Arbitral tribunal under the ICC Rules confirms Transdnistria’s access to arbitration (as respondent)

In a 2018 award that recently surfaced in the US enforcement proceedings, the tribunal (Noah Rubins, Sophie Nappert, Galina Zukova) found that Transdnistria had standing to participate in the arbitration. This finding was made with the caveat that the tribunal does not need to decide on Transdnistria’s legal status, and, in particular, on whether it was a State because neither party contested Transdnistria’s standing.

The tribunal engaged extensively with the issue of arbitrability of the dispute under Transdnistrian law (and other issues of Transdnistrian law). It stressed that an ICC tribunal seated outside of Transdnistria is not bound by its laws on arbitrability. Nevertheless, the tribunal considered respondent’s objections to discharge the obligation of striving to render an enforceable award. The tribunal found that respondent’s prior initiation of ICC arbitration to resolve a dispute respondent claimed to be non-arbitrable in this one precluded respondent from invoking non-arbitrability.

The tribunal also ducked the question of whether the respondent was entitled to sovereign immunity. Transdnistria claimed that the tribunal lacked jurisdiction, because under Transdnistrian law, it enjoyed sovereign immunity. The tribunal dismissed the objection, finding that the arbitration clause amounted to waiver of immunity under French lex arbitri.

The pragmatic approach adopted by the tribunal appears to be reasonable. It remains to be seen how the US courts will deal with some of the same issues (most notably status). However, one should be cautious not to infer too much from the award in terms of access of non-recognized entities to arbitration generally – a lot will depend on the specific situation in each case