A Russian government representative signed the Treaty but the draft law that would have ratified the Treaty was never passed. Under Article 45(1) of the Treaty, Russia undertook to apply the Treaty provisionally “to the extent that” such provisional application was “not inconsistent with” Russia's Constitution, laws and regulations.
(1) do I, as the judge assigned to hear Russia's application, have the jurisdiction to change a prior evidentiary ruling by a judge who will no longer be hearing the application; and, if so, in what circumstances may I make a different ruling? and
(2) should new evidence be admitted in the circumstances?1
(1) that I have the authority to reconsider the prior interlocutory ruling of a judge concerning the admissibility of evidence in a matter for which I am the hearing judge; and
(2) a party to a challenge of the jurisdiction of an arbitral tribunal under Articles 16 and 34 of the Model Law may not file fresh evidence as of right but must obtain leave to do so by providing a reasonable explanation for why new evidence is necessary, including why that evidence was not, or could not have been, put before the tribunal in the first place.
Under the direction of the Tribunal, the parties spent over 16 months engaged in the process of pleading, evidence gathering, disclosure and trial of the preliminary issues raised by Russia's jurisdictional objections:
(a) the Tribunal set out the procedural timetable for the arbitration and the procedure for disclosure and submission of pleadings and evidence;
(b) Russia filed its Memorial on jurisdiction in October 2014. This Memorial included 77 factual exhibits, 111 legal authorities and an expert report from Professor Asoskov (with a further 70 exhibits);
(c) Luxtona filed its Counter-Memorial on jurisdiction in February 2015. Luxtona's Counter-Memorial included 43 factual exhibits, 62 legal authorities, an expert report from Professor Willems (with a further seven exhibits), an expert report from Professor Stephan (with a further 24 exhibits) and a witness statement from Mr. Misamore;
(d) in March 2015, the parties submitted requests that the Tribunal order the production of documents;
(e) in April 2015, the Tribunal issued its decision on the document requests, granting certain requests and denying others;
(f) in May 2015, the parties confirmed their availability in January 2016 for the hearing on jurisdiction;
(g) in June 2015, Russia filed its Reply on Jurisdiction. Russia's Reply included 94 factual exhibits, 143 legal authorities, another expert report from Professor Asoskov (with a further 65 exhibits) and an expert report from Professor Tjittes (with an additional 22 exhibits);
(h) Luxtona filed its Rejoinder on Jurisdiction in October 2015. Luxtona's Rejoinder included 29 factual exhibits, 28 legal authorities, an expert report from Dr. Epstein (with a further five exhibits), a second expert report from Professor Willems (with a further 13 exhibits), a second expert report from Professor Stephan (with nine further exhibits) and a second witness statement from Mr. Misamore;
(i) in total, Russia and Luxtona filed approximately 700 exhibits, eight expert reports, two fact witness statements and approximately 530 pages of submissions;
(j) the hearing was held over five days in January 2016 in London, United Kingdom. There were five witnesses, all of whom testified before the Tribunal: Misamore, a fact witness; and four expert witnesses (Stephan, Willems, Asoskov and Tjittes);
(k) Luxtona was represented by five lawyers associated with the London office of Gibson, Dunn & Crutcher LLP. Russia was represented by eight lawyers associated with the London office of Debevoise & Plimpton LLP. These counsel had great expertise and experience in international arbitration;
(l) there were three objections raised by Russia to the Tribunal's jurisdiction: (1) the provisional application of the arbitration provision of the Treaty is inconsistent with Russian law; (2) Russia is entitled to deny Luxtona the benefits of the Treaty; and (3) Luxtona did not make a qualifying “investment” under the Treaty;
(m) on March 22, 2017, the Tribunal issued a 146 page interim award in which the Tribunal unanimously dismissed Russia's first and second objections. The Tribunal deferred its decision on the third objection; and
(n) although costs were not finally determined (due to the deferral of the Tribunal's decision on the third issue), I was advised that the cost submissions were in the order of approximately $7 million for Luxtona and approximately $8 million for Russia.
