Edward Sukyas v. Romania, PCA Case 2020-54
PCA · Investment (ICSID and treaty) · Romania · 6 Nov 2024
Why it matters
This case clarifies the scope of the 'cultural industries' exception in Canadian BITs, holding that it bars jurisdiction over claims involving cultural property even if the investor attempts to use MFN clauses to import more favorable treatment from other treaties. It also addresses the limits of dual nationality in investment treaty arbitration, confirming that a claimant cannot invoke a BIT with a state of which they are a national.
Summary
Mr. Edward Sukyas, a Canadian national also holding Turkish nationality, initiated arbitration against Romania under the Canada-Romania BITs (1996 and 2009) and later the Turkey-Romania BIT. The dispute concerned the alleged expropriation of shares in a pharmaceutical laboratory (CIRO) that belonged to his father and uncle, which were taken by the Romanian state in 1948. Claimant sought compensation for the loss, but the tribunal found it lacked jurisdiction. First, regarding the Turkey-Romania BIT, the tribunal held that Claimant could not invoke it because he was a Turkish national, and the BIT does not allow claims by investors against their own state. Second, under the Canada-Romania BITs, the tribunal applied the 'cultural industries' exception in Article VI(3), which excludes from the treaty's scope measures related to cultural industries, including the protection of cultural property. The tribunal found that the laboratory's products (pharmaceuticals derived from natural substances) could be considered cultural property, and thus the exception applied. Claimant argued that the MFN clause in the Canada-Romania BITs could import more favorable treatment from other treaties, but the tribunal rejected this, stating that if the base treaty does not apply, its MFN clause cannot be used. Consequently, all claims were dismissed. The tribunal also ordered Claimant to bear the arbitration costs (EUR 473,293.13) and reimburse Respondent's legal costs (EUR 373,788.48).
The detail
Parties: Edward Sukyas v. Romania, PCA Case 2020-54
Case number: italaw/cases/10624
Outcome: Tribunal declined jurisdiction over all claims; Claimant ordered to bear arbitration costs and reimburse Respondent's costs.
Applicable law: Canada-Romania BITs (1996 and 2009), Turkey-Romania BIT, UNCITRAL Arbitration Rules (2010)
Issues in play: The cultural industries exception in the Canada-Romania BITs (Article VI(3)) was invoked to exclude jurisdiction over claims related to cultural property. The tribunal also considered whether the MFN clause could circumvent this exception, and whether the Turkey-Romania BIT applied given Claimant's dual nationality.
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