Summary

Introduction

This claim concerns an Agreement for the Promotion and Reciprocal Protection of Investments concluded between Canada and the USSR in Moscow on 20 November 1989 that entered into force on 27 June 1991 ("the FIPA").

The defendant ("Kazakhstan") came into being as part of the dissolution of the USSR as the successor state to the USSR in respect of the territory of the Soviet Socialist Republic of Kazakhstan, one of the USSR's member republics. It is common ground that Russia declared itself to be, and was accepted by the international community as, the continuation of the USSR for public international law purposes. So Kazakhstan was, and is, a successor to, but not the continuation of, the USSR.

The claimant ("Gold Pool") claims that in or about August 1997, it was deprived of a valuable investment in Kazakhstan causing it loss it has claimed can be quantified at over US$900 million. Gold Pool says that the circumstances of the case entitle it to compensation from Kazakhstan if the FIPA was binding between Canada and Kazakhstan at the material time. It is common ground that:

(1) Canada and Kazakhstan concluded no succession treaty in respect of the FIPA providing in terms for that result.

(2) As a successor state, Kazakhstan could have succeeded to the FIPA impliedly through words or conduct (often referred to in this field, not entirely helpfully, as a 'tacit' agreement). As Kazakhstan put it in the skeleton argument from Mr Malek QC, "A tacit agreement will exist where the successor state. .. has indicated by words or conduct that it considers itself to have succeeded to a treaty of the predecessor state. .. and the other state party to that treaty. .. indicates by words or conduct that succession is accepted such that the Treaty is in force between them".

(3) There is no requirement as to form in respect of an implied succession agreement, but the parties must be ad idem.

The FIPA contained an arbitration agreement providing investors of either contracting state with a right to refer to arbitration, in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law, any dispute with the other contracting state relating to the effects of a measure taken by that state on the management, use, enjoyment or disposal of qualifying investments. Gold Pool commenced arbitration against Kazakhstan in respect of its asserted investor protection claim in March 2016, purportedly pursuant to that arbitration agreement, upon the basis, as it alleged, that there had been an implied succession agreement between Canada and Kazakhstan in respect of the FIPA. By an award dated 30 July 2020, the arbitrators found that they lacked jurisdiction ratione voluntatis in respect of Gold Pool's claim because, in their view, Gold Pool had failed to establish any such agreement.

That award followed a full hearing of all issues as to jurisdiction and as to merits, without prejudice to the objection to jurisdiction, the arbitrators having refused an application by Kazakhstan to bifurcate the arbitral proceedings to deal with jurisdiction first and separately. By the award, the arbitrators declared that Kazakhstan did not succeed to the FIPA and that the FIPA was not in force between Canada and Kazakhstan at the date of the award, upheld Kazakhstan's objection to jurisdiction ratione voluntatis and declared that they had no jurisdiction to entertain Gold Pool's claim, ordered costs (and interest on costs) against Gold Pool, and formally rejected all other claims.

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See also:

• OGEL: Press release Ministry of Justice of the Republic of Kazakhstan - Kazakhstan Won a Multimillion Arbitration Brought by Canadian Company Gold Pool - August 2020
• TDM: Press release Ministry of Justice of the Republic of Kazakhstan - Kazakhstan Won a Multimillion Arbitration Brought by Canadian Company Gold Pool - August 2020