chapter 1 and Part VI, Chapter 2 of the Telecommunications Law.31

The NFAT and Frequency Management Plans

127.
Art. 111(1) of the Telecommunications Law envisages the creation of the National Frequency Allocation Table (the "NFAT").32 This is largely based on the ITU and CEPT allocation tables.33 The NFAT lists the allocation of frequencies or frequency bands to particular radiocommunication services and their use. It is issued by the Council of Ministers.34 The NFAT indicates, in relation to each frequency band, the type of radiocommunication service (fixed or mobile) for which the frequency can be used.35
128.
Art. 112 of the Telecommunications Law empowers the Regulator to determine the frequency management plans, and provides detailed information on the use of frequencies. This has to be consistent with the NFAT.36 Any requests to modify the frequency management plans are determined by the Regulator.37

Frequency Reservation

129.

In order to operate a telecommunications network, an operator first needs to obtain a frequency reservation. This is done by obtaining a "general exclusive frequency license" ("frequency reservation"), pursuant to Art. 114 of the Telecommunications Law:

"1. A general exclusive frequency or orbital resources license, hereinafter called ‘a general exclusive frequency license’, shall specify the frequencies or orbital resources which remain, during the period of its validity, at the disposal of the entity to which the license was granted, the frequency rights were transferred or the right to use the frequencies for the purposes of obtaining a radio license was transferred.

2. A general exclusive frequency license shall be granted, modified or withdrawn by the President of UKE."

130.

The frequency reservation is granted under certain requirements that are to be met by the operators (Article 114 of the Telecommunications Law):

"3. A general exclusive frequency license shall be granted to an entity which meets the requirements specified in the Act and if the frequencies covered by the request:

а) [sic] are available,

2) have been allocated in the National Frequency Allocation Table for the requested radiocommunication service and the frequency management plan provides for their use in accordance with the request;

3) may be protected against harmful interference;

4) may be used by radio equipment without causing harmful electromagnetic disturbances or collisions with general exclusive frequency licenses, radio licenses or decisions referred to in Article 114 and Article 114 [sic] that have been granted to other entities;

5) may be used effectively;

6) have been internationally agreed within the scope and form specified in international radiocommunication regulations or agreements to which the Republic of Poland is a party -if there is a possibility of causing harmful interference outside the borders of the Republic of Poland."

131.

Art. 115 of the Telecommunications Law details what shall, or may,38 be provided in a frequency reservation:

"1. A general exclusive frequency license shall specify:

1) an entitled entity to which a general exclusive frequency license is granted, as well as its seat and address;

2) a frequency band or orbital positions covered by the license;

3) the area in which the frequencies may be used;

4) types of radiocommunication services;

5) the time limit within which the entity is entitled to commence frequency usage;

6) conditions for issuing a radio license taking account of the conditions resulting from international agreements to which the Republic of Poland is a party;

7) (deleted);

8) the periods for frequency use;

9) obligations of an entity assumed during a tender, an auction or a contest, if they have been assumed."

Primary and Secondary Services in the NFAT

132.
As per the NFAT, the allocation of frequencies in respect of which frequency reservations are granted can be done for primary services or for secondary services.39 This is in line with the ITU Regulations on the same issue.40 In the NFAT, services which are of a primary nature are written in uppercase, i.e., they are capitalized (e.g.: FIXED, or MOBILE). Services which are of a secondary nature are written in lowercase or normal characters (e.g.: Mobile).41
133.
Radio devices using frequencies for a primary service are protected from harmful interference from the devices using secondary services. Radio devices using frequencies for a secondary nature are not protected from harmful interference from the radio devices using frequencies in a primary service.42 Both primary and secondary services enjoy protection in respect of the same nature of services; the order of priority is established by reference to the date of establishment.43

Fixed, Nomadic and Mobile services

134-140.

[Redacted]

Radio Permits

141.
In order for a telecommunications operator to use radio equipment, a frequency reservation alone is not enough. The operator is required to obtain a radio permit for each specific location of its transmitters, i.e., for each base station.53
142.

The Telecommunications Law refers to such permit as a "radio license". Obtaining a license is required by Art. 143 of the Telecommunications Law:

"1. Subject to Article 144, Article 144a and Article 144b, the use of radio equipment shall require the possession of a radio license, hereinafter called the ‘license’.

2. A license shall be issued by the President UKE, by means of a decision.

3. The procedure for the issuance of a license shall be initiated at the request of an interested entity.

[...]

6. In the case of radio frequencies which have been allocated in the National Frequency Allocation Table or in the frequency management plan, a decision should be made within 6 weeks of the day the request is submitted.

7. The provision of paragraph 6 shall not apply to events requiring international coordination or resulting from international agreements binding for the Republic of Poland in the field of radio frequency or orbital position use."

143.

Art. 148 of the Telecommunications Law lays down the requirements for obtaining a radio license, or a radio permit:

"1. Subject to paragraph 4, a radio license shall be issued to an entity which meets the requirements defined in the Act, and where:

1) the circumstances referred to in Article 123 (7) (1)-(3) do not occur;

2) frequencies included in a request:

a) are available,

b) have been allocated in the National Frequency Allocation Table for a requested radiocommunication service, and a frequency management plan provides for their management in consistency with the request,

c) may be used by radio equipment without causing harmful electromagnetic disturbances or collisions with general exclusive frequency licenses, radio licenses or decisions on the right to use the frequencies that have been granted to other entities,

d) have been internationally agreed within the scope and form specified in international radiocommunication regulations or agreements to which the Republic of Poland is a party, if there is a possibility of causing harmful interference outside the borders of the Republic of Poland,

e) will be used effectively;

3) equipment operating based on that decision may be protected against harmful interference; [...]"

144.

The circumstances in which a radio permit may be refused or withdrawn are listed in Art. 123 (7) of the Telecommunications Law:

"7. During the validity of a general exclusive frequency license, a radio license for the use of radio equipment using the frequencies subject to a license may be refused or withdrawn where one of the following circumstances occur:

1) a risk to national defence or state security, or to public safety and order;

2) a violation of international agreements to which the Republic of Poland is a party;

3) interference of telecommunications equipment or networks operation.

4) failure to meet the conditions referred to in Article 114 (3) (2), unless the legal or actual status used as the basis for granting a license has changed."

D. The frequency reservation of 2003

145.

On 18 July 2003, the Regulator invited telecommunication companies to submit applications for frequency reservations for wireless subscriber access in fixed telecommunication networks, under various bands.

146-148.

[Redacted]

149.
Since the decision upheld Sferia’s request in full, pursuant to the terms of Article 107(4) of the Polish Code of Administrative Procedure, the Regulator provided no reasons.62

E. The 2005 Frequency Reservation amendment. The change of frequency bands

150-157.

[Redacted]

F. The 2005 Frequency Reservation amendment. The change of mode

158-165.

[Redacted]

G. [Redacted]

166-181.

[Redacted]

H. Radio Permits in UMTS technology

182-185.

[Redacted]

I. Radio Permits in HSPA technology

186-191.

[Redacted]

J. Radio Permits in LTE technology

192-196.

[Redacted]

Regarding the 5 permits issued initially

197-200.

[Redacted]

Regarding the applications for 165 permits

201-211.

[Redacted]

K. The tendering procedures for the 900 MHz and 1800 MHz bands

The 2008 tender for the 900 MHz band

212-219.

[Redacted]

[Redacted]

220-228.

[Redacted]

L. [Redacted]

229-235.

[Redacted]

M. [Redacted]

236-260.

[Redacted]

VI. APPLICABLE LEGAL FRAMEWORK

261.

Article 1 of the Treaty ("Definitions") provides in relevant part:

"For the purposes of this Agreement:

1. The term ‘investments’ shall comprise every kind of asset and in particular, though not exclusively:

(a) movable and immovable property as well as any other property rights in respect of every kind of asset;

(b) rights derived from shares, bonds and other kinds of interests in companies;

(c) title to money, goodwill and other assets and to any performance having an economic value;

(d) rights in the field of intellectual property, technical processes and know-how.

These investments shall be made in compliance with the laws and regulations and any written permits that may be required thereunder of the Contracting Party in the territory of which the investment has been made.

A possible change in the form in which the investments have been made does not affect their substance as investments, provided that such a change does not contradict the laws and regulations and written permits of the Contracting Parties.

[...]

3. The term ‘investor’ shall comprise with regard to either Contracting Party:

(a) natural persons having the citizenship of that Contracting Party in accordance with its law;

(b) legal persons constituted or incorporated in compliance with the law of that Contracting Party,

who, in compliance with this Agreement are making investments in the territory of the other Contracting Party."

262.

Article 2 of the Treaty ("Promotion and Protection of Investments") provides:

"1. Each Contracting Party shall promote in its territory the investments by investors of the other Contracting Party.

2. Investments permitted in compliance with the laws and regulations of the Contracting Party in the territory of which they are made, enjoy the protection of the present Agreement.

3. In cases of approved reinvestments, the incomes ensuing therefrom enjoy the same protection as the original investments.

4. The present Agreement shall apply to all investments made in the territory of either Contracting Party by investors of the other Contracting Party after its entry into force."

263.

Article 3 of the BIT ("Treatment of Investments") reads:

"1. Each Contracting Party shall ensure fair and equitable treatment to the investments of investors of the other Contracting Party and shall not impair, by unreasonable or discriminatory measures, the operation, management, maintenance, use, enjoyment or disposal thereof by those investors.

2. More particularly, each Contracting Party shall accord to such investments full security and protection which in any case shall not be less than that accorded to investments of investors of any third State.

3. If a Contracting Party has accorded special advantages to investors of any third State by virtue of agreement establishing custom unions, economic unions or similar institutions, or on the basis of interim agreements leading to such unions or institutions, that Contracting Party shall not be obliged to accord such advantages to investors of the other Contracting Party.

4. The treatment granted under the present Article shall not extend to taxes, fees, charges and to fiscal deductions and exemptions granted by either Contracting Party to investors of third States by virtue of a double taxation agreement or other agreements regarding matters of taxation, or on the basis of reciprocity with a third State."

264.

Article 4 of the Treaty ("Compensation") provides:

"1. Neither Contracting Party shall take any measures depriving, directly or indirectly, investors of the other Contracting Party of their investments unless the following conditions are complied with:

(a) the measures are taken in the public interest and under due process of law;

(b) the measures are not discriminatory,

(c) the measures are accompanied by provision for the payment of prompt, adequate and effective compensation.

2. The amount of this compensation may be estimated according to the laws and regulations of the country where the expropriation is made.

3. The compensation shall amount to the market value of the investments affected immediately before the measures referred to in paragraph (1) above, were taken or became public. The compensation shall be paid without unreasonable delay and be remitted abroad at the request of the investor in a freely convertible currency at the bank rate of exchange on the date of transfer."

265.

Article 7 of the BIT ("Application of other Rules") reads:

"If the provision of law of either Contracting Party or provision of international agreement established between the Contracting Parties contain, at present or hereafter, rules, whether general or specific, entitling investments by investors of the other Contracting Party to a treatment more favourable than that provided for by the present Agreement, such rules shall prevail over the present Agreement."

266.

Article 9 of the Treaty ("Disputes between an Investor and a Contracting Party") provides:

"1. Any dispute between either Contracting Party and the investor of the other Contracting Party concerning expropriation of an investment shall, as far as possible, be settled by the disputing parties in an amicable way.

2. If such disputes cannot be settled within six months from the date either party requested amicable settlement, it shall, upon request of the investor, be submitted to one of the following:

(a) the Arbitration Institute of the Arbitral Tribunal of the Chamber of Commerce in Stockholm;

(b) the Arbitral Tribunal of the International Chamber of Commerce in Paris;

(c) the International Centre for the Settlement of Investment Disputes in case both Contracting Parties have become members of the Convention of 18 March 1965 on the Settlement of Investment Disputes between States and Nationals of Other States."

267.
In the analysis below, the Arbitral Tribunal has not only considered the positions of the Parties as summarized below, but also their numerous detailed arguments made in their written memorials and at the hearing. To the extent that these arguments are not referred to expressly, they must be deemed to be subsumed in the Arbitral Tribunal’s analysis.

VII. JURISDICTION

A. Respondent’s position

1. Objection No. 1: Respondent’s EU law objection

268.

