Transnational Dispute Management | September 2016
Case report : Recofi SA v. Socialist Republic of Vietnam
by : Sergey Alekhin, Editor Ignacio Torterola
Summary : In its September 20, 2016 Ruling, the Swiss Federal Supreme Court refused to set aside an Award in a UNCITRAL investment arbitration between Recofi SA, a French
company, and the Socialist Republic of Vietnam under the France-Vietnam BIT dismissing the case for lack of jurisdiction ratione materiae. In essence, the Federal Supreme Court validated the interpretation by the Tribunal of the BIT, highlighting that it cannot lightly ignore the definition of investment given by three experienced arbitrators. The Court also pointed out that it cannot second-guess the application of the Tribunal’s definition of investment to the facts of the case. Furthermore, the Court rejected Recofi’s due process complaints on the allegedly improper application of the burden of proof with respect to the travaux preparatoires of the BIT (on the record of the arbitration only from the French side). More specifically, the Court deemed that the burden of proof never shifted to Vietnam, as the French travaux of the BIT were not used by the Tribunal to determine prima facie jurisdiction. The Court also pointed out that Recofi failed to request the Tribunal to order Vietnam to produce its own travaux of the BIT. Finally, the Court ordered Recofi to pay CHF 250,000 of costs and court fees.