VSA- 512
Professor V.S. Mani Memorial International Law Moot Court Competition – 2016 2016 (Banking and Investment Law)
Before
THE AD-HOC ARBITRAL TRIBUNAL SETUP IN ACCORDANCE WITH UNCITRAL IN JAIPUR NATIONAL UNIVERSITY, JAIPUR
I n th e matter matter of RURITANIAN TELECOMS LIMITED ……………………..…….…………
APPLICANT
V.
REPUBLIC OF AREANA ………………………….…………………….……RESPONDENT
M emori al on behalf behalf of the Applicant Applicant
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) TABLE OF CONTENTS
LIST OF ABBREVIATIONS ....................................................... ....................................................................................................... ................................................ IV TABLE OF AUTHORITIES ........................................................................................................ ......................................................................... ............................... VI STATEMENT OF JURISDICTION.................................. J URISDICTION.......................................................................................... ............................................................XV SUMMARY OF FACTS ........................................................................................................... XVI QUESTIONS PRESENTED PR ESENTED................................................ .................................................................................................... ........................................................ XIX SUMMARY OF ARGUMENTS ................................................. ................................................................................................. ................................................ XX 1. THAT THE ARBITRAL PROCEEDINGS UNDER ARTICLE 9(2) OF THE BIT ARE MAINTAINABLE. .................................................... ......................................................................................................... ..................................................................... ................ 1 1.1
THAT THEREARE NO EFFECTIVE LOCAL R EMEDIES EMEDIES TO BE EXHAUSTED. .......................... 1
1.2
THAT THE EXHAUSTION OF LOCAL R EMEDIES EMEDIES WAS FUTILE. ........................................... 3
1.3
THAT THE ACT OF AREANA‘S JUDICIARY AMOUNTS TO DENIAL OF JUSTICE. ................. 5
2. THAT THE ACTS OF THE STATE OF AREANA AMOUNTED TO DEPRIVATION OF SOVEREIGN WEALTH OF THE RURITANIAN REPUBLIC, IN VIOLATION OF THE PRINCIPLE OF SOVEREIGN IMMUNITY ................................................ ................................................................................. ................................. 9 2.1
THAT THE ACT OF AREANA HAS LED TO DEPRIVATION OF SOVEREIGN WEALTH OF
R URITANIA ........................................................................................................... .............................................................................. ........................ 9 URITANIA ..................................................... 2.2
THAT THE VIOLATION OF SOVEREIGN IMMUNITY R ENDERS ENDERS THE EXHAUSTION OF LOCAL
R EMEDIES EMEDIES CLAUSE MEANINGLESS ..................................................... ............................................................................................. ........................................ 10 2.3
THAT THE DEPRIVATION OF SOVEREIGN WEALTH HAS LED TO VIOLATION OF THE
PRINCIPLE OF SOVEREIGN IMMUNITY ........................................................................................ 12 3. THAT RURITANIA HAS HAS VIOLATED ARTICLE 2(2) OF THE BIT BY NOT CONFORMING TO THE PRINCIPLES OF FAIR AND EQUITABLE TREATMENT AND FULL PROTECTION AND SECURITY. ................................................................................... 17 3.1
THAT THE R ESPONDENT ESPONDENT HAS VIOLATED THE LEGITIMATE EXPECTATIONS OF THE
CLAIMANT COMPANY. ............................................................................................................... 18 II | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
3.2
THAT THE R ESPONDENT ESPONDENT DID NOT FOLLOW DUE PROCESS NORMS. .................................. 20
3.3
THAT THE R ESPONDENT ESPONDENT DID NOT ACT I N GOOD FAITH. ................................................ 22
3.4
THAT THE R ESPONDENT ESPONDENT‘S ACTIONS LACKED PROPORTIONALITY.................................... 23
4. THAT THE 2012 SUPREME COURT RULING AND AND THE 2015 STATE HIGH COURT RULING
AMOUNTED
TO
EXPROPRIATION
OF
INVESTMENTS
OF
THE
APPLICANT…………………………………………………………………………………… 25 4.1
VALIDITY OF ―SOLE EFFECTS ‖ DOCTRINE. ............................................... ..................................................................... ...................... 26
4.2
THE R EQUIREMENT EQUIREMENT FOR SERIOUS A ND IRREVERSIBLE DAMAGE .................................... 29
4.2.1
EASURE .................................................................................... DURATION O F T HE M ..................................................... ............................... 31
4.2.2
HAT T HERE W AS A L ONTROL OVER T HE I NVESTMENT ................................ 32 T A LOSS O F C ONTROL
4.2.3
HAT T HERE W AS I NTERFERENCE W ITH I NVESTOR‟ S E XPECTATIONS .......................... T .......................... 33
4.2.4
HAT T HE ACTIONS O F R ESPONDENT L ACK P ROPORTIONALITY .................................. 35 T
4.3
THAT THE POLICE POWER EXCEPTION CANNOT BE TAKEN BY THE R ESPONDENTS ESPONDENTS ....... 37
4.4
THAT THE R URITANIA URITANIA- AREANA BIT DOES NOT CONTAIN A NY EXCEPTION TO THE
PAYMENT OF COMPENSATION. .................................................................................................. 37 5. THAT THE RESPONDENT ARE OBLIGED TO MAKE REPARATION FOR THE LOSSES. ....................................................................................................................................... 39 5.1
THAT R EPARATION EPARATION AGAINST U NLAWFUL EXPROPRIATION IS TO BE MADE. .................. 39
5.2
THAT THE COMPENSATION FOR VIOLATION OF FAIR A ND EQUITABLE TREATMENT IS TO
BE MADE . ...................................................... ............................................................................................................ ............................................................................ ...................... 40 5.3
THAT THE MORAL DAMAGES SHOULD I N PRINCIPLE BE AWARDED TO THE
CLAIMANTS…….. ................................................... ........................................................................................................ ................................................................... .............. 41 PRAYER ................................................................................................ ...................................... XV
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) LIST OF ABBREVIATIONS
S NO.
ABBREVIATION
FULL FORM
1.
¶
Paragraph
2.
Art.
Article
3.
BIT
Bilateral Investment Treaty
4.
Chap.
Chapter
5.
DoT
Department of Telecomunication
6.
Ed.
Edition
7.
Eds.
Editions
8.
FCFS
First Come First Serve
9.
FET
Fair And Equitable Treatment
10.
ICSID
International Center For Settlement of Investment Dispute
11.
ICJ
International Court of Justice
12.
IIAs
International Investment Agreements
13.
ILC
International Law Commission
14.
NAFTA
North-American Free Trade Agreement
15.
No.
Number
16.
O.U.P.
Oxford University Press
17.
P.
Page
18.
PCIJ
Permanent Court Of International Justice
19.
Rep.
Report
20.
RTL
Ruritanian Telecoms Company
21.
RAAWL
Ruritania- Areana Air Waves Limited
22.
SC
Supreme Court IV | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
23.
TAAWL
Trans- Areana Air Waves Limited
24.
TRAA
Telecom Regulatory Authority of Areana
25.
UAS
Unified Access Services
26.
UN
United Nations
27.
UNGA
United Nations General Assembly
28.
UNCTAD
United Nations Conference on Trade and Development
29.
UNCITRAL
United Nations Commission on International Trade Law
30.
v.
Versus
31.
VCLT
Vienna Convention on the Law of Treaties
V|Page
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) TABLE OF AUTHORITIES ARTICLES
1.
A. Bjorklund,‗Reconciling State Sovereignty and Investor Protection in Denial of Justice Claims‘(2005) 45 Virginia Journal of International Law Law 809
2.
A.O. Adede,ASurvey of Treaty Provisions on the Rule of Exhaustion of Local Remedies, Harward Law Review, Vol. 18 1 (1977)
3.
Barnali Choudhury, Evolution or Devolution: Defining Fair and Equitable Treatment in International Investment Law, 6 J. WORLD INV. & TRADE 297 (2005).
4.
F. Bloch, ―Indirect Expropriation: Conceptual Realignment?‖ International Law Forum,
vol. 5(3), 2003. 5.
Gaukrodger, D. (2010), ―Foreign State Immunity and Foreign Government Controlled Investors‖, OECD Working papers on International Investments 2010/02 OECD.
6.
J.D.M. Lew, ‗Does National Court Involvement Undermine the International Arbitration
Process?‘ (2008)[24](3) American University International Law Review PL 489 7.
KajHober, ‗State Responsibility and Attribution‘ in Muchlinski, Ortino and Schreuer , The Oxford Handbook of International Investment Law (Oxford Uni Press, Oxford and New
York 2008) 553 8.
P. Y. Tschanz and J. E. Vinuales,„Compensation for Non-Expropriatory Non-Expropriatory Breaches of International Investment Law‟ , Journal of International Arbitration, Vol. 26 (5)
9.
Richard B. Lillich, ‗The Effectiveness of Local Remedies Rule Today‘ (1964) [58]
American Society of International Law 101 10.
R. Dolzer, ―Indirect Expropriation, New Developments?‖ Environmental Law Journal,
vol. 11, 2002
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
11.
Suzi H. Nikiema, Best Practices: Indirect Expropriation, THE I NTERNATIONAL I NSTITUTE FOR
SUSTAINABLE
DEVELOPMENT,
11
(Sept.
3,
2016)
http://www.iisd.org/pdf/2012/best_practice_indirect_expropriation.pdf 12.
Ioana Tudor, ―Actual Situations in which the FET Standardhas been applied in International Law‖, The Fair and Equitable Treatment Standard in the International Law
of Foreign Investment, Oxford University Press (2008) 13.
Kenneth J Vandevelde, ―A Unified Theory of Fair and Equitable Treatment‖ 43 New
York University Journal International, Law & Politics (2010 – 11) 11) 14.
Vicuna, Some International Law Problems Posed by the Nationalization of the Copper Industry by Chile, 67 Am. J. INT'L INT'L L. 7"1, 7r5-i8 (i973).
15.
W. Dodge, ‗National Courts and International arbitration: Exhaustion of local Remedies and Res judicata under Chapter Eleven of NAFTA‘ (2000) [23] Hasting International and
comparative Law review 357 16.
YemiOsinbajo, International Commercial Arbitration: The Nigerian Experience, 4 Afr. J. Int'l & Comp. L. 1 (1992) BOOKS
1. Ernest K. Bankas, The State Immunity Controversy in International Law: Private Suits Against Sovereign States in Domestic Courts (2005). 2. J. Paulsson, Denial of Justice in International Law (Published in 2005). 3. Majorie M Whiteman, Damages in International Law 1837 (USGPO 1937). 4. M.N. Shaw, International Law (first published in 1977, 6th ed. 2008) 148-157, 166-179 5. R. Dolzer and C. Schreuer, Principle of International Law (Published in 2012, 2nd edition) 214
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) CASE LAWS
INTERNATIONAL 1.
Asian Agricultural Products Limited v. Democratic Socialist Republic Of Sri Sri Lanka
Award, ICSID CASE No. ARB/87/3 ( 27 June, 1990) 2.
ADC Affiliate Limited and ADC & ADMC Management Limited v. The Republic of Hungary,Award, ICSID Case No. ARB/03/16 (2 October, 2006)
3.
Akdivar and Others v. Turkey,1987 I.C.J 68-69
4.
Amco Asia Corporation and an d others v. Republic of IndonesiaAward, ICSID Case No.
ARB/81/1 (10 May, 1988) 5.
Amoco Iran Oil Co. v. Iran1 Iran-U.S. C.T.R. 493 (1982)
6.
Mr Frank Charles Arif v. Republic of Moldova, Award, ICSID Case No. ARB/11/23
(8 April, 2013) 7.
Azinian v. Mexico,Award, ICSID Case No. ARF (AF)/97/2 (1 November, 1999)
8.
Azurix Corp. v.The Argentine Republic, Award, ICSID Case No. ARB/01/12(14 July
2006) 9.
BayindirInsaatTurizmTicaretVeSanayi A.S. v. Islamic Republic of Pakistan,Decisio
on Jurisdiction, ICSID Case No. ARB/03/29, (27 August, 2000). 10.
Biloune and Marine Drive Complex Ltd v. Ghana Investments Centre and the Government of Ghana, ad hoc award of October 27, 1989, ILR, vol. 95, 1990
11.
Chattln Case (United States v. Mexico),4 R. Int'l Arb. Awards 282 (1927)
12.
Case concerning the Factory at Chorzow Factory (Poland v. Germany)PCIJ (1927)
Judgment No.8
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
13.
CMS Gas Transmission Company v. The Argentine Republic,Decision on
Jurisdiction,ICSID Case No. ARB/01/8 (17 July, 2003) 14.
Compañía del Desarrollo de Santa Elena S.A. v. Republic of Costa Rica, Award,
ICSID Case No. ARB/96/1. (17 February, 2000). 15.
Consortium R.F.C.C. v. Kingdom of Morocco(ARB/00/6), award Dec 22, 2003, ICSID Rev.-FILJ , vol. 20, 2005.
16.
Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, Award, ICSID Case No. ARB/09/2, Award (31 October 2012).
17.
Desert Line Projects LLC v. The Republic of Yemen, Award, ICSID Case No.
ARB/05/17 (6 February, 2008) 18.
Duke Energy Electroquil Partners &Electroquil S.A. v. Republic of Ecuador, Award, ICSID Case No. ARB/04/19 (18 August, 2008)
19.
Edward Case (United States v. Cuba)
20.
EnCana
Corporation
v.
Republic
of
Equador,
LCIA
Case No.
UN3481
UNCITRAL(Feb 3, 2006) 21.
ElettronicaSicula S.p.A. (ELSI) (U.S. v. Italy), 1989 I.C.J. 15
22.
Eliza Case (United States v. Peru)(1864), de La Pradelle,,RAI, vol. 2.
23.
Enron Corporation Ponderosa Assets, L.P v. Argentine Republic, Award, ICSID Case
No. ARB/01/3 (24 March, 2007) 24.
Fabian Case (France v. Venezuela)Ralston, French Venzuelan Mixed Claims
Commission Report, 1906, p. 182 25.
Marvin Feldman v. Mexico, Award, ICSID Case No. ARB(AF)/99/1 (16 December,
2002)
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
26.
Finnish Ships Arbitration (Fin. v. U.K.),2 R.I.A.A. 1479, 1502 (1934).
27.
Fireman‟s Fund Insurance Insurance Companyv.The United Mexican State, Award, ICSID Case
No. ARB/02/1,(17 July, 2003). 28.
Foremost Tehran, Inc., et al v. Islamic Republicof Tehran,Award No. 10-7174, 10
Iran-United States Claims Tribunal Reports 29.
Gahagan Case (United States v. Mexico)
30.
Genin v. Estonia,Award, ICSID Case no. ARB/99/2 (25 June, 2001)
31.
Great Britain v. Colombia, 2 J. MOORE, ARBITRATIONS 2050 (1875)
32.
ITT Industries Inc. v. Iran et al., Award, 26 May 1983, 2 Iran-United States Claims
Tribunal Reports 33.
Khashiyev and Akayeva v. Russia, 1984 I.C.J. 116-17
34.
Lauder v. Czech Republic,UNCITRAL (United States/Czech Republic BIT),3
September 2001 35.