Respondent argues that the Arbitral Tribunal should decline jurisdiction to hear this case based on the following grounds:

i. The Treaty was terminated by virtue of Article 59(1) of the Vienna Convention on the Law of Treaties (the "VCLT"), as a result of the later conclusion by Cyprus and Poland of the 2003 Accession Treaty and the 2007 Treaty of Lisbon;

ii. The Treaty is inapplicable to the present dispute by virtue of Article 30(3) of the VCLT, on account of its incompatibility with Articles 18, 267 and 344 of the Treaty on the Functioning of the European Union (the "TFEU") and with Article 19(1) of the Treaty on the European Union (the "TEU", when referred to jointly with the TFEU, the "EU treaties");

269.
In its SoD, Respondent also argued that the Arbitral Tribunal lacks jurisdiction to hear this case on account of the exclusive jurisdiction of the CJEU to interpret and apply EU law.194 In its submission concerning the Achmea judgment, Respondent however clarified that its EU law jurisdictional objection is based on the two contentions set out at points i. and ii. of paragraph 268 above. The Arbitral Tribunal thus understands that Respondent’s argument based on the exclusive jurisdiction of the CJEU is subsumed in its pleadings covering Articles 59 and 30 of the VCLT.
270.
The Arbitral Tribunal also notes Respondent’s position that, as per the provisions of Article 31(3)(c) of the VCLT, the Arbitral Tribunal should construe the Treaty differently in light of Respondent’s accession to the European Union. In particular, Respondent considers that the rights and expectations of investors from EU Member States set out in the Treaty should be interpreted by taking into account EU law.195 The Arbitral Tribunal considers that, on its face, this argument does not constitute a jurisdictional objection but forms part of Respondent’s arguments on the merits of Claimants’ claims. It shall thus be considered as part of Respondent’s position on the merits of this case.

The Treaty was terminated as a result of the conclusion of the 2003 Accession Treaty

271.
Respondent first argues that the BIT was tacitly terminated by virtue of Article 59(1) of the VCLT as a result of the conclusion between Cyprus and Poland of the 2003 Accession Treaty and the 2007 Treaty of Lisbon.196
272.
Respondent argues that the condition of "identity of subject matter" included in Article 59(1) of the VCLT cannot be construed too narrowly, for instance by confining it to a situation where both the earlier and the later treaty contain "equally formulated provisions".197 In Respondent’s view, such an interpretive effort would blatantly contravene the purpose of Article 59 of the VCLT, which is to provide solutions to conflicts of obligations stemming from different treaties. Respondent adds that its broader interpretation of the identity of subject-matter criterion is in conformity with the drafting history of the VCLT.198
273.
Respondent considers that, in any event, regardless of the Arbitral Tribunal’s understanding of the concept of "identity of subject-matter", this condition is met in the case sub judice. In particular, Respondent takes the view that the provisions of the Treaty and of EU law overlap in respect of the substantive protections offered to investments made in the territory of an EU Member States by an investor from another EU Member State. The EU principles of free movement of capital and the freedom of establishment exhaustively regulate all aspects related to intra-EU investments. Respondent adds that the procedural guarantees included in the Treaty (the arbitration clause) and provided by EU law (access to the EU courts) likewise demonstrate the overlap between the BIT and the EU treaties.199
274.
Respondent’s position under Article 59(1) of the VCLT is that both "it appears from the later treaty or is otherwise established that the parties intended that the matter should be governed by that treaty" (Article 59(1)(a) of the VCLT) and "the provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable of being applied at the same time" (Article 59(1)(b) of the VCLT).
275.
In this respect, Respondent first submits that, by acceding the European Union, Poland and Cyprus expressed the intention to terminate the BIT and replace it with the various protections afforded to EU investments under the Treaty Establishing the European Community ("TEC"), substituted in 2009 by the TFEU. According to Respondent, a cardinal principle of EU law is that pre-accession agreements between Member States cease to be binding from the moment of accession insofar as they are in conflict with EU law. In Respondent’s view, this principle is not dependent on the initiation of formal proceedings for the termination of previous international obligations. Respondent adds that neither the EU treaties nor the acquis communautaire contain any indication that prior agreements between Poland and Cyprus would somehow be protected from the application of the principle of primacy of EU law.200
276.
Second, Respondent takes the position that the Treaty was terminated on account of its incompatibility with the EU treaties ("both of these legal instruments cannot be implied [sic] at the same time"201).
277.
Respondent submits that, as established by the CJEU in the Achmea judgment, Article 9 of the Treaty is incompatible with Articles 344 and 267 of the TFEU. Respondent maintains that the CJEU judgment is an authoritative and binding interpretation of the EU treaties, and produces effects ex tunc. The generality of the terms employed by the CJEU202 also shows that it applies to all intra-EU BIT cases, including the one before the Arbitral Tribunal. Further, Respondent argues that the CJEU’s findings were not premised upon disputes of a particular nature. It is sufficient that arbitral tribunals, instead of the courts of EU Member States, "may be called on to interpret or indeed apply EU law".203 Respondent argues that the CJEU’s findings apply with even more force in a case such as this one, where Claimants are for all intents and purposes requesting that the Arbitral Tribunal interpret and apply EU law, in particular the Telecoms Package and EU law provisions on illegal State aid.204
278.
Respondent takes the view that the Treaty is incompatible with the EU treaties for the additional reason that it infringes the principle of non-discrimination on the grounds of nationality (Article 18 of the TFEU). While EU law permits Member States to implement rules that are more favorable than those included in the TFEU, this is only possible if the more favorable rules are made available to all EU investors, from all Member States, on a non-discriminatory basis. Respondent argues that, by offering benefits exclusively to Polish and Cypriot investors, the Treaty falls foul of the TFEU’s Article 18.205
279.
Respondent further considers that an additional incompatibility exists between Article 75 of the TFEU, which sets out acceptable restrictions to the free movement of capital, and Article 5 of the Treaty, which provides for an unconditional right of free transfer of capital between Cyprus and Poland.206
280.
Finally, Respondent contends that the Treaty represents a hurdle to the realization of the EU’s regulatory goals and could result in the sanctioning of an EU Member State on account of the fulfillment of its obligations under EU law.207

The Treaty is inapplicable by virtue of Article 30(3) of the VCLT

281.
Respondent argues that, if the Arbitral Tribunal were to find that the Treaty was not terminated by application of Article 59(1) of the VCLT, it should nevertheless conclude that it is inapplicable pursuant to Article 30(3) of the VCLT.208
282.
Respondent’s primary contention is that the entire Treaty has been displaced by the later EU treaties and is inapplicable to this case. Respondent maintains that the BIT and the EU treaties relate to the same subject-matter, both as regards the substantive standards of protection and the available mechanisms for dispute resolution. Further, Respondent argues that the BIT and the EU treaties are incompatible and thus cannot be applied at the same time.209
283.
In the alternative to the above, Respondent contends that Article 9 of the Treaty, the arbitration clause, is inapplicable to the present dispute by operation of Article 30(3) of the VCLT. Respondent reiterates that the Achmea judgment has conclusively established that arbitration clauses included in intra-EU BITs such as the present Treaty are incompatible with Articles 344 and 267 of the TFEU. By application of the lex posterior principle, the TFEU must take precedence over Article 9 of the Treaty, which results in this Arbitral Tribunal being deprived of jurisdiction. Respondent adds that, following the issuance of the Achmea judgment, submitting investment disputes that potentially relate to matters covered by EU law to an adjudicatory body outside the EU judicial system amounts to a flagrant violation of the principle of primacy of EU law.210
284.
Respondent further argues that an award upholding jurisdiction in the present arbitration is likely to be set aside at the seat and be denied enforcement on the grounds that it would be contrary to the EU ordre public. Respondent notes that the seat of this arbitration is Paris, France, an EU Member State, and the award will in all likelihood need to be enforced in the territory of the EU. Thus, a judicial review of the award may take place before the French courts on the basis of EU and French law (as lex loci arbitrï). On this basis, Respondent argues that Article 9 of the Treaty and Article 41 of the ICC Arbitration Rules require the Arbitral Tribunal to decline jurisdiction.211

2. Objection No. 2: Claimants are not protected investors under the Treaty

285.
Respondent submits that both Juvel and Bithell have Cypriot nationality on paper only and that the real investors in interest in this case are Polish nationals, Messrs. [Person 13] and [Person 31]. On this basis, Respondent argues that Claimants do not meet the requirements of Article 1(3)(b) of the Treaty that defines the notion of "investor".212
286.

Respondent points out that the Parties are not in dispute with regard to Claimants’ corporate structure.213 [Redacted]214 215 216

287.
The first prong of Respondent’s argument, made in its SoD, is that Claimants do not qualify as "investors" as per Article 1(3)(b) of the Treaty, which requires that the investor have the "effective nationality" of Cyprus. According to Respondent, Claimants have Cypriot nationality on paper only, as they are effectively controlled and owned by Polish nationals.217
288.
In Respondent’s view, domestic investors such as Mr. [Person 13] should be prevented from using foreign entities for the sole purpose of evading the jurisdiction of domestic courts. Access to international treaty arbitration should be limited to genuinely international investments and tribunals should sanction abuse of process and forum shopping. In this respect, Respondent relies on Prof. Weil’s dissenting opinion in Tokios Tokelés v. Ukraine, stating that investor-State arbitration "should not be interpreted so as to allow domestic, national corporations to evade the application of their domestic, national law and the jurisdiction of their domestic, national tribunals".218
289.
Respondent submits that piercing the corporate veil is a permissible and equitable remedy in the present scenario and would reveal that Claimants do not have a genuine Cypriot nationality. Respondent argues that there is case law to support tribunals’ authority to pierce the corporate veil. The Saluka v. Czech Republic tribunal held that "[i]t might in some circumstances be permissible for a tribunal to look behind the corporate structures of companies involved in proceedings before it".219 In a similar vein, the Orascom v. Algeria tribunal ruled that "[t]he doctrine of abuse of rights prohibits the exercise of a right for purposes other than those for which the right was established".220
290.
The second prong of Respondent’s argument, raised in its Rejoinder and in its subsequent oral and written submissions, consists of arguing that the Treaty only protects investors that have "made" the investment at issue, which would require: (i) that the investment be made under the investor’s direction; and (ii) that the investment process be attributable to the particular investor.
291.
In this regard, Respondent argues that an interpretation of Article 1(3)(b) of the Treaty "in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose" (Article 31(1) of the VCLT) demonstrates that the definitions of "investor" and "investment" are intrinsically connected with each other, and that an "investment" needs to be the result of a "qualified investor’s activity".221 Respondent contends that Article 1(3)(b) of the Treaty is not satisfied purely as a result of incorporation in Cyprus ("a legal person constituted or incorporated in compliance with the law of that Contracting Party"), but also requires that the incorporated entity itself make the investment ("legal persons... who, in compliance with this Agreement are making investments in the territory of the other Contracting Party"). In Respondent’s view, the use of the verb "make" ("legal persons... who... are making investments") in Article 1(3)(b) demonstrates that the Treaty requires an investment to be made under the investor’s direction. Claimants’ interpretation that incorporation is sufficient for purposes of Article 1(3)(b) fails to account for this additional language in the Treaty, which, pursuant to the principle of effectiveness, must be ascribed meaning.222
292.
Respondent adds that the context in which Article 1(3)(b) is placed further underscores that incorporation is not sufficient for a finding of jurisdiction ratione personae. Articles 2(1)223, 2(4)224, 3(1)225, 3(2)226, 4(1)227 and 5(1)228 of the BIT, all of which require investors to be "of the other Contracting Party", reinforce the conclusion that investors must be able to provide evidence of effective nationality.229
293.
In Respondent’s view, the object and purpose of the Treaty, as stated in the Preamble, do not support the conclusion that investments made by Polish citizens should be afforded protection under international law. Respondent disputes that the Treaty’s stated goal of intensifying "economic cooperation to the mutual benefit of both states on a long-term basis" and creating "favourable conditions for investments by investors or either Party in the territory of the other Party" supports a pro investor-approach in relation to the issue of jurisdiction. In Respondent’s view, this interpretation is not grounded on the Treaty and on the practice of investment tribunals. Referring inter alia to Saluka v. Czech Republic,230 Azurix v. Argentina231 and Mondev v. United States,232 Respondent argues that case law supports a balanced consideration of the interests of both the investor and the host State. Respondent adds that the Preamble’s reference to the "mutual benefit" of the Contracting Parties underscores the need for reciprocity. In the case of claims brought by Polish citizens in relation to their investments in Poland, there can be no reciprocity and, therefore, the pursuit of such claims runs counter to the object and purpose of the Treaty.233
294.
According to Respondent, Claimants have failed to establish that it was Juvel and Bithell that made the investment at issue in the present case. Instead, Polish citizens, Messrs. [Person 13] and [Person 31], as well as their companies, stood behind the investments in Sferia, which are thus not attributable to Juvel and Bithell.234

