The seat of the Arbitral Tribunal in the present case is located in Geneva. Both Parties had their seat outside Switzerland at the time (Art. 176(1) PILA). As the Parties did not expressly opt out of the provisions of Chapter 12 PILA, its provisions are applicable (Art. 176(2) PILA).

The challenged arbitral Award in this case is a final award. Such an award may be challenged by appeal under Art. 190(2) PILA.

A civil law appeal within the meaning of Art. 77(1) BGG is, in principle, of a purely cassatory nature, i.e. it may only seek the setting aside of a decision which is being challenged (see Art. 77 (2) BGG, ruling out the applicability of Art. 107(2) BGG to the extent that this empowers the Federal Tribunal to adjudicate the matter itself). To the extent that the dispute relates to the jurisdiction of the arbitral tribunal or its composition, however, there is an exception to this rule providing that the Federal Tribunal may itself rule on the arbitral tribunal’s jurisdiction or lack thereof and/or on the challenge of the arbitrator involved (BGE 136 III 605 at 3.3.4. p. 616, with references). Similarly, the Federal Tribunal may remand the matter to the arbitral tribunal (Judgements 4A_418/2019 of May 18, 2020 at 2.3; 4A_294/20197 of November 13, 2019 at 2.2; 4A_462/2018 of July 4, 2019 at 2.2; 4A_628/20188 of June 19, 2019 at 2.2).

The applications of the Appellant are accordingly admissible.

Only the grievances listed in Art. 190(2) PILA are admissible (BGE 134 III 1869 at 5 p. 187; 128 III 50 at 1a p. 53; 127 III 279 at 1a p. 282). Pursuant to Art. 77(3) BGG, the Federal Tribunal reviews only grievances raised and reasoned in the Appeal Brief; this corresponds to the duty to provide reasons in Art. 106(2) BGG for the violation of constitutional rights and of cantonal and inter-cantonal law (BGE 134 III 186 at 5 p. 187; cited Judgement 4A_418/2019 at 2.4; Judgement 4A_80/201810 of February 7, 2020; each with references). Criticisms of an appellate nature are inadmissible (BGE 134 III 565 at 3.1 p. 567; 119 II 380 at 3b p. 382; cited Judgement 4A_80/2018 at 2.2).

The Federal Tribunal bases its judgement on the factual findings of the arbitral tribunal (Art. 105(1) BGG). These include the findings as to the facts upon which the dispute is based and those concerning the first instance proceedings, i.e. the findings as to the contents of the case, which include, in particular, the submissions of the Parties, their factual allegations, legal arguments, statements in the case, evidence and offers of evidence, the contents of a witness statement or an expert report, or the findings of visual inspections (BGE 140 III 16 at 1.3.1 with references).

The Federal Tribunal may not rectify or supplement the factual findings of the arbitral tribunal, even when they are blatantly inaccurate or based on a violation of the law within the meaning of Art. 95 BGG (see Art. 77(2) BGG, ruling out the applicability of Art. 97 BGG and Art. 105(2) BGG). However, the Federal Tribunal may review the factual findings of the arbitral award under appeal but only when some admissible grievances within the meaning of Art. 190(2) PILA are raised against them or, exceptionally, when new evidence is taken into consideration (BGE 142 III 220 at 3.1 p. 224, 239 at 3.1 p. 244; 140 III 47711 at 3.1, p. 477; 138 III 29 at 2.2.1; cited Judgement 4A_418/2019 at 2.5; each with references).

Pursuant to Art. 190(2) PILA, the Federal Tribunal freely reviews jurisdictional objections as to legal issues, including preliminary substantive issues upon which the determination of jurisdiction depends (BGE 144 III 55912 at 4.1, p.563; 142 III 23913 at 3.1, p.244; 134 III 565 at 3.1, p.567; 133 III 139 at 5, p. 141; examples in the realm of BIT cases: BGE 146 III 142 at 3.4.1, p.148-149; cited Judgement 4A_80/2018 at 2.5; Judgements 4A_65/201814 of December 11, 2018 at 2.4.1 and 3.2.1-3.2.3; 4A_157/201715 of December 14, 2017 at 3.3.4).

Where such preliminary substantive issues are to be determined under foreign law, the Federal Tribunal will likewise freely review the question of their application in the course of the jurisdiction appeal and has full discretion in ruling on these. In doing so, the Federal Tribunal will follow the clearly prevailing view in the applicable foreign legal system, and, where there are disagreements between the jurisprudence and the legal scholars, it will follow the jurisprudence of the highest courts of that legal system (BGE 138 III 714 at 3.2; cited Judgement 4A_80/2018 at 2.5; each with references).

