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FIND OUT MOREThe Paris Court of Appeal was recently asked to rule on the conformity of an investment to Libyan law as Libya challenged the jurisdiction of the arbitral tribunal based on the Libya-Turkey BIT.
Following allegations by Libya that certain contracts were obtained through corruption, the Court stated that whether corruption could affect the arbitral tribunal’s jurisdiction was a matter relating to the substance of a case, to be decided by the arbitral tribunal, unless the “alleged [corruption] related to the jurisdiction of the arbitral tribunal itself”. This follows the principle already set in its 25 May decision (Libya v. Cengiz, RG No. 18/27648): “the standing offer to arbitrate [the dispute] is autonomous and independent of the validity of the transaction giving rise to or supporting the investment. Therefore, the acceptance of [the offer to arbitrate] resulting from the notification of the request for arbitration is sufficient to justify the jurisdiction of the arbitral tribunal to rule on the legality of the investment and the claim for compensation.” From a practical perspective, this means that as regards awards on jurisdiction, allegations of corruption will not be analysed by the Court unless they target the constitution of the tribunal or the arbitration agreement very specifically.
Interestingly, the Court criticised the fact that Libya had not raised the inapplicability of the Libya-Turkey BIT due to a notification failure at the end of the ratification process in the Cengiz case, implying that it could not raise it now.
A link to the decision in Libya v. Nurol can be found here.
