GPF GP S.À.R.L. v The Republic of Poland

A hearing under section 67 of the Arbitration Act 1996 is a rehearing. Permission to appeal should be granted only where the proposed grounds, considered individually and cumulatively, have a real prospect of success or there is some other compelling reason. Treaty construction ordinarily turns on the particular wording of the instrument, applying Article 31 of the Vienna Convention and the ordinary and natural meaning of the words. Finality and expedition in arbitration are relevant considerations, but cannot justify refusing permission where an appeal genuinely has prospects.

The claimant had successfully challenged the tribunal’s jurisdiction under section 67 of the Arbitration Act 1996. In the earlier judgment, the court held that the tribunal’s jurisdiction was wider than the arbitrators had found and set aside the relevant part of the award.

The respondent sought permission to appeal. The proposed grounds concerned the nature of a section 67 hearing, linguistic differences in the treaty texts, construction of Article 9.1(b) of the bilateral investment treaty, the principle of effectiveness, the pro tem test and creeping expropriation. The court also dealt with the claimant’s costs.

1. Permission to appeal. The application was dismissed. A section 67 hearing is a rehearing. The court followed the established approach and considered that there was no real prospect of success on that ground.
2. The construction of Article 9.1(b) depended on the ordinary and natural meaning of the words used in that particular bilateral investment treaty. Applying Article 31 of the Vienna Convention, the court was satisfied that its interpretation gave meaning and effect to both clauses and all the words used. The linguistic differences did not affect that conclusion because the interpretation reflected the French text.
3. The alleged misuse of the principle of effectiveness disclosed no arguable error. The respondent’s construction gave no real meaning or effect to the second clause. The court was also satisfied that there was no arguable error in its application of the pro tem test or in its treatment of creeping expropriation.
4. The court considered the proposed grounds both separately and cumulatively. None had a real prospect of success, and there was no other reason to grant permission. Finality and the need for arbitration matters to proceed expeditiously supported that conclusion, although they would not have justified refusal if a real prospect of success had existed.
5. Costs followed the event. The claimant succeeded on the section 67 application. Despite the substantial claim, the court summarily assessed costs at £273,000, exercising its discretion after considering the complexity, evidence, authorities, legal teams, counsel’s fees and possible duplication.

1. High Court (Commercial Court): In [2018] EWHC 409 (Comm), the court allowed the section 67 jurisdiction challenge in substance, finding that the tribunal’s jurisdiction was wider than the arbitrators had determined and setting aside the relevant part of the award.
2. High Court (Commercial Court): Permission to appeal was refused in the present judgment. The claimant was awarded its costs, summarily assessed at £273,000.