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French Supreme Court in Libya v Nurol: autonomy of arbitration agreement; investment legality goes to merits, not jurisdiction; Libya-Turkey BIT temporal scope clarified; Libya’s prior acknowledgements undermine challenge.

Published on: 28 February 2025

Published by a LexisNexis Arbitration expert
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Article summary

Libya v Nurol Insaat Ve Ticaret Anonim, French Supreme Court, First Civil Chamber, 12 February 2025, No. 22-11.436

What are the practical implications of this case?

The decision carries concrete consequences. It confirms the independence of the arbitration clause in the investment arbitration context. It further explains that the lawfulness of the investment is a matter for the merits, not a question of jurisdiction, and that lawfulness does not affect whether the BIT applies; instead, it governs access to the BIT’s substantive safeguards for the investment. In short, the core practical points are:

  • The autonomy of the arbitration agreement in investment arbitration is upheld;
  • Whether an investment is lawful concerns the merits rather than jurisdiction;
  • Lawfulness does not determine the BIT’s applicability, but conditions the benefit of its substantive protections.

Accordingly, an arbitral tribunal’s jurisdiction under a BIT is not dependent on the investment’s compliance with host-state legality requirements, save where the BIT expressly stipulates otherwise...

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