Gold Pool JV Limited v The Republic of Kazakhstan

A challenge under section 67 of the Arbitration Act 1996 is a rehearing de novo, not a review of the arbitral tribunal’s decision. The tribunal’s conclusions have no legal or evidential weight, although its reasoning may be persuasive.

A successor state may agree impliedly to succeed to a predecessor’s treaty. No particular form is required, but the parties’ words or conduct must objectively and unambiguously convey a meeting of minds. Ambiguous communications are insufficient. Uncommunicated views and subsequent expressions of opinion cannot alter the meaning of an earlier documented consensus.

Gold Pool claimed compensation for the alleged loss of an investment in Kazakhstan under the 1989 Agreement for the Promotion and Reciprocal Protection of Investments between Canada and the USSR (the FIPA). Kazakhstan was a successor state to the USSR, but no express succession treaty had been concluded.

Gold Pool commenced arbitration in 2016. The tribunal held that it lacked jurisdiction ratione voluntatis because Kazakhstan had not succeeded to the FIPA. Gold Pool brought a claim under section 67 of the Arbitration Act 1996 to set aside or vary that part of the award.

The issue was whether Canada and Kazakhstan had impliedly agreed that Kazakhstan had succeeded to the FIPA through a 1992 declaration, a 1994 diplomatic exchange and a 1995 trade-agreement recital.

1. Disposition. The section 67 claim succeeded. The award dated 30 July 2020 was to be set aside, the tribunal’s jurisdiction ratione voluntatis was to be declared, and the matter was to be remitted to the tribunal to determine the substantive claims and costs afresh.
2. De novo rehearing. Section 67 required a rehearing de novo. The court was not reviewing the arbitrators’ decision, and their conclusions had no legal or evidential weight. Their reasoning could nevertheless be considered if adopted as an argument or found persuasive. The court therefore had to decide the succession issue independently.
3. Implied succession. No formality was required for an implied succession agreement, but there had to be consensus ad idem. Where written bilateral communications were relied upon, their words and context had to be incapable, on an objective reading, of conveying a meaning other than agreement on succession. Ambiguity would prevent an agreement.
4. Relevant evidence. Uncommunicated opinions or understandings within Canada or Kazakhstan were irrelevant to the meaning and effect of the documented consensuses. Subsequent expressions of view could not alter the true meaning of an earlier declaration, exchange or recital, absent an applicable estoppel argument.
5. Application. Paragraph 3 of the 1992 Declaration treated the FIPA as an existing agreement in accordance with which future economic co-operation would proceed. It therefore impliedly confirmed that the FIPA applied between Canada and Kazakhstan. The 1994 Exchange expressly confirmed that treaties concluded between Canada and the USSR remained in force until different provision was made. The 1995 Recital, read in context and with “referring to” understood as “taking into account”, likewise conveyed that the FIPA was in force between the parties.
6. The later contrary opinions and materials did not alter those earlier agreements. Canada and Kazakhstan had therefore impliedly agreed to Kazakhstan’s succession to the FIPA.

First-instance section 67 challenge. No appellate history was stated in the judgment.