The Tribunal accepted and rejected some of each party’s arguments.
It found it had jurisdiction to decide SGS’s claims of violations of the
Switzerland–Pakistan treaty.
It held that the right to exercise jurisdiction
over treaty claims did not depend on the findings of the Pakistan
Arbitration (which was adjudicating issues of contract breach arising under
the PSI Agreement), thereby permitting parallel proceedings arising from
the same set of facts, albeit under different governing laws.
The Tribunal similarly rejected several of Pakistan’s other jurisdictional arguments.
More specifically, it found that the expenditures made by SGS pursuant to the
PSI Agreement constituted an “investment” within the meaning of the BIT
and the Convention on the Settlement of Investment Disputes between
States and Nationals of Other States (the ICSID Convention) and that,
because the BIT did not contain a “fork-in-the-road” clause.
SGS had not waived its rights to arbitration under the BIT by participating in the Swiss
and Pakistani legal proceedings; it also found that the 12-month consultation period in the BIT was directory and procedural rather than mandatory and jurisdictional in nature.