3. Objection No. 3: Claimants did not make an investment in the territory of Poland

295.
Respondent’s arguments in support of its objection to jurisdiction ratione materiae are intrinsically connected with its objection to jurisdiction ratione personae. Respondent reiterates that the Treaty requires an investment to be the result of a "qualified investor’s activity".235 In Respondent’s view, Claimants were required, but failed to show that: (i) the investment in Sferia was made at their direction; and (ii) the investment process is attributable to them. As a direct consequence of this failure, Respondent considers that Claimants have likewise failed to demonstrate that they have made a contribution or assumed any risk in connection with their shareholding. On these bases, Respondent concludes that Claimants’ ownership in Sferia was purely passive and does not amount to an "investment" under the Treaty.236
296.
According to Respondent, the plain wording of Article 1(1) of the Treaty ("[t]hese investments shall be made in compliance with the laws and regulations and any written permits that may be required thereunder of the Contracting Party in the territory of which the investment is made") confirms that it is not sufficient for a claimant to possess one of the assets enumerated therein in order to have made a qualifying "investment". It is also necessary that the assets must be the result of an investment process, which requires a commitment of resources. Respondent contends that the ordinary meaning of the term "investment", as per Black’s Law Dictionary, is a process "where capital is committed to make an income from it".237 Investment treaty tribunals likewise widely recognize that the ordinary meaning of the term "investment" entails (i) a contribution of resources; (ii) duration and (iii) the assumption of risk.238
297.
According to Respondent, Claimants have failed to demonstrate that they made an investment in Poland.
298.
First, Respondent takes the view that Claimants have made no contribution of their own.
299.

[Redacted]

300.
Respondent adds that, even if the copies of the bank transfers were to evidence the payment of Claimants’ shares in Sferia, this would be insufficient to meet the jurisdictional threshold. In Respondent’s view, in order for Claimants to demonstrate that they have made a "contribution", it is not sufficient to demonstrate that they relied on a third party’s funds, but must show a financial contribution of their own. Respondent considers that, in cases in which the capital comes from the parent company or from the beneficial owner, the funds can be deemed a "contribution" only if they were obtained by the subsidiary on a commercial basis (for instance, on the basis of a loan agreement) and not if they were "given" or "donated" to the subsidiary. Respondent submits that "the process of investment has its inherent meaning and it cannot be reduced to simple ‘intermediation’ in the actions decided and undertaken by a person or entity on the higher level of the corporate structure", as a "‘middleman’... does not contribute any resources of its own".243 Respondent disputes that it considers the origin of capital to be a decisive criterion when assessing jurisdiction ratione materiae. Nevertheless, in its submission, the Arbitral Tribunal should not ignore this important factual element. Referring to Caratube v. Kazakhstan, Respondent contends that investors must provide evidence of some economic link between the capital and the purported investor so that a tribunal may conclude that an investment is attributable to a certain investor.244
301.
In Respondent’s view, such an economic link is absent in the case before the Arbitral Tribunal, where Polish citizens, Messrs. [Person 13] and [Person 31], as well as their companies, were the driving forces behind the investments, with Claimants only acting as empty shells, or mailbox companies. Respondent maintains that Claimants have not presented any evidence that the funds used for the acquisition of shares in Sferia were put at their disposal following arms’ length transactions.245
302.
Respondent argues that an additional reason why Claimants have not made any contribution is because their ownership of the shares in Sferia was purely passive. Both Juvel and Bithell merely hold the shares for the benefit of Polish nationals, who managed and planned the investment from Poland. Referring to Quiborax v. Bolivia, Respondent argues that "mere ownership of a share is, in and of itself, insufficient to prove a contribution or money or assets" and that "[a]bsent any... control, it is difficult to... show that the investment process was actually made at the direction of Claimant as investor".246 Respondent submits that Claimants did not put forward any evidence that their managing bodies took the decision to invest in Sferia and subsequently direct the investment process. To the contrary, the testimony given by Mr. [Person 13] at the hearing leaves no doubt that it was his personal decision to invest in Sferia.247
303.
Second, Respondent argues that, as a direct consequence of their lack of involvement in the investment, either financial or otherwise, Claimants never assumed any risk associated with the investment in Sferia.248
304.
Finally, Respondent submits that its interpretation of the term "investment", requiring the active involvement of the investor, is also supported by the context in which Article 1(1) of the Treaty is placed and by the object and purpose of the Treaty. Respondent refers in particular to Article 2(4) of the Treaty, which specifies that it applies to "investments made in the territory of either Contracting Party by investors of the other Contracting Party after its entry into force" and to the Preamble’s stated aim to "intensify the economic cooperation to the mutual benefit" of Poland and Cyprus. In Respondent’s view, this underscores that an investment must be actively done and effectively managed from the territory of Cyprus in order to qualify for protection. Respondent adds that the difference in wording between Article 1(3) of the Treaty and other treaties entered into by Poland, such as Article 1(2) of the Poland-Spain BIT likewise supports the proposition that Article 1(3) of the Treaty requires that the investment be effectively managed from the territory of Cyprus.249

4. Objection No. 4: The Arbitral Tribunal only has jurisdiction over expropriation claims

305.

Respondent argues that Article 9 of the Treaty, by its very clear and unambiguous terms, confers jurisdiction upon the Arbitral Tribunal solely over expropriation claims ("dispute between either Contracting Party and the investor of the other Contracting Party concerning expropriation of an investment"). Respondent rebuts Claimants’ contention to the contrary by making the following arguments:

i. the conditions of lawful expropriation, set out in Article 4(1) of the Treaty, cannot serve to extend the Arbitral Tribunal’s jurisdiction which is explicitly outlined in Article 9 of the Treaty;

ii. the Treaty does not contain a general most-favored-nation ("MFN") clause; and

iii. quod non, an MFN clause cannot extend the Arbitral Tribunal’s jurisdiction.

306.
The Arbitral Tribunal will summarize Respondent’s position in respect of each one of these points below.

Article 4(1) of the Treaty cannot extend the Arbitral Tribunal’s jurisdiction beyond expropriation claims

307.
Respondent argues that Claimants are confusing the examination of the various conditions required in order for an expropriation to be lawful with establishing the scope of the Arbitral Tribunal’s jurisdiction under the Treaty. Respondent maintains that there is "a fundamental difference"250 between claiming that an investor was not afforded due process of law as part of a claim for unlawful expropriation, and claiming that the absence of due process is a standalone ground for a claim for breach of the Fair and Equitable Treatment ("FET") standard. Even if one were to accept arguendo Claimants’ argument that the Arbitral Tribunal could not make a finding of unlawful expropriation without first verifying if other treatment standards have been breached, that would not assist Claimants’ case, as the Arbitral Tribunal would remain bound by the provisions of Article 9 of the Treaty and could only reach a finding of expropriation.251
308.
Respondent adds that Claimants have put forward no travaux préparatoires that support their unusual interpretation of Articles 4 and 9 of the Treaty. Their reliance on Seventhsun V. Poland252 and on Poland’s past failure to raise jurisdictional objections is misplaced. In that award, the claimants’ claims were improperly formulated and were manifestly deprived of legal merit, and the arbitral tribunal had no choice but to address them "globally". Respondent points out that, more importantly, that award "does not contain a single word relating to the scope of arbitral tribunal’s jurisdiction under Article 9 of the Treaty".253 Respondent adds that likewise unhelpful is Claimants’ reliance on the ADC v. Hungary award,254 as in that case the investors did not advance any standalone claims for breach of the FET standard, but only an expropriation claim. Consequently, that arbitral tribunal’s conclusion that "it [had] full jurisdiction to hear all of the claims made in this case"255 cannot in any way support Claimants’ interpretation of Articles 4 and 9 of the Treaty.256
309.

Respondent argues that a much more pertinent authority that specifically addresses Claimants’ arguments is Servier v. Poland.257 That award was based upon the France-Poland BIT, which limited tribunals’ jurisdiction to expropriation claims.258 That tribunal concluded:

"521. [...] Although claims for expropriation and related compensation often intersect with applications related to unfair and inequitable treatment, or denial of full protection and security, each claim category remains distinct in nature, with potentially divergent evidentiary requirements, remedies and standards for quantum of compensation.

522. Jurisdiction to vindicate rights related to expropriation cannot create authority to decide claims derived from other rights in a treaty which by its terms grants recourse to arbitration only for limited types of claims [...].

[...]

525. [I]t would constitute an unacceptable stretch of logic to presume that authority to adjudicate requests related to one set of alleged wrongs can ipso facto create arbitral power to decide a different variety of claims."259 [emphasis added]

The Treaty does not contain an MFN clause

310.
Respondent adds that, contrary to Claimants’ submission, neither Article 7, nor Article 3(2) of the Treaty can substantiate Claimants’ proposed expansion of the Arbitral Tribunal’s jurisdiction.
311.
In particular, Respondent contends that Article 7 of the Treaty is not an MFN clause, as it does not have any one of the characteristic features of an MFN clause. The MFN treatment is a relative standard and requires a comparison between two investors in like circumstances, but who are nationals of different States. In contrast, Article 7 of the Treaty only applies in the relationship between Poland and Cyprus ("If the provision of law of either Contracting Party or provision of international agreement established between the Contracting Parties contain..."). Article 7 contains no reference to a third State or an investor from a third State, which makes it impossible to conduct the required comparative test required in the case of an MFN clause.260
312.
Respondent takes exception to Claimants’ argument that all BITs concluded by Poland with third countries fall within the category of "provision[s] of law of [a] Contracting Party", arguing that it would be equivalent to an effective re-writing of clear Treaty language. Article 7 does not refer to "all international agreements concluded by the Contracting Parties", but to "international agreement[s] established between the Contracting Parties", i.e., between Poland and Cyprus. All other international agreements are therefore excluded from the sphere of application of Article 7. Respondent adds that, in any event, the language of Article 7 clearly only refers to substantive standards of investment protection, as opposed to having any jurisdictional function.261
313.
In Respondent’s view, Claimants’ case does not fare better with regard to Article 3(2) of the Treaty ("[e]ach Contracting Party shall accord to such investments full security and protection which in any case shall not be less than that accorded to investments of investors of any third state"). Respondent maintains that this provision is entirely inapposite, as its ambit is limited to the substantive standard of treatment of Full Protection and Security ("FPS"). Referring to the ejusdem generis principle, Respondent argues that Article 3(2) cannot attract matters belonging to a different category of subject: in this case, it cannot be used to extend the Arbitral Tribunal’s jurisdiction ratione materiae. Neither can Article 3(2) be read in conjunction with Article 7 so as to effectively override the clear provisions of Article 9 of the Treaty.262

An MFN clause cannot extend a tribunal’s jurisdiction

314.
Respondent adds that even if, quod non, one were to assume that the Treaty includes an MFN clause, the operation of such a clause could not lead to the extension of the Arbitral Tribunal’s jurisdiction ratione materiae.
315.
Referring to Plama v. Bulgaria263 and Wintershall v. Argentina,264 Respondent submits that, absent clear language to the contrary in the applicable treaty, MFN clauses do not extend to dispute resolution matters. As support for its position, Respondent maintains that the ordinary meaning of the term "treatment" refers to the protection of substantive rights and not to dispute settlement. Referring to Berschader v. Russia,265 Respondent adds that MFN clauses link the word "treatment" with the concept of the "territory" of the Contracting States, which further underscores that MFN clauses only operate in relation to substantive standards of protection.266
316.

