The public sphere has been rife with rushed, not to say rash, conclusions about the current situation, with everybody clamouring to weigh in on the emotional, ethical, or political dimensions of the Lex TVN being pushed through Polish parliament. But anybody with even a basic grasp of investment arbitration in all its complexity will withhold judgment, and refrain from discussing the potential for the Discovery group seeking damages pursuant to the BIT without in-depth analysis. The submissions in such a case, if it is in fact initiated, are bound to run into the thousands of pages.

The Bilateral Investment Treaty between Poland and the United States has the basic objective of safeguarding legitimate interests of American investors in Poland and vice versa. It lays down certain principles which the host country is meant to observe in dealings with foreign investors; if an investor believes that these principles have been violated, he can cite the BIT as a direct basis for a claim.

These principles are formulated as a series of general clauses; given this generality, they are subject to construction by the arbitral tribunal on a case by case basis. With time, arbitration practice has produced an accrual of interpretations formulated in myriad cases, many of them mutually contradictory. The parties to any proceedings will have plenty to choose from as they structure their arguments.

By way of illustration, we need look no further than the seemingly straightforward obligation of one contracting state (in this case, Poland) to treat investments from the other one (USA) in a non-discriminatory fashion (Art. II.1 of the Polish-American BIT). This principle comes part and parcel with the reservation that the given contracting state shall have the right to reserve exceptions in specific areas. And, in the relevant Annex to the BIT, the Polish party has made the reservation that such exceptions may apply, among other areas, to ownership and operation of radio and television stations, unless changes in this regard have been notified to the other party. This remains without prejudice to the overarching principle that an investment should always be treated fairly and equitably, but application of these general norms to a specific case will always be a matter of individual interpretation.

Another likely sticking point would be Art. XII of the Polish-American BIT, whereunder the treaty shall not impinge on the legislation of a contracting state, on its administrative decisions, or on the judgments of its courts. The exact scope of this regulatory freedom of individual states has been the object of hard argumentation in many arbitration cases, for example in a recent case brought by renewable energy investors against Spain. Again, there is no – and, in fact, there couldn’t be any – established interpretation, and every specific case must be considered on its own merits.

Another issue arises in connection with the legislative Act regarding the Polish National Broadcasting Council, which makes no provision for assessing the corporate chain of dominance; the essential criterion refers to a corporate seat in an European Economic Area jurisdiction, whatever the underlying shareholding structure. Yet opinions have been voiced to the effect that the legislature did intend for dominance to be evaluated more thoroughly, and that the Act falls to be construed in reference to its underlying purpose, more broadly. And the list of issues goes on...

It will be up to the aggrieved investor to decide whether he wants to pursue the investment arbitration route, or to take his case before the general courts. That said, in a situation where the dispute refers to the freedom of a country to shape its laws, and the BIT is likely to be invoked as a counterweight to such freedom, litigation before the state courts does not seem a likely strategy in the Lex TVN case.