Lemire v. Ukraine, Award, ICSID Case NO. ARB/06/18 (28 March, 2011)
36.
LG&E Energy Corp., LG&E Capital Corp., LG&E International Inc. v. Argentine Republic,Award, ICSID Case No. ARB/02/1 (25 July, 2007)
37.
Lubicon Lake Band v. Canada,1984 I.C.J 32.
38.
Martini Case (Italy v. Venezuela)(1930)2 R.I.A.A. 975
39.
M.C.I. Power Group L.C. and New Turbine, Inc. v. Republic of Ecuador,Award,
ICSID Case No. ARB/03/6 (31 July, 2007) 40.
Metalclad Corporation v. The United Mexican States, Award, ICSID Case No.
ARB(AF)/97/1 (August 30, 2000) X|Page
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
41.
Methanex Corp. v. United States of America, Final Award, NAFTA(3 August , 2005)
42.
Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of Egypt,Award, ICSID Case No. ARB/99/6 (12 April, 2002)
43.
Morton Case (United States v. Mexico),GCC, vol. IV(1929)
44.
Noble Ventures Inc. v. Romania,Award, ICSID Case No. ARB/01/11 (12 October,
2005) 45.
Norwegian Loans (France v. Norway),1957 I.C.J. 39
46.
NykombSynergetics Technology Holding AB, Stockholm v. The Republic of Latvia,
Award, The Arbitration Institute of The Stockholm Chamber of Commerce (16 December, 2003) 47.
Paksas v. Lithuania 1972 I.C.J 392
48.
A/B) No.76 Panevezys-Saldutiskis Railway (Estonia v. Lithuania)1939 P.C.I.J. (ser. A/B)
49.
Pope & Talbot Inc. v. The Government of Canada, Award on the Merits of Phase
2 , NAFTA NAFTA (10 April, 2001 ) 50.
PSEG Global Inc. And Konya IlginElektrikUretimveTicaretLimitedSirketi v. Republic of TurkeyICSID Case No ARB/02/5, (19 January,2007)
51.
Case Concerning Pulp Mills on the River Uruguay (Argentina v Uruguay)[2010] ICJ
Rep 14 [273] 52.
Revere Copper and Brass Incorporated v. Overseas Private Investment Corporation, Award, United States Court of Appeals17 ILM 1978
53.
Rexnord Inc. v. Iran (1983)2 Iran-U.S. C.T.R. [6] [10]
54.
Robert E. Brown (U.S. v. Gr. Brit.), 6 Int'l Arb. Awards 120, 129 (Perm. Ct. Arb.
923). XI | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
55.
Rumeli Telecom A.S. &Telsim Mobil TelekomikasyonHizmetleri A.S. v. Republic of KazakhstanAward, ICSID Case No. ARB/05/16 29 July 2008
56.
SalukaInvestmentsBVv.The Czech Republic, (PCA) Partial Award of March 17, 2006
57.
Compañiá del Desarrollo de Santa Elena, S.A. v. The Republic ofCosta Rica,
Award, ICSID Case No. ARB/96/1,(17, February 2000) 58.
Scoppola v. Italy 1965 I.C.J 32
59.
S.D. Myers, Inc. v.GovernmentofCanadaPartial Award,NAFTA (13 November, 2000)
60.
Sempra Energy International v. Argentine Republic,Award, ICSID Case No. ARB/02/16 (28 September, 2007)
61.
Siderman v. Republic of Argentina
965 F.2d 699 (1992); 103 ILR. 62.
Starrett Housing Corporation, Starrett Systems, Inc., Starrett Housing International, Inc., v. Iran, Bank Oman, Bank Mellat, Bank Markaziaward Dec 19, 1983.
63.
State v Trostle191 Ariz. 4, 951 P.2d 869 (1997), 884-86
64.
Sterling Case (Great Britain v. Peru)
65.
TecnicasMedioambientalesTecmedS.A. v. United States of MexicoAward ICSID Case
No. ARB(AF)/00/2 (29 May, 2006) 66.
International
Thunderbird
Gaming
Corporation
v.
The
United
Mexican
StatesAward,NAFTA (26 January, 2006)
67.
Tippetts, Abbett, McCarthy, Stratton v. TAMS-AFFA Consulting Engineers of Iran, the Government of the Islamic Republic of Iran, Civil Aviation Organization, Plan and Budget Organization, Iranian Air Force, Ministry of Defense, Bank Melli, Bank Sakhteman, Mercantile Bank of Iran and Holland Iran-U.S. Iran-U.S. Claims Tribunal Case No.
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
7, Award No. 141-7-2 of June 29, 1984 68.
TokiosTokeles v. Ukraine, Decision on Jurisdiction,ICSID Case No. ARB/02/18 (29
April, 2004) 69.
U.S. v Great Britain (1923) 4 UNRIAA [120] [129]
70.
Compañia De Aguas Del Aconquija S.A. and Vivendi Universal v. Argentine Republic
Award, ICSID Case No. ARB/97/3 (21 November, 2000) 71.
Compañia de Aguas del Aconquija SA and Vivendi Universal v. Argentine Republic
Award, ICSID Case no. ARB/97/3,(20 August, 2007) 72.
WaguihElie George Siag and ClorindaVecchi v. The Arab republic of Egypt Award
ICSID Case No.ARB/05/15(19 June, 2009) 73.
Waste Management, Inc. v. United Mexican StatesAward ICSID Case No.
ARB(AF)/00/3 (30 April, 2004) 74.
Captain T. Melville White (Great Britain v. Peru) 1864 5 Moore Int‘l Arbitration 4969
MUNICIPAL 1.
Buttes Gas and Oil Co. v .Hammer (No. 3):273 [1982]AC 888,931;64 ILR
2.
De Sanchez v. Banco Ban co Central de Nicaragua and Others. 770 F.2d 1385, 1393 (1985);
88 ILR 3.
Ex parte Pinochet [2000] [2000] 1 AC 147, 201; 119 ILR
4.
Holland v. Lampen-Wolfe[2000] 1 WLR 1573, 1588; 119 ILR
5.
R v. Director of the Serious Fraud Office and BAE Systems [2008] EWHC 714
(Admin)
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
6.
Reid v. Republic of Nauru [1993] 1 VR 251; 101 ILR.
7.
The Schooner Exchange v. McFaddon, 7 Cranch 116, 136 (1812)
8.
Trendtex Trading v. Bank of Nigeria [1977] 1 Q.B. 529
9.
United States of America v. The Public Service Alliance of Canada and Others (Re Canada Labour Code). (1992) 91 DLR (4th) 449; 94 ILR
REPORTS
1.
Difference Relating to Immunity from Legal Process case, ICJ Reports, 1999,
2.
Ekizabeth Wilmshurst & Joanne Foakes, State Immunity: The United Nations Convention and its effect, International law Programme, Chatam House ILP BP 05/01
3.
ELSI, id., at para.59; Draft Articles on Diplomatic Protection, art. 14(1), International Law Commission, U.N. GAOR, 61st Sess., Supp. No. 10, U.N. Doc. A/61/10 [Draft Articles on Diplomatic Protection]; Draft Articles on State Responsibility, supra n.85, art. 44(b).
4.
UNCTAD Series on International Investment Agreements II
TREATIES & CONVENTIONS
1. 2. 3. 4.
UN Convention on Jurisdictional Immunities of States and Their Property, 2004 United Nations, Draft articles on Diplomatic Protection, 2006, Art 14(2). Arbitration rules, United Nation Commission on International Trade Law Conciliation Rules, United Nations Commission on International Trade Law
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) STATEMENT OF JURISDICTION
Ruritanian Telecoms Limited (RTL), the Applicant, has the honour to submit the present dispute and its memorandum before the International Arbitration Tribunal set up in accordance with the arbitration rules of UNCITRAL, under article 9(2) of the Bilateral Investment Treaty (BIT) between Government of Republic of Ruritania and Government of Republic of Areana for the Promotion and Protection of Investment.The UNCITRAL Rules for Arbitration shall be the governing law for the dispute.
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) SUMMARY OF FACTS
I Areana and Ruritania are two friendly neighbouring countries which have forged strong economic and commercial relations since 1990's. They have entered into a Bilateral Agreement for the Promotion and Mutual Protection of investments on 23rd December, 1994 (Annexure I). The Agreement came into force on 1 January, 1995. Due to very cordial relationship between these two countries, although the initial period of validity validity of this agreement was 10 years , the agreement continues to be in force since neither party has served notice of termination on the other and investments from either country in the other have proliferated over time. II In 1999 there was the introduction of 2-G mobile cell technology on a massive scale in the state of Areana the 2-G mobile cell technology came to be widely introduced in Areana. 2G is the short form for second-generation wireless telephone technology. Second generation 2G cellular telecom networks being much more efficient and better than its predecessors quickly became the need of the hour. At the same time Ruritarian government was encouraging advancement and development in the telecom sector by subsidizing Research and developmentthrough directly subscribing to the equity of the new telecom companies. As a result RTL was formed with 20% stakes of Ruritanian Government in it.By the end of 1990's, the Ruritanian Telecoms became a name to reckon with in the world of advanced telecoms technology. III The Areana Department of Telecommunications (DoT) followed the simple first-come-firstserved (FCFS) 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, from 200307. IV In 2008, the Areana Minister for DoT deviated from FCFS policy without consulting the Cabinet. This resulted in a number of flaws of both substantial and procedural nature. As a result of which many corporations which were in eligible were given licenses and favourism and inconsistency prevailed. Furthermore, despite the warnings from the Areana Ministry of Finance XVI | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
expressing strong procedural concerns to the DoT, these were ignored, and the cut-off date was moved backwards from 1st October 2007 to 25th September. (The reason for this backdating could probably be that by 1st October, 2007 DoT received 575 applications for UAS licences from 46 companies.). On 25th September, the DOT announced on its website that applicants filing between 3:30 and 4:30 pm that day would be granted licenses, and 122 licenses were shown to have been granted that day, according to a 10th January, 2008 DoT notification. V As a result of diversification in Ruritanian investment, after the allocation of spectrum, RTL entered into a 51:49 joint venture agreement with TAAWL, which was granted 17 licenses under the Areana Dot notification of 25th September 2007. the January 2008 allocation and formed RAAWL which entered the market of both the countries in March 2008. VI As a result of all these defections and inconsistencies the Supreme Court of Areana in Airtel Infotech Co. Ltd. v. Government of Areana and Others decided on 2nd February, 2012, quashed all the 122 licenses issued by Dot, calling the procedure arbitrary and unconstitutional. Furthermore, it directed TRAA to make fresh recommendations for grant of license and allocation of spectrum in 2G band by auction. The Court also imposed a fine of US $ 50 million on two licensee companies, and US $ 5 million on four other licensee companies which included RAAWL. VII Reacting to the Areana Supreme Court's judgment, RTL invoked its right under Article 9.1 of the Ruritania-Areana bilateral investment treaty by filing a notice of dispute against Areana and called for conciliation proccedings. However,the Government of Areana drew the attention of the Ruritanian parties to Para 81 (iv) of the Supreme Court Ruling, and asked them to await the outcome of the public auction. Also, one of the companies penalized with US $ 50 million fine had preferred a review of the on 2nd February,2012 Judgment of the Areana Supreme Court on 10 December, 2012 and this review was pending decision. For these reasons, the Government requested RTL to postpone the conciliation conciliation proceedings. For the moment RTL, upon a little persuasion from the Ruritanian Government, decided to suspend the conciliation proceeding. Following RTL's notice. XVII | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
VIII However, subsequent developments proved unfavourable to RTL as the auction that took place on 15th November 2012, proved too expensive for RAAWL which had to pay US $ 1400/= million per licenses. The review petition was dismissed by the Areana Supreme Court in June 2013. Furthermore, Areana State High Court in Airwaves Holding v. the Areana Department of Telecoms declared the 15th November, 2012 auction illegal and banned the fined companies from participating in future auctions,without serving notices on the said companies, on 30th January, 2015. The Areana Department of Telecoms' appealed against this ruling before the Supreme Court which is pending. The Supreme Court refused to implead any interveners as there were none before the High Court. IX In the meantime, the Government of Areana did propose to RTL other lucrative areas of investment, such as manufacturing of mobile cells and I-Pads. However, taking 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, RTL has now invoked the arbitration procedure vide Article 9 (2) (2 ) of the Bilateral Treaty. Areana Government has accepted ac cepted the notice of arbitration under protest.
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) QUESTIONS PRESENTED
The following questions have been raised before this Honorable Tribunal to consider: I.
WHETHER THE ARBITRAL PROCEEDINGS UNDER ARTICLE 9(2) OF THE BIT ARE MAINTAINABLE?
II.
WHETHER BOTH THE DEPRIVATIONS WERE TANTAMOUNT TO DEPRIVATION
OF
SOVEREIGN
WEALTH
OF
THE
RURITANIAN
REPUBLIC IN VIOLATION OF THE PRINCIPLES OF SOVEREIGN IMMUNITY?
III.
WHETHER THE GOVERNMENT OF REPUBLIC OF AREANA HAS VIOLATED ARTICLE 2(2) OF THE BIT BY NOT CONFORMING TO THE PRINCIPLES OF FAIR AND EQUITABLE TREATMENT AND FULL PROTECTION AND SECURITY?
IV.
WHETHER THE FEBRUARY 2012 SUPREME COURT JUDGEMENT AND THE JANUARY 2015 RULING OF THE STATE HIGH COURT AMOUNTS TO EXPROPRIATION?
V.
WHETHER THE RESPONDENT IS OBLIGED TO MAKE REPARATION FOR THE FOR THE LOSSES?
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) SUMMARY OF ARGUMENTS
I.
THAT THE ARBITRAL PROCEEDINGS UNDER ARTICLE UNDER ARTICLE 9(2) OF THE BIT ARE MAINTAINABLE.
The arbitral proceedings under Article 9(2) of the BIT are maintainable. RTL has all the rights to go for arbitration proceedings. The Areana government had failed in providing an effective redress to the Claimant and thus it can approach the forum to seek relief. Under customary international law all local remedies must be pursued within the state allegedly responsible before an international claim is admissible. But this principle also contains a condition that the local remedies available must be effective to provide redress to the Claimant. Secondly, the remedies if any available under Areana laws were futile and would not have resulted in any benefit but pursuing them could have rather aggravated the situation. The same is evident by the precedents set by their judicial system and their administrative setup.The acts of the Respondent amount to denial of justice, thereby paving the way for the Claimant to directly seek relief through arbitration procedure. Under international law, non – recourse to a local remedy is permissible when a denial of justice is suffered in affording such remedies.
II.
THAT THE ACT OF AREANA HAS LED L ED TO DEPRIVATION OF SOVEREIGN WEALTH OF RURITANIA IN VIOLATION OF THE PRINCIPLE OF SOVEREIGN IMMUNITY
The Claimant humbly submits that the act of Areana has led to deprivation of sovereign wealth of Ruritanian Republic in violation of the principle of Sovereign Immunity. This Contention is threefold (a)That the decision of Supreme Court and High Court has led to deprivation of wealth of Ruritanian Republic as Ruritanian Government owned 20% shares of RTL;(b)That the Municipal Courts have no jurisdiction to deal with issues arising in case where the Sovereign Immunity of a particular state has been infringed.;(c)That the deprivation of Sovereign wealth has led to violation of Sovereign immunity as the formation of RTL as well as its investment in Areana was for public welfare.
