University Institute of Legal Studies, Panjab University, ChandigarhFull description
Claimant Memorial, Winner Team - NLS Int. Arbi. Moot, 2016
The moot team of AIL performed wonders at the 4th KIIT National Moot Court Competition 2016, held in KIIT Institute in Bhubaneshwar, Orissa. Nehmat Sethi, Aman Venugopal and Akanksha, the team of ...
Petitioner Memo, Runners Up - BR Sawhny Moot Competition 2016
Full description
moot demo memo
This is a moot memorialFull description
5TH JNU INTERNATIONAL BANKING AND INVESTMENT LAW MOOT COURT COMPETITION – 2016
R URITANIAN URITANIAN TELECOMS LIMITED V. THE GOVERNMENT
I.
OF THE R EPUBLIC EPUBLIC OF AREANA
Areana - Rurit ita ani nia a Ec Econ ono oi icc Co Coo! o!eerati tio on
1. Areana and Rurita Ruritania nia are two friendly friendly neighbour neighbouring ing countries countries which which have forged forged strong economic and commercial relations since 1990’s. As part of this emerging relationship both the countries co untries have signed an “Agreement between the Government of the Republic Rep ublic of Ruritania and the Government of the Republic of Areana for the romotion and !utual rotection of "nvestments on #$rd %ecember& 199' (Anne)ure "*. +he Agreement came into force on 1st ,anuary& ,anuary& 199-. +he inance inance !inisters !inisters of both the countrie countries& s& while signin signing g the Agree Agreemen ment& t& said in a Joint Communiqué& inter alia& “/oth the Republics pledge support for the security of all investments made by the nationals of either country in the other& irrespecti irrespective ve of any formal provisions provisions in such agreements. agreements. Although Although the initial period of validity of this agreement was 10 years& since neither party has served notice of termination on the other& the agreement continues to be in force even as investments from either country in the other have proliferated over time. II.
Te"eco# In In$u#tr%
#. "t was 1999 1999 that the #G mobile mobile cell cell technology technology came to be widely widely introduce introduced d in Areana. Areana. #G is the sho short rt form form for second secondge gener nerati ation on wirele wireless ss telepho telephone ne technol technology ogy.. 2econd 2econd generation generation #G cellular cellular telecom networ3s were first first commercially commercially launched on the G2! standard in inland by Radiolin4a in 1991. +hree primary benefits of #G networ3s over their predecessors were that phone conversations were digitally encrypted5 #G systems were significantly more efficient on the spectrum allowing for far greater mobile phone penetration levels5 and #G introduced data services for mobile& starting with 2!2 te)t messages. $. 6hen 6hen the the #G #G techn technol ology ogy was intr introd oduc uced ed in Area Areana na&& ther theree were were not many many Areana Areana companies in the field. Areana is divided into ## telecommunications 7ones& with #81 1
5TH JNU INTERNATIONAL BANKING AND INVESTMENT LAW MOOT COURT COMPETITION – 2016
7onal licenses. +he Ruritanian Government was then enouraging the local entrepreneurs to enter the telecom field& by subsidi7ing R % through directly subscribing to the e:uity of the new telecom companies. +hus was formed the Ruritanian +elecoms ;ompany (R+<* in 199' with #0 = shareholding by the Ruritanian Government.
/y the end of
1990’s& the Ruritanian +elecoms became a name to rec3on with in the world of advanced telecoms technology. '. "n view of the limited number of companies in the field& the Areana %epartment of +elecommunications (%o+* followed the simple firstcomefirstserved (;2* policy in allocating spectrum licences to eligible applicant firms& in order to encourage more operators to venture in this arena for the benefit of the consumers. %uring #00$0> this was the policy followed by %ot. III.