Respondent adds that Article 9 of the Treaty, which limits Poland’s consent to arbitrate to expropriation claims, embodies a pre-condition to arbitration ratione voluntatis. Respondent submits that the limits of Poland’s offer to arbitrate cannot be circumvented by an MFN clause. As support for this argument, Respondent refers, inter alia, to Sanum v. Laos,267 where the underlying treaty also limited the tribunal’s jurisdiction to expropriation claims. The Sanum v. Laos tribunal concluded that:268

"To read into that clause a dispute settlement provision to cover all protections under the Treaty when the Treaty itself provides for very limited access to international arbitration would result in a substantial re-write of the Treaty and an extension of the States Parties’ consent to arbitration beyond what may be assumed to have been their intentions, given the limited reach of the Treaty protection and dispute settlement clause."269

317.
Respondent further notes that other investment treaties concluded by Poland provide for a broader jurisdiction of arbitral tribunals. In its view, this further confirms that Article 9 of the BIT reflects a deliberate choice to limit arbitration to disputes relating to expropriation.270
318.
Finally, Respondent argues that the Arbitral Tribunal should decline jurisdiction based on the additional ground that Claimants’ expropriation case does not meet the prima facie test. According to Respondent, even if one were to assume that Claimants’ factual contentions are proven, they would be incapable of constituting a violation of the Treaty as Claimants were unable to demonstrate any expropriatory measure or the substantial deprivation of any right.271

5. [Redacted]

319-322.

[Redacted]

B. Claimants’ position

1. Objection No. 1: The Treaty has not been terminated by virtue of Article 59 (1) VCLT and is not inapplicable by virtue of Article 30(3) VCLT

323.

Claimants argue that Respondent’s jurisdictional objection is without merit for the following reasons:

i. Achmea does not affect the Arbitral Tribunal’s jurisdiction;

ii. The Treaty has not been terminated by virtue of Article 59(1) of the VCLT;

iii. The Treaty has not been partially or entirely rendered inapplicable by virtue of Article 30(3) of the VCLT.

The Achmea judgment does not affect the Arbitral Tribunal’s jurisdiction

324.
First, Claimants argue that, not being a "court or Arbitral Tribunal of a Member State" within the meaning of Article 267 of the TFEU, the Arbitral Tribunal is neither bound by the Achmea judgment, nor is it precluded from coming to its own conclusions regarding the CJEU’s rationale. In Claimants’ view, the Arbitral Tribunal has unfettered discretion in deciding whether or not to adopt the conclusions in Achmea.276
325.
Second, Claimants consider that, even if the Achmea judgment were to be taken into account by the Arbitral Tribunal in its analysis, it would not affect the Arbitral Tribunal’s jurisdiction.
326.
In this regard, Claimants submit that the CJEU considered, but ultimately did not uphold, the arguments raised before it purporting to show a substantive incompatibility between BITs and EU law. The CJEU did not address and, more importantly, did not depart from the Advocate General Wathelet’s opinion, which confirmed that "intra-EU BITs [...] establish rights and obligations which neither reproduce nor contradict the guarantees of the protection of cross-border investments afforded by EU law".277 Claimants maintain the only incompatibilities identified by the CJEU concerned Article 8 of the Netherlands-Slovakia BIT and Articles 267 and 344 of the TFEU.278
327.
Claimants add that the findings of the CJEU in Achmea should be construed narrowly, as they were prompted by the special characteristics of Article 8 of the Netherlands-Slovakia BIT. In Claimants’ view, those characteristics are not present here, thus precluding the application of Achmea. In particular, Claimants argue that, unlike in Achmea, Article 9 of the Treaty does not call for the application of the law of the Contracting State that is a party to the dispute, which means that the Arbitral Tribunal is not called upon to interpret and apply EU law, but only the Treaty and general international law. Municipal law and EU law are only relevant as part of the factual background of this case. Claimants further submit that Article 9 of the Treaty more closely resembles commercial than investment arbitration, as it does not set up an autonomous and self-contained system such as the one in Article 8 of the Netherlands-Slovakia BIT. In particular, Article 9 of the Treaty does not set out the manner of appointment of the Arbitral Tribunal, its functioning, the bases for its decisions and the effects of the award, but only includes the Contracting Parties’ consent to arbitrate disputes with investors and their choice of applicable arbitration rules. Claimants add that, unlike in Achmea, Article 9 of the Treaty does not provide for an ad hoc Arbitral Tribunal that determines its own procedure and chooses its own seat, but for institutional arbitration under the ICC Arbitration Rules or the Stockholm Chamber of Commerce Arbitration Rules, neither of which give the Arbitral Tribunal freedom to determine its seat. Claimants also contend that, unlike in Achmea, awards issued by tribunals under Article 9 of the Treaty are not self-executing and are subject to the control of courts and tribunals of Member States similarly to commercial arbitration awards.279
328.
Third, Claimants argue that Achmea does not affect the arbitrability of the present dispute nor the fact that the arbitration agreement between Claimants and Respondent has already been concluded upon the filing of the Request. In Claimants’ view, the Achmea judgment deals exclusively with a Member State’s commitment to a particular form of dispute resolution, but is silent with regard to arbitration agreements that have already been concluded.280
329.
Fourth, Claimants take the view that Poland should be precluded from relying upon the Achmea judgment following the triggering of proceedings under Article 7 of the TEU concerning the respect for the rule of law. Claimants maintain that a fundamental basis of the CJEU’s reasoning in Achmea was the principle of mutual trust that must exist between Member States. According to Claimants, the applicability of that principle is now in question in the case of Poland, as evidenced by the recent referral for a preliminary ruling from the Irish High Court to the CJEU, inquiring whether certain intra-EU mechanisms that rely upon the principle of mutual trust may continue to apply where a breach of the rule of law principle has been found.281
330.
Finally, Claimants argue that the findings of the CJEU in Achmea are in any event limited to its conclusion that "Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the BIT, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept".282 Claimants maintain that the CJEU did not examine the legal effects of this finding such as, for instance, whether the Treaty has been terminated or has ceased to apply. Claimants consider that Article 344 of the TFEU, which they deem the "cornerstone"283 of the Achmea judgment, is only addressed to Member States. Thus, to the extent that a Member State’s international obligations under an intra-EU BIT and the EU treaties are in conflict, the solution is provided by Article 351 TFEU. This provision requires Member States to take all appropriate steps to eliminate any incompatibilities between their pre-accession international agreements and EU law.284
331.
In Claimants’ view, this can only mean that Member States may be required to take steps in order to ensure the application of the Achmea judgment and this may include the termination of their intra-EU BITs. Claimants maintain that the Achmea judgment did not by itself affect the validity or application of these treaties, as per the summary below.285

The Treaty has not been terminated by virtue of Article 59(1) of the VCLT

332.
Claimants first submit that the VCLT, which exhaustively lists the ways in which a treaty can be terminated, does not recognize any automatic or retroactive termination mechanisms. Pursuant to the VCLT, the parties to a treaty are required to notify each other of their intent to terminate the treaty (Article 65 of the VCLT) and, unless the parties expressly agreed otherwise, the termination of a treaty only produces effects for the future (Article 70 of the VCLT).286
333.
Claimants argue that Poland’s own treaty practice confirms the continued validity and application of the Treaty. The Polish Government has filed with the Polish Parliament a bill authorizing it to terminate the Treaty, but the bill has not been adopted yet. Poland also approached Cyprus with a proposal to terminate the Treaty and eliminate the sunset clause by mutual agreement, but was refused. Following the issuance of the Achmea judgment, subsequent bills to terminate other BITs (with the United Kingdom, Greece, Spain, Austria, Germany, Finland and Bulgaria) were put before the Polish Parliament for future adoption. Claimants consider that, if Respondent’s automatic termination theory had been valid, there would have been no need to place such bills before Parliament or to approach Cyprus in order to terminate the Treaty by mutual agreement.287
334.
Claimants add that an additional reason why the Treaty could not have been terminated pursuant to Article 59(1) of the VCLT is that it relates to a different subject-matter than the 2003 Accession Treaty, the TEU and the TFEU. In Claimants’ view, the free movement of capital and the freedom of establishment do not overlap with the substantive standards of treatment included in the Treaty. In particular, Articles 49-55 and 63-66 of the TFEU do not refer to the FET standard or contain a codification of the customary international law principles governing expropriation. They also do not establish the obligation to pay damages as compensation for the harm suffered by entrepreneurs of any one of the Member States. Claimants argue that this conclusion was reached by numerous international tribunals and was later confirmed by Advocate General Wathelet in his opinion that "intra-EU BITs [...] establish rights and obligations which neither reproduce nor contradict the guarantees of the protection of cross-border investments afforded by EU law".288 This point was not challenged by the CJEU in its judgment.289
335.
Claimants further argue that Respondent has not demonstrated that Poland and Cyprus intended to terminate the Treaty, as would have been required under Article 59(1)(a) of the VCLT. Claimants maintain that Respondent has put forward no evidence of Cyprus’ views on this matter and that no intent to terminate the Treaty can be discerned from the 2003 Accession Treaty, the TEU or the TFEU. None of these latter three treaties even mentions the BIT. There is likewise no reference to the Treaty in the Accession Act,290 which forms an integral part of the 2003 Accession Treaty and identifies specific categories of international agreements that the acceding States (which included Poland and Cyprus) were required to terminate or adjust after their accession to the EU.291

The Treaty has not been rendered inapplicable by virtue of Article 30(3) of the VCLT

336.
Claimants further argue that the Treaty has not become inapplicable by virtue of Article 30(3) of the VCLT, whether for incompatibility with Articles 267 and 344 of the TFEU or otherwise.
337.
In this respect, Claimants reiterate their argument that the Treaty does not relate to the same subject-matter as the TEU or the TFEU.292
338.
Claimants add that the Achmea judgment has confirmed that there is no substantive incompatibility between the substantive standards of protection under the Treaty and EU law. In his opinion, Advocate General Wathelet clearly endorsed the view that no such incompatibility exists. Claimants consider that the CJEU’s silence on this point can only signify its acceptance of the Advocate General’s position.293
339.
In the conclusion of their observations on this jurisdictional objection, Claimants submit that the Arbitral Tribunal must bear in mind that its first duty to the Parties is to issue an award. To the extent that any public policy questions arise out of the Achmea judgment, it is not up to the Arbitral Tribunal to resolve them, but for the courts at the seat of the arbitration. Claimants consider it unlikely that French courts will be persuaded by Respondent’s public policy arguments, since the standard of review that applies under French law in these situations requires that violations of international public policy be flagrant, effective and concrete in order to be actionable.294

