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CME v. Czech Republic

Type of decisionPartial Award
Date of decision13 September 2001
Wolfgang Kühn (President)
Jaroslav Hándl
Stephen M. Schwebel
Legal instrumentBIT between Czech Republic and Netherlands (1991)
Related decision(s)Final Award, 14 March 2003
Further information

Statements from this decision

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All treaties of a given country are of equal rank; where more than one treaty’s standards of protection apply to a single case, the treaties influence each other only on the issues of loss and quantum
As long as the IIT does not require an exhaustion of local remedies, a tribunal’s jurisdiction can be established even if the state has not treated the investment finally including through judicial process
In case restitution in kind is not possible, the respondent must pay a sum corresponding to the fair market value of the investment before the breach of treaty occurred
A breach of an IIT obligates a state to make full reparations for the damage caused by the breach
For protection by an IIT, it does not matter whether the investor made the investment or acquired a predecessor’s investment
Unfair bargaining practises by the state party can constitute a measure violating the treaty
Omissions can constitute an expropriation
It derives from the sovereignty of a state that it may amend or alter the basis for an investment, subject to acquired rights and treaty obligations
The motivation of a state agency concerning a deprivation is of no relevance regarding the characterization of the measure as expropriatory, as long as it is not a regulatory measure for the general welfare
Definition of indirect expropriation
The deprivation of legal protection can constitute an expropriatory act even if no loss occurs as a direct consequence
A violation of fair and equitable treatment cannot be justified by the fact that the same treatment was also accorded to domestic investments
The legitimate expectations of the investor can be a relevant factor within the standard of fair and equitable treatment
The obligation of full protection and security may constitute an obligation of legal protection of the investment
As long as the treaty does not require an exhaustion of local remedies, jurisdiction of a tribunal can be established even if the state has not treated the investment finally through judicial process
The existence of a parallel commercial dispute between the parties does not impact at tribunal’s jurisdiction over treaty claims, even if the tribunal’s award might have impact on the quantum of damages adjudicated in both proceedings
In case the claimant and its shareholder pursue two parallel treaty proceedings and thus increase costs and risks, it may be justified to require a partial refund of legal fees by the loosing state party
A state is not absolved of its international responsibility because of the participation of other tortfeasors
Causation requires that the damage or disadvantage deriving from the state measure is foreseeable and occurs in a normal sequence of events
Under UNCITRAL proceedings, the parties can waive defences on jurisdiction and a tribunal is not obligated to decide on them ex officio


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