&-G Sca in Areana
-. "n #008& the Areana !inister for %o+ deviated from ;2 policy without consulting the ;abinet. +his was done despite a rime !inister ’s ?ovember #00> letter advising the !inister to allot #G spectrum transparently and revise the #001 license fee. +his resulted in a number of flaws of both substantial and procedural nature. irst& the license fee of #001 was retained on the basis of a recommendation of the +elecom Regulatory Authority of Areana& but contrary to the ;abinet decision of #01$. 2econd& eligibility of the bidder was no longer insisted as a criterion. 6hen the license was issued it was put as a condition in the license that should the licensee lac3 the necessary technology or infrastructure& it should ac:uire them as soon as possible or at least within one year of the issuance of the license. "n fact according to an Audit Report by the Areana ;omptroller and Auditor General& licenses were consciously granted to ineligible corporations& including those with no e)perience in the telecom sector and those who had concealed relevant information. +hird& despite the warnings from the Areana !inistry of inance e)pressing strong procedural concerns to the %o+& these were ignored& and the cutoff date was moved bac3wards from 1st @ctober #00> to #-th 2eptember. (+he reason for this bac3dating could probably be that by 1st @ctober& #00> %o+ received ->- applications for #
5TH JNU INTERNATIONAL BANKING AND INVESTMENT LAW MOOT COURT COMPETITION – 2016
A2 licences from 'B companies.*. @n #-th 2eptember& the %@+ announced on its website that applicants filing between $C$0 and 'C$0 pm that day would be granted licenses& and 1## licenses were shown to have been granted that day& according to a 10th ,anuary& #008 %o+ notification. B. "n the result& although one corporation was ineligible& it was granted a license for 2D#$0 million& but the corporation immediately sold a '-percent share to a foreign based ;ompany for 2DB#0 million. Another ineligible company obtained a license for 2D#-0 million& but immediately sold a B0percent share for 2D9#0 million to yet another foreignbased company. IV.
'oint Venture
>. Even as the Ruritanian investments diversified& Ruritanian mobile cell industry began ta3ing interest in the fast e)panding cell mar3et in Areana& since 199-. +hus Ruritanian +elecoms
+he 4oint venture company& RuritaniaAreana Air 6aves
formed on 10th ebruary #008& entered the mar3ets of both countries by !arch #008. "n lieu of its '9= shares& +AA6< transferred its seventeen #G licenses in favour of RAA6< for the entire duration of the licenses (a license was effective for #0 years e)tendable to 10 more years*5 whereas R+< pledged its latest technology in favour RAA6< and an underta3ing not to sell its brand of cells in Ruritania. "t may be noted that +AA6< was among the licensees who were granted licenses under the Areana %o+ notification of #-th 2eptember& #00>& having won 1> licenses. V.
&()& Ru"in* o+ Su!ree Court o+ Areana
8. "n the meantime& Airtel "nfotech ;o.
& felt aggrieved of the decision by %o+ as its application was not considered under the ;2 rule. "t moved the 2upreme ;ourt of
$
5TH JNU INTERNATIONAL BANKING AND INVESTMENT LAW MOOT COURT COMPETITION – 2016
Areana on writ petition. %ecsslaring the allotment of spectrum as Funconstitutional and arbitraryF& the ;ourt :uashed all 1## licences issued in ,anuary #008.
,. "n the Airtel Infotech Co. Ltd. v. Government of Areana and Others decided on #nd
ebruary& #01#& the 2upreme ;ourt of Areana heldC 77. The eercise underta!en b" the officers of the #oT bet$een %e&tember' ())7 and *arch ())+' under the leadershi& of the then *inister of C,IT $as $holl" arbitrar"' ca&ricious and contrar" to &ublic interest a&art from being violative of the doctrine of equalit". The material &roduced before the Court sho$s that the *inister of C,IT $anted to favour some com&anies at the cost of the -ublic chequer. 7+. The manner in $hich the eercise for grant of Licenses to the a&&licants $as conducted on /)./.())+ leaves no room for doubt that ever"thing $as stage managed to favour those $ho $ere able to !no$ in advance the change in the im&lementation of the first0come0first served &olic". +/. In the result' the $rit &etitions are allo$ed in the follo$ing terms1 2i3 The licences granted to the &rivate res&ondents on or after /)./.())+ &ursuant to t$o &ress releases issued on /)./.())+ and subsequent allocation of s&ectrum to the licensees are declared illegal and are quashed. 2ii3 The above direction shall become o&erative after four months. 2iii3
4ee&ing in vie$ the decision ta!en b" the Areana Government in ()//'
2iv3Telecom 5egulator" Authorit" of Areana 2T5AA3 shall ma!e fresh recommendations for grant of licence and allocation of s&ectrum in (G band in (( %ervice Areas b" auction.
'
5TH JNU INTERNATIONAL BANKING AND INVESTMENT LAW MOOT COURT COMPETITION – 2016
2v3 The Areana Government shall consider the recommendations of T5AA 6on their merits and ta!e a&&ro&riate decision $ithin net one month and fresh licences be granted b" auction.