2. Objection No. 2: Whether Claimants are protected investors under the Treaty

340.
Claimants argue that they meet the requirements set out in Article 1(3)(b) of the Treaty, which defines the term "investor" as "legal persons constituted or incorporated in compliance with the law of [Cyprus]". In this respect, Claimants note that Juvel was incorporated on 13 November 1999 in Nicosia, Cyprus, while Bithell was incorporated on 22 November 2007, in Limassol, Cyprus.295
341.
Claimants add that their corporate structure, relied upon by Respondent as support for its jurisdictional objection and which is not contested,296 is irrelevant for purposes of an inquiry into this Arbitral Tribunal’s jurisdiction. Claimants argue that the language of Article 1(3)(b) of the BIT is clear and should be applied as such by the Arbitral Tribunal. Even though Respondent proposes that the Arbitral Tribunal depart from the express language of the Treaty, it does not put forward any legal basis for doing so. Claimants consider that their interpretation of Article 1(3)(b) of the Treaty is in accordance with the principles established in Article 31 VCLT. The ordinary meaning of "legal person" is "a body of persons or an entity (as a corporation) considered as having many of the rights and responsibilities of a natural person and especially the capacity to sue and be sued", whereas to "constitute" is to set up, to establish, while to "incorporate" is to "form into a legal corporation".297 Claimants contend that Juvel and Bithell meet these requirements. Further, Claimants add that their interpretation of Article 1(3)(b) is supported by the object and purpose of the Treaty, as expressed in the Preamble. In their view, the language employed therein, confirming the Contracting Parties’ intent to "intensify their economic cooperation to the mutual benefit of both states on a long term [sic] basis" and to "create favorable conditions for investments by investors of either Party in the territory of the other Party", supports a broad scope of protection for investors.298
342.
Claimants add that Poland’s and Cyprus’ treaty practice confirms that the definition of "investor" in Article 1(3)(b) of the Treaty is the result of a deliberate choice to offer broad protection to investors. Claimants submit that 23 out of 60 BITs concluded by Poland contain language imposing stricter conditions for qualifying investors, such as "economic activities", "real economic activities", "substantial economic activities" or "effective economic activities" being carried out by the investor in the host State.299 The Poland-Israel BIT even specifies that a legal person cannot be considered an investor if it is directly or indirectly controlled by investors of the other contracting party.300 These treaties were concluded between 1989 and 1994, on or around the time of the execution of the BIT. Claimants add that Cyprus has concluded only three BITs that contain requirements of carrying out economic activities in the other contracting State or of not being directly or indirectly controlled by investors of the other contracting Party.301 In Claimants’ view, the practice of the Contracting Parties shows that they intentionally chose a more expansive definition of the term "investor" in the Treaty.302
343.
Claimants argue that there is no reason for the Arbitral Tribunal to seek to override the express language of the Treaty and pierce their corporate veil. Referring to ADC v. Hungary,303 KT Asia v. Kazakhstan.304 Saluka v. Czech Republic305 and Tokios Tokelés v. Ukraine,306 Claimants contend that prevailing jurisprudence counsels against reading more into the BIT than can be discerned from its text. In Seventhsun v. Poland,307 a case decided on the basis of the same Treaty as the one applicable in this arbitration, the tribunal found that proof of incorporation in accordance with the laws of Cyprus was sufficient to establish that Claimants were protected investors. In Claimants’ contention, these awards also establish that piercing a claimant’s corporate veil is only possible in extraordinary circumstances, such as the use of a corporate structure in order to perpetrate fraud or other malfeasance. However, Respondent has failed to demonstrate the existence of such exceptional circumstances in the case sub judice. Moreover, Claimants consider that Respondent’s reliance on the dissenting opinion of Prosper Weil in Tokios Tokelés v. Ukraine is unhelpful, as that opinion was not shared by the majority of the tribunal or by subsequent arbitral practice and, in any event, it was based upon a particular understanding of the Convention on the Settlement of Investment Disputes between States and Nationals of other States signed on 18 March 1965 (the "ICSID Convention"), to which Poland is not a party.308
344.

[Redacted]

3. Objection No. 3: Whether Claimants made an investment in the territory of Poland

345.

[Redacted]

346.
Claimants argue that their shares in Sferia represent a protected investment under Article 1(1) b) of the Treaty ("rights derived from shares, bonds and other kinds of interests in companies"). They add that the protection of the Treaty also extends to the assets of the company under Article 1(1)c) ("title to money, goodwill and other assets and to any performance having an economic value"), specifically to the concession and the frequency bands, as the value of these assets directly affects the value of Sferia’s shares. As support for their position, Claimants refer to Seventhsun v. Poland, which was based on the same Treaty and concluded that the ownership of shares and the rights derived therefrom qualified as an investment. According to Claimants, this should be the end of the inquiry under Article 1(1) of the Treaty, as this legal text does not distinguish between direct or indirect investments.314
347.
Claimants add that Respondent’s arguments in favor of its objection to jurisdiction ratione materiae lack merit.
348.
Claimants consider that Respondent merely reformulates its objection to jurisdiction ratione personae when arguing that the Treaty was not intended to offer a forum for claims formulated by nationals of a State against their State of nationality.315
349.
Claimants further submit that, contrary to Respondent’s arguments, the Treaty does not contain any language that requires: (i) an active contribution to the investment; (ii) the effective management of the investment by the investor; (iii) proof of monetary contributions; (iv) proof of the origin of the funds; (v) an arm’s length transaction; (vi) an economic link between the investment and the investor; (vii) a certain duration; (viii) risk; or (ix) an active ownership.316
350.
In this respect, Claimants argue that the language in the Treaty invoked by Respondent as support for its objection does not assist its case. Article 2(4) of the Treaty only provides that it will apply to investments that were "made" in the territory of the other Contracting State, a requirement which Claimants consider they satisfy. Article 3 of the Treaty does not mention or even allude to a requirement of "effective management". Further, Claimants consider that Article 1(2) of the Poland-Spain BIT relied upon by Respondent ("[t]he term ‘investment’ shall comprise every kind of asset, invested by investors...")317 is inapposite, as this text differs from Article 1(1) of the Treaty ("[t]he term ‘investments’ shall comprise every kind of asset and in particular..."). To the extent that an additional requirement of effective management can be discerned in these texts, Claimants consider that this could only be in the case of the Poland-Spain BIT. Further, Claimants argue that the arbitral awards referred to by Respondent do not support its position, as they were either based on the ICSID Convention or on a completely different set of facts. In Standard Chartered Bank v. Tanzania,318 a case based on the ICSID Convention, the claimant had no connection to the investment other than owning the shares in a company that owned the majority of the shares in the company making the investment. In Quiborax v. Bolivia,319 another case based on the ICSID Convention, the claimant was formally the owner of the shares, but had not paid for them, thus making no "contribution". However, in the case before the Arbitral Tribunal, the ICSID Convention is not applicable and Claimants transferred money when acquiring their shares in Sferia.320
351.

[Redacted]

352.
Claimants further submit that, contrary to Respondent’s contention, these transactions were carried out at arms’ length and all transactions involved the acquisition of shares above their nominal price. Claimants dispute that they implicated what Respondent terms as the "[Person 13]’s group". In 2007, when Juvel acquired shares, the shareholders of Sferia included Mr. [Person 32], Plio Limited and Chione Limited. In 2008, Juvel acquired shares from Plio Limited and Chione Limited, while Bithell acquired shares from Mr. [Person 32]. Claimants add that, as owners of shares in Sferia, they hold the shares in their own name and not as nominees or agents of any other person. Claimants contend that, in any event, the shares in Sferia are instruments governed by Polish law, which does not distinguish between legal and beneficial ownership. As a result, the legal owner of the shares is also their beneficial owner.326
353-354.

[Redacted]

4. [Redacted]

355.
Claimants note that Respondent does not dispute that the Arbitral Tribunal has jurisdiction over Juvel’s and Bithell’s claim for compensation for unlawful expropriation under Article 9(1) of the Treaty. However, Claimants also consider that the Arbitral Tribunal has jurisdiction to hear their claims concerning the breach of other Treaty standards by virtue of Article 4(1) of the Treaty, or, alternatively, as a result of the application of the BIT’s MFN clause, included in Articles 3(2) and 7.330
356.
In this respect, Claimants argue that Article 4(1) of the Treaty not only forbids the host State from unlawfully expropriating an investment, but also from taking "any measure[e]" that would result in depriving the investor (directly or indirectly) of its investment under conditions that do not meet the Treaty standards. Claimants consider that, contrary to Respondent’s contention, Article 9 should not be read in isolation from the rest of the Treaty, but in conjunction with Article 4(1) that establishes the criteria for lawful expropriation. Thus, in order to investigate whether the expropriation of their investment took place, the Arbitral Tribunal must first analyze all the measures taken by Respondent, including those actions and omissions that might be seen as encompassed by the FET, non-impairment and promotion and protection standards. Claimants consider that the Arbitral Tribunal will thus have to determine whether these other standards have been breached.331
357.

Claimants contend that their interpretation of Article 4(1) of the Treaty corresponds to that of the Seventhsun v. Poland tribunal, which analyzed the same BIT and found that it had jurisdiction over all claims advanced by the claimant, including for breaches of Articles 3, 4 and 5 of the Treaty. Claimants note that, in that case, Respondent did not argue that Article 9(1) of the Treaty was a narrow jurisdictional clause. Claimants add that a similar conclusion was reached by the tribunal in ADC v. Hungary. The underlying treaty in that case contained identical language to that of Article 9(1) of the Treaty and the tribunal found that it had jurisdiction to hear all the claims raised and that:

"the expropriation of Claimants’ interest constituted a depriving measure under Article 4 of the BIT and was unlawful as: (a) the taking was not in the public interest; (b) it did not comply with due process, in particular, Claimants were denied of ‘fair and equitable treatment’ specified in Article 3(1) of the BIT and Respondent failed to provide ‘full security and protection’ to Claimants’ investment under Article 3(2) of the BIT; (c) the taking was discriminatory and (d) the taking was not accompanied by the payment of just compensation to the expropriated parties."332

358.
Claimants also submit that their interpretation of Article 4 of the Treaty has recently been confirmed by the High Court of Justice of England and Wales when setting aside portions of an interim award on jurisdiction in Griffin v. Poland.333 In that case, the arbitral tribunal had found its jurisdiction to be limited to claims for expropriation and to not extend to claims for violation of the FET standard. The High Court confirmed that the wording of Article 9(1) of the applicable BIT (the Luxembourg-Poland BIT) allowed that tribunal to hear claims for breach of the FET standard because the formula "any other deprivation or restriction of property rights by state measures that lead to consequences similar to expropriation" in the treaty encompassed such breaches. Claimants consider that, while some measures can lead to deprivation, not all amount to an expropriation, which underscores that "deprivation" is a broader notion than "expropriation". Claimants note that Article 4(1) of the Treaty forbids any Contracting Party from taking "any measure depriving, directly or indirectly, investors of the other Contracting Party of their investments", thus applying not only to expropriatory measures per se. On these bases, Claimants submit that, if a violation of the FET standard results in deprivation that leads to consequences similar to expropriation, the Arbitral Tribunal necessarily has jurisdiction to hear claims for breach of the FET standard.334
359.
Claimants consider that Respondent’s reliance on Sender v. Poland335 to advance its position is misplaced, as the analysis of that tribunal was based on completely different treaty language. In contrast to Article 4(1) of the Treaty ("[n]either Contracting Party shall take any measures depriving, directly or indirectly, investors of the other Contracting Party of their investments unless..."), the treaty in the Sender v. Poland case referred to "expropriation or nationalization measures" having "the effect of divesting investors" of their investment and did not require the expropriatory measures to be conducted under due process of law.336
360.
Claimants argue that, should the Arbitral Tribunal be in favor of a narrower interpretation of Articles 4(1) and 9 of the Treaty, it would still have jurisdiction over their claims under Articles 2 and 3 by virtue of the MFN clause included in Articles 3(2) and 7 of the Treaty. In Claimants’ view, these latter provisions should be read in conjunction and entitle them to rely upon other BITs concluded by Poland which contain provisions explicitly giving arbitral tribunals jurisdiction over any dispute between the investor and the host State. The secondary treaty relied upon by Claimants in this particular instance is the Poland-Spain BIT.337
361.

[Redacted]

5. [Redacted]

362-367.

[Redacted]

C. The Arbitral Tribunal’s analysis

1. Objection No. 1: Respondent’s EU law objection

368.
Having carefully considered the Parties’ arguments and the evidence before it, the Arbitral Tribunal has reached the conclusion that Respondent’s jurisdictional objection must be dismissed. The Arbitral Tribunal will explain its finding in more detail in the paragraphs below.
369.

First, the Arbitral Tribunal observes that Article 21 (Applicable Rules of Law) of the ICC Arbitration Rules provides as follows in relevant part:

"1. The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.

2. The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages."

370.

The Arbitral Tribunal notes that (in contrast to the treaty at issue in Achmea) Article 9 of the Treaty ("Disputes between an Investor and a Contracting Party") does not contain any choice of law clause:

"1. Any dispute between either Contracting Party and the investor of the other Contracting Party concerning expropriation of an investment shall, as far as possible, be settled by the disputing parties in an amicable way.

2. If such disputes cannot be settled within six months from the date either party requested amicable settlement, it shall, upon request of the investor, be submitted to one of the following:

(a) the Arbitration Institute of the Arbitral Tribunal of the Chamber of Commerce in Stockholm;

(b) the Arbitral Tribunal of the International Chamber of Commerce in Paris;

(c) the International Centre for the Settlement of Investment Disputes in case both Contracting Parties have become members of the Convention of 18 March 1965 on the Settlement of Investment Disputes between States and Nationals of Other States."

