The Kyrgyz Republic v Stans Energy Corporation & Anor

On a section 67 Arbitration Act 1996 challenge, the court conducts a rehearing of the tribunal’s jurisdiction. Foreign law is a question of fact proved by expert evidence. Where expert evidence conflicts, the court may examine the foreign sources relied upon, but must apply the foreign legal system’s own interpretative principles.

Under Kyrgyz law, statutory words must be read in their sentence, article and statute, with regard to statutory context and purpose. A preamble may assist construction. The definition of an investment dispute in Article 1(6) of the 2003 Investment Law therefore covered disputes arising during implementation of investments, rather than only disputes arising during their sale. The tribunal had jurisdiction.

The Kyrgyz Republic applied under section 67 of the Arbitration Act 1996 to challenge the substantive jurisdiction of an UNCITRAL tribunal and to set aside part of its award dated 25 January 2017.

The arbitration concerned alleged breaches of Kyrgyz and international law arising from mining investments and the revocation of mining licences. The tribunal had rejected the Republic’s jurisdictional objection. The dispute before the court concerned the interpretation of Article 1(6) and Article 18 of the 2003 Investment Law, which existed in Russian and Kyrgyz versions. The central question was whether an investment dispute meant one arising during implementation of investments or only one arising during their sale.

1. The application was a rehearing of the jurisdictional issue. The tribunal’s conclusion had no legal or evidential weight, although the court considered the reasoning where relevant. The burden lay on the Republic to prove the foreign law on which its challenge depended.

2. Foreign law was a question of fact. It had to be established principally through expert evidence. Where experts conflicted, the court could examine the foreign sources relied upon, while remaining confined to the foreign-law principles established by the evidence.

3. The court accepted that, under Kyrgyz principles of statutory interpretation, words were not to be construed in isolation. They had to be read as part of the sentence, article and statute. The purpose of interpretation was to identify statutory intention by reference to plain meaning in statutory context and having regard to statutory purpose. A Kyrgyz statutory preamble could be used as an interpretative aid.

4. Applying those principles, Article 1(6) covered disputes arising during the implementation of investments. Article 1 gave investment a wide meaning, Article 18 provided a broad dispute-resolution regime, and the preamble identified protection of investments and promotion of investment as statutory purposes. Limiting Article 1(6) to disputes arising during sale would produce an implausibly narrow and incomplete jurisdictional regime.

5. The Republic had not proved that the Kyrgyz word relied upon meant, and could only mean, sale. In any event, the two language versions were not legally inconsistent when construed in context. Article 6(3) of the Law on Normative Legal Acts 2009 was therefore not engaged. Even if it had applied, contextual interpretation would have produced the same result.

6. As an alternative, the dispute would also have been sufficiently connected to the sale of the investment because the acquisition of the shares and mining licences formed an integrated transaction. The alternative issue did not arise on the primary conclusion.

7. The tribunal had jurisdiction and the Republic’s arbitration claim was dismissed.

There was no appeal. The application challenged an arbitral award under section 67 of the Arbitration Act 1996.