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) III.
THAT AREANA HAS VIOLATED ARTICLE 2(2) OF THE BIT BY NOT CONFORMING TO THE PRINCIPLES OF FAIR AND FAIR AND EQUITABLE TREATMENT AND FULL PROTECTION AND SECURITY.
The fair and equitable treatment (FET) standard is a key element in contemporary international investment agreements (IIAs). It requires that Respondent act in a manner that is not arbitrary, in violation of legitimate expectations of the investor, grossly unfair, unjust, idiosyncratic, [or] lacking in due process or procedural propriety. The acts of Areana do not conform to such conditions of fair and equitable treatment treatment resulting in violation of the same. A reasonable relationship has to be established between the measures of the State and the burden on the investor, taking into account the investor‘s legitimate expectation which the Respondent failed to
maintain. IV.
THAT THE FEBRUARY 2012 SUPREME COURT JUDGEMENT AND THE JANUARY 2015 RULING OF THE STATE HIGH COURT AMOUNTS TO EXPROPRIATION.
It is humbly submitted that indirect expropriation of Claimant‘s investments has occurred which
is in violation of Article 5 of the Ruritania- Areana BIT. Expropriation may be defined as the taking or deprivation of the property of the foreign investor by a host state. Indirect expropriation occurs when control or the economic value of any property has been rendered ‗essentially useless‘. In the course of the argument the Claimant establishes the validity of the ―Sole effects‖ Doctrine
which focuses on the adverse effect of the State measure on the investor as a major factor, or even the sole factor, in determining whether or not a Taking has occurred. Further the major factors which indicate expropriation are examined with respect to the given situation. The claimant demonstrates how the 2012 Supreme Court ruling and 2015 State High Court ruling resulted in substantial and and irreversible loss to the RTL‘s investments investments and how the acts of State
of Areana have culminated in Claimant‘s loss of control control over its investments and were contrary contrary to the valid expectations of the Claimant as an investor. Finally the measures taken by the state of Areana were completely disproportional they to the public interest presumably protected thereby and to the protection legally granted to investments. XXI | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
Finally it is the responsibility of the Respondent to provide full and effective compensation as they cannot take the exception of the Doctrine of Police Powers cannot be applied in this case and even if the tribunal considers the acts of the State of Areana as regulatory measures, the respondents still has to provide damages for the loss incurred by the Claimant under the provision of Lawful Expropriation which is stated in Article 5 of the BIT. V.
THAT THE RESPONDENT ARE OBLIGED TO MAKE REPARATION FOR THE LOSSES.
The February 2013 SC judgment and the January 2015 ruling of the Areana State High Court amounts to expropriation of property for which it is obliged to make reparation for the losses. The violation of Fair and equitable treatment also poses a liability on the Respondent to compensate the Claimant for its breach. Further, the Claimants also seek moral damages on the grounds of loss of reputation and harm to its social position.It is a settled principle that unlawful expropriation requires reparation for the losses so caused. It is widely recognized under international law that the responsible State is under an obligation to make full reparation for the injury caused by the internationally wrongful act. The acts of the State of Areana amount to expropriation and it needs to be compensated.
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) ARGUMENTS ADVANCED 1.
THAT THE ARBITRAL PROCEEDINGS UNDER ARTICLE UNDER ARTICLE 9(2) OF THE BIT ARE MAINTAINABLE.
1. It is humbly submitted that the arbitration proceedings under Article 9(2) of the BIT are maintainable. The submission is threefold- Firstly, the claimants have exhausted all the effective legal remedies. Secondly, exhaustion of legal remedies was futile. Thirdly, the act of Areana amounts to denial of justice. 1.1
THAT THEREARE NO EFFECTIVE LOCAL R EMEDIES EMEDIES TO BE EXHAUSTED.
2. Under customary international law,1 all local remedies must be pursued within the State allegedly responsible before an international claim is admissible.2 The Claimant‘s claim are admissible because it has exhausted all the effective remedies possible under Areana laws. 3. The ILC, Articles on Diplomatic Protection (2006) define local remedies in Article 14(2) as a legal remedy which is open to an injured person before the judicial or administrative courts or bodies, whether ordinary or special, of the State alleged to be responsible for causing the 3
injury.
4. It is also a settled principle that the local remedies need to be exhausted only when the same are effective. In The Lubicon Lake Band case,4 regarding exhaustion of domestic remedies before approaching human rights laws internationally, it was said that the requirement need to be fulfilled only when the remedies are effective and applicable. This precondition does not stand where there is no reasonably available local remedy to provide effective redress.5 5. The Court must take realistic account not only of formal remedies available in the domestic legal system, but also of the general legal and political context in which they operate as well as the personal circumstances of the applicant.6 The remedy must be capable of providing redress in 1
ElettronicaSicula S.p.A. (ELSI) (U.S. v. Italy), 1989 I.C.J. 15, ¶50 (July 20); Finnish Ships Arbitration (Fin. v. U.K.), 2 R.I.A.A. 1479, 1502 (1934). 2 Draft Articles on Diplomatic Protection, art. 14(1), International Law Commission, U.N. GAOR, 61st Sess., Supp. No. 10, U.N. Doc.A/61/10 Doc.A/61/10 [Draft Articles Articles on Diplomatic Diplomatic Protection]. 3 United Nations, Draft articles on Diplomatic Protection, 2006, Art 14(2) (2006). 4 Lubicon Lake Band v. Canada, 1984 I.C.J 32. 5 ILC Article on Diplomatic D iplomatic Protection, Art 15(a) (2006). 6 Akdivar and Others v. Turkey, 1987 I.C.J 68-69; 68 -69; Khashiyev and Akayeva v. Russia, 1984 I.C.J. 116-17.
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) respect of the applicant‘s complaints and of offering reasonable prospects of success.7Thus, the
claimant asserts that exhaustion of local remedies means exhaustion of effective local remedies. 6. It is also argued that in the present matter pecuniary interests of the State of Areana are concerned and thus, going before its legal system for any remedy will not be effective as it would not offer reasonable prospects of success.8 7. The claimants most humbly submit that they have exhausted all the available effective remedies and the onus of proving it otherwise lies on the respondents. In ELSI , the ICJ found that the initial onus was on the party who asserts that local remedies have not been exhausted to ―prove
the existence, in its system of internal law, of remedies which have not been used.‖9Amerasinghe stated that if the respondent claims that local remedies have not been exhausted, it will be incumbent upon them ―to prove not only that some local remedies existed, but also that they 10
were effective.‖
8. In his opinion in the Norwegian Loans Case,11 Justice Lauterpacht recognized the view quoted by Trindade. He referred to the burden of proof as ―it is for the defendant state to show that notwithstanding the apparent absence of a remedy its existence can nevertheless reasonably be assumed‖. Thus, the local remedies rule applies only when effective remedies are available in the national system. 9. The claimants hereby submit that they have made all the possible efforts from their side and have resorted to all the available effective remedies. It is submitted that in response to the SC decision quashing the licenses12 a review petition was filed by one of the aggrieved company.13 The subject matter of this review petition contained the essence of claimant‘s claims. Under customary international law, an international claim is not admissible unless the essence of the claim has been pursued as far as permitted by the local law of the state allegedly responsible.14Also, according to the principle of res judicata, the review petition could not be 7
Scoppolav.Italy 1965 I.C.J 32. Sejdovicv.Italy 1956 I.C.J 373; Paksas v. Lithuania 1972 I.C.J 392. 9 ElettronicaSicolacase supra note 1. 10 EMEDIES IN I NTERNATIONAL LAW, 285Cambridge Univ. Press CHITTHARANJAN FELIX AMERASINGHE, LOCAL R EMEDIES nd (2 ed. 2004). 11 Certain Norwegian Loans (Fr. v. Nor.), 1957 I.C.J. 39 (July 6). 12 Factsheet ¶ 8 13 ¶12 Ibid ¶12 14 ElettronicaSicolacase supra note 1 at ¶51. 8
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
filed as the subject matter of the review petition was already decided over by SC in the review filed by another company. In the Panevezys-Saldutskis Railway15case, the Permanent Court of International Justice ("PCIJ") declared: "There can be no need to resort to the municipal courts if those courts have no jurisdiction to afford relief; nor is it necessary aga in to resort to those co urts if the result must be a repetition of a decision already given.”
10. Apart from this the claimants did not have any effective remedy available to them. In the case filed by Airwaves Holding Company the Areana State High Court without serving notice to the company16 decided the matter. Also, in the appeal filed by dot against the High Court decision, the SC did not allowed the claimants to intervene. The claimants were not left with any effective remedy for exhaustion. 1.2
THAT THE EXHAUSTION OF LOCAL R EMEDIES EMEDIES WAS FUTILE.
11. The Claimant argue that remedies if any available under Areana were futile and would not have resulted in any benefit but pursuing them could have rather aggravated the situation. In many countries domestic courts are bound to apply the local law even if it is at odds with international legal rules protecting the rights of investors.17 Even if the investor succeeds in proceedings before domestic courts, the executive may choose to ignore the verdicts of the judiciary.18Host States dealing with foreign investors will frequently act in the exercise of sovereign powers (jureimperii) rather than in a commercial capacity (jure gestionis).19 12. It is a settled principle that where resort to local remedies would be obviously futile, the requirement to exhaust local- remedies will be excused. Thus, for instance, where a State's judiciary has established a consistent course cou rse of decisions or jurisprudence constant which could only lead to a hopeless pursuit of a remedy, it will be unnecessary to seek to exhaust local
15
Panevezys-SaldutiskisRailway(Estonia Panevezys-SaldutiskisRailway(Estonia v. Lithuania) 1939 P.C.I.J. (ser. A/B) No.76 Factsheet, ¶13 17 M.N. SHAW, I NTERNATIONAL LAW 148-157, 166-179 (6th ed. 2008). 18 WaguihElie George George Siag and and ClorindaVecchi v. v. The Arab republic republic of Egypt [2009] WL 1834562[33-87], [436], [436], [448], [454-455] 19 J.D.M. Lew, Does National Court Involvement Undermine the International Arbitration Process? ,AMERICAN U NIVERSITY I NTERNATIONAL LAW R EVIEW EVIEW PL 489 (2008). 16
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
remedies. In the Panevezys-Saldutskis Railway20case, the Permanent Court of International Justice ("PCIJ") declared: "There can be no need to resort to the municipal courts if those courts have no jurisdiction to afford relief; nor is it necessary aga in to resort to those co urts if the result must be a repetition of a decision already given.”
13. One of the reasons for instituting an international arbitration procedure is precisely that parties — — rightly or wrongly — feel feel often more confident with a legal institution which is not entirely related to one of the parties. If a national judgment was binding on an international tribunal such a procedure could be rendered meaningless.21The main reason why local remedies are ineffective in many countries is the obvious fact that their judicial and administrative bodies often fail to render impartial and unbiased decisions. The intrusion of political considerations into the courtroom is apparent.22 14. Seeking judicial remedies against executive action is an unnecessary endeavor where the executive branch of government dominates the courts. Local remedies are ineffective where the courts have been reduced to submission and brought into line with a determined policy of the Executive to reach the desired result regardless of Constitutional guarantees and inhibitions.23 15. Arbitration clauses allow the investor to bypass local courts and the obstacles that it fears might arise from local remedies. The main concerns arising from the submission of investment disputes to local courts are the following: (1) Domestic remedies in developing states might be inadequate because they are biased, corrupt and unreliable. The investors will fear a lack of impartiality as, in many countries, the independence of the judiciary cannot be taken for granted and political pressures are likely to influence the outcome of the proceedings.24
20
Estonia v. Lithuania case supra note 15. Amco-Asia Corp v. Republic of Indonesia 1985 (24) ILM 1022 [177] 22 Richard B. Lillich, The Effectiveness of Local Remedies Rule Today , AMERICAN SOCIETY OF I NTERNATIONAL LAW 101 (1964). 23 Robert v. Brown (U.S. v. Gr. Brit.), 6 Int'l Arb. Awards 120, 129 (Perm. Ct. Arb. 923)., U.S. v Great Britain (1923) 4 UNRIAA [120] [129] 24 R. DOLZER AND C. SCHREUER , PRINCIPLE OF I NTERNATIONAL LAW 214 (2d ed, 2012). 21
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) (2) These courts might rely on the act of state doctrine and the foreign sovereignty immunity, if the host state acts in the exercise of sovereign powers, rather than in a commercial capacity.25 (3) Local courts might be bound to apply national law even if they are at odds with the rights of the investors under the BIT. In that respect, the State can unilaterally change its laws in the disfavour of the investors and the courts would have to apply domestic laws instead of the BIT. (4) Also the domestic courts lack the expertise to correctly apply and enforce international investment law.26
1.3
THAT THE ACT OF AREANA‘S JUDICIARY AMOUNTS TO DENIAL OF JUSTICE.
16. The Claimant humbly submits that the actions of Areana and its judiciary amount to denial of justice. If an adequate remedy exists ex ists in the state, the nonrecourse to such remedy is permissible when a denial of justice has been suffered inresorting to the remedy afforded and an international claim arises.27 The State is responsible for the acts of its judiciary28 and violation of investors‘ rights may occur as a consequence of the actions of domestic courts.29 The classical case would be a denial of justice- well-recognized under customary international law.30 In Azinian v. Mexico the Tribunal defined denial of justice in the following terms:“A denial of justice could be pleaded pleaded if the relevant courts refuse to entertain a suit, if they subject it to undue delay, or if they administer justice in a seriously inadequate way. . . . There is a fourth type of denial of justice, namely the clear and malicious 31
misapplication of the law” law”.