371.
The Arbitral Tribunal notes that there is no agreement between Cyprus and Poland with respect to the law that applies in the case of disputes under Article 9(2) of the Treaty. Likewise, there is no agreement between the Parties to this arbitration with respect to the law that governs this dispute. The Arbitral Tribunal will thus have to make this determination, pursuant to the powers granted to it by Article 21(1) of the ICC Arbitration Rules.
372.
The Arbitral Tribunal, having regard to the circumstances of this case and the fact that it is called upon to determine whether Respondent has breached several provisions in the Treaty, considers that the Treaty and customary international law should apply. The Arbitral Tribunal’s reasoning and decision in this Award are in fact based on the Treaty and applicable principles of customary international law. In reaching its ultimate conclusions, the Arbitral Tribunal has not examined and, more importantly, has not applied principles of EU law.
373.
Second, the Arbitral Tribunal has taken note of the Parties’ arguments in connection with the succession in time between the BIT and the EU treaties, and, in particular, of their submissions concerning the impact of the CJEU’s judgment in Achmea on the question of jurisdiction.
374.
The Arbitral Tribunal observes that the CJEU based the Achmea judgment exclusively on principles of EU law. The CJEU found that Articles 267 and 344 of the TFEU preclude provisions such as Article 8 of the Netherlands-Slovakia BIT. The CJEU did not examine the issues of the intra-EU BITs’ possible termination or inapplicability as a result of the application of rules of international law, in particular the VCLT. These analyses are to be carried out on the basis of the facts of each individual case, by arbitral tribunals seized with claims for breaches of these treaties.
375.
Third, it is not disputed by the Parties that the Treaty has not been terminated by Poland or Cyprus pursuant to Article 13 of the Treaty. The Tribunal is aware that some EU Member States have embarked on the process of modifying and/or terminating their intra-EU BITs, while others have not. For their part, Poland and Cyprus have signed a political declaration (together with other EU Member States) regarding the consequences of the Achmea judgment, but have not yet terminated the Treaty. Instead, they have committed to do so by the end of this year. If anything, the Arbitral Tribunal considers that Poland’s and Cyprus’ actions evidence their understanding that the Treaty is still in force.
376.
Nevertheless, the Arbitral Tribunal will set out below the additional reasons that have prompted it to reach the conclusion that the Treaty has not been terminated or entirely or partially displaced as a result of the application of Articles 59 and 30 of the VCLT.
377.
The Arbitral Tribunal finds that neither Article 59, nor Article 30 of the VCLT applies in this case.
378.
In this respect, the Arbitral Tribunal notes that both Article 59 and Article 30 of the VCLT apply only when the two successive treaties (in this case, the BIT and the EU treaties) relate to the "same subject-matter".
379.
The Parties debate whether this condition is satisfied in connection with the Treaty and the TFEU. Claimants contend that the condition is not fulfilled and that the EU law principles of the free movement of capital and the freedom of establishment do not overlap with the substantive standards of treatment included in the Treaty. Respondent argues that such a definition is too narrow and that, in any event, there is an overlap between the substantive and procedural protections included in the Treaty and the fundamental freedoms provided by EU law.
380.
The Arbitral Tribunal, similarly to the EURAM v. Slovakia tribunal,345 considers that a good faith interpretation of Articles 59 and 30 of the VCLT, in accordance with the ordinary meaning of the terms employed, seen in their context and in light of the object and purpose of the VCLT, does not support the conclusion that two successive treaties deal with the same subject-matter only because they may apply simultaneously to the same set of facts. Two different treaties may apply simultaneously to the same set of facts without them having the same subject-matter. Further, if two treaties have the same goal but approach the achievement of that goal from two different perspectives, the treaties do not have the same subject-matter. The Arbitral Tribunal also considers that, for purposes of an analysis under Articles 59 and 30 of the VCLT, the question of compatibility between two successive treaties only arises if and when it has been determined that the treaties have the same subjectmatter. This Arbitral Tribunal agrees with the EURAM v. Slovakia arbitral tribunal that the subject-matter of a treaty refers to the issues with which its constituent provisions deal, its topic or substance.
381.
The Arbitral Tribunal finds that the Treaty and the EU treaties do not have the same subjectmatter. Moreover, the Arbitral Tribunal sees no reason to depart from consistent case law finding that intra-EU BITs and the EU treaties deal with different subject-matters.
382.
The Arbitral Tribunal considers that the EU treaties’ objective is to create a common market between the Member States, whereas the objective of BITs (including the Treaty) is to provide for specific guarantees in order to encourage the international flows of investment into particular States. Further, the Arbitral Tribunal is not persuaded that the substantive protections afforded to a foreign investor under the Treaty are comparable or of the same nature as those offered under the EU treaties. The protections afforded by BITs under the FET standard are not exhausted by the existing EU law provisions prohibiting discrimination. Further, the Arbitral Tribunal is not persuaded that the Treaty’s FET standard is coextensive with the fundamental EU freedoms or that EU law specifically forbids investor treatment that is not fair and equitable. In any event, Respondent has not carried its burden of making this demonstration. Further, while EU law may condition expropriatory takings to public interest and fair compensation requirements, Respondent has not established that it offers comparable protections to those available under the Treaty in the case of indirect expropriations, or that it applies to "every kind of asset". In any event, the Arbitral Tribunal is not convinced that the relevant provisions of EU law guaranteeing the fundamental freedoms or prohibiting discrimination have the same topic or substance as the substantive protections offered under the Treaty. Their potential simultaneous application to the same set of facts is not, as demonstrated above, conclusive proof that the BIT and the EU treaties have the same subject-matter.
383.
The Arbitral Tribunal also considers it significant that, in rendering the Achmea judgment, the CJEU concluded that the dispute resolution clause included in the Netherlands-Slovakia BIT was incompatible with EU law, but remained silent with respect to the compatibility of that treaty’s substantive protections with other principles of EU law. As pointed out by Claimants, the CJEU did not depart from Advocate General Wathelet’s opinion, pursuant to whom the rights and obligations included in intra-EU BITs are not co-extensive with the protections to cross-border investments under EU law.
384.
Consequently, the Arbitral Tribunal finds that, since the Treaty and the EU treaties do not have the same subject-matter, neither Article 59, nor Article 30 of the VCLT apply to this case. Respondent’s arguments pertaining to the alleged intent of Poland and Cyprus to terminate the BIT, or to the purported incompatibility between the Treaty and its various provisions, and EU law, do not thus require further examination by the Arbitral Tribunal.
385.
The Arbitral Tribunal also observes that Article 13 of the Treaty establishes a clear procedure that Poland and Cyprus must follow if they want to be released from their obligations under the BIT, including their obligations towards investors protected by the Treaty. This procedure has not been completed to date and, in any event, would only produce effects for the future. Article 65 of the VCLT likewise sets up a procedure if a party to a treaty invokes "a ground for impeaching the validity of a treaty, terminating it, withdrawing from it or suspending its operation". In the view of the Arbitral Tribunal, the terms of these provisions clearly establish that, if seeking to be released from their BIT obligations, both Cyprus and Poland must follow specific procedures that are intended to ensure compliance with the principle of legal certainty. In the Tribunal’s view, the rights of third parties that in good faith relied to their detriment upon provisions of the Treaty specifically established for their protection, and commenced arbitral proceedings pursuant to the Treaty’s protections, may not be affected by that Treaty’s premature termination or invalidation.
386.
The Arbitral Tribunal has taken note of the Parties’ arguments with respect to some of the difficulties that may arise if and when this Award is presented for enforcement. It may well be that the enforcement of the present Award will be subject to scrutiny in the territories of the EU Member States, or elsewhere. However, the jurisdiction of this Arbitral Tribunal is not determined by the various national rules governing the enforceability of arbitral awards, but by this Treaty and international law. The Tribunal has concluded, based on the Treaty and international law, that is has jurisdiction to hear this dispute following the issuance of the Achmea judgment, and the Tribunal’s mandate requires it to exercise that jurisdiction. In any event, it is not at all clear to the Tribunal that all the courts in the EU or outside of the EU will approach the issue of enforcement in an identical manner. It will be up to each court at the enforcement stage to draw the necessary consequences from the Achmea judgment and their national laws with respect to the enforceability of this Award.
387.
For the reasons identified above, the Arbitral Tribunal finds that the Treaty remains in force and the arbitration clause included in Article 9 of the Treaty continues to be applicable. Therefore, Respondent’s jurisdictional objection is hereby dismissed.

2. Objection No. 2: Whether Claimants are protected investors under the Treaty

388.

Article 1(3) of the Treaty provides:

3. The term ‘investor’ shall comprise with regard to either Contracting Party:

(a) natural persons having the citizenship of that Contracting Party in accordance with its law;

(b) legal persons constituted or incorporated in compliance with the law of that Contracting Party,

who, in compliance with this Agreement are making investments in the territory of the other Contracting Party." [emphasis added]

389.
The Arbitral Tribunal observes that Juvel was constituted on 13 November 1999 in Cyprus.346 For its part, Bithell was constituted on 22 November 2007 in Cyprus.347 Thus, both Claimants are "legal persons constituted or incorporated in compliance with the law of [Cyprus]", as per Article 1(3)(b) of the Treaty.
390.
Respondent argues that this is not sufficient for establishing jurisdiction ratione personae. Respondent considers that a "formalistic"348 application of the incorporation theory would not be "equitable"349 in this case, and that Claimants should have been required to demonstrate that they have effective Cypriot nationality (i.e., that their siège social is in Cyprus). Respondent is of the view that Claimants have Cypriot nationality on paper only on account of the Polish nationality or the connections to Poland of Claimants’ owners.350
391.
The Arbitral Tribunal considers that Respondent’s interpretation of Article 1(3)(b) is not supported by the Treaty.
392.
First, the Arbitral Tribunal considers that an interpretation of Article 1(3)(b) that is made in good faith and in accordance with the ordinary meaning of the terms employed, as per Article 31(1) of the VCLT, underscores that the Contracting Parties to the Treaty deemed constitution or incorporation to be sufficient for purposes of establishing an investor’s nationality. In this respect, the ordinary meaning of the term to "constitute" is to "set up, establish", while the ordinary meaning of the term to "incorporate" is to "form into a legal corporation".351 It is not disputed by the Parties that Juvel and Bithell have been incorporated in Cyprus in accordance with the laws of that jurisdiction. Article 1(3)(b) contains no additional express requirement concerning an investor’s seat or siège social.
393.
Second, the Arbitral Tribunal is not persuaded that the context of Article 1(3)(b), as well as the object and purpose of the Treaty, support Respondent’s restrictive interpretation of the term "investor". The Arbitral Tribunal finds that Articles 2(1), 2(4), 3(1), 3(2), 4(1) and 5(1) of the BIT, requiring that the investor be "of the other Contracting Party", simply connote the fact that the investor must have the nationality of Cyprus, without more. The Arbitral Tribunal is likewise not convinced that the Preamble of the Treaty, stating the Contracting Parties’ aims to "intensify their economic cooperation in the mutual benefit of both states on a long term [sic] basis" and to "create favourable conditions for investments by investors of either Party in the territory of the other Party" could be read solely in the fashion advocated by Respondent. The Arbitral Tribunal considers that an equally plausible interpretation of the Preamble is that all investors, both those with substantial economic activities in Cyprus or those acting as conduits for entities established in another jurisdiction, intensify economic cooperation between Cyprus and Poland through their investments. More importantly, the Arbitral Tribunal is not persuaded that the broad (and non-specific) objective of encouraging foreign investments could be interpreted so as to effectively override the clear and unambiguous language of Article 1(3)(b), which only requires that legal persons be constituted or incorporated in the host State. Since both Article 1(3)(b) and the Preamble are located in the same Treaty, the Arbitral Tribunal is of the view that Poland and Cyprus must have viewed the two as being perfectly compatible with each other.
394.
Third, the Arbitral Tribunal considers that, if Poland and Cyprus had wished to limit the sphere of protected investors to those with qualified economic activities in the State of incorporation, it would have been possible for them to do so. Indeed, it appears that Poland has concluded no less than 23 such treaties, where it required that investors have "real economic activities", "economic activities", "substantial economic activities" or "effective economic activities" in the host State.352 For its part, Cyprus is a signatory to three such treaties.353 The fact that Poland and Cyprus have not agreed to similar limitations in the Treaty can only signify that they did not wish to thus limit the sphere of protected investors.
395.
The Arbitral Tribunal therefore concludes that there is no support in the Treaty for an interpretation requiring that a protected investor have its siège social in Cyprus. Moreover, while the Arbitral Tribunal agrees with the Saluka v. Czech Republic tribunal that piercing the corporate veil may be permissible in some circumstances, the Arbitral Tribunal is not persuaded that such an equitable remedy would be appropriate in this case. There is nothing exceptional, inherently unreasonable or abusive in the fact that Claimants are owned or controlled by Polish nationals.
396.
The Arbitral Tribunal will now turn to Respondent’s argument, according to which the Treaty requires investors to have made and directed the investment at issue in order to qualify for protection.
397.
The Arbitral Tribunal observes that Respondent’s arguments in support of its objection to jurisdiction ratione personae are inextricably connected with its objection to jurisdiction ratione materiae. Since the Arbitral Tribunal will address these arguments in depth in Section VII.C.3 below dedicated to Respondent’s objection to jurisdiction ratione materiae, the Arbitral Tribunal will not develop those considerations here. For purposes of Respondent’s objection to jurisdiction ratione personae, the Arbitral Tribunal makes the following observations.
398.
The Arbitral Tribunal agrees with Respondent that an interpretation of Article 1(3) of the Treaty made in good faith, in accordance with the ordinary meaning of the terms employed, seen in their context, evidences that the terms "investor" and "investment" are connected ("[t]he term ‘investor’ shall comprise... legal persons... who... are making investments"). As pointed out by Respondent, an interpretation of the term "investor" that is limited to points (a) and (b) in Article 1(3), but fails to take into account the additional language at the end of Article 1(3) ("who, in compliance with this Agreement are making investments in the territory of the other Contracting Party"), falls foul of the principles of treaty interpretation set out in the VCLT.
399.

