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New victory for Venezuela before the Dutch Supreme Court in the arbitration case brought by the García Armas family

Photo by Alex Dudar / Unsplash

On 21 April 2023, the Supreme Court (Civil Chamber) of the Netherlands dismissed [see the unofficial English translation below] an appeal lodged by some members of the García Armas family to set aside an Award of 13 December 2019 rendered by an Arbitral Tribunal seated in the Hague under the auspices of the Permanent Court of Arbitration (PCA).

Within the framework of said Award, the Arbitral Tribunal had accepted the exceptions ratione voluntatis and ratione personae alleged by the Respondent Venezuela and declined its jurisdiction in relation to the claim submitted by some members Gacía de Armas family in 2015.

Subsequently, the Claimants filed a petition before the Hague Court of Appeal to set aside the award, which was rejected on 19 January 2021.

Finally, the García Armas family sought to annul the Award before the Supreme Court of the Netherlands.

Specifically, after making some preliminary observations regarding the legislative history of Articles 1052(5) and 1065(1) of the Dutch Civil Procedure Act, and following the Opinion of the Advocate General, the Supreme Court concluded that the decision declaring that an arbitral tribunal lacks jurisdiction due to the absence of a valid arbitration agreement cannot be annulled under Article 1065(1) of Dutch Civil Code of Procedure (DCCP).

In fact, and as noted in the legislative history of the reform of these articles, the grounds for setting aside under Section 1065(1)(a) DCCP only come into play if the arbitral tribunal finds that it has no jurisdiction to hear the case. If the arbitral tribunal upholds the plea of lack of jurisdiction due to the absence of a valid arbitration agreement, the ordinary court has jurisdiction to hear the case pursuant to Section 1052(5) DCCP. In the opinion of the Court, there is no reason to interpret the first sentence of Article 1052(5) differently in the case of international investment arbitration.

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