17. The states have often suspended the application of the rule of exhaustion of local remedies when denial of justice has occurred. Denial of justice embraces the whole field of state responsibility 25
W. Dodge, National Courts and International arbitration: Exhaustion of local Remedies and Res judicata under Chapter Eleven of NAFTA , Hasting International and com¶tive Law review 357 (2000). 26 DOLZER supranote 24. 27 Finnish Ships (Fin. v. U.K.), 1934 I.C.J. 413; M ARJORIE M WHITEMAN, DAMAGES IN I NTERNATIONAL LAW 3 (US GPO 1937). 28 ILC Articles on State Responsibility, Art 4. 29 A. Bjorklund, Reconciling State Sovereignty and Investor Protection in Denial of Justice Claims , VIRGINIA JOURNAL OF I NTERNATIONAL LAW809 (2005). 30 J. PAULSSON, DENIAL OF JUSTICE IN I NTERNATIONAL LAW (1sted, 2005). 31 (1999) 5 ICSID Reports 272 [102][103] Azinian v. Mexico, Award (1999) 5|Page
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
and has been applied to all types of wrongful conduct on the part of the state toward aliens.32 The expression 'denial of justice' has been employed in connection with improper administration of civil and criminal justice as regards an alien, including denial of access to local courts, inadequate procedures and unjust decisions.33By including "unjust decisions," it recognizes the existence of both procedural34 and substantive denial of justice. Such a distinction was drawn in the Cotesworthand Powell case, which established that "unjust decisions" oflocal courts constitute substantive denial of justice. To deal with the problem of defining "unjust decisions," the following useful definition has been suggested: 18. Adecision or judgment of a tribunal or an administrative authority rendered in a proceeding involving the determination of the civil rights or obligations of an alien or criminal charges against him, and either denying him recovery in whole or in part or granting recovery against him or imposing a penalty, whether civil or criminal charges upon him is wrongful: (a) If it is a dear and discriminatory violation of the law of the State concerned; (b) If it unreasonably departs from the principles of justice recognised by the principal legal system of the world; (c) If it otherwise involves a violation by the State of a treaty.35 19. Also, as mentioned in the UNCTAD, Denial of justice may include: (a) Denial of access to justice and the refusal r efusal of courts to decide; (b) Unreasonable delay in proceedings; (c) Lack of a court‘s independence from the legislative and the executive branches of the State; (d) Failure to
execute final judgments or arbitral awards; (e) Corruption of a judge; (f) Discrimination against the foreign litigant; (g) Breach of fundamental due process guarantees, such as a failure to give notice of the proceedings and failure to provide an opportunity to be heard.36
32
Charles C. Hyde. I C. HxD, INTERNATIONAL INT ERNATIONAL LAW 491-92 (1922). L. SOHN &R. BAXTER (Rapporteurs), CONVENTION ON INTERNATIONAL RESPONSIBILITY OF STATES FOR INJURIES TO ALIENS (Draft No. 13), in L. SOHN. BAXTER, RECENT CODIFICATIONS OF THE LAW OF STATE RESPONSIBILITY FOR INJURIES TO ALIENS 180 (1974). 34 Gahagan Case (United States v. Mexico), 4 J. MOORE, ARBTRATIONS 3240 (1839); White Case (Great Britain v. Peru), H. LA 46 (1889); Barcelona Traction Case, [1970] I.C.J. 3, digested in 64 Am. J. INr'- L. 653 (1970). 35 L. SOHN OHN,, supra note 33, at 96; Vicuna, Some International Law Problems Posed by the Nationalization of the Copper Industry by Chile, 67 AM. J. I NT‘L L. 711 (1973). 33
36
‗UNCTAD, Fair and Equitable Treatment, UNCTAD Series On Issues In International Investment Agreements II‘,
81 ( Sep. 07, 2016) http://unctad.org/en/Docs/unctaddiaeia http://unctad.org/en/Docs/unctaddiaeia2011d7_en.pdf 2011d7_en.pdf 6|Page
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
In the instant case, the decision of the supreme court to quash the licenses without giving compensation to the aggrieved parties as well as High Court‘s decision to ban the companies
fined by Supreme Court37 without giving them an opportunity to present their case is a violation of their right to be heard and as such fulfils the criteria of Denial of Justice. 20. This indicates that when denial of justice is shown, exhaustion of local remedies is no longer required and an international proceeding in the form of conciliation can be instituted. Thus, it contains evidence indicating that states have accepted the occurrence of a denial of justice as a legitimate basis for relieving an alien of the duty to exhaust local remedies as a precondition of admissibility of his claim to an international forum. 21. It is humbly submitted that Claimant invoked Article 9(2) of the BIT because of the ineffective local remedies. The decisions of SC and Areana State HC amount to denial of justice. 22. The claimants most humbly submit that the Arbitral Tribunal do not condition its jurisdiction on the exhaustion of local remedies.38The mere availability of a local remedy, whether judicial or otherwise, cannot preclude the Tribunal from its jurisdiction.39 The UNCITRAL Arbitration Rules40and the Additional Facility Rules provide that the tribunal has the power to rule on its own jurisdiction. 23. In BancoNacional de Cuba v. Sabbatino, the U.S. SupremeCourt held that before resort can be made to international law, claimants are required to first seek local remedies or show that such remedies are unavailable, but this does not render it an absolute condition of admissibility of international claims.41 24. It is also submitted that the rule of exhaustion of local remedies is procedural, rather than substantive in nature.42 25. Hence, it is submitted that the Claimant invoked the arbitration after trying all the effective local remedies but finding them of no help and keeping in mind the loss through which the company 37
Factsheet ¶ 13 Amoco Iran Oil Co. v. Iran (1982) 1 Iran-U.S. C.T.R. 493 (1982); Amoco Amoco Int'l Fin. Corp. v. Iran (1987) 15 IranU.S. C.T.R. 189 39 Rexnord Inc. v. Iran (1983)2 Iran-U.S. C.T.R. [6] [10] 40 UNCITRAL Arbitration Rules 2010, Art. 23(1) 41 Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964) 42 AO Adede, A Survey of Treaty Provisions , 18 HARVARD ILJ1, 1-17 (Winter 1977),. 38
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
was going on, had to find a suitable remedy through International Arbitration under Article 9(2) of the agreement between both the contracting parties for the promotion and protection of investments.
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) 2.
THAT THE ACTS OF THE STATE OF AREANA AMOUNTED TO
DEPRIVATION OF SOVEREIGN WEALTH OF THE RURITANIAN REPUBLIC, IN VIOLATION OF THE PRINCIPLE OF SOVEREIGN IMMUNITY
26. The Claimant humbly submits that the decision of Areana Supreme Court to quash the licenses as well as the decision of High Court to quash the auction of 15th November 2012 and bar RTL from taking part in the subsequent auction was tantamount to deprivation of Sovereign wealth of the Ruritanian Republic, in violation of the principle of Sovereign Immunityand as such the local courts of Areana have no jurisdiction to hear the case so the decision of RTL to approach the Arbitration Tribunal is justified and the exhaustion of local remedies clause is waived of. This contention is threefolds (a) Act of Areana has led to deprivation of Sovereign wealth of Ruritania. (b)Violation of Sovereign immunity renders the Exhaustion of Local remedies Clause meaningless (c) Deprivation of Sovereign wealth has violated the principle of sovereign immunity. 2.1
THAT THE ACT OF AREANA HAS LED TO DEPRIVATION OF SOVEREIGN WEALTH OF R URITANIA URITANIA
27. The claimant humbly submits that there has been a loss of sovereign wealth of the state of Ruritania. 20% of the shares of Ruritanian Telecom Limited is being owned by the government43 and the fact that RTL is a well-known name in the field of advanced telecom technology44 shows that the stakes are very high and any loss suffered by RTL is a direct loss to the treasury of the state of Ruritania and as such a loss to public in general. 28. RTL invested in Areana in 2008 and owns majority shares in the joint venture company, Ruritania-Areana Air Waves Limited (RAAWL).45 In the joint venture agreement RTL pledged its latest technology in favour of RAAWL. The fact that after investing billions of dollars into 46
Areana‘s cellular sector ,
the Supreme court‘s decision of quashing the licenses without
granting compensation for that and furthermore imposing a fine of $ 5 million on RAAWL47 has not only violated the BIT but also affected the money invested by RTL and frozen it assets in Areana as now. It cannot withdraw the money it has invested and advanced machinery that has 43
Factsheet ¶ 3
44
Ibid ¶ 3 45 ¶ 7 Ibid ¶ 46 ¶ 11 Ibid ¶ 47 ¶ 10 Ibid ¶
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
been installed by RTL is useless without the spectrum. Also, the cost of spectrum in the auction of 15th November was $ 1400 million per license48 which was much higher than the cost at which TAAWL had bought during the allocation. 2.2
THAT THE VIOLATION OF SOVEREIGN IMMUNITY R ENDERS ENDERS THE EXHAUSTION OF LOCAL R EMEDIES EMEDIES CLAUSE MEANINGLESS
29. The rules of state immunity address the extent to which a foreign state is protected from being sued in the courts of other countries. Immunity prevents a foreign state being made a party to proceedings in the forum state and/or will protect its property from being seized to satisfy a judgment. Immunity can extend to legal proceedings against the foreign state itself, its organs and enterprises, and its agents.49 30. As ,the question of sovereign immunity is a procedural one and one to be taken as a preliminary issue,50 logically preceding the issue of act of state,51 it decides the jurisdiction of the local court. 31. It has been a general principal of International law that one state cannot inquire in to matters relating to other states, in consonance with the principle of Sovereign Immunity. This principle was reinstated in UN Convention on Jurisdictional Immunities of States and Their Property, 2004, which notes that: Astate enjoys immunity in respect of itself and its property, from the jurisdiction of the 52
courts of another state subject to the provisions of the present Convention.
32. This principle has been further provided in judgements of various cases like in the case of The Schooner Exchange v. McFaddon,53 Chief Justice Marshall declared that the jurisdiction of a
state within its own territory was exclusive and absolute, but it did not encompass foreign sovereigns. 33. Similarly, Lord Browne-Wilkinson stated in Ex parte Pinochet that, that,
48
Ibid ¶ ¶ 13
49
Gaukrodger, D., Foreign State Immunity and Foreign Government Controlled Investors ,OECD WORKING PAPERS ON I NTERNATIONAL I NVESTMENTS (2010). 50
Difference Relating to Immunity from Legal Process case, ICJ Reports, 1999, 62, 88; Siderman v. Republic of Argentina 965 F.2d 699 (1992); 103 ILR, 454. 52 David P. Stewart, The UN Convention on Jurisdictional Immunity of States and their Property , 99 AJIL, 194-211 (Jan. 2005) 53 The Schooner Exchange v. McFaddon, 7 Cranch 116, 136 (1812) 51
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) It is a basic principle of international law that one sovereign state(the forum state) does not adjudicate on the conduct of a foreign state. The foreign state is entitled to procedural immunity from the processes of the forum state. This immunity extends to both criminal and civil liability.54
34. Also, Lord Millett in Holland v. Lampen-Wolfe put the point as follows: State immunity...is a creature of customary international law and derives from the equality of sovereign states. It is not a self-imposed restriction on the jurisdiction of its courts which theUnited Kingdom has chosen to adopt. It is a limitation imposed from without upon the sovereignty of the United Kingdom itself.55
35. Lord Wilber force declared in Buttes Gas and Oil Co. v .Hammer Case: 36. There exists in English law a general principle that the courts will not adjudicate upon the transactions of foreign sovereign states...it seems desirable to consider this principle...not as a variety of ‗act of state‘ but one for judicial restraint or abstention.56
37. Thus, widespread state practice and arbitration judgements proves that sovereign immunity is the established principle of International Law. 38. State immunity has been justified on a variety of grounds. One ground is the status of equality attaching to the independent sovereign, which is said to preclude one State from exercising jurisdiction over another under the principle of par in parem non habetjurisdictionem: one sovereign State is not subject to the jurisdiction of another State. This was often invoked as the basis for absolute immunity, as for instance in the frequently-cited 1849 French case, 57
LambègeetPujol.
39. As noted by Brownlie, ―the rationale rests equally on the dignity of the foreign nation, its organs and representatives, and on the functional need to leave them unencumbered in the pursuit of
54
R v Bow Street Metropolitian Stipendiary Stipendiary Magistrate, exppinochet[2000] 1 AC 147, 201; 119 ILR, p. 152. Holland v. Lampen-Wolfe[2000] 1 WLR 1573, 1588; 119 ILR, p. 367. 56 Buttes Gas and Oil Co. v .Hammer (No. 3):273[1982]AC888,931;64 ILR, p. 344; Duke of Brunswick v. King of 55
Hanover (1848) 1 HLC 1. Fatima,Using International Law, pp. 385 ff. ; R v. Director of the Serious Fraud Office
and BAE Systems [2008] EWHC 714 (Admin), ¶ 74 and ¶160. 57 Spanish Government v. Lambege and Pujol Jan 22, 1849, Sirey 1830, I, 81 at 93. 11 | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) their mission‖.58 There is also no doubt that court proceedings against foreign states may
generate tensions and interfere with the conduct of international relations. 40. A number of commentators have pointed to another aspect that may be relevant in the current context with regard to SWFs. It is that the economic interests of States may affect their interpretation of state immunity principles. An eminent professor offered a version of this thesis in his conclusions to a 2004 international conference on state immunity: “Considerations specific to States significantly influence the supposed interpretation of international law in the development of their own national law of immunity. immunity. […] To a substantial degree it is the interests of States and businesses in those States that determine the national rules applicable to the immunity of foreign States”.59
41. This was seen in the case of Trendtex Trading v. Bank of Nigeria,60 in which the Central Bank of Nigeria (C.B.N.) was sued on one of the letters of credit issued by it in relation to the cement transactions. C.B.N. claimed that it could not be sued in the U.K. on the letters of credit issued by it in relation to the cement transactions as it was entitled to sovereign immunity. After a detailed analysis, Lord Denning M.R. held that the C.B.N. had no immunity once it entered into a commercial transaction. The English court also held that the Central Bank was not an organ or a department of the Federation of Nigeria. That a U.K. court could hold that the Central Bank of a sovereign nation is not a department of that nation's government is an indication of the extent of the panic caused by the cases."61 2.3
THAT THE DEPRIVATION OF SOVEREIGN WEALTH HAS LED TO VIOLATION OF THE PRINCIPLE OF SOVEREIGN IMMUNITY
42. The Claimant contends that while dealing with the instant case the tribunal shall apply absolutely the approach of Sovereign Immunity as direct interest of Ruritania is involved. Also, continued application of the absolute rule relating to commercial acts have appeared in court decisions in
58
I. BROWNLIE , PRINCIPLES OF PUBLIC I NTERNATIONAL LAW 326 (7th ed. 2008). 59 PINGEL, I., ED., DROIT DES IMMUNITÉS ET EXIGENCES DU PROCÈSÉQUITABLE 152 (Editions Pedone 2004). 60 Trendtex Trading v. Bank of Nigeria [1977] 1 Q.B. 529 61 YemiOsinbajo, Sovereign Immunity in International Commercial Arbitration – The Nigerian Experience ,7 AFRICAN JOURNAL OF I NTERNATIONAL AND COM ¶TIVE LAW 7, ¶3(1992) 12 | P a g e
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Bulgaria, the Czech Republic, Poland, Romania and Russia.62A recent monograph argues that a broad range of countries continues con tinues to hold to the doctrine of absolute immunity.63 43. The consistent and principled position of China is that a state and its property shall, in foreign courts, enjoy absolute immunity, including absolute immunity from jurisdiction and from execution, and [it] has never applied the so-called principle or theory of ―restrictive immunity‟.64 44. Further, from the fact that The United Nations Convention on Jurisdictional Immunities of States (UNCSI) which was adopted by the United Nations General Assembly after decades of negotiations and which provided restrictive approach to state immunity has only been signed by 28 countries(the treaty provided that at least 30 states must sign it, for it to be enforced) and ,as of March 2010, has been ratified by only 4 states clearly proves that majority of states still prefer and adopt absolute approach on sovereign immunity.65 45. Theconcept of absolute immunity, whereby the sovereign was completely immune from foreign jurisdiction in all cases regardless of circumstances. circumstance s.66 46. Also, proceeding before a court of a State shall be considered to have been instituted against another State if that other State: (a) is named as a party to that proceeding; or (b) is not named as a party to the proceeding but the proceeding in effect seeks to affect the property, rights, interests or activities of that other State.67 In the instant case the property as well as the interests of Ruritanian state has been affected as it has 20% shares in RTl68 and RTL has invested billions of dollars in Areana69 thus the interest of Ruritania is conspicuous enough to fall within the definition of point (b).