Nevertheless, the Arbitral Tribunal is not persuaded that the connection between the terms "investor" and "investment" is the one advocated for by Respondent, namely that the investment should be "attributable" to the investor who directs and controls it. The Arbitral Tribunal considers that establishing the extent of this connection requires the interpretation of the verb "to make". The Arbitral Tribunal recalls that the ordinary meaning of the term "to make" an investment includes the act of acquiring an investment, including by purchasing shares in a company.354 Thus, both "active" and "passive" investors (for instance, portfolio investors) "make" investments when purchasing shares in companies. Respondent’s interpretation of the verb "investor" seeks to ascribe it a special meaning and reduced scope without a valid basis to do so. Indeed, the Arbitral Tribunal finds no support in the language of Article 1(3) or in any other text of the Treaty for the interpretation of the verb "investor" advocated by Respondent. The use of phrases such as "investments by investors of the other Contracting Party" (Article 2(1) of the Treaty), "investments made in the territory of either Contracting Party by investors of the other Contracting Party" (Article 2(4)), and "investments of investors of the other Contracting Party" (Articles 3(1), 4(1) and 5(1)) only demonstrate that there must be a connection, a link between the investor and the investment consisting of the investment belonging to the investor. [Redacted].

400.
For these reasons, the Arbitral Tribunal hereby dismisses Respondent’s objection to jurisdiction ratione personae.

3. Objection No. 3: Whether Claimants made an investment in the territory of Poland

401.

Article 1(1) of the Treaty provides:

"1. The term ‘investments’ shall comprise every kind of asset and in particular, though not exclusively:

(a) movable and immovable property as well as any other property rights in respect of every kind of asset;

(b) rights derived from shares, bonds and other kinds of interests in companies;

(c) title to money, goodwill and other assets and to any performance having an economic value;

(d) rights in the field of intellectual property, technical processes and know-how.

These investments shall be made in compliance with the laws and regulations and any written permits that may be required thereunder of the Contracting Party in the territory of which the investment has been made."

402.
The Parties disagree on the correct interpretation to be given to the term "investment" under the Treaty. According to Claimants, Article 1(1) contains the Contracting Parties’ agreed definition of the term "investment" and there is no need to look beyond the clear terms of the Treaty in order to establish the Arbitral Tribunal’s jurisdiction ratione materiae. Respondent counters that Claimants’ definition is incomplete and fails to account for the inherent meaning of the term "investment", which requires proof of a contribution, risk and duration. Respondent adds that a qualifying investment also requires the active involvement of the investor.
403.
The Arbitral Tribunal notes that the Parties’ arguments reflect the two schools of thought on the meaning of the term "investment". The Arbitral Tribunal, after examining the evidence before it, concludes that, whether one adopts the interpretation propounded by Claimants or the one of Respondent, the answer remains the same: Claimants have made a qualifying "investment" and the objection to jurisdiction ratione materiae is dismissed.
404.
At the outset, the Arbitral Tribunal would like to recall that, as established in Section VII.C.2 above, the Treaty does not support Respondent’s contention that an "investor" must have been actively involved in the making of an investment in order to qualify for protection. For the same reasons, the Arbitral Tribunal also concludes that no similar restrictions exist with respect to the sphere of protected investments either.
405.
The Tribunal considers that Article 1(1) of the Treaty reflects the agreement of the Contracting Parties on the definition of the term "investment", i.e., that certain kinds of economic activity constitute an "investment". According to the Contracting Parties’ express agreement memorialized in the Treaty, the rights derived from shares qualify as an "investment" ("The term ‘investments’ shall comprise every kind of asset and in particular, though not exclusively [...] (b) rights derived from shares"). The Arbitral Tribunal notes that the language of Article 1(1) is imperative ("[t]he term ‘investments shall comprise [...]") and un-ambiguous. As an arbitral tribunal constituted on the basis of the Treaty, this Arbitral Tribunal must give effect to the clear and unequivocal agreement of the Contracting Parties.
406.
If the Arbitral Tribunal were to adopt Claimants’ interpretation and find that Article 1(1) of the Treaty contains the complete and binding definition of the term "investment", the Arbitral Tribunal would conclude, after examining the evidence in the record, that both Claimants’ shareholdings in Sferia constitute an "investment" as per Article 1(1)(b) of the Treaty.
407-412.

[Redacted]

413.
The Arbitral Tribunal therefore finds that, if it were to adopt Claimants’ interpretation of the term "investment", Juvel’s and Bithell’s shareholdings in Sferia would satisfy the requirements of Article 1(1)(b) of the Treaty ("The term ‘investments’ shall comprise every kind of asset and in particular, though not exclusively: [...] (b) rights derived from shares, bonds and other kinds of interests in companies").
414.
Claimants also argue that, pursuant to Article 1(1)(c) ("title to money, goodwill and other assets and to any performance having an economic value"), the protection of the Treaty extends to the assets of Sferia, as the value of these assets directly affects the value of Claimants’ shares. The Arbitral Tribunal recalls that the principle of corporate separateness (i.e., the separate legal personality of a company and its shareholders) is a general principle of international law. Claimants, as shareholders in Sferia, are distinct from the company in which they hold shares, and do not have rights over Sferia’s assets. However, and only to the extent that a diminution in the value of Sferia’s assets is reflected in the value of Sferia’s shares, the Treaty can be deemed to indirectly "protect" such assets.
415.
For the reasons identified above, the Arbitral Tribunal concludes that, if it were to adopt the interpretation of the term "investment" put forward by Claimants, it would find that Claimants have made an investment in Poland consisting of their shareholding in Sferia. In this scenario, Respondent’s objection to jurisdiction ratione materiae would be dismissed.
416.
As shown in the paragraphs below, if the Arbitral Tribunal were to endorse Respondent’s interpretation of the term "investment" and find that the term has an objective, inherent meaning, involving contribution, duration and risk, Respondent’s objection to jurisdiction ratione materiae would still be dismissed.
417-419.

[Redacted]

420.
The Arbitral Tribunal considers that, in its post-hearing brief, Respondent has put forward no new grounds that could justify the exclusion from the record of Exhibits C-344 and C-345. Consequently, the Arbitral Tribunal’s decision to grant Claimants leave to file this new evidence, made during the hearing, remains applicable.
421.
The Arbitral Tribunal has taken note of Respondent’s position that the inherent meaning of the term "investment" requires proof of a contribution (consisting of a commitment of resources), a certain duration and an element of risk. The Arbitral Tribunal considers that, under Respondent’s interpretation, the evidence in the record would still support the conclusion that Claimants have made an investment.
422.
In particular, with respect to the issue of a contribution, the Arbitral Tribunal finds that Claimants’ contribution consisted of the purchase price paid in exchange for their shares in Sferia.
423-424.

[Redacted]

425.
Regardless of the date when Bithell paid for its first batch of shares, the Arbitral Tribunal considers that the evidence above shows that Bithell did make a contribution, consisting of the purchase price of its shares.
426.
The Arbitral Tribunal cannot endorse Respondent’s submission, pursuant to which Claimants must be able to show that they used their own funds to purchase the shares in Sferia in order to demonstrate that they made a contribution. The Arbitral Tribunal considers that no such requirement can be found anywhere in the language of the Treaty. Moreover, arbitral case law has been consistent in its conclusion that, absent specific language in the underlying treaty, the origin of the funds employed by an investor for making an investment (i.e., the investor’s own funds, funds from affiliates, funds from financing entities) is irrelevant.
427.
The Arbitral Tribunal further finds that Claimants’ investment entailed a certain duration: in the case of Juvel, since December 2006, and in the case of Bithell, since April 2008. It also involved an element of risk: by investing funds in a company, Claimants assumed the risk that that company would not be successful and that they would incur losses.
428.
For these reasons, the Arbitral Tribunal concludes that, if it were to endorse Respondent’s interpretation of the term "investment", Respondent’s objection to jurisdiction ratione materiae would still be dismissed.
429.
In conclusion, regardless of whether the Arbitral Tribunal adopts the interpretation of the term "investment" pur forward by Claimants or the one put forward by Respondent, the result remains the same: Claimants have made a qualifying "investment" and the objection to jurisdiction ratione materiae is dismissed.

4. Objection No. 4: Whether the Arbitral Tribunal only has jurisdiction over expropriation claims

430.
The Arbitral Tribunal, after having carefully examined the Parties’ submissions and the evidence in the record, has concluded that its jurisdiction is limited to hearing claims for expropriation. The Arbitral Tribunal will explain its conclusion in more detail in the paragraphs below.
431.

First, the Arbitral Tribunal notes that Article 9 of the Treaty, which includes Respondent’s consent to arbitration, provides in very clear and unambiguous terms that an investor may bring before an arbitral tribunal only claims concerning the expropriation of its investment:

"1. Any dispute between either Contracting Party and the investor of the other Contracting Party concerning expropriation of an investment shall, as far as possible, be settled by the disputing parties in an amicable way.

2. If such disputes cannot be settled within six months from the date either party requested amicable settlement, it shall, upon request of the investor, be submitted to one of the following:

(a) the Arbitration Institute of the Arbitral Tribunal of the Chamber of Commerce in Stockholm;

(b) the Arbitral Tribunal of the International Chamber of Commerce in Paris;

(c) the International Centre for the Settlement of Investment Disputes in case both Contracting Parties have become members of the Convention of 18 March 1965 on the Settlement of Investment Disputes between States and Nationals of Other States." [emphasis added]

432.
The Arbitral Tribunal considers that the interpretation of the terms "dispute... concerning expropriation of an investment" in Article 9(1) and "such dispute" in Article 9(2) of the Treaty, made in "good faith" and in accordance with the "ordinary meaning" of the terms employed (Article 31(1) of the VCLT), evidences that the Contracting Parties to the Treaty desired to limit the categories of disputes that may be brought to international arbitration to claims for expropriation. In particular, the Arbitral Tribunal notes the use of the term "concerning", meaning "regarding", "about",373 as opposed to potentially broader language, such as "involving" or "including". In the Arbitral Tribunal’s view, the Contracting Parties’ choice of wording cannot be deemed accidental, but shows their intent to precisely identify specific categories of disputes that may be brought to international arbitration. Further, the use of the terms "such disputes" in paragraph (2) of Article 9 is a direct reference to the same category of disputes as that mentioned in paragraph (1): "concerning expropriation of an investment".
433.
The Arbitral Tribunal is of the view that this interpretation is also supported by the context in which Article 9 is placed, as well as by the object and purpose of the Treaty.
434.

In this respect, the Arbitral Tribunal has taken note of Claimants’ argument, pursuant to which Article 9 must be read in conjunction with Article 4 in the Treaty, which they deem to be broader than the expropriation standard. For ease of reference, the Arbitral Tribunal renders below the text of Article 4:

"1. Neither Contracting Party shall take any measures depriving, directly or indirectly, investors of the other Contracting Party of their investments unless the following conditions are complied with:

(a) the measures are taken in the public interest and under due process of law;

(b) the measures are not discriminatory;

(c) the measures are accompanied by provision for the payment of prompt, adequate and effective compensation.

