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Lauder v. Czech Republic

Type of decisionFinal Award
Date of decision3 September 2001
Tribunal
Robert Briner (President)
Bohuslav Klein
Lloyd Cutler
Legal instrumentBIT between Czech Republic and USA (1991)
Further information

Statements from this decision

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Multiple parallel proceedings neither affect the tribunal’s authority nor undermine the parties’ rights; it does not amount to an abuse of process to pursue the rights under a treaty in front of a tribunal, if this tribunal is the only forum to protect them
The claimant’s non-disclosure of a prima facie case that the respondent has breached the treaty does not constitute an abuse of process
A statement of a member of a state organ does not constitute a measure as long as the statement has no direct effect on the investment or cannot be attributed to the state
A statement by a state organ does not amount to a measure inasmuch as it refers to the interpretation of law only and does not have any legal effect
Definition of an expropriatory act
Expropriation requires an act initiated by the state and the act has to result in a benefit for the state
The obligation to provide treatment in conformity with public international law does not broaden the protection of the investor beyond the other more specific standards of protection of the IIT
General remarks on fair and equitable treatment
In case the IIT requires the respondent to refrain from “arbitrary and discriminatory” treatment, a measure must be both arbitrary and discriminatory to violate the IIT
A tribunal must compare the measure to the treatment of domestic investments only; as long as the treatment is identical, a measure is not discriminatory, even if the consequences of the treatment were more severe for the foreign investor
Definition of arbitrary
The full protection and security standard is not a strict liability standard
There is no obligation for a state to intervene in a dispute between two companies; the state’s only duty is to provide a functioning judicial system
A waiting period is not a jurisdictional provision, but a procedural rule
The waiting period runs from the date at which the state is advised that the breach in question occurred
It would be overly formalistic for a tribunal to insist on a waiting period in case the respondent would never have accepted to enter into negotiations
Parallel proceedings neither affect the tribunal’s authority nor undermine the parties’ rights; it does not amount to an abuse of process to pursue the rights under a treaty before a tribunal, if this tribunal is the only forum to protect them
A treaty provision that requires that “the dispute” shall not have been submitted for resolution in accordance to other dispute-settlement procedures, precludes jurisdiction only if the different proceedings concern the same parties and the same dispute
Causality requires that the breach is conditio sine qua non and no superseding cause exists

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