62
Shaw, supra note 17. ERNEST K. BANKAS, THE STATE IMMUNITY CONTROVERSY IN I NTERNATIONAL LAW: PRIVATE SUITS AGAINST SOVEREIGN STATES IN DOMESTIC COURTS (Springer 2005) 64 Gaukrodger, supra note 50. 63
65
Ibid
66
Shaw supra note 17, at 701 Joanne Foakes and Elizabeth Wilmshurst, State Immunity: The United Nations Convention and its effect , CHATHAM HOUSE (2005). 68 Factsheet ¶ 3 69 Factsheet ¶ 11 67
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47. There is some limitation to the absolute immunity rule to the extent that a mere claim by a foreign sovereign to have an interest in the contested property would have to be substantiated before the English court would grant immunity.70 48. Thus, in the light of above stated facts and keeping in mind the absolute approach on sovereign immunity the petitioner contends that the respondent court has no jurisdiction to decide the matter, as such the claimant is not under the obligation to exhaust the local remedies as provided in the BIT. 49. [Inarguendo], even if the honorable tribunal wishes not to apply the absolute approach on sovereign immunity, then also the investment by RTL doesn‘t form outside the definition of
Sovereign act. According to the established principle of International law, Governmental acts with regard to which immunity would be granted are termed acts jure imperii71 or sovereign act which is different from ―commercial transaction‖.
50. It should be noted that article 2(2) of the Convention72 provides that: In
determining
whether
a
contract
or
transaction
is
a
„commercial
transaction‟...reference should be made primarily to the nature of the contractor transaction, but its purpose should also be taken into account if the parties to the contract or transaction have so agreed, or if, in the practice of the state of the forum, that purpose is relevant to determining the non-commercial character of the contract or transaction.
51. The reason for the modified ‗nature‘ test was in order to provide an adequate safeguard and protection for developing countries, particularly as they attempt to promote national economic development. The ILC Commentary notes that a two-stage approach is posited, to be applied successively. First, reference should be made primarily to the nature of the contract or transaction and, if it is established that it is non-commercial or governmental in nature, no further enquiry would be needed. If, however, the contract or transaction appeared to be commercial, then reference to its purpose should be made in order to determine whether the contract or transaction was truly sovereign or not. States should be given an opportunity to maintain that in 70
Shaw, supra note 17, at 703. Shaw, supra supra note 17, at 701. 72 United Nations Convention on Jurisdictional Immunities of States, art.2, 2004. 71
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their practice a particular contract or transaction should be treated as non-commercial since its purpose is clearly public and supported by b y reasons of state.73 52. The importance of the contextual approach at least as the starting point of the investigation was also emphasized by the Canadian Supreme Court in United States of America v. The Public 74
Service Alliance of Canada and Others (Re Canada Labour Code).
53. In Reid v. Republic of Nauru,75which stated that in some situations the separation of fact, motive and purpose might not be possible. The motive or purpose underlying particular conduct may constitute part of the definition of the act itself in some cases, while in others the nature or
quality of the act performed might not be ascertainable without reference to the context within which it is carried out. The Court also made the point that a relevant factor was the perception held or policy adopted in each particular country as to the attributes of sovereignty itself.76 54. The point that ‗unless we can inquire into the purpose of such acts, we cannot determine their nature‘ was also made by the US Court of Appeals in De Sanchez v. Banco Central de 77
Nicaragua and Others.
55. Thus, in order to decide whether a transaction is a commercial transaction or a sovereign act the purpose of that transaction has to be considered. In the instant case the purpose of Ruritanian government was to provide cheaper and better services to its people and also to equip them with state of the art technology, this was the reason why it encouraged local entrepreneurs to enter the telecom field by subsidized R & D through directly subscribing to the equity of the new telecom companies.78Thus, RTL was formed as a result of Ruritania‘s keen interest and enthusiasm in its development by development in telecom sector and as such the purpose of establishing RTL as well as its investment in Areana was not benefit individuals but to serve the public purpose and as such was entitled to benefits of sovereign immunity.For, ―ultimately, activities of the State, if
not wholly, then to the widest degree, serve sovereign purposes and duties ….‖79As was held in the well-known Empire of Iran case. Also, as stated earlier, it had 20% shares in RTL and the 73
Shaw, supra note 17, at 710 United States of America v.The Public Service Alliance of Canada &Ors. ( (1992) (1992) 91 DLR (4th) 449; 94 ILR, p.264 75 Reid v. Republic of Nauru [1993] 1 VR 251; 101 ILR, p. 193 76 Ibid at 195 – 6 77 De Sanchez v. Banco Central de Nicaragua and Others 770 F.2d 1385, 1393 (1985); 88 ILR, pp. 75, 85. 78 Factsheet ¶3 79 Empire of Iran case , German Federal Constitutional Court (30 April 1963), 45 ILR 57. 74
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fact that Ruritanian Telecom Limited was renowned company throughout the world in advanced telecom technology clearly makes out the point that a huge amount of public money is involved in the company. 56. The above claims have been supported in the case of AIG v. Republic of Kazakhstan, in which the court appeared to consider that an SWF that invests in securities is engaged in immune sovereign activity by virtue of its general purpose of accumulating assets in the public interest; the invested assets were accordingly immune from execution.80
80
AIG Capital Partners Inc. and Another v. Kazakhstan , [2005] EWHC 2239 (Comm.), 129 ILR 589
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THAT RURITANIA HAS VIOLATED ARTICLE 2(2) OF THE BIT BY NOT
CONFORMING TO THE PRINCIPLES OF FAIR AND FAIR AND EQUITABLE TREATMENT AND FULL PROTECTION AND SECURITY.
57. The fair and equitable treatment (FET) standard is a key element in contemporary international investment agreements (IIAs). Over the years, it has emerged as the most relied upon and successful basis for IIA claims by investors. The standard protects investors against serious instances of arbitrary, discriminatory or abusive conduct by host States.81 58. The FET standard is a broad standard,82 which requires that Respondent act in a manner that is not ―arbitrary, grossly unfair, unjust, idiosyncratic, [or] lacking in due process or procedural propriety.‖83 It requires Respondent to ―provide . . . treatment that does not affect the basic
expectations that wer e taken into account by the foreign investor‖ and ―act in a consistent manner, free from ambiguity and totally transparently in its relations with the foreign investor.‖ 84
Tribunals and scholars have understood this language to mean that the fair and equitable treatment standard is breached by conduct that violates principles of transparency, the protection of the investor‘s legitimate expectations, freedom from coercion or harassment, procedural
propriety and due process, and good faith.85 59. Also, as far as the scope of the FET is concerned, current arbitral practice shows that all types of governmental conduct – legislative, legislative, administrative and judicial alike – can can potentially be found to breach the FET obligation.86 60. It is humbly submitted that Respondent has breached Article 3(2) of the BIT and ―any relevant rules of international law‖87 by failing to accord Claimant‘s investment fair and equitable
treatment (FET). Article 3(2) of the BIT provides that ―investments of each Party or of nationals of each Party shall at all times be accorded fair and equitable treatment.‖88In addition,
81
UNCTAD Fair and Equitable Treatment II, supra 37 at 1. Ibid at 11. 83 BitwaterGauff Ltd. V. Tanzania, Award, ICSID Case No. ARB/05/22,¶253 (July 18, 2002). 84 TécnicasMedioambientalesTecmed, S.A. v. The United Mexican States, ICSID Case No. ARB (AF)/00/2,¶154 (May 29, 2003). 85 Barnali Choudhury, Evolution or Devolution: Defining Fair and Equitable Treatment in Investment Law, 6 J. WORLD INV. & TRADE 297 (2005) 86 UNCTAD supra note 37 at 12. 87 SGS v. Philippines,ICSID Case No. ARB/03/11, ¶153 (Apr. 24, 2002). 88 BIT, Art 3(2) 82
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) Areanamay not impair ―by unreasonable or discriminatory measures the management, use, enjoyment or disposal of investment in its territory‖of nationals of Ruritania.
61. Article 3(2) of the BIT also requires Areana to provide ―full protection and security‖ to investments made by nationals of Ruritania in its territory. Tribunals generally treat this as a different standard. Nevertheless, it should be noted that Respondent‘s actions would also breach
the full protection and security standard, which imposes upon states an obligation of objective vigilance and due diligence, which ―should be legitimately expected to be secured for foreign
investors by a reasonably well-organized modern State.‖89 The facts that support Claimant‘s argument that Respondent violated FET also demonstrate that Respondent failed to meet its obligations under the full protection and security standard. 62. The claimants most humbly submit that the respondent state has violated the principle of fair and equitable treatment. The following are the aspects of the Fair and Equitable Treatment, violation of any of which results in violation of the principle of fair and equitable treatment: a. Legitimate Expectations b. Due Process c. Proportionality d. Good Faith 3.1
THAT THE R ESPONDENT ESPONDENT HAS VIOLATED THE LEGITIMATE EXPECTATIONS OF THE CLAIMANT COMPANY .
63. The aspect of Legitimate Expectation has been referred to as a dominant element of the Fair and Equitable Treatment standard.90 Foreign investors take relevant business decisions based on the existing legal framework of the host State.91 Tribunals and scholars agree that investors‘
89
AAPL v Sri Lanka, ICSID Case No.ARB/87/3, ¶77 (27 June 1990). Saluka Investments v Czech Republic, Partial Award, IIC 210, ¶ 302 (2006). 91 DOLZER supranote 24 90
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) legitimate expectations rely on the stability, predictability and consistency of the host State‘s
legal and business framework.92 64. Also, Claims relating to breach of legitimate expectations arise in situations when an investor is suffering losses due to the changes brought about by certain State measures. In other words, when a host State‘s conduct causes adverse effects to an investment, that is, it reduces its
economic value, an investor may allege that the State violates legitimate expectations that the investor had when making the investment.93 65. In light of the good faith principle established by internati onal law, the plain language of ―fair and equitable treatment‖ establishes that the Respondent must treat Claimant in a manner that
accords with the basic expectations it had when it made the investment.94 66. The tribunal in Thunderbird defined legitimate expectation as ‗a ‗a condition which creates reasonable and justifiable expectations on the part of an investor to act in reliance on said conduct, and that a failure to honour those expectations could cause the investor to suffer damages.95
67. In determining a violation of FET, the expectations to be considered are those existing when the investor decided to invest.96From the statement of tribunals in Duke Energy v.Ecuador and other cases97, it is possible to identify a number of key qualifying elements:
(a) Legitimate expectations may arise only from a State‘s specific representations or commitments made to the investor, on which the latter has relied; (b) The investor must be aware of the general regulatory environment in the host country; (c) Investors‘ expectations must be balanced against legitimate regulatory activities
of host countries.
92
Uni fied Theory of Fair and Equitable Treatment, 43 New York Unib J IntnL& Pol 43, Kenneth J Vandevalde, A Unified 66 (2010-11). 93 UNCTAD:Fair and Equitable Treatment supra note 37 at ¶2, 63 94 DOLZER , supranote 24, at 133-149. 95 International Thunderbird Gaming Corporation v Mexico, Award, IIC, ¶ 147, 36 (2006). 96 BayindirInsaatTurizmTicaretVeSanayi BayindirInsaatTurizmTicaretVeSanayi A.S. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29 (Aug. 27 2010) 97 Duke Energy Electroquil Partners and Electroquil S.A. v. Republic of Ecuador, Award, ICSID Case No. ARB/04/19 (Aug. 18 2008)
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In the instant case the Bilateral Investment Treaty between Areana and Ruritania provided for protection and promotion of each other‘s investments. This satisfies the first criteria mentioned in Duke Energy v.Ecuador and and other cases. 68. The claimant company had sufficient grounds to believe that the general regulatory environment was safe as for their investments. It is so because even after the expiry of 10 years the agreement continued to be in force as the investments from either country in the other proliferated over time.98 69. Later the respondent state breached the legitimate expectations of the claimant company. The Areana Dot arbitrarily, capriciously and contrary to public interest allocated the spectrum licenses. Both the legislative environment as well as the attitudes and policies of the administration relating to investments were contrary to the need to ―ensure a stable and
predictable business environment for investors to operate in, as required […] by the Treaty,‖99 and hence, the acts of Areana cannot be called a ‗legitimate regulatory activity‘. This situation
was unknown to the Ruritanian company which in good faith entered into a joint venture with one such company to whom the Dot had arbitrarily allocated the spectrum licenses. 3.2
THAT THE R ESPONDENT ESPONDENT DID NOT FOLLOW DUE PROCESS NORMS.
70. Due process of law is unanimously considered to be a universally accepted principle of international law.100 It applies to all forms of government decision making in which the host state decisions affect the rights of the investor.101 Due process, inter alia, must be observed in order for a taking of property to be lawful both in domestic legal systems and international law which protects the basic rights of natural and legal persons.102 In order for due process of law to be respected, State actions must not be arbitrary or discriminatory.103
98
Factsheet ¶3 PSEG v. Turkey, ICSID Case No. ARB/02/5 (2007) 100 MCLACHLAN, C. ET AL, I NTERNATIONAL I NVESTMENT ARBITRATION: SUBSTANTIVE PRINCIPLES239 (Oxford 2008). 101 NEWCOMBE, A. AND DELL, L., LAW AND PRACTICE OF I NVESTMENT TREATIES : STANDARDS OF TREATMENT244 (Kluwer Law International 2009). 102 PAULSSON, supra supra note 30, at 148 103 CMS Gas Transmission Company Company v The Republic of Argentina, ICSID Case No. ARB/01/8 ARB/01/8 (2007) 99
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71. Furthermore, the duty to accord due process of law shall also be deemed breached in case of procedural irregularities.104 Accordingly, in ADC case, the tribunal ruled that the due process requires some basic legal mechanisms, such as reasonable advance notice, a fair hearing and unbiased and impartial adjudicator and if no legal procedure of such nature exists at all, the argument that the actions are taken under due process of law rings hollow.105 72. Due Process refers to procedural fairness in all types of procedures in which the investor may be involved with the organs of the state.106 The Tribunal in Waste Management defined lack of due process as complete lack of transparency and candour in administrative process. The Claimant contends that the actions of the Areana Government are in gross violation of due process norms. Specifically the Claimant questions the acts of the Respondent on the following aspects :1. Arbitrary allocation of licesnses. 2. SC decision cancelling the licenses of the claimant company without providing appropriate compensation. 3. SC decision holding the Claimant company as disqualified from participation in subsequent auctions. 4. HC proceedings without serving notices to the Claimant company. 73. Many tribunals have found a separate requirement of transparency within the standard of fair and equitable treatment. In Tecmed, for example, the tribunal found that fair and equitable treatment includes the idea that: The foreign investor expects the host State to act in a consistent manner, free from ambiguity and totally transparently in its relations with the foreign investor, so that it may know beforehand any and all rules and regulations that will govern its investments.107
104
Alex Genin, Eastern Credit Limited, Inc. and A.S. Baltoil v.The Republic of Estonia, ICSID Case No.ARB/99/2 ¶371 (2002). 105 ADC Affiliate Ltd. & ADC & ADMC Management Ltd. v The Republic of Hungary, ICSID Case No. ARB/03/16, ¶ 435 (Oct. 2, 2006) 106 Parkerings-Compagniet Parkerings-Compagniet v. Republic of Lithuania, ICSID ICSID Arbitration Case No. ARB/05/8 , 35 (Sept. 2007) 2007) 107 TecnicasMedioambientalesTecmed S.A, v. The United Mexican States, ICSID Award Case No. ARB (AF)/00/2 (2003). 21 | P a g e
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74. In Waste Management, the tribunal found that a violation of fair and equitable treatment would involve a lack of due process leading to an outcome which ―offends judicial propriety,‖ as might be the case with ―a lack of transparency and candour [sic] in an administrative process.‖108
75. The Respondent state did not afford Claimant transparency and did not serve formal notice providing them opportunities that would be consistent with traditional notions of due process proces s and judicial propriety. In Metalclad , the tribunal found a violation of the FET standard because the claimant received no notice, invitation, or opportunity to appear at a meeting at which its permit was denied.109 In Tecmed , the tribunal found a violation of the FET standard where the claimant had been deprived of the opportunity to contest the non-renewal of its regulatory permit.110 In Deutsche Bank AG, the tribunal found a violation of the FET standard because the claimant was neither informed of the case against it before the state‘s central bank nor given an opportunity to
respond to an investigation report.111 76. The Respondent‘s failure to provide an opportunity to the claimants to put their objections bef ore ore its courts represents a violation of the FET standard, which requires consistency and transparency so that the investor ―may know any and all rules and regulations that will govern its investments.‖112
3.3
THAT THE R ESPONDENT ESPONDENT DID NOT ACT I N GOOD FAITH.