2. The amount of this compensation may be estimated according to the laws and regulations of the country where the expropriation is made.

3. The compensation shall amount to the market value of the investments affected immediately before the measures referred to in paragraph (1) above, were taken or became public. The compensation shall be paid without unreasonable delay and be remitted abroad at the request of the investor in a freely convertible currency at the bank rate of exchange on the date of transfer."

435.
The Arbitral Tribunal does not consider it necessary to take any view on Claimants’ argument pursuant to which Article 4 of the Treaty is broader than standard expropriation provisions in bilateral investment treaties. That may well be the case. However, such a conclusion would have no impact on the Arbitral Tribunal’s jurisdiction. Indeed, Article 9 of the Treaty does not provide that "[a]ny dispute between either Contracting Party and the investor of the other Contracting Party concerning the breach of Article 4" will be resolved by arbitration. Article 9 of the Treaty is clearly circumscribed to disputes concerning the "expropriation" of investments. In other words, when interpreting Article 9 of the Treaty in its context, and thus correlating it with Article 4, the result of the analysis would be the same regardless of the scope of Article 4: only disputes concerning expropriation would be arbitrable.
436.
The Arbitral Tribunal has taken note of Claimants’ argument, pursuant to which, in order to determine whether an expropriation has taken place, the Arbitral Tribunal must first analyze all the measures taken by Respondent, including those measures that fall under the sphere of application of other Treaty standards. According to Claimants, the Arbitral Tribunal has to establish whether these other Treaty standards have been breached before ruling on the claim for expropriation. The Arbitral Tribunal disagrees. The facts underpinning a claim for breach of a Treaty standard are conceptually distinct from the standard itself. For instance, an absence of due process in administrative proceedings can be a relevant fact for both a claim for expropriation and a claim for breach of the FET standard. Nevertheless, the two Treaty standards remain distinct and require frameworks of analysis that are different. A notable difference in this respect is that the expropriation standard requires proof of a "taking", whereas the standards of FET, FPS, non-impairment and others, contain no such requirement. Consequently, even if the Arbitral Tribunal were to examine in the context of the claim for expropriation the same set of facts that Claimants have put forward as bases for their claims based on the FPS, FET or other standards, the Arbitral Tribunal will nevertheless only follow the framework of analysis for the expropriation claim, and not those pertaining to other Treaty standards. If the Arbitral Tribunal were to do otherwise, this would amount to a failure to apply the applicable law.
437.

As noted by the Servier v. Poland tribunal:

"521. Although claims for expropriation and related compensation often intersect with applications related to unfair and inequitable treatment, or denial of full protection and security, each claim category remains distinct in nature, with potentially divergent evidentiary requirements, remedies and standards for quantum of compensation.

522. Jurisdiction to vindicate rights related to expropriation cannot create authority to decide claims derived from other rights in a treaty which by its terms grants recourse to arbitration only for limited types of claims [...].

[...]

525. [I]t would constitute an unacceptable stretch of logic to presume that authority to adjudicate requests related to one set of alleged wrongs can ipso facto create arbitral power to decide a different variety of claims."374

438.
The Arbitral Tribunal also considers that, even if Claimants’ argument above were correct (quod non), ultimately, this would have no bearing on the Arbitral Tribunal’s jurisdiction. Indeed, while the Arbitral Tribunal could look into other Treaty standards for purposes of its analysis, it could make no rulings that those standards were breached. The Arbitral Tribunal would remain bound by the clear and unequivocal provisions of Article 9 of the Treaty and could only determine whether or not Respondent expropriated Claimants’ investment.
439.
The Arbitral Tribunal has taken note of the case law invoked by Claimants as support for their position. The Arbitral Tribunal recalls in this context that there is no principle of binding precedent in international investment arbitration and that the Arbitral Tribunal may come to its own conclusions regarding the interpretation of the Treaty. Nevertheless, for the sake of completeness, the Arbitral Tribunal observes that the Seventhsun v. Poland award cited by Claimants, which is based on the same underlying Treaty, never examined the issue of the scope of application of Article 9. Further, the claimant in ADC v. Hungary only brought a claim for expropriation. As a result, that Arbitral Tribunal’s finding that it had jurisdiction to hear all the claims before it is not relevant in the case sub judice. Finally, the Arbitral Tribunal observes that the arbitration clause in Griffin v. Poland was significantly broader than Article 9 of the Treaty: "disputes relating to expropriation, nationalisation or any other similar measures affecting investments, and notably the transfer of an investment into public property, placing it under public supervision as well as any other deprivation or restriction of property rights by state measures that lead to consequences similar to expropriation".375 Consequently, if in the Griffin v. Poland case, the claimant could justify that Arbitral Tribunal’s jurisdiction over claims other than expropriation based on the fact that they concerned the "deprivation or restriction of property rights", the much more limited scope of Article 9 of the Treaty ("[a]ny dispute... concerning expropriation of an investment") makes no such allowances.
440.
Further, the Arbitral Tribunal is persuaded that the above interpretation of Article 9 of the Treaty is also consistent with the object and purpose of this legal instrument, as set out in the Preamble. The Arbitral Tribunal refers in particular to the third recital in the Preamble, pursuant to which the Contracting Parties "[recognize] that the promotion and protection of investments, on the basis of the present Agreement, will promote initiatives in this field" [emphasis added]. In other words, the Contracting Parties to the Treaty perceived that any benefits that could be derived from the BIT were intimately connected with the respect for the precise Treaty terms agreed upon, including the terms of Article 9.
441.
For all the reasons indicated above, the Arbitral Tribunal concludes that Article 9 of the Treaty only grants it jurisdiction over claims for expropriation.
442.
The Arbitral Tribunal further finds that the limited scope of the Contracting Parties’ consent to arbitration in Article 9 of the Treaty cannot be extended by application of Articles 7 and 3(2).
443.
At the outset, the Arbitral Tribunal aligns itself with the Plama v. Bulgaria, Wintershall v. Argentina and Sanum v. Laos tribunals, and finds that, absent clear language to the contrary, an MFN clause cannot be used to extend the consent to arbitration of the contracting parties to a bilateral investment treaty. The Arbitral Tribunal need not examine this issue in any more detail however, as the Treaty contains no MFN clause that could potentially be invoked in matters of dispute resolution.
444.

In particular, contrary to Claimants’ submission, the Arbitral Tribunal finds that Article 7 of the Treaty does not contain an MFN clause. The Arbitral Tribunal recalls that Article 7 provides as follows:

"If the provision of law of either Contracting Party or provision of international agreement established between the Contracting Parties contain, at present or hereafter, rules, whether general or specific, entitling investments by investors of the other Contracting Party to a treatment more favourable than that provided for by the present Agreement, such rules shall prevail over the present Agreement." [emphasis added]

445.
The Arbitral Tribunal considers that there is nothing in the language of Article 7 that could suggest this is an MFN clause. By definition, an MFN clause presupposes that one of the contracting parties to a treaty provides better treatment to investors from a third State, and requires the contracting party in question to extend that superior treatment to similarly situated investors from the other contracting party to the treaty. Article 7 contains no reference to investors from a third State or to a third State. Article 7 essentially stipulates that, if better treatment than the one provided for in the Treaty is made available to investors from one of the Contracting Parties through either (i) the internal law of the other Contracting Party or through (ii) a different international agreement concluded between the same Contracting Parties, then these rules should prevail over the Treaty. In other words, Article 7 lacks an essential element that is indispensable to any MFN clause: the comparator that is the third-State investor. Moreover, as pointed out by Respondent, bilateral investment treaties concluded by either Contracting Party with third States are excluded from the sphere of application of Article 7, which only refers to treaties concluded between Cyprus and Poland.
446.
The Arbitral Tribunal has taken note of Claimants’ submission (disputed by Respondent) that the Polish legal system is a monist system of law and that international agreements ratified by Poland become part of the law of the land upon ratification. The Arbitral Tribunal need not take any view on this matter for it to conclude that it does not assist Claimants’ case. Regardless of whether other bilateral investment treaties signed by Poland with third States become part of the internal law of Poland through ratification ("the law of either Contracting Party"), the Arbitral Tribunal considers that the very premise of Article 7 is not met in the case of such agreements: namely, such BITs do not provide investors from Cyprus ("investors of the other Contracting Party") better treatment than the one offered under the Treaty.
447.
For these reasons, the Arbitral Tribunal finds that Article 7 of the Treaty is not an MFN clause.
448.

Turning now to Article 3(2) of the Treaty, the Arbitral Tribunal holds that its scope of application is expressly limited to "full security and protection" and that, pursuant to the ejusdem generis principle, Article 3(2) cannot be extended so as to cover dispute resolution. Article 3 reads in relevant part:

"1. Each Contracting Party shall ensure fair and equitable treatment to the investments of investors of the other Contracting Party and shall not impair, by unreasonable or discriminatory measures, the operation, management, maintenance, use, enjoyment or disposal thereof by those investors.

2. More particularly, each Contracting Party shall accord to such investments full security and protection which in any case shall not be less than that accorded to investments of investors of any third State." [emphasis added]

449.

In this respect, the Arbitral Tribunal refers to Article 9(1) of the ILC 1978 Draft Articles on Most-Favoured-Nation Clauses:

"Article 9. Scope of rights under a most-favoured-nation clause

1. Under a most-favoured-nation clause the beneficiary State acquires, for itself or for the benefit of persons or things in a determined relationship with it, only those rights which fall within the limits of the subject-matter of the clause."376

450.

The Arbitral Tribunal also considers it useful to render below the commentary that accompanies Article 9(1) above:

"(1) The rule which is sometimes referred to as the ejusdem generis rule is generally recognized and affirmed by the jurisprudence of international tribunals and national courts and by diplomatic practice. The essence of the rule has been explained in the following graphic way:

Suppose that a most-favoured-nation clause in a commercial treaty between State A and State B entitled State A to claim from State B the treatment which State B gives to any other State, that would not entitle State A to claim from State B the extradition of an alleged criminal on the ground that State B has agreed to extradite alleged criminals of the same kind to State C, or voluntarily does so. The reason, which seems to rest on the common intention of the parties, is that the clause can only operate in regard to the subject-matter which the two States had in mind when they inserted the clause in the treaty." [internal citations omitted]377

451.

In other words, Article 3(2) of the Treaty will only confer upon Cypriot investors those rights that fall within the limits of the subject-matter of Article 3(2): the rights encompassed in the "full security and protection" standard. The Arbitral Tribunal could not interpret Article 3(2) so as to refer to any other subject-matter, be it a different Treaty standard or, even more inappropriately, to dispute resolution, without impermissibly altering the balance of rights and obligations under the Treaty. In the words of the Sanum v. Laos Arbitral Tribunal:

"[T]o read into the clause a dispute settlement provision to cover all protections under the Treaty when the Treaty itself provides for very limited access to international arbitration would result in a substantial re-write of the Treaty and an extension of the States Parties’ consent to arbitration beyond what may be assumed to have been their intention, given the limited reach of the Treaty protection and dispute settlement clauses."378

452.
Having found that Article 7 of the Treaty does not contain an MFN clause and that Article 3(2) does not refer to any other subject-matter than the "full security and protection" standard, the Arbitral Tribunal also concludes that, by reading these provisions in conjunction with each other, the Contracting Parties’ limited consent to arbitration included in Article 9 of the Treaty cannot be extended to cover any other disputes than those concerning expropriation.
453.
For all these reasons, the Arbitral Tribunal concludes that, pursuant to Article 9 of the Treaty, its jurisdiction is limited to hearing Claimants’ expropriation claim, and therefore accepts Respondent’s fourth jurisdictional objection.
454.
The Tribunal has taken note of Respondent’s contention, pursuant to which Claimants’ expropriation claim should be dismissed at the outset on account of not meeting the prima facie requirements of a claim for expropriation under Article 4 of the Treaty. The Tribunal notes that Respondent has not elaborated upon this objection. In any event, as the Tribunal is of the view that Claimants’ expropriation claim is without merit (see, Section XIII.