The Czech Republic v Diag Human SE & Anor
| Judge | Mr Justice Foxton |
| Neutral Citation | [2024] EWHC 2102 (Comm) |
| Year | 2024 |
| Court | Queen's Bench Division (Commercial Court) |
| Counsel | Graham Dunning Kc,Lucas Bastin Kc,Peter Webster,Richard Hoyle,Katherine Ratcliffe,Lord Verdirame Kc,Philip Riches Kc,Kate Parlett,Jonathan Ketcheson,Sam Goodman,Isabelle Winstanley |
| Date | 09 August 2024 |
Neutral Citation Number: [2024] EWHC 2102 (Comm)
Case No: CL-2022-000307
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING’S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Date: 09/08/2024
Before :
MR JUSTICE FOXTON
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Between :
THE CZECH REPUBLIC Claimant/
Applicant
- and -
(1) DIAG HUMAN SE
(2) MR JOSEF STAVA Defendants/
Respondents
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Graham Dunning KC, Lucas Bastin KC, Peter Webster, Richard Hoyle and Katherine
Ratcliffe (instructed by Arnold & Porter Kaye Scholer (UK) LLP) for the Claimant
Lord Verdirame KC, Philip Riches KC, Kate Parlett, Jonathan Ketcheson, Sam Goodman
and Isabelle Winstanley (instructed by Mishcon de Reya LLP) for the Defendants
Hearing dates: 17-21, 24, 25, 28 June and 2 July 2024
Further written submissions: 11 July 2024
Draft Judgment Circulated: 31 July 2024
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Approved Judgment
This judgment was handed down at 10.30am on 09 August 2024 by circulation to the parties
or their representatives by e-mail and by release to the National Archives.
.............................
MR JUSTICE FOXTON
MR JUSTICE FOXTON
Approved Judgment
Czech Republic v Diag Human SE and Stava (s.67)
The Honourable Mr Justice Foxton:
INTRODUCTION
1. This is the second substantive judgment in a challenge brought by the Czech Republic
to an award dated 18 May 2022 (“the Award”), made by a tribunal (“the Tribunal”)
appointed under the Agreement between the Czech and Slovak Federal Republic and the
Swiss Confederation on the Promotion and Reciprocal Protection of Investments of 5
October 1990 (“the BIT”). The Award was rendered in an arbitration commenced by
Diag Human SE and Mr Stava (“ the Arbitral Claimants”) against the Czech Republic
(“the BIT Arbitration”).
2. I handed down judgment addressing aspects of the Czech Republic’s challenge on 8
March 2024 ([2024] EWHC 503 (Comm)) (“the March Judgment”) in which I
determined most of the issues raised by the Czech Republic’s challenge under s.68 of
the Arbitration Act 1996 (“the 1996 Act”), the extent to which challenges brought by
the Czech Republic were barred by s.73(1) of the 1996 Act and whether all of the issues
jurisdictional for the purposes of that section.
3. This judgment addresses:
i) The surviving s.67 challenges on their merits:
a) The “No Investment” objection.
b) The “Ratione Temporis” objection.
c) The objection that Diag Human is not a protected investor (“the No
Investor” objection).
ii) In the context of that third issue, the Arbitral Claimants’ application to amend to
advance an argument of issue estoppel.
iii) A residual issue in relation to one of the s.68 challenges which I left open in the
March Judgment.
4. I do not intend to repeat the summary of the background of this case, the history of the
arbitral proceedings or the terms of the Award which appear in the March Judgment.
RELEVANT PRINCIPLES: S.67
5. It is well established that in resolving the s.67 challenges, I must determine the question
of whether the Tribunal had substantive jurisdiction de novo. Any influence of the
Award in this context must derive from the cogency of its reasoning, rather than the fact
of the determination.
6. In reaching my conclusions, I am not confined to the evidence before the Tribunal nor –
provided that the points raised remain within the permissible bounds of s.73(1) of the
2
MR JUSTICE FOXTON
Approved Judgment
Czech Republic v Diag Human SE and Stava (s.67)
1996 Act – by the particular arguments deployed in support of a jurisdictional objection
before the Tribunal. Inevitably, with such a narrow front left in play, the resources of
time and thought poured into the surviving jurisdiction challenges far exceed the
attention given to these matters in the BIT Arbitration, when there were so many other
issues to address. The evidence adduced at the s.67 hearing is, as with other hearings,
Shipping Co (The Kalisti) [2014] EWHC 2397 (Comm), [2015] 1 All ER (Comm) 580,
[14]-[33]. However, the circumstances in which the court can refuse to admit new
evidence on a s.67 application, and in particular how far the prior conduct of the
arbitration bears on that issue, remains obscure.
THE EVIDENCE
Oral evidence
The Czech Republic
7. The Czech Republic adduced oral evidence from two witnesses.
8. The first was Mr Jensen. Mr Jensen was a company lawyer at Novo Industries from
1986 and, following a 1989 merger with Nordisk Gentofte, with Novo Nordisk until
January 2012. He made it clear that he was not involved in Novo Nordisk’s business nor
how Mr Klaus Eldrup-Jørgensen (head of the blood plasma unit) ran that business. I
accept that Mr Jensen was doing his best to assist the court. However, he had almost no
involvement in the key events in 1990-1992, and his principal involvement came in
2004, when he was responsible for Novo Nordisk’s official interactions with a Czech
Parliamentary Commission established to investigate the claim brought by Conneco
against the Czech state. In that context, he was essentially dependent on the recollection
of those ex-employees he spoke to, and those few documents to which Novo Nordisk
still had access following the sale of the blood plasma business and the transfer of its
archive in 1995. Even in relation to events in 2004, Mr Jensen’s recollection, some 20
years, on was clearly inaccurate in certain respects. For example, while he was adamant
that he only attended one meeting with the Commission, an all-day meeting on a
Sunday, the contemporaneous documents show that he attended two, both on Mondays:
one on 31 May 2004 and another 28 June 2004. I have concluded that the contemporary
documents and the inherent probabilities provide a better guide as to Conneco’s
interactions with Novo Nordisk. I consider that material in some detail in Annex 2.
9. The Czech Republic’s second factual witness was Dr Petr Turek, a physician who
specialised in haematology. He worked at the Institute of Haematology and Blood
Transfusion in Prague between 1980 and 2005 and was a consultant to the Czech
Ministry of Health. He explained why the committee established by the Ministry of
Health (of which he was a member) did not select Conneco in the 1991 tender. I am
satisfied that Dr Turek was doing his best to assist the court, albeit the events he was
describing took place over 30 years ago. His evidence was of very limited relevance to
the matters which remain in issue.
The Arbitral Claimants
3
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