77. Good faith refers in a general sense to the duty of the parties to act reasonably, consistently, and transparently in their relations with each other.113 This duty to act in good faith stems from the BIT‘s Preamble, which specifies that the BIT‘s goal is to prom ote greater economic cooperation
through a stable investment climate for investments made by nationals of a BIT party. This duty also derives from Article 26 of the VCLT, which states: ―Every treaty in force is binding upon
the parties to it and must be performed in good faith.‖114 Accordingly, the performance of an investment treaty must be in good faith.
108
Waste Management, Inc. v. United Mexican State s, ICSID Case No.ARB(AF)/00/3 (2001). Metalclad Corporation v. Mexico, Award, ICSID Case No. ARB (AF)/97/1),¶91 (Aug 30, 2000). 110 Tecmedcase supra note 107 at ¶162. 111 Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, ICSID Case No.ARB/09/2, No. ARB/09/2, ¶487-488 (2009). 112 Tecmedcase supra note 107 at ¶154. 113 Vandevelde supra note 93 at 98. 114 Vienna Convention on the Law of Treaties, Art.3, 1155 U.N.T.S. 331, 8 I.L.M. 679. 109
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78. In Tecmed , the tribunal found that Mexico breached a good faith obligation because its denial of the permit necessary for the claimant‘s investment to yield returns was either a coercive attempt to force relocation of the claimant‘s facility or a nontransparent attempt to achieve some other
undisclosed objective.115 Coercion and a lack of transparency are, as the Tecmed decision demonstrates, hallmarks of a violation of the good faith obligation. 79. In the instant case the actions of the Respondents which resulted in denial of legitimate expectations of the Claimants constitutes bad faith on behalf of the Respondent. Further, the lack of transparency in spectrum allocation, failure to create a stable investment climate are sufficient to prove bad faith on behalf of the Respondents. 80. The Claimant submits that lack of good faith is viewed as an aggravating measure for violation of FET rather than a separate component of FET116 especially when the failure to negotiate in good faith is accompanied by the discriminatory application of the law.117 81. Alternatively, lack of bad faith is not an essential characteristic to find a breach of FET.118 In the C.M.S Award , the ICSID tribunal found that breach of FET requires an objective requirement,
unrelated to deliberate intention or bad faith in adopting the measures in question.119 3.4
THAT THE R ESPONDENT ESPONDENT‘S ACTIONS LACKED PROPORTIONALITY.
82. It is important to ensure the measures do not cause more economic harm than what is necessary to achieve those ends. The Tribunal in Tecmed laid laid down a proportionality test which weighs the reasonableness of a measure to its goal, the deprivation of the Claimant‘s economic rights and the legitimate expectations of the investor.120 There must be a reasonable relationship between the measures of the State and the burden on the investor, taking into account the investor‘s
legitimate expectation. 83. The Claimant puts forth that there was absence of proportionality in the actions of the Respondents in :115
Tecmedcase supra note 107 at ¶172. Azurix Corp. v.The Argentine Republic, ICSID Case No.ARB/01/12, ¶ 372 (2001). 117 Salukacase supra note 92 at ¶ 466. 118 Loewen Group, Inc. and Raymond Raymond L. Loewen v. United States States of America, America, Award, ICSID Case No ARB(AF)/98/3, ¶ 132 (2003). 119 CMS Gas Transmission Company v.The Republic of Argentina, ICSID Case No.ARB/01/8, ¶ 280 (2012). 120 Tecmedcase supra note 107. 116
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1. The SC order quashing the licenses without providing the claimant company any compensation. 2. The Areana State HC decision declaring the claimant as disqualified for subsequent auction. 84. In response to the writ petition filed by Airtel Infotech Co. Ltd, the SC quashed all 122 licenses issued in January 2008. This amounts to expropriation of property of RTL. Article 5 of the BIT provides protection against expropriation ex propriation except in cases where wher e expropriation serves s erves some public purpose but that too can be done only against compensation. The SC order led to expropriation of the investments of the claimant. Even if the expropriation is said to be done to serve a public purpose it was to be compensated for as provided in Article 5 of the BIT. 85. The Areana State High Court in response to a writ petition filed by Airwaves Holding Company held that the companies fined by the SC in its Feb 2012 judgment were disqualified from the auction involving the spectrum. This again clearly indicates the disproportionality in the actions of Areana. The order could not be said to be justified. There has to be a reasonable balance between the measures of the state and the burden on the investor. The said action did not serve any purpose of the Areana government.
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THAT THE 2012 SUPREME COURT RULING AND THE 2015 STATE HIGH
COURT RULING AMOUNTED TO EXPROPRIATION OF INVESTMENTS OF THE APPLICANT
86. It is humbly submitted before the Hon‘ble Tribunal that indirect expropriation of Claimant‘s property has occurred. Expropriation may be defined as the taking or deprivation of the property of the foreign investor by a host state.121 Indirect expropriation occurs when control or the economic value of any property has been rendered ‗essentially useless‘.122The Tribunal in
explained that an expropriation takes place where the act radically deprives the investor Tecmed explained of the economic use and enjoyment of the investment.123 87. In fact, it has been held that incidental interference in the use and benefit of the investment alone is sufficient to establish the existence of expropriation.124 Therefore, expropriation may be ascertained even if control vests with the investor.125 88. The BIT between Ruritania and Areana protects foreign= foreign=investors= investors=from= from=host= host=StateStateexpropriations or takings. Article 5(1) of the BIT provides that: Investments of Investors of either Contracting Party shall not be nationalised, expropriated or subjected to measures having effect equivalent to nationalisation or expropriation (hereinafter referred to as ―expropriation) in the territory of the State of the
other Contracting Party except for a public purpose in accordance with the laws and regulations of the State of the latter Contracting Party, on a non-discriminatory basis, and against compensation.126 89. The determination of whether an action or series of actions by a Party, in a specific fact situation, constitutes an indirect expropriation, requires a case-by-case, fact-based inquiry that considers, among other factors: 121
Marvin Roy Feldman Karpa v. United Mexican States, Award, ICSID Case No. ARB(AF)/99/1, ¶ 366-67 (2003); SD Myers Incorporated Incorporated v Canada IIC 252 (2004 ) 122 Ibid at 100; MckessonCorporationForemost Iran Corporation; Overseasprivate Investment Corporation,appellees/cross-appellant Corporation,appellees/cross-appellants, s, v. Islamic Republic of Iran, Appellant/cross-appellee, Appellant/cross-appellee, 52 F.3d 346 (D.C. Cir. 1995). 123 Telenor Mobile Communications A.S. v.The Republic of Hungary, ICSID Case No.ARB/04/15, ¶ 67 (2006). 124 DOLZER , supra supra note 24, at 108. 125 EnCana Corporation v. Republic of Ecuador, LCIA Case No. UN3481, UNCITRAL (2006); Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of Egypt, ICSID Case No. ARB/99/6 (2002) 126 BIT, Art. 5(1) 25 | P a g e
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I. II.
The economic impact of the government action; The extent to which the government action interferes with distinct, reasonable investment- backed expectations; and
III.
The character of the government action.
90. Three factors must be used on a cumulative basis, although these factors are not exhaustive, as evidenced by the use of the phrase ―among other factors‖ the above paragraph. Firstly, the
investor must have suffered an adverse impact to the investment concerned. This is the economic impact of the measure. Secondly, reasonable investment-backed expectations are taken into account when assessing whether there has been expropriation. Thirdly, and finally, the character of the measure must be taken into consideration.127 91. Three main criteria are used by arbitration tribunals to identify whether there has been an indirect expropriation: detrimental effect, legitimate expectations of the investors and proportionality.128 The following criteria in relation the given situation are examined below
4.1
VALIDITY OF ―SOLE EFFECTS‖ DOCTRINE.
92. A major determining factor to establish expropriation is the presence of substantial deprivation, which has been identified through an effects based doctrine developed in various instances.129 The Sole Effects doctrine is regarded as the dominant doctrine in international investment law, which looks at the effects of the governmental measure on the investor, instead of the purpose behind it. 130 This includes a substantial deprivation of the rights of the Investor.131 The Doctrine has been applied successfully in the various decisions of arbitral tribunals, all of whom have held in some degree that the intention behind adopting any measure is not material in identifying an expropriatory conduct.132
127
Suzi H. Nikiema, Best Practices: Indirect Expropriation , THE I NTERNATIONAL I NSTITUTE FOR SUSTAINABLE DEVELOPMENT, 11 (Sept. 3, 2016) http://www.iisd.org/pdf/2012/best_practice_indi http://www.iisd.org/pdf/2012/best_practice_indirect_expropriati rect_expropriation.pdf on.pdf 128
Ibid
129
M.C.I. Power Group L.C. and New Turbine, Inc. v. Republic of Ecuador, ICSID Case No. ARB/03/6, ¶300 (2007);LG&E Energy Corp., LG&E Capital Corp., and LG&E International, Inc .v. Argentine Republic, ICSID Case No. ARB/02/1,¶65 (2007). 130 TokiosTokelés v. Ukraine, ICSID Case No.ARB/02/18, ¶120 (2004). 131 Sempra Energy International v.The Argentine Republic, ICSID Case No.ARB/02/16, ¶284 (2007). 132 TokiosTokeles Award supra note 131 at ¶205 ; Compañiá de AguasdelAconquija S.A. & Vivendi Universal S.A. v. Argentine Republic, ICSID Case No. ARB/97/3 (2010). 26 | P a g e
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93. The exclusive criterion of injurious or adverse effect on the investment, also known as the ―sole effect doctrine‖133 has been described as making the adverse effect of the State measure on the investor ―a major factor, or even the sole factor, in determining whether or not a Taking has occurred.‖134 In this regard, the terms ―measure tantamount to expropriation‖ or ―measure with a similar effect to expropriation‖ simply mean ―measure having the same injurious effect on the 135
investment as expropriation.‖
94. The injurious effect criterion has been applied in numerous arbitration awards. It has become known as the ―Tippets– Biloune Biloune –Metalclad line,‖136 after the three principle cases often cited in
support of this approach. 95. The Tippets v. Iran award clearly illustrates the sole effect doctrine.In fact, the arbitrators explicitly rejected all other conceivable criteria before concluding that the damage suffered by the investor alone was relevant: ―[T]he government‘s intention is less important than the effects
of the measures on the owner of the assets [...], and the form of the measures of control or interference is less important than the reality of their impact. ‖137 The tribunal in the case of Biloune v. Ghana only took into account the fact that the measure had ―the effect of causing the irreparable cessation of work on the project‖
138
due to the order to stop work, the demolition of
the works, and the arrest and then deportation of Mr. Biloune. Finally, in Metaclad v. Mexico, the tribunal unambiguously defended the sole effect doctrine in the following terms: ―The
Tribunal need not decide or consider the motivation or intent of the adoption of the Ecological Decree (...).‖139 It added that indirect expropriation could occur ―even if not necessarily to the obvious benefit of the host State.‖140
96. The NykombSynergetics v. Latvia tribunal described this approach as follows: ―The ―The Tribunal finds that „regulatory takings‟ may under the the circumstances amount to expropriation or the equivalent of an expropriation. The decisive factor for drawing the border line towards expropriation must 133
R. Dolzer, ― Indirect Expropriation, New Developments?‖ Developments ?‖ 11 Environmental Law Journal, 65 (2002). Dolzer supranote 24 at 78. 135 Suzi H. Nikiema, Best Practices: Indirect Expropriation supra note 128 at 113. 136 F. Bloch, Indirect Expropriation: Conceptual Realignment? , 5(3) I NTERNATIONAL LAW FORUM, 161 (2003). 134
137
Tippetts, Abbett, McCarthy, Stratton (Tams) v. Tams-Affa Consulting Engineers of Iran v. Iran, and others, Award, Iran-U.S. CTR, 6, 225 – 226 226 (1986). 138 Biloune and Marine Drive Complex Ltd v. Ghana Investments Centre and the Government of Ghana, Ad hoc award of October 27, 1989, ILR, vol. 95, 209 (1990). 139 Metalclad Case supra note 110, at¶111. 140 ¶103. Ibid ¶103. 27 | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) primarily be the degree of possession taking or control over the enterprise the disputed measures entail ”. ”.141
97. The tribunal in Fireman‟s Fund v. Mexico, when summarizing its understanding of current law of expropriation under NAFTA, stated that ―[t]he ―[t]he effects of the host State‟s measures are 142
dispositive, not the underlying intent, for determining whether t here is expropriation‖ expropriation‖.
98. The caseCompañía del Desarrollo de Santa Elena v. Costa Rica143, although referred to a direct expropriation, not an indirect taking, has attracted particular attention because the panel expressly stated that the environmental purpose had no bearing on the issue of compensation. In this case, the claimant (Company Santa Elena) was formed primarily for the purpose of purchasing Santa Elena – a a 30 kilometer terrain in Costa Rica – with with the intention of developing it as a tourist resort. In 1978, Costa Rica issued an expropriation decree for Santa Elena aiming at declaring it a preservation site. Twenty years of legal proceedings between the Parties finally ended with a decision by an ICSID panel. While this case concerns a direct expropriation where the issue was the day of the taking for purposes of determining compensation, the panel, citing the Tippett case144, indicated that a compensable expropriation could occur through measures of a state which deprives the owner of ―access to the benefit and economic use of his property‖ or ―has made those [property] rights practically useless‖.
