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UNCITRAL tribunal declines jurisdiction over dual-national claim against Mauritius

An UNCITRAL-rules tribunal has declined jurisdiction over a claim brought by a dual national against the Republic of Mauritius.

Dawood Rawat filed his claim in November 2015 under the France-Mauritius bilateral investment treaty (BIT), seeking at least US$1 billion in compensation for alleged interferences with a banking and insurance business, British American Investment Co (Mauritius) Ltd, and its subsidiary, Bramer Bank (see our report here).

In a January 2017 decision on interim measures in the case (see here), the tribunal at the Permanent Court of Arbitration had held that the investor’s French nationality gave him a prima facie right to rely on the BIT against Mauritius, even if he also held the respondent state’s nationality.

However, in a final award dated April 6, 2018, the tribunal ruled that the states parties to the BIT did not intend it to apply to French-Mauritian dual nationals, meaning that the tribunal had no jurisdiction to hear Mr Rawat’s claim.

[UPDATE: the award is now available for download on our website.]

Arbitrators in the case were Lucy Reed (chair, chosen by co-arbitrators), Jean-Christophe Honlet (claimant’s nominee) and Vaughan Lowe (state’s nominee). The claimant was represented by De Gaulle Fleurance & Associés and Paris-based academic Xavier Boucobza, while Mauritius was represented by the LALIVE law firm.

Dual nationals not expressly excluded by BIT text, but treaty context points to a different conclusion

The tribunal firstly confirmed that Mr Rawat was clearly a Mauritian citizen since his birth, and was also a French national, accepting the evidence that he acquired this nationality under French law by marriage in 1998. Moreover, the tribunal observed that Mr Rawat had received the Legion d’Honneur from France in 2014 ‘as a French and Mauritian citizen’.

The tribunal noted that the French-language BIT did not expressly exclude dual nationals from its definition of ‘ressortissant’ (ie, ‘national’). However, the tribunal said, the BIT must be interpreted according to the rules of the Vienna Convention on the Law of Treaties, including consideration of the treaty’s context and object and purpose.

While the object and purpose of the BIT would suggest including dual nationals (as noted by the Armas v. Venezuela case, reviewed here), the tribunal observed, the context of the BIT was equally important.

Reference to ICSID in one BIT clause reveals states’ intention to exclude dual nationals

Here, the tribunal focused on Article 9, which required France and Mauritius to insert a clause consenting to arbitration at ICSID into any investor-state contract that either state concluded with ‘ressortissants’ of the other state. The tribunal then recalled that Article 25(2)(a) of the ICSID Convention defined ‘ressortissant’, in the French version, and ‘national’, in the English version, to exclude dual nationals (of the home and host state). For the tribunal, this confirmed that there would be no jurisdiction at ICSID in a dual-national claim under an arbitration clause inserted into an investor-state contract under Article 9 of the BIT.

Thus, according to the tribunal, while the general meaning of ‘ressortissant’ might include dual nationals, the specific context of the France-Mauritius BIT indicated that the two states parties did not intend the term to include dual nationals in that instrument.

It was ‘decisive’ here that the BIT required the insertion of the ICSID clause in investor-state contracts; this ‘implicitly, but necessarily, excluded French-Mauritian dual nationals from the scope of application of the BIT’.

Terms must have same meaning throughout a treaty

The investor had argued that this result did not necessarily follow; Article 9 might instead simply have no effect in a situation where the ICSID clause was inserted into an investment contract with a dual national. However, the tribunal rejected this, finding that terms must have the same meaning throughout a treaty, and that ‘ressortissant’ could not exclude dual nationals for the purposes of Article 9 but include them for the rest of the BIT.

The tribunal also cited the effet utile principle; the investor’s interpretation (covering dual nationals) would render Article 9 meaningless, since it would oblige parties to include an ICSID consent clause in contracts even though this clause would necessarily be ineffective.

Thus, ‘the BIT does not apply to Rawat as a dual national of Mauritius and France’.

ANALYSIS: issues of dual nationality continue to feature in claims

Issues of dual nationality have been raised in several investment treaty claims in recent years. As we reported in February this year, an UNCITRAL tribunal majority appeared to accept the principle of dual national claims in a case against Egypt, while the third arbitrator issued a separate opinion appearing to doubt the view that a dual national claimant could pursue a claim against one of its home states.

Meanwhile, as mentioned above, the Armas tribunal accepted a dual-national claim against Venezuela, declining to import a test of ‘dominant and effective nationality’ from general international law. In other cases heard under UNCITRAL rules, by contrast, the issue has been resolved by specific wording in the relevant investment treaty; CAFTA-DR, for instance, explicitly imposes a test of ‘dominant and effective nationality’ for dual nationals, as we’ve discussed here in relation to the Ballantine case.

At first glance, the Rawat tribunal’s reasoning relies strongly on the unusual clause in the France-Mauritius BIT requiring the contracting states to include ICSID arbitration clauses in investor-state contracts, potentially limiting the lessons of the Rawat case for other dual-national claimants.

No need to consider MFN issues of ‘first impression’

Alongside the objection relating to dual nationality, Mauritius had also objected to the claimant’s efforts to rely on the BIT’s MFN clause to ground jurisdiction.

As the investor acknowledged, the France-Mauritius BIT did not contain an investor-state arbitration clause. The investor sought to side-step this limitation by importing the consent to UNCITRAL arbitration granted by Mauritius in its 2007 BIT with Finland. Mauritius objected to this, arguing that no prior case had imported consent to arbitration where no such consent existed at all in the main treaty. Furthermore, Mauritius said, the MFN clause applied to ‘matters governed by the present Convention’; since investor-state arbitration was not mentioned in the BIT, it was not a ‘matter’ to which the MFN clause applied.

However, given its conclusion that the BIT did not apply at all, the tribunal determined that it did not need to consider the MFN question. Instead, the BIT was simply inapplicable to Mr Rawat, and he could therefore not base any arguments on the BIT’s MFN clause.

Nevertheless, the tribunal expressed appreciation for the ‘high quality’ submissions on ‘an issue of first impression in investment treaty arbitration’. These issues would have required consideration of the ejusdem generis principle and a finding on the extent of the ‘matters’ governed by the BIT, the tribunal noted.

Investor pays one-third of state legal costs

The investor claimed around €177,000 in legal costs for the jurisdictional phase, while Mauritius claimed around US$335,000.

In light of the investor’s loss on jurisdiction, the tribunal ordered the investor (by majority, with an unnamed dissenter) to pay one-third of the state’s legal fees. Given that both parties had presented ‘strong arguments on complex jurisdictional questions’, each party was ordered to bear half of the costs of arbitration (set at €300,000).