The relevant sections of Art. 8 BIT read as follows:

Settlement of Disputes Between One Contracting Party and Investors of the Other Contracting Party
1. Disputes between one of the Contracting Parties and an investor of the other Contracting Party, in connection with his investment, shall be notified in writing, including detailed information, by the investor to the recipient Contracting Party of the investment. [...].
2. If these disputes cannot be settled in this way within ninety (90) days [...], the dispute can be submitted, as the investor may choose, to the competent court of the Contracting Party in whose territory the investment has been made or to international arbitration under:
(a) [...]
(b) [...]
(c) the Court of Arbitration of the Paris International Chamber of Commerce. 3. Once the investor has submitted the dispute to the one of the dispute settlement procedures mentioned in paragraph 2 of this Article, the choice of one of these procedures is final.
4. Notwithstanding the provisions of paragraph 2 of this Article;
(a) only the disputes arising directly out of investment activities which have obtained necessary permission, if any, in conformity with the relevant legislation of both Contracting Parties on foreign capital, and that effectively started shall be subject to the jurisdiction of the International Center for Settlement of Investment Disputes (ICSID), in case both Contracting Parties become signatories of this Convention, or any other international dispute settlement mechanism as agreed upon by the Contracting Parties;
(b) [...]
(c) [...]
5. [...]16

In addition, Art. 10 BIT provides:

The present Agreement shall apply to investments in the territory of a Contracting Party made in accordance with its laws and regulations by investors of the other Contracting Party before or after the entry into force of this Agreement. However, this Agreement shall not apply to disputes that have arisen before its entry into force.17

The Appellant raises the grievance that the Arbitral Tribunal has wrongfully exercised its Kompetenz- Kompetenz.

In the view of the Appellant, the Arbitral Tribunal would have had to find it lacked jurisdiction, due to the principle of res judicata. The Tripoli Judgement, it says, is capable of being recognised and enforced in Switzerland and is thus, it argues, binding on every arbitral tribunal in Switzerland.

This objection fails, as well. First, the Federal Tribunal is unable to see how the Arbitral Tribunal would have been able to take account of the Tripoli Judgement, as the Appellant did not in fact introduce that judgment during the arbitration at all. The Appellant claims that the Tripoli Judgement was issued on January 15, 2019, after the close of proceedings, and that it was validly served on the Respondent in certified form, in addition to diplomatic service, on September 20, 2019. Although this may be true, it does nothing the change the fact that the Arbitral Tribunal was unable to give any consideration to the judgment because it was unaware of it. Second, the objection also misses the point, irrespective of whether the Arbitral Tribunal was aware of the Tripoli Judgement. This is because, apart from the fact that the Appellant has not furnished any evidence of the res judicata status of the Tripoli Judgement (which the Respondent correctly raises in its defence), under Art. 27(2)(c) PILA a decision issued abroad will not be recognised in Switzerland if one party furnishes evidence that litigation between the same parties on the same subject matter was first initiated in Switzerland, even if the Swiss proceedings take longer than the foreign proceedings initiated subsequently (Däppen/Mabillard, in: Basler Kommentar Internationales Privatrecht, 4th Ed. 2020, N. 66 to Art. 27 PILA; see also Markus Müller-Chen, in: Zürcher Kommentar zum IPRG, Band I, 3rd Ed. 2018, N. 104 to Art. 27 PILA).

To this end, it referred by way of introduction to Art. 1(2) BIT, which defines the term “investment” by way of a non-exhaustive list (a)-(e). In the present case, the investment in question is an investment pursuant to Art. 1(2)(b) BIT (“returns reinvested, claims to money or any other rights having financial value related to an investment”18). The Settlement Agreement itself, the Respondent argues, is an investment of this kind, specifically constituting “claims to money related to an investment”, because, the Respondent argues, it vests a claim for LD 5,420,308.707 in the Respondent. It argues that the Settlement Agreement is “related to an investment” in the sense that it “flows from, and crystalizes, a range of earlier investments” of the Appellant in the 1980s and 1990s. The Respondent argues that the fact that this investment was made before the BIT entered into fore in April 2011 does not harm its argument, as shown by Art. 10 BIT (see at 3.2 supra). Pursuant to Art. 10, the BIT also protects investments made prior to April 22, 2011, but not disputes arising out of them. Thus, the Respondent argues, the jurisdiction of the Arbitral Tribunal ratione materiae is made out.

The Appellant argues that the Arbitral Tribunal’s reasoning is based solely on the Settlement Agreement. If that Settlement Agreement is invalid, then jurisdiction will fail. Consequently, it disputes the Settlement Agreement’s validity, citing two aspects.

The Appellant argues that this (“too narrow”, “legalistic”) interpretation by the Arbitral Tribunal, which it classifies as being solely geared to the legal effects of a settlement agreement under Libyan law, is incorrect. It argues that the interpretation of the Settlement Agreement should be undertaken in line with the Vienna Convention on the Law of Treaties of May 23, 1969 (Vienna Convention; SR 0.111). It argues that a good-faith interpretation of the BIT would make clear that the parties to it did not have the intention of extending the agreed investment protection to disputes that had already arisen. It argues that the fact that a settlement had been concluded in the present case does nothing to change the fact that the disputes between the Appellant and the Respondent had already arisen before the BIT was concluded. It argues that the Arbitral Tribunal’s remarks as to its interpretation of “compromise” under Libyan law were only correct to the extent that they related to new claims in the more narrow sense of that term (“claims”) from the Settlement Agreement. However, to the extent that the Arbitral Tribunal was applying an independent interpretation, as required under BIT agreements, the Arbitral Tribunal’s remarks on Libyan law missed the mark, because they did not take account of the comprehensive concept of “dispute” within the meaning of Art. 10 BIT, which goes beyond the definition of “claim”. The Appellant argues that the meaning and purpose of the BIT, according to its Preamble, is the “encouragement and reciprocal protection of investments” and/or incentives for new investments, “which will stimulate the flow of capital and technology and the economic development of the Contracting Parties”. Thus, old disputes that existed prior to the entering into force of the BIT should remain excluded from its purview, because the contracting parties of the BIT had not wanted claims which were controversial between the parties prior to its entry into force to enjoy the legal protections of the BIT, even if they had been the subject of a new agreement after it entered into force. In addition, it argues that the old dispute could only be regarded as having been settled when the Settlement Agreement was fully performed.