99. The panel held that:―While an expropriation or taking for environmental reasons may be classified as a taking for a public purpose, and thus be legitimate, the fact that the property was taken for this reason does not affect either the nature or the measure of the compensation to be paid for the taking. That is, the purpose of protecting p rotecting the environment for which the Property Propert y was taken does not alter the legal character of the taking for which adequate compensation must be paid.145 The international source of the obligation to protect the environment makes no no matter how laudable difference‖. It also added that:―Expropriatory environmental measures – no and beneficial to society as a whole – are, in this respect, similar to any other 141
NykombSynergetics Technology Holding AB AB v Latvia, Award, IIC 182 (2003), ¶4.3.1 ¶4.3.1 (Dec. 16 2003). 2003). Fireman's Fund Insurance Company v. The United Mexican States, Award, ICSID Case No. ARB(AF)/02/1, ¶176(f) (July 17 2006). 143 CompañíadelDesarrollo CompañíadelDesarrollo de Santa Elena S.A. v. Republic of Costa Rica, Award, ICSID Case No. ARB/96/1. (Feb. 17, 2000). 144 Tippettscase supra note 138 at 225-226. 142
145
Ibid.
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expropriatorymeasures that a state may take in order to implement its policies: where property is expropriated, even for environmental purposes, whether domestic or international, the state‘s obligation to pay compensation remains‖.
100.
The sole effect doctrine is thus an exclusive criterion that disregards all other parameters in the process of determining determinin g whether an indirect expropriation has occurred, occurr ed, particularly par ticularly the intention of those in government to do harm to the investor (or not), the public interest aim being pursued by the measure and the beneficial effect (or not) no t) that the lost investment may have on the State‘s S tate‘s
assets. It is only the damage suffered by the investor that counts when deciding whether or not a State measure constitutes an indirect expropriation. 101.
It is humbly submitted that the measures taken by the state of Ruritania were tantamount to expropriation and the cancellation of licenses was contrary to the obligations of Areana under the BIT, especially Article 3 which deals with promotion and mutual protection of Investments.146 4.2
102.
THE R EQUIREMENT EQUIREMENT FOR SERIOUS A ND IRREVERSIBLE DAMAGE
In order to define any State measure as indirect expropriation, the tribunals require proof that the measure has caused serious and irreversible damage to the investment. In the Starrett Housing case, the tribunal thus spoke of rights ―rendered so useless that they must be deemed to have been expropriated.‖147 Nonetheless, some tribunals have ruled that mere interference in the investor‘s enjoyment of rights can represent serious damage,
148
or have admitted in theory that
partial damage could be sufficient.149 103.
Destruction of the economic value of the investment must be total or close to total. In Pope & Talbot v. Canada, the test used by the arbitral tribunal to establish indirect expropriation was ―whether the interference is sufficiently restrictive to support a conclusion that the property has 150
been taken from the owner ‖. This approach has been followed in other cases. In Vivendi v. Argentina II , the tribunal observed that the ―weight ―weight of authority … appears to draw a distinction between only a partial deprivation of value (not an expropriation) and a complete or near
146
BIT, Art. 3 Iran-US Claims Tribunal, Starrett Housing Corp. v. Iran, 16 IRAN -U.S. C.T.R., at 112 et seq. (Dec 19, 1983). 148 Metalclad case supra note 110, at ¶110. 149 SD Myers case supra note 125 at ¶283. 150 Pope & Talbot v. Canada , Interim Award, NAFTA ch. 11, Arb. Trib26, ¶102 (June 2000). 147
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) complete deprivation of value (expropriation)‖ (expropriation)‖.151 In Sempra v. Argentina, the tribunal explained that the value of the business had to be ―virtually ―virtually annihilated ‖.152 In CMS v. Argentina, the tribunal opined that the relevant test was ―whether ―whether the enjoyment of the property has been effectively neutralized ‖.153
104.
The income-producing nature of investments may pose a challenging problem when a State measure extinguishes the ability to generate profits but leaves an investor‘s physical assets intact.
The question is whether the loss of income can be viewed as a separate investment or whether the impact should be assessed by reference to the overall investment that includes physical assets. As a general matter, it would seem that the future income is not an asset capable of separate economic exploitation and the assessment of the impact that the measure has on the value of investment must take into account the residual value of physical assets as well as other expenditures made as part of the investment. This would mean that the requisite level of neartotal deprivation would need to be reached with respect to the investment as a whole.154 105.
Itis humbly submitted that the orders of the Supreme Court and the State High Court have resulted in a substantial and a near complete reduction of the value of the investments made by the Claimant. The claimant is a telecommunications company and entered the Ruritanian mobile cell industry by forming a joint venture RAAWL with a local company TAAWL. 155 In the joint venture the claimant company, RTL, pledged its latest technology for which it is renowned in the world in favor of RAAWL while TAAWL transferred its seventeen 2G licenses which it had acquired through an auction conducted by the Government of Areana. It is humbly submitted that RTL has invested enormous amounts of money156 for the setting up of technology and acquiring the spectrum licenses and when the Supreme Court of Areana gave an order cancelling the licenses and ordering a re-auction due to the faults of the Telecom Minister of Areana, there was substantial deprivation of investments of the claimants company. Furthermore the 2015 State High Court order banning RAAWL from participating in the re-auction resulted in 151
Vivendi v. Argentina (II)Suez, Sociedad General de Aguas de Barcelona, S.A. & Vivendi Universal, S.A. v. Argentine Republic, Award, ICSID Case No. ARB/03/19, ¶7.5.11 (Aug 20 2007). 152 Sempra Energy v. Argentina supra note131 at ¶285. 153 CMS v. Argentina supra note 104 at ¶262. 154
OECD (2004), ―"Indirect Expropriation" and the "Right toRegulate" in International Investment Law‖, OECD Working Papers on International Investment , 2004/04, OECD Publishing. (Sept 3 2016)
http://dx.doi.org/10.1787/780155872321.pdf Fact Sheet ¶7 156 Ibid ¶11 155
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imperishable losses to the claimant as it completely eliminated the profit making ability of RTL‘s investments. The claimant also suffered large losses as huge amounts of Claimant‘s money is
now locked up in capital projects having long gestation periods from which it cannot withdraw. EASURE 4.2.1 DURATION O F T HE M
106.
In order to constitute an expropriation, the measure should be definitive and permanent. A measure that leads to a temporary diminution in value or loss of control would normally not be viewed as expropriatory. As noted by the Tecmed v. Mexico tribunal, ―it ―it is understood that the measures adopted by a State, whether regulatory or not, are an indirect de facto expropriation if they are irreversible and permanent …‖ …‖.
107.
157
However, some of the de jure temporary measures may also be considered expropriatory depending on the specific circumstances of the case. As noted in the explanatory note to Article 10(3) of the Harvard Draft Convention on the International Responsibility of States for Injuries to Aliens (1961), whether an interference might amount to indirect expropriation will depend on its extent and duration, but ―there ―there obviously comes a stage at which an objective observer would conclude that there is no immediate prospect that the owner will be able to resume the enjoyment of his property‖ property‖.158
108.
As to the irreversible nature of the adverse measure, this implies that the investor‘s situation will be compromised over a long period of time. The tribunals thus require that damage is ―not merely ephemeral,‖ 159or is a ―deprivation […] enduring.‖ 160For the tribunal in LG&E v. Argentina, Argentina, ―the expropriation must be permanent, that is to say, it cannot have a temporary nature.‖ 161As
to the issue
how long does such a measure therefore have to last, the tribunals do not set a standard period of of how time162 but assess situations on a case-by-case basis. In the case Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of Egypt,
163
a mere four-month import ban following the revocation
of a license was deemed sufficient to be termed an expropriation measure. measure. As stated by the tribunal in the case of RFCC v. Morocco Morocco,, ―a temporary measure must […] have substantial consequences equivalent to a 157
Tecmed v. Mexico supra note 108at ¶116. Harvard Draft Convention on the International Responsibility of States for Injuries to Aliens, Art. 10(3) (1961) 159 Tippettscase supra note 138 at 225. 160 LG&E Energy Corp. v. Argentina, supra note 130 at ¶190. 161 Ibid ¶ 193. 162 SD Myers Incorporated v Canada IIC 252 (2004). 163 Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of Egypt (ARB/99/6), award,18 ICSID 200, 602 et seq, (Apr. 12, 2002) Rev.-FILJ 200, 158
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) permanent loss. The recovery of the property right or access to it does not replace ownership in its initial situation (…).‖164Consequently, it is not a matter of how long the measure itself lasts but of how long the
adverse effects endure on the investment, i nvestment, in other words, their irreversible nature. 165
109.
In the given case the permanent nature of the expropriatory measures of the State of Areana are clearly visible as the Court orders cancelled the licenses held by RAAWL and ordered for a fresh auction. Moreover the State High Court banned the claimant company from taking part in the reauction. Thus there is no immediate prospect that RTL will be able to resume the enjoyment of its property166 and the measures adopted by the state whether regulatory or not, are an indirect de facto expropriation as they are irreversible and permanent.167 4.2.2
110.
HAT T HERE W AS A L ONTROL OVER T HE I NVESTMENT T A LOSS O F C ONTROL
It has been held that an expropriation claim may be accepted not because of a decrease in value of investment, but because of a loss of control, which prevents the investor from using or disposing of its investment. An investor may lose control of the investment by losing rights of ownership or management, even if the legal title is not affected.
111.
Loss of control is thus a factor that is alternative to destruction of value. It is particularly relevant in situations where the the investment is a company or a shareholding in a company. The tribunal noted in Sempra v. Argentina that ―a ―a finding of indirect expropriation would require … that the investor no longer be in control of its business operation, or that the value of the business has been virtually annihilated ‖.168 A valuable investment would be useless to the owner if he cannot
use, enjoy or dispose of such an investment. 112.
In ITT Industries v. Iran169 and Starrett Housing 170the Tribunal held that the assumption of control over the claimant‘s assets by government appointed managers, which rendered the claimant‘s rights of ownership meaningless, amounted to an effective expro priation.
164
Consortium R.F.C.C. v. Kingdom of Morocco (ARB/00/6), Award,20 ICSID Rev.-FILJ , 2005, ¶68, 391 (Dec 22, 2003). 165 Suzi H. Nikiema, Best Practices: Indirect Expropriation supra note 128 at 14. 166 Harvard Draft Convention on the International Responsibility of States for Injuries to Aliens, Art. 10(3) , (1961) 167 Tecmed v. Mexico supra note 108at ¶116. 168 Sempra Energy v. Argentina supra note131 at ¶285. 169 ITT Industries, Inc. v. Iran et al., Award, 26 May 1983, 2 Iran-United States Claims Tribunal Reports 348, pp. 351 – 352. 352. 170 Starrett Housing v. Iransupra note 148 32 | P a g e
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113.
It is humbly submitted that the acts of the State of Areana has resulted in the loss of control of the claimant over its investments as the 2015 order of the Supreme Court cancelled the 2G spectrum licenses171 which were a part of its investments. Furthermore the State High Court order disqualifying RAAWL from participating in the fresh auctions172 has virtually incapacitated the claimant from using its investments without being able to acquire spectrum licenses, the capital goods machinery and other technology used in telecom sector owned by the claimant become redundant and of no use. 4.2.3
114.
AS I NTERFERENCE W ITH I NVESTOR‟ S E XPECTATIONS T HAT T HERE W
Another criterion identified is whether the governmental measure affects the investor‘s
reasonable expectations. In these cases the investor has to prove that his/her investment was based on a state of affairs affai rs that did not include the challenged regulatory regulator y regime. The claim must be objectively reasonable and not based entirely upon the investor‘s subjective expectations.
115.
A relevant factor used in IIAs to guide the determination of whether a measure or series of measures amounts to an indirect expropriation relates to the existence of expectations on the part of the investor that a certain type of act or measure will not be taken by the host State. It requires an evaluation of whether the measure interferes with an investor‘s reasonable investment backed
expectations.173 116.
In IIA arbitrations, the notion of legitimate expectations has gained particular prominence in the context of the fair and equitable treatment standard.174 However, this concept has a role to play when considering expropriation claims too – both both on the national and international level. Recent research, which focused on a number of national jurisdictions and on experiences of the European Court of Human Rights and the EU, has concluded that ―one ―one important factor for the court ‟s ‟s assessment [of an expropriation claim] is whether the individual has some form of legitimate expectation that his or her rights will not be regulated or restricted in a certain way‖ way‖.175
171
Fact Sheet ¶81 Ibid ¶13
172 173
‗UNCTAD, Expropriation, UNCTAD Series on Issues in International Investment Agreements II‘, 73 (Sep. 03,
2016) http://unctad.org/en/Docs/unc http://unctad.org/en/Docs/unctaddiaeia2011d7_en.pdf. taddiaeia2011d7_en.pdf. 174
Ibid STEPHAN W. SCHILL , I NTERNATIONAL I NVESTMENT LAW AND COMTIVE PUBLIC LAW AW,, 149 (2010).
175
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117.
In TecnicasMedioambientalesTecmed S.A, v. The United Mexican States,176 the Tribunal attempted to determine whether the Mexican government‘s measures were ―reasonable with
respect to their goals, the deprivation of economic rights and the legitimate expectations of who suffered such deprivation‖. ―…Even before the Claimant made its investment, it was widely
known that the investor expected its investments in the Landfill to last for a long term and that it took this into account to estimate the time and business required to recover such investment and obtain the expected return upon making its tender offer for the acquisition of the assets related to the Landfill. To evaluate if the actions attributable to the Respondent – as well as the Resolution – violate the Agreement, such expectations should be considered legitimate and should be evaluated in light of the Agreement and of international law‖.177 Based on this and the fact that the ―Resolution‖ was not proportionate to the ―infringements‖ by Techmed, the Tribunal found that the ―Resolution‖ and its effects amounted to an expropriation.
118.
It is humbly submitted that the measures of the state of Areana were against the legitimate expectations of the Claimant Company. When the claimant company entered the Areana Telecom sector it acted on the belief that it is making investments for a long period and the same will be protected by State of Areana from any expropriatory measures as stated in article 3 and article 4 of the BIT. The claimant company while acquiring the 2G Spectrum licenses from TAAWL acted on the faith that the companies had obtained those licenses by a fair and equitable procedure after following due process and law. However when it was found that the procedure followed by Minister of C&IT followed an unconstitutional and arbitrary, the Supreme Court cancelled all the licenses issued
178
which resulted in substantial losses to the Claimant even
though it was not at fault. Further the State High Court decision banning RAAWL from participating in the re-auction further went against the expectations of the claimant as the company acted on the belief that it will participate in the telecom sector of Areana for a long period of time and thus invested billions of Dollars into the Areana cellular sector 179 and acquired the spectrum licenses accordingly which were valid for 20 years with further 10 years
176
Tecmed v. Mexico supra note 108at ¶116.
177
Ibid.
178
Fact Sheet, ¶ 8 Ibid ¶11.
179
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extension.180 However the disqualification of RAAWL incapacitated the claimant to use the resources which it had acquired considering the long term stay. 4.2.4
119.
