Duke Investment Limited (Duke) (a Cyprus company) enforced a 2004 LCIA award rendered against the Region of Kaliningrad (Russian Federation) for its failure to reimburse a loan. The award was enforced in Lithuania against two buildings that the Region of Kaliningrad owned there.

In 2006, the Government of the Region of Kaliningrad (Russian Federation) (GRK) commenced ICC arbitration proceedings against The Republic of Lithuania (Lithuania) based on the bilateral investment treaty (BIT) between the Russian Federation and Lithuania. GRK claimed compensation for the expropriation of its assets further to the enforcement of the 2004 LCIA award.

The ICC arbitral tribunal found that it did not have jurisdiction over the dispute and that the application was unfounded. GRK sought the annulment of the award before the Paris Court of Appeal on the ground that the tribunal had ruled without complying with the mandate conferred upon it.

Before the Court of Appeal, GRK first argued that the arbitral tribunal erred in its application of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Second, it alleged that the tribunal erred in holding that GRK was improperly attempting to use the BIT as a mechanism to appeal the LCIA award, while the ICC arbitration did not involve the same parties (GRK and Region of Kaliningrad being different entities) or causes of action.

The Court of Appeal rejected GRK's application and found that the enforcement of an international arbitral award did not amount to expropriation under a BIT. It also held that the arbitral tribunal's interpretation of the BIT was correct, insofar as it related to the principles established by the New York Convention and the Vienna Convention on the Law of Treaties. The Court also noted that the BIT could not be interpreted as giving rise to state liability for complying with its obligations under the New York Convention.