(1) documents that existed before the arbitration that relate factual findings made by the Tribunal based on the record that Russia presented;
(2) documents that Russia withheld from the Tribunal on grounds of privilege/state secrecy;
(3) documents that Russia attempted to file late in the arbitration in which the Tribunal deemed inadmissible;
(4) documents related to issues in separate proceedings, not the subject of the arbitration;
(5) pre-existing fact documents and legal authorities that Russia had access to and chose not to raise during the arbitration to support its argument; and
(6) new fact documents and legal authorities that Russia obtained after the arbitration.
(1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.
(3) The arbitral tribunal may rule on a plea referred to in paragraph (2) of this article either as a preliminary question or in an award on the merits. If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request, within thirty days after having received notice of that ruling, the court specified in article 6 to decide the matter, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.
(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article.
(2) An arbitral award may be set aside by the court specified in Article 6 only if:
(a) the party making the application furnishes proof that:
(i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this State; or
(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside.
The starting point for consideration of Articles 16 and 34 of the Model Law in Canada is the decision of the Court of Appeal for Ontario in United Mexican States v. Cargill Inc., 2011 ONCA 622. The issue before the court was the standard of review by a court on an application to challenge jurisdiction under Article 34(2) of the Model Law.
In the course of its analysis, the Court of Appeal considered the decision of the UK Supreme Court in Dhalla Real Estate and Tourism Holding Company v. Pakistan,  UKSC 46, which concerned s. 103(2)(b) of the 1996 Act/Article V1(a) of the New York Convention. The Supreme Court held that when the issue is initial consent to arbitration, the court must determine for itself whether or not the objecting party actually consented. The objecting party has the burden of proof, which it may seek to discharge as it sees fit. In making its determination, the court may have regard to the reasoning and findings of the alleged arbitral tribunal, if they are helpful, but it is neither bound nor restricted by them. The Court of Appeal observed that the UK Supreme Court's approach was to address the issue de novo but concluded this approach was “a variant of applying the correctness standard.”
(1) in hearing an application to set aside an arbitral decision for lack of jurisdiction the court is performing a review of the decision;
(2) the onus is on the party challenging the award;
(3) the court must be satisfied that the challenge raises a “true question of jurisdiction”; but once that criterion is satisfied,
(4) the tribunal has to be correct in its assumption of jurisdiction and it is up to the reviewing court to determine, without deference, whether it was.
In a more recent decision, however, the Singapore High Court concluded that new evidence should not be admitted on the review of a tribunal's jurisdiction without leave, which should only be granted on the basis of a Palmer-like test. Leow J. held in Government of the Lao People's Democratic Republic v. Sanum Investment Ltd.,  SGHC 15, that a party does not have a full, unconditional power to adduce fresh evidence at will on a challenge brought to a tribunal's jurisdiction. He applied a “modified” approach to the test for fresh evidence on appeal:
(1) the party seeking to admit the evidence must demonstrate sufficiently strong reasons why the evidence was not adduced at the arbitration hearing;
(2) the evidence if admitted would probably have an important influence on the result; and
(3) the evidence is apparently credible, though it need not be incontrovertible.
On appeal, the Court of Appeal of the Republic of Singapore ( SGCA 57, at para. 27) held that the standard test in Ladd v. Marshall applied (Ladd v. Marshall is the UK equivalent, adopted in Singapore, to Canada's R. v. Palmer). That test is: 1) the evidence could not have been obtained using reasonable diligence; 2) the evidence would probably have an important influence on the case; and 3) the evidence must be apparently credible.
1) the evidence could not have been obtained using reasonable diligence;
2) the evidence would probably have an important influence on the case;
3) the evidence must be apparently credible; and
4) the evidence must be such that if believed it could reasonably, when taken with the other evidence adduced at the hearing, be expected to have affected the result.
In my Endorsement in this matter of December 13, 2019, I stated:
(c) in a footnote on p. 2 that, with respect to the R. v. Palmer test for the introduction of new evidence, that the applicant, The Russia Federation “concedes that it would not meet this test or any variant of the test”; and
(d) in para. 70, that The Russia Federation had “not attempted to justify admission of its fresh evidence under any of” the four requirements under the test in R. v. Palmer, and, as a result, “Russia's new evidence is not admissible in its application to review the correctness of the arbitral tribunal's award on jurisdiction.”
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