ROPORTIONALITY T HAT T HE ACTIONS O F R ESPONDENT L ACK P
The principle of proportionality is defined as that of finding a balance between two contradictory interests, in this case the public and the private. Its aim is to ensure that, when pursuing a public interest, the sacrifice imposed on private interests is ―proportionate.‖181
120.
In Tecmed v. Mexico, Mexico, regarding the State‘s refusal to renew an operating licence for a hazardous waste treatment plant, the tribunal deemed that the criterion of proportionality was a necessary criterion in establishing a case of indirect expropriation: ―The Arbitral Tribunal will consider, in
order to determine if they are to be characterized as expropriatory, whether such actions or measures are proportional to the public interest presumably protected thereby and to the protection legally granted to investments.‖182 Since the award in Tecmed v. Mexico, the relevance
of the criterion of proportionality has been recognized as applicable to expropriation litigation in other treaty-based investor-State disputes.183 121.
The tribunal took three factors into account when assessing whether the regulatory measure taken to protect the public interest was proportional to the damage suffered by the investor.
122.
Firstly, the damage has to be substantial. To assess this, the arbitrators took into account the sole effect doctrine.184Secondly, the prima facie existence of a public interest has to be verified. In Tecmed v. Mexico, the arbitrators did, however, deem it necessary to verify whether the public
interest invoked by the State was, in fact, the reason behind the measure, not in order to scrutinise the legitimacy of the measure but to test its proportionality in terms of the real public interest at issue. Thirdly, at least one tribunal, the tribunal in Tecmed v. Mexico, has demanded that the authorities‘ response be necessary to achieve the intended public interest. This means
that the measure taken by the State has to be the only measure available to achieve the objective, or the least detrimental if a number of effective solutions exist.185 It is in the light of this 180
Ibid ¶ 7
181
Suzi H. Nikiema, Best Practices: Indirect Expropriation supra note 128 at 15. Tecmed v. Mexico, ICSID Case No.ARB(AF)/00/2, Award, 43 ILM, 2004, ¶122 (May 29, 2003). 183 LG&E Energy Corp. v. Argentina, supra note 130 at ¶190. 184 Tecmed v. Mexico case supra note 183 at ¶124 185 Suzi H. Nikiema, Best Practices: Indirect Expropriation supra note 128 at 15. 182
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condition that the damage caused to the investor must be proportional. In this case, the tribunal concluded that the decision not to renew the operating licence was not necessary to achieve the intended goal, which was to resolve the complaints from people living in the vicinity of the factory regarding the health and environmental consequences of its operations. Other less detrimental solutions were conceivable, such as relocation of the treatment plant to a more appropriate site. The measure had thus imposed an excessive burden on the investor.186 123.
It is humbly submitted that on applying the conditions enumerated above in the Tecmed case, it is clear that the acts of the Respondent were expropriatory in nature. Keeping in consideration the sole effects doctrine, the first condition is fulfilled as the Claimant incurred substantial losses. Further the State High Court decision resulted in the fulfillment of second and third condition as the claimant was made to suffer even though it was not at fault. The fault in the arbitrary allocation of Spectrum Licenses was of senior representatives of the Government of Areana187 and RTL acquired the licensees acting on the faith that the allocation process was fair and equitable and followed due process and law. Thus the cancellation of licenses by the Supreme Court resulted in substantial losses to the claimant without doing anything wrong. Moreover the State High Court order was prima facie in violation of principle of proportionality as the disqualification of RAAWL from the re-auction was completely unjustifiable and disproportional. Regarding the issue of not being eligible for the first election, the fault if any was of the domestic company TAAWL which was no longer the owner of the licenses and RAAWL cannot be punished for TAAWL‘s faults.188 Still in honoring the Supreme Court
decision RAAWL duly paid the fine which was imposed on it by the apex court of Areana. However the State High Court decision declaring the claimant as disqualified was completely out of proportion as the claimant company was punished twice for a wrong it did not commit. The act of disqualifying RAAWL from the auctions was not required and neither necessary. 124.
Thus it becomes clear that the acts of the state of Areana led to substantial loss to the investments of the Claimant, disproportional, permanent and irreversible in nature and were against the legitimate expectations of the investor. The claimant deserves full and effective compensation for the same. 186
Tecmed v. Mexico case supra note 183 at ¶151. Fact Sheet, ¶ 8 188 Ibid ¶ 7 187
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4.3 125.
THAT THE POLICE POWER EXCEPTION CANNOT BE TAKEN BY THE R ESPONDENTS ESPONDENTS
The Police powers exception gives the state a right to regulate in public interests without that measure being rendered expropriatory and liable for compensation.189 However, this doctrine has been severely criticised since the conditions for the application of the doctrine are identical to those of a lawful expropriation except the obligation to pay compensation.190
126.
Tribunals have held that the obligation to pay compensation is not extinguished merely because the nature or purpose of regulation is in public interest, particularly if the actions have a severe impact in diminishing the value of the investments.191
127.
Moreover, the scope of the police powers exception was read in a limited sense by the tribunal in Tecmed , to cover bona fide general taxation and measures necessary for the maintenance of
public order, provided it is not discriminatory.192 128.
Thus, in the absence of any specific clause exempting the Respondent‘s from paying
compensation and the limited scope of the police powers doctrine, the Respondent has breached Article 4 and 5 of the Ruritania- Areana BIT. 4.4 129.
THAT THE R URITANIA URITANIA- AREANA BIT DOES NOT CONTAIN A NY EXCEPTION TO THE PAYMENT OF COMPENSATION.
Article 5 of the BIT prohibits any form of expropriation by the host state except when it is for public purpose, is non-discriminatory, follows due process of law and is against compensation. Thus a lawful expropriation necessarily requires payment of adequate compensation. Failure to pay compensation would render the expropriation unlawful and give the Claimant a claim for compensation and damages.193
130.
The Ruritania- Areana BIT does not contain any provision which gives any exception to the payment of compensation unlike other BITs where regulatory measures for the public purpose are excluded from the scope of payment of compensation.194 Following the literal interpretation
189
Salukacase supra note 91 at ¶262. Azurix Corp. v.The Argentine Republic, Republic, ICSID Case No. ARB/01/12, ARB/01/12, ¶311 191 CompañiadelDesarrollo CompañiadelDesarrollo de Santa Elena S.A. v. Republic of Costa Rica, ICSID Case Ca se No. ARB/96/1, ¶71 (2000). 192 Tecmed v. Mexico case supra note 183 at ¶115. 193 Siemens A.G. v.The Argentine Republic, ICSID Case No. ARB/02/8 (2008) 194 US-Rwanda BIT, Annex B 4(b), Canada- Peru BIT B IT Annex B13 (1) (c). 190
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standard of the VCLT,195 since there is no exception for non-payment of compensation, the Respondent is liable to pay the Claimant‘s damages for breach of the BIT.
195
VCLT, Art 31(1). 38 | P a g e
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THAT THE RESPONDENT ARE OBLIGED TO MAKE REPARATION FOR THE FOR THE LOSSES.
131.
The Claimant most humbly submits that the February 2013 SC judgment and the January 2015 ruling of the Areana State High Court amounts to expropriation of property for which it is obliged to make reparation for the losses. The violation of Fair and equitable treatment also poses a liability on the Respondent to compensate the Claimant for its breach. Further, the Claimants also seek moral damages on the grounds of loss of reputation and harm to its social position. 5.1
132.
THAT R EPARATION EPARATION AGAINST U NLAWFUL EXPROPRIATION IS TO BE MADE.
It is a settled principle that unlawful expropriation requires reparation for the losses so caused.196 Investment treaties do not include rules on reparation leaving this matter to customary international law. It is widely accepted that the applicable standard for the assessment of damages resulting from an unlawful act is set out in the decision of the Permanent Court of International Justice in the Chorzów Factory case, and later formulated in Article 31 of the Articles on International State Responsibility of the International Law Commission.
133.
In Chorzów Factory case concerning reparation for international wrongful act it was held, ―The essential principle contained in the actual notion of an illegal act – a a principle which
seems to be established by international practice and in particular by the decisions of arbitral tribunals – is is that reparation must, as far as possible, wipe out all the consequences of the illegal act and re-establish the situation which would, in all probability, have existed if that act had not been committed. Restitution in kind, or, if this is not possible, payment of a sum corresponding to the value which a restitution in kind would bear; the award, if need be, of damages for loss sustained which would not be covered by restitution in kind or payment in place of it – such are the principles which should serve to determine the amount of compensation due for an act contrary to international law.‖
134.
The Chorzów Factory standard of compensation demands wiping out the consequences of the wrongful act and re-establishing the situation that would have prevailed had the illicit act not occurred. 196
UNCTAD, Expropriation supra note 174 at 131. 39 | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
135.
The Articles on the Responsibility of States for Internationally Wrongful Acts ( ASR ASR), drafted by the International Law Commission (ILC), was adopted as Resolution 56/83 by the UN General Assembly.197According to Noble Ventures Inc v Romania Ro mania,, it is ―widely regarded as codification of customary international law.‖198
Article 31(1) stipulates that ―the responsible State is under an obligation to make full reparation for the injury caused by the internationally wrongful act.‖ The PCIJ PC IJ in the Chorzów Factory case also affirmed
that "it is a principle of international law that the breach of an engagement involves an obligation to make reparation in an adequate form… there is no necessity for this to be
stated in the convention itself."199 In Argentina v Uruguay, citing the ASR, the ICJ stated that customary international law provides that compensation is available.200 136.
The Claimant submits that the February 2012 SC judgment and the January 2015 ruling of the Areana State High Court amounts to unlawful expropriation. It is thus evident that Areana is responsible for committing internationally wrongful acts201 and must compensate for RTL‘s injuries. 5.2
137.
THAT THE COMPENSATION FOR VIOLATION OF FAIR A ND EQUITABLE TREATMENT IS TO BE MADE .
The Claimant most humbly submit that the respondents apart from their expropriatory measures are also liable for breach of their duty to accord fair and equitable treatment.It is submitted that the Respondent breached the condition of fair and equitable treatment on the grounds of violation of legitimate expectations of the Claimant, failure to follow due process, acting unproportionally, failure to act in good faith. All these grounds clearly show violation of the fair and equitable treatment which can only be compensated by awarding damages against such breach.
197
UNGA Resolution 56/83 ‗Responsibility of States for internationally wrongful acts ’
(28 January 2002) (A/56/589
and Corr.1) [3] 198 ICSID Noble Ventures Inc v Romania (2005) No ARB/01/11 [69]; KajHober, ‗State Responsibility and Attribution‘ in Muchlinski, Ortino and Schreuer , The Oxford Handbook of International Investment Law (Oxford Uni Press, Oxford and New York 2008) 553 199 Case Concerning the Factory at Chorzów (Germany v Poland) (Merits) PCIJ Rep Series A No 17 29 200 Case Concerning Pulp Mills on the River Uruguay (Argentina v Uruguay) [2010] ICJ Rep 14 [273] 201 State v Trostle191 Ariz. 4, 951 P.2d 869 (1997), 884-86 40 | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
138.
The Claimant submits that the effects of a treatment that redundantly fails to be ‗fair and equitable‘ ultimately leads to such a substantial deprivation of rights that the investor can only be
compensated if he is granted the fair market value of his investment. In such a situation, the ongoing losses burden the business so dire that its value is not diminished, but rather voided , allowing for the ‗import‘ of compensation standards originally applicable to expropriation.
139.
A series of investment arbitration practitioners and scholars have argued that the standard of compensation for expropriation can also be applied in regard to breaches of FET, stating that ―the absence of explicit standards of compensation for non-expropriatory breaches of
international investment law does not preclude the use of standards applicable in case of expropriation‖.202
140.
Investment treaties typically set out an explicit standard of compensation for expropriation cases only – most most frequently, IIAs require prompt, adequate and effective compensation equal to the fair market value of the expropriated investment. When non-expropriatory treaty violations are found, damages have been awarded in accordance with the rules of international law that require 203
―full compensation‖.
In a number of cases concerning FET breaches, this resulted in an award
of the fair market value of the investment calculated by reference to future cash flows.204 5.3 141.
THAT THE MORAL DAMAGES SHOULD I N PRINCIPLE BE AWARDED TO THE CLAIMANTS.
Moral Damages should be awarded to the Claimant for the suffering and loss of reputation for the Claimants as well as representatives of the Claimant. Various arbitral tribunals have recognized the capacity of investment tribunalstoward damages for actions against the investors.205 Actions that restrict the enjoyment of the rights of the Claimant and its executives should necessarily be heard by this Tribunal since the Treaty itself is titled Mutual Promotion and Protection of Foreign Investment.
202
P. Y. Tschanz and J. E. Vinuales, Compensation for Non-Expropriatory Breaches of International Investment Law,26(5) J OURNAL OF I NTERNATIONAL ARBITRATION 735 (2009). 203 R IPINSKY IPINSKY, S. AND WILLIAMS, K., DAMAGES IN I NTERNATIONAL I NVESTMENT LAW 88-90(British Institute of International and Comparitive Law 2008). CMS v. Argentina, Award, 12 May 2005; Enron v. Argentina, Award of 22 May 2007; Sempra Energy v. Argentina, Award, 28 September 2007; British Gas v. Argentina, Final Award, 24 December 2007. 205 Desert Line Projects LLC v. The Republic of Yemen, ICSID Case No. ARB/05/17, ¶290 (2008) 204
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Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law)
142.
The Tribunal in Lemirelaiddown the conditions206 in which moral damages can be awarded. It specifically laid down that if the State‘s actions cause a deterioration of health, stress, anxiety,
other mental suffering such as humiliation, shame and degradation, or loss of reputation, credit and social position then moral damages can be claimed. 143.
The Claimant most humbly submits that the expropriatory measures of Areana government , the breach of fair and equitable treatment laid down in the BIT has caused a great loss of reputation and social position to the company in addition to the economic losses suffered by the company.
144.
The Claimant thus request the Hon‘ble tribunal to award moral damages in addition to damages
for expropriation and breach of fair and equitable treatment.
206
Joseph Charles Lemire v. Ukraine, ICSID Case No. ARB/06/18, ¶333(2011). 42 | P a g e
Prof. V.S. Mani Memorial International Law Moot Court Competition – 2016 (Banking and Investment Law) PRAYER
Wherefore, in the light of the facts stated arguments advanced and authorities cited, it is most humbly prayed and implored before this arbitration tribunal, that it may be graciously pleased to adjudge and declare that: I.
The Tribunal has jurisdiction and the claims put forth are admissible.
II.
The act of State of Areana has led to deprivation of sovereign wealth of Ruritanian Republic which is in violation of the principle of sovereign immunity.
III.
The State of Areana has violated Article 2(2) of the BIT by not conforming to the principles of Fair and Equitable Treatment and full protection and security. secu rity.
IV.
The February 2012 Supreme Court judgement and the January 2015 ruling of the State High Court amounts to Expropriation of investments made by RTL.
V.
The respondent state is obliged to make reparation for the losses incurred by RTL.
Also, pass any other order that it may deem fit in the favour of the Claimant to meet the ends of equity, justice, and good conscience. For this act of Kindness, the Claimant shall duty bound forever pray.
s/d Counsel for Applicant