Sukyas v Romania, PCA Case 2020-53 & Sukyas v Romania, PCA Case 2020-54

At a glance

Parties

Mr. Edward Sukyas (Canadian national, also claiming Turkish nationality) v. Romania

Case no.

PCA Case 2020-53 & PCA Case 2020-54 (case record). This award concerns Mr. Edward Sukyas's claim; a legally distinct but procedurally coordinated proceeding was brought by his brother, Mr. Jak Sukyas.

Forum and rules

PCA-administered arbitration under the UNCITRAL Arbitration Rules 2010; seat Paris, France

Treaty

Canada–Romania BIT of 8 May 2009 and/or Canada–Romania BIT of 17 April 1996; Turkey–Romania BIT of 3 March 2008 also invoked

Tribunal

Prof. Bernard Hanotiau (Presiding Arbitrator), Prof. Dr. Stephan W. Schill, Ms. Loretta Malintoppi

Sector

Film production and post-production; cultural industries

Outcome

Final Award of 6 November 2024: all claims dismissed for lack of jurisdiction; the claimant bears the costs.

Amount

Claimed (jointly by both brothers): no less than USD 2,060,145,997.43 plus interest. Awarded: nothing. The claimant bears the arbitration costs of EUR 473,293.13, so he must reimburse Romania's advance of EUR 236,646.57. He also pays Romania's legal costs of EUR 373,788.48.

The dispute

The claimant's uncle, Melik Sukyas, and his father, Vahram Sukyas, owned Cinegrafia Română (CIRO), a Romanian film company that ran the Mogoşoaia film production and post-production laboratory near Bucharest. The claimant alleged that in 1948 Romania took CIRO after Vahram was arrested and coerced, and that CIRO was dissolved and its laboratory taken over by the National Cinematographic Office. From 2001 the Sukyas brothers sought restitution or compensation in the Romanian courts under Law 10/2001, Law 221/2009 and the Civil Code, without success; they also litigated in US courts and before the European Court of Human Rights. The claimant brought claims under the two Canada–Romania BITs and, from his Statement of Claim onwards, under the Turkey–Romania BIT. Romania raised ten preliminary objections, including that the Turkey–Romania BIT claims were added too late, that the 'cultural industries' exception in the Canada–Romania BITs applied, that the claim had been settled by a 1960 US–Romania lump-sum agreement, and objections on nationality, ratione temporis, waiver and abuse of process.

Key holdings

1. No jurisdiction over the Turkey–Romania BIT claims. Jurisdiction is assessed at the date the arbitration began (18 February 2020). The claimant accepted Romania's offer to arbitrate under the Turkey–Romania BIT only on 1 April 2022, in his Statement of Claim. A tribunal constituted under the Canada–Romania BITs cannot extend its jurisdiction to a later arbitration agreement under a different treaty without the parties' agreement, and Romania did not agree. ¶¶ 187–199
2. Article 22 of the UNCITRAL Rules does not allow the Turkey–Romania BIT claims to be introduced as an amendment, because they fall outside the Tribunal's jurisdiction. Romania's refusal to consent is not an abuse of right or process: it is not tainted by an ulterior motive to evade a duty to arbitrate (applying Renco v. Peru). ¶¶ 202–203
3. Article VI(3) of both Canada–Romania BITs ('Investments in cultural industries are exempt from the provisions of this Agreement') is a clear and broad exception. It focuses on the nature of the investment, not on the State's measures. The Tribunal rejected the claimant's reading that it only protects regulatory autonomy, pointing to the specific regulatory exceptions in Article XVII. ¶¶ 228–237
4. The claimant's investment, CIRO and its film laboratory, falls squarely within Article VI(3)(b) ('the production, distribution, sale or exhibition of film or video recordings'). Because 'the provisions of this Agreement' include Romania's offer to arbitrate, Romania never consented to arbitrate disputes about such investments. Canada's non-disputing party submission only confirms this reasoning. ¶¶ 227, 242–244
5. The MFN clauses (Article III) cannot be used to avoid the exception. They are part of the BITs, so an investor without access to 'the provisions of' the BITs also has no access to their MFN clauses (following Mesa Power v. Canada). The claims under both Canada–Romania BITs are dismissed. ¶¶ 248–249
6. The Tribunal addressed only the objections that were decisive, for reasons of judicial economy, and did not rule on Romania's other objections. ¶¶ 165–167
7. Costs follow the event. Romania's legal costs are reasonable and are a small fraction of the claimant's. The claimant bears the arbitration costs of EUR 473,293.13 (and must reimburse EUR 236,646.57 to Romania), his own legal costs, and Romania's legal costs of EUR 373,788.48. ¶¶ 258–261

Procedural history

1. 18 February 2020Notice of Arbitration filed under Article XIII of the 1996 and 2009 Canada–Romania BITs. The claimant appoints Prof. Dr. Stephan W. Schill.
2. 1 November 2020Tribunal constituted when the parties appoint Prof. Bernard Hanotiau as presiding arbitrator.
3. 15 January 2021Terms of Appointment (dated 13 January 2021) and Procedural Order No. 1 issued. The proceeding is to be coordinated with the parallel case of Mr. Jak Sukyas.
4. 12 April 2021Proceedings suspended for four months after the claimant's counsel withdrew. On 13 August 2021 the suspension is extended to 30 September 2021.
5. 30 January 2022Procedural Order No. 2 requires a written undertaking from Hecht Partners to pay any adverse costs award and refuses Romania's application for disclosure of third-party funding.
6. 1 April 2022Statement of Claim filed; it adds claims under the Turkey–Romania BIT.
7. 13 April 2023Canada files a non-disputing Contracting Party submission under Annex C of the 2009 BIT.
8. 5 July 2023PCA press release on the public viewing of the hearing.
9. 10–13 July 2023Hearing on jurisdiction and admissibility at Hôtel du Louvre, Paris.
10. 6 November 2024Final Award: no jurisdiction under any of the three BITs; costs against the claimant.

Tribunal, counsel and experts

Decided by

• Bernard Hanotiau President — appointed by the parties jointly
• Stephan W. Schill Co-arbitrator — appointed by the claimant
• Loretta Malintoppi Co-arbitrator — appointed by the respondent

For the claimant

Hecht Partners LLP · Potestas Partners · Cozac Sofia Elena Attorney's Office · I.A. Chambers – New York · Victoria Associates · Mayer Brown · Pierce Bainbridge Beck Price & Hecht · Crina Baltag Law Office · Maravela Mihaela Law Office · Zamfirescu Racoti Vasile & Partners

For the respondent

Stoica & Asociații · Savoie Arbitration · FAR Avocats · Laborde Law · Savoie Laporte

Experts

Lavinia Stan (claimant) · Flavius Antoniu Baias (claimant) · David Nolte (claimant) · Răzvan Dincă (respondent)

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Keywords

• cultural industries exception
• Canada–Romania BIT
• Turkey–Romania BIT
• most-favoured-nation clause
• jurisdiction ratione voluntatis
• critical date for jurisdiction
• new treaty claims
• Article 22 UNCITRAL Rules
• abuse of process
• non-disputing party submission
• film laboratory
• CIRO
• Mogoşoaia
• communist-era nationalisation
• Law 10/2001
• security for costs
• contingency fee undertaking
• Mesa Power

Summary generated with AI from the published documents — refer to the award for the authoritative text.