In a ruling handed down this week following a consequentials hearing on 15 July 2025, the Court of Appeal confirmed the award in favour of Mr Stava and that all jurisdictional challenges against him had been dismissed. In doing so, the Court comprehensively dismissed the Czech Republic's attempt to argue that its earlier decision to set aside the award in favour of Diag Human SE on jurisdictional grounds impacted Mr Stava's own entitlement to damages.
The dispute arose from wrongdoing by the Czech Health Minister dating as far back as the early 1990s and involving interference in and corruption of a commercial arbitration by the Czech State, including in the arbitral review process. Mr Stava and Diag subsequently brought a claim under Switzerland’s 1990 bilateral investment treaty with the former Czechoslovakia. In 2022, a London-seated tribunal chaired by Bernard Hanotiau, with Daniel Price and Rolf Knieper, found the Czech Republic liable for abusing its sovereign powers and interfering in the commercial arbitration, awarding Mr Stava and Diag the Czech koruna, now equivalent of around US$750 million (the BIT Award). Mishcon acted for the client to win the award originally and has represented the clients through the Czech Republic's challenge before the Commercial Court and now also the Court of Appeal.
The Czech Republic challenged the BIT Award in the English courts, raising issues of substantive jurisdiction and serious irregularity (most of which were dismissed in a series of rulings last year by Mr Justice Foxton in the Commercial Court).
Following a subsequent hearing before the Court of Appeal in respect of Mr Justice Foxton's rulings, Lords Justices Males and Popplewell and Lady Justice Andrews upheld one of the Czech Republic's two appeals and set aside the award in favour of Diag on jurisdictional grounds, finding that Diag was no longer controlled by a Swiss national after June 2011. At the same time, however, the Court dismissed the Czech Republic's attempt to revive its challenge to the tribunal’s jurisdiction over Mr Stava, finding that Mr Justice Foxton had correctly characterised the objection as a matter of substance rather than jurisdiction. The Czech Republic then sought to argue that the Court's decision in respect of its appeal against Diag impacted Mr Stava's own entitlement to damages under the BIT Award. In a thorough and well-reasoned judgment following a consequentials hearing on 15 July 2025, the Court comprehensively dismissed the Czech Republic's argument and confirmed the BIT Award in favour of Mr Stava.
The Czech Republic's limited prior success before the Court of Appeal as against Diag does not (in any event) materially improve its position as it still has to contend with an earlier commercial award in favour of Diag. The Court of Appeal's decision is yet another blow to the Czech Government’s strategy of seeking to evade its obligations under international law by resorting to endless and costly proceedings and delays. There is now no remaining credible basis for the Czech Republic to resist enforcement of Mr Stava’s and Diag's entitlement to c. US$750 million (under the BIT Award and the earlier commercial award respectively). The Court of Appeal’s decision expressly contemplates each being able to take enforcement steps in respect of the award applicable to them. The Czech Government’s failing strategy is proving costlier to the Czech taxpayer with each day that passes, as interest and legal costs continue to accrue in respect of an ever-increasing debt which will have to be paid, sooner or later, by the Czech Government.
The Mishcon de Reya team was led by Partner Nicola Bridge, Managing Associate Lydia Allaby, and Associate Himaansu Servansingh in London. This is the latest success for our multi-award-winning team that can help with the full service for arbitrations.
Instructed by Mishcon de Reya, the Counsel team was led by Lord Verdirame KC and Philip Riches KC (Twenty Essex Chambers), supported by Kate Parlett, Sam Goodman, Jonathan Ketcheson and Isabelle Winstanley (Twenty Essex Chambers).