10. +he ;ourt also imposed a fine of 2 D -0 million on two licensee companies& and 2 D million on four other licensee companies which included RAA6<. +he ;ourt further stipulated that the licences would continue to be valid for four more months from the date of its 4udgment& whereafter they should be auctioned by the Areana Government. VI.
11. Reacting to the Areana 2upreme ;ourt’s 4udgment& R+< invo3ed its right under Article 9.1 of the RuritaniaAreana bilateral investment treaty by filing a notice of dispute against Areana. +he formal notice by R+<& served on the government of Areana by the Embassy of Ruritania& +imbactoo (Republic of Areana* re:uested the Republic of Areana to settle the dispute relating to the revocation of RAA6<’s 1> telecom licenses in an amicable way within si) months. "f the dispute was not amicably resolved by August #8& #01# R+< reserved the right to commence proceedings against +he Republic of Areana as provided in the bilateral treaty. R+< believed that the cancellation of RAA6<’s licenses following R+<’s investment of billions of dollars into the Areana cellular sector was contrary to "ndia’s obligations under the /"+& including obligations to provide investments with full protection and security and obligations not to e)propriate investments. 1#. ollowing R+<’s notice& the Government of Areana entered into negotiations with R+< and the Ruritanian Government. "t drew the attention of the Ruritanian parties to ara 81 (iv* of the 2upreme ;ourt Ruling& and as3ed them to await the outcome of the public auction. Also& one of the companies penali7ed with 2 D -0 million fine had preferred a review of the on #nd ebruary& #01# ,udgment of the Areana 2upreme ;ourt on 10th %ecember& #01# and this review was pending decision.
or these reasons& the -
5TH JNU INTERNATIONAL BANKING AND INVESTMENT LAW MOOT COURT COMPETITION – 2016
Government re:uested R+< to postpone the conciliation proceedings. or the moment R+<& upon a little persuasion from the Ruritanian Government& decided to suspend the conciliation proceeding. 1$. owever& R+< found the subse:uent developments unacceptable. +he auction that too3 place on 1-th ?ovember #01#& proved too e)pensive for RAA6< which had to pay 2 D 1'00HI million per licence. +he review petition was dismissed by the Areana 2upreme ;ourt in ,une #01$. urther& one of the losing bidders at the auction& Airwaves olding ;ompany& filed a writ petition in the Areana 2tate igh ;ourt :uestioning both the reserve price at the auction and also participation by companies fined by the 2upreme ;ourt in its ebruary #01# 4udgment. +he Areana 2tate igh ;ourt& without serving notices on the said companies& finally decided Air$aves 8olding v. the Areana #e&artment of Telecoms on $0th ,anuary& #01-& holding that the companies fined by the
2upreme ;ourt in its ebruary #01# 4udgment were dis:ualified from the auction involving the spectrum as available as at 10th ,anuary& #008& and that for that reason& the 1-th ?ovember& #01# auction was illegal. +he Areana %epartment of +elecoms’ appealed against this ruling before the 2upreme ;ourt which is pending. +he 2upreme ;ourt refused to implead any interveners as there were none before the igh ;ourt. 1'. "n the meantime& the Government of Areana did propose to R+< other lucrative areas of investment& such as manufacturing of mobile cells and "ads. owever& ta3ing the view that no useful purpose would be served either by resorting to any further grievance redressal mechanism or to waiting any longer for the conciliation procedure& R+< has now invo3ed the arbitration procedure vide Article 9 (#* of the /ilateral +reaty.
Areana
Government has accepted the notice of arbitration under protest. 1-. R+<’s arguments in a nutshell include the followingC 1. +here are no effective legal remedies to be e)hausted. #. +he ebruary #01# 2upreme ;ourt 4udgment amounted to deprivation of property for which R+< deserves compensation& e:uivalent to the losses suffered by RAA6<. B
5TH JNU INTERNATIONAL BANKING AND INVESTMENT LAW MOOT COURT COMPETITION – 2016
$. +he ,anuary #01- ruling of the 2tate igh ;ourt amounted to another count of deprivation of property. '. /oth the deprivations were tantamount to deprivation of sovereign wealth of the Ruritanian Republic& in violation of the principle of sovereign immunity. -. $0th ,anuary& #01- ,udgment of the Areana 2tate igh ;ourt and the procedure followed by the 2upreme ;ourt on appeal amounted to denial of 4ustice under international law. B. ;ompensation is due on each of these counts. A##u!tion#
1. /oth Ruritania and Areana are parties to all relevant treaties and international conventions and have underta3en to implement them in their ?ational
>