Pursuant to Art. 31(1) VCLT, a treaty is to be interpreted in good faith in accordance with the ordinary meaning to be given to its terms in their context in the light of their object and purpose. Together with interpretation in good faith, a teleological interpretation guarantees a treaty’s “effet utile”. If there are multiple possible interpretations, the term to be interpreted is to be assigned the meaning that guarantees its effective application and does not lead to a result that conflicts with the treaty’s object and purpose (BGE 144 III 599 at 4.4.2 p. 568; 144 II 130 at 8.2.1 p.139; 143 II 136 at 5.2.2 p. 148-149; 142 II 161 at 2.1.3 p.167; 141 III 49519 at 3.5.1 p. 503).

The Federal Tribunal cannot concur with the Appellant. First of all, it is questionable whether a sufficient grievance (see section 2.3) has been made out at all where the Appellant simply asserts that the Arbitral Tribunal had failed to take account of the “comprehensive understanding of ‘dispute’ within the meaning of Art. 10 BIT” and that the investment protection could not in good faith be extended to disputes which had already arisen previously. In further respects, the Arbitral Tribunal’s reasoning is persuasive: the dispute in this case arose because the Settlement Agreement was not complied with and its validity was disputed. This dispute regarding the validity of the Settlement Agreement falls easily within the scope of Art. 10 BIT. The Settlement Agreement itself makes unmistakably clear that as of the date of its conclusion, all the domestic and international court proceedings and other proceedings in connection with the Beida Judgement were settled (see Facts, A). There were thus no longer any “disputes” between the Parties remaining from the time prior to the BIT’s entry into force. As the Respondent correctly points out, the Arbitral Tribunal did not solely base its ruling on jurisdiction by referring to the effects of “compromise” under Libyan law, but rather primarily relied on the wording of the Settlement Agreement. The Appellant, however, fails to deal with this fact, for which reason there is likewise no sufficient grievance made out. It is therefore not necessary for this Court to further delve into the question of what the legal effects of a settlement under Libyan law are.

The reference to the meaning and purpose of the BIT pursuant to its Preamble likewise does not help the Appellant. With this argument, it appears to be trying to assert that only investments which were solicited and then made after the entry into force of the BIT would fall under the scope of its protection. However, this argumentation conflicts with the wording of Art. 10 BIT, which expressly speaks of “investments […] before or after the entry into force of this Agreement”. Furthermore, the BIT, as well as the “non-exclusive” list of assets which are protected as “investments” in Art. 1(1) BIT, is based on a broad property-oriented perspective, which does not rely on any particular act (transaction) occurring. Thus, the Treaty envisages both the promotion and the mutual protection of investments (as to this distinction between a transaction-based and property-based approach, see BGE 144 III 55920 at 4.4.2 and 4.4.3, pp. 570-571). Thus, the Arbitral Tribunal correctly assumed that the BIT was also applicable in terms of its temporal scope.

The Appellant’s argument referring to the ICSID decisions it submitted in evidence is likewise incapable of changing this result in any way. It is already the case that such decisions in the realm of international BIT law do not constitute actual sources of law which the Arbitral Tribunal is bound to follow (BGE 144 III 559 at 4.4.2, p. 569).

It will thus not be necessary for the Federal Tribunal to delve into the alternative justification that was put forward by the Respondent before the Arbitral Tribunal and then again in these appellate proceedings, arguing that jurisdiction is present irrespective of the validity of the Settlement Agreement because its activities in Libya in the 1980s and 1990s were investments within the meaning of Art. 8 BIT and the actions of the Appellant in connection with the conclusion of the Settlement Agreement and its dispute of the validity of the Settlement Agreement constituted a violation of the principle of “fair and equitable treatment” guaranteed by the BIT (“fair and equitable treatment”, FET; see also BGE 141 III 495 at 3, pp. 496 ff.).

The Appeal is rejected, to the extent the matter is capable of appeal.

The judicial costs of CHF 60’000 shall be paid by the Appellant.

The Appellant shall pay the Respondent a total of CHF 80’000 for the proceedings before the Federal Tribunal. This payment of compensation will be taken from the security for costs which were paid into the cashier of the Federal Tribunal.

This Judgement shall be communicated in writing to the Parties and to the arbitral tribunal seated in Geneva.