Republic of Korea v Elliott Associates, L.P.

Whether a treaty condition limits an investor’s right to arbitrate is a question of international-law interpretation. Under the Vienna Convention on the Law of Treaties 1969, the court applies ordinary meaning in context and in light of object and purpose, consistently across signatory jurisdictions.

Where an investment treaty says that KORUS FTA applies to specified measures, “This Chapter” ordinarily includes its dispute-settlement section. The scope requirements may therefore be jurisdictional conditions of the State’s offer to arbitrate, even where their application overlaps with the merits. Domestic policy concerns and domestic assumptions about a Arbitration Act 1996 challenge cannot alter that meaning.

Elliott, a United States investment fund, commenced UNCITRAL arbitration against Korea under Chapter 11 of the KORUS FTA, alleging that Korean State conduct had interfered with its investment and breached treaty protections. Korea challenged the tribunal’s substantive jurisdiction under section 67 of the Arbitration Act 1996.

Foxton J dismissed the challenge, holding that Article 11.1(1) defined the substantive scope of Chapter 11 but did not limit the offer to arbitrate. His decision is reported at [2024] EWHC 2037 (Comm). Permission to appeal was granted. The appeal concerned whether Article 11.1(1) imposed jurisdictional conditions on the offer to arbitrate. Korea also relied on supplementary interpretive materials and a later diplomatic exchange, issues which the Court did not decide.

1. Disposition. The Court of Appeal, in the leading judgment of Phillips LJ agreed with by Falk LJ and Bean LJ, allowed the appeal. Article 11.1(1) imposed jurisdictional limitations on the offer to arbitrate. Korea’s section 67 application was therefore remitted to the Commercial Court for determination on its merits.
2. Treaty interpretation. The issue was one of international-law interpretation under the Vienna Convention on the Law of Treaties 1969. The relevant question had to be approached uniformly across signatory jurisdictions by applying ordinary meaning, context, object and purpose. English domestic presumptions about section 67 challenges, and national-policy concerns arising from de novo review, could not be imported into the interpretation of the Treaty. The Court explained that the caution identified in Czech Republic v Diag Human SE and Stava [2025] EWCA Civ 588 concerned the different ways tribunals may classify jurisdiction, standing and admissibility.
3. Meaning and context. “This Chapter” in Article 11.1(1) ordinarily meant the whole of Chapter 11, including Section B. The scope-and-coverage requirements therefore applied to the arbitration offer in Articles 11.16 and 11.17. Articles 11.11 and 11.14 showed that provisions in Section A could qualify rights under the whole Chapter, including the right to arbitrate. The temporal and inter-chapter provisions in Articles 11.1(2) and 11.2 likewise applied to Section B. The territorial connection required by Article 11.1(1) could not otherwise be found expressly in Section B.
4. Merits overlap and authorities. The fact-sensitive character of the requirements, or their integration with the merits, could not displace the ordinary treaty language. The Court gave considerable respect to Republic of Korea v Mason Capital L.P. [2025] SGHC(I) 9 but did not follow its contrary interpretation. The consistent approach of the investment-treaty awards under NAFTA and the KORUS FTA supported the Court’s conclusion. The Court did not decide whether those awards, later material or the diplomatic notes constituted supplementary means, a subsequent agreement or subsequent practice under the VCLT.

• Court of Appeal (Civil Division). The appeal was allowed and Korea’s section 67 application was remitted to the Commercial Court for determination on its merits: [2025] EWCA Civ 905.
• High Court of Justice, Commercial Court. Foxton J dismissed Korea’s section 67 challenge, holding that Article 11.1(1) did not limit the offer to arbitrate. Permission to appeal was granted: [2024] EWHC 2037 (Comm).