Case discussion of Tokios Tokeles v. Ukraine by

filipbatsele — 2024-11-03 10:28:42 UTC

Can you summarize the facts of the dispute (max. 200 words). In particular, refer to (1) the identity of the two parties, (2) the nature of the dispute, (3) the legal instrument used to bring the claim to ICSID.

filipbatsele — 2024-11-03 10:30:04 UTC

Why does the majority of the arbitral tribunal find that the claimant is a Lithuanian investor? (max. 250 words) In your summary, touch on (1) the definition of “investor” according to the Ukraine-Lithuania BIT and (2) the definition of “investor” according to the ICSID Convention.

filipbatsele — 2024-11-03 10:30:54 UTC

Why does the chairman of the tribunal, Prosper Weil, conclude that the tribunal does not have jurisdiction? (max. 200 words) Touch in particular on his arguments related to the “object and purpose” of the ICSID Convention.

filipbatsele — 2024-11-03 10:31:09 UTC

What is your opinion? Do you find the argument of the majority, or the argument of Prosper Weil, more convincing? Why? (max. 100 words).

2024-11-06 13:19:49 UTC

The dispute between Tokios Tokeles (a Lithuanian company) and Ukraine. Tokios Tokeles claims that Ukrainian authorities took harmful actions against its investment in Ukraine through the subsidiary, Taki spravy. (This is not my finished answer, will work on this later... thank you for your patience)

2024-11-07 07:43:56 UTC

Article 25 of the ICSID Convention sets forth the objective criteria for ICSID’s jurisdiction and provides in relevant part: (1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State…and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally. (2) National of another Contracting State means: (b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration and anyjuridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention. 16. 17. 18. Article 8 of the Ukraine-Lithuania BIT sets forth the disputes that may be submitted to international arbitration: (1) Any dispute between an investor of one Contracting Party and the other Contracting Party in connection with an investment on the territory of that other Contracting Party shall be subject to negotiations between the parties in dispute. (2) If any dispute between an investor of one Contracting Party and the other Contracting Party can not be thus settled within a period of six months, the investor shall be entitled to submit the case to: (a) The International Centre for Settlement of Investment Disputes (ICSID)…. Article 1(1) of the BIT defines “investment” as “every kind of asset invested by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the laws and regulations of the latter….” The definition includes a nonexhaustive list of the forms that an investment may take, such as “(a) movable and immovable property…(b) shares [and] stocks…(c) claims to money….” Article 1(1) further provides that “[a]ny alteration of the form in which assets are invested shall not affect their character as investment provided that such an alteration is made in accordance with the laws of the Contracting Party in the territory of which the investment has been made.” Article 1(2) defines “investor” as: (a) in respect of Ukraine: - natural person [sic] who are nationals of the Ukraine according to Ukrainian laws;- any entity established in the territory of the Ukraine in conformity with its laws and regulations; (b) in respect of Lithuania: - natural person [sic] who are nationals of the Republic of Lithuania according to Lithuanian laws; - any entity established in the territory of the Republic of Lithuania in conformity with its laws and regulations; (c) in respect of either Contracting Party – any entity or organization established under the law of any third State which is, directly or indirectly, controlled by nationals of that Contracting Party or by entities having their seat in the territory of that Contracting Party; it being understood that control requires a substantial part in the ownership.

Requirements are met: (1) the Claimant is an investor of one Contracting Party; (2) the Claimant has an investment in the territory of the other Contracting Party; (3) the dispute arises directly from the investment; and (4) the parties to the dispute have consented to ICSID jurisdiction over it.

The nationality of a corporation is determined on the basis of its siège social or place of incorporation. the Claimant is an “investor” of Lithuania under Article 1(2)(b) of the Ukraine-Lithuania BIT based on its state-of-incorporation. Among the relevant evidence of siège social, the Claimant’s registration certificate (issued by the Ministry of the Economy of Lithuania),31 its statute of incorporation,32 and each of the Claimant’s “Information Notices of Payment of Foreign Investment” (registered by Ukrainian governmental authorities),33 all record the Claimant’s address as Vilnius, Lithuania.

In the present case, there was no agreement between the Contracting Parties to treat the Claimant as anything other than a national of its state of incorporation, i.e., Lithuania.

No Veil Piercing due to lack of e fraud or engagement in malfeasance.

bestebozdag — 2024-11-07 14:13:10 UTC

(1)The dispute between the two parties Tokios Tokeles (a Lithuanian company) and Ukraine. Tokios Tokeles is a LT based business and has another business, Taki spravy, in UA which is established under UA law but Tokias Tokeles has the full subsidiary ownership.

Tokios Tokeles, in case the claiment, claims that UA authorities took harmful actions against its investment in Ukraine through the subsidiary, Taki spravy.

The claims include:

-invasive tax investigations

-judicial actions to invalidate contracts

-public accusations of illegal conduct

The claims impacted the investment of Taki Spravy in a negative way (so that means it also affects the business in Lithuania)

(2) The nature of dispute between Tokios Tokeles and UA is on allegations of unfair treatment and breaches of the bilateral investment treaty between UA & LT. Tokios Tokelės claims that Ukrainian governmental authorities engaged in a series of hostile actions against its wholly owned subsidiary, Taki spravy, including:

-conducting invasive tax investigations that were perceived as unjustified.

-pursuing court actions to invalidate contracts that Taki spravy had entered into.

-seizing financial and other documents without proper justification.

-placing the assets of Taki spravy under administrative arrest.

-publicly accusing Taki spravy of illegal activities.

(3)The legal instrument that has been brought to the ICSID is the UA - LT BIT. It provides the framework for resolving the disputes between states & investors. And article 7 & 8 of the BIT stresses that both parties should first do a negotiation and if there's no consensus, the investor (Taki Spravy) can submit the case to the ICSID.