TEAM DEJVICKA GERMAN INSTITUTION OF ARBITRATION UNDER THE UNCITRAL ARBITRATION RULES ADMINISTERED BY THE DIS DIS CASE NO. ARB******** CONTIFICA ASSET MANAGEMENT CORP. (CLAIMANT) v. REPUBLIC OF RURITANIA (RESPONDENT) SKELETON BRIEF FOR CLAIMANT
I. THE TRIBUNAL HAS JURISDICTION OVER THE CLAIMS SUBMITTED BY CAM AND ALL THOSE CLAIMS ARE ADMISSIBLE IN LIGHT OF THE FACTS SURROUNDING ACQUISITION OF THE SHARES IN FBI BY CAM. A. Having the jurisdiction 1. Proper choice of the Tribunal in accordance to the Ruritania-Cronos BIT ( BIT ) a. Proper subject of the BIT i. Contracting State where Claimant located in ii. Normal way of Claimant acquiring the qualification as subject of BIT by transferring the shares (aa) Motivation: Normal business motivation for protecting its further interesting 1 (bb) Movement: Having the right to decide the price to transfer the shares as an inner movement of company iii. No prohibition on treaty shopping 2 in the BIT b. Disputes arisen on the basis of the Ruritania-Cronos BIT ( BIT ) c. Agreement of the choice of tribunal in light of BIT Art.8.2 3 2. Within the scope of the jurisdiction of the Tribunal according to the UNCITRAL Arbitration Rules a. Proper applicable rule in light of BIT Art.8.2 b. Effective agreement about the disputes could submit arbitration according to the applicable rule c. Conformed with the agreement about the scope of the protection by BIT i. Exact investor as defined by the BIT in light of BIT Art.1.1 1 B.V. et al. v. Bolivarian Republic of Venezuela, ICSID CASE NO. ARB/07/27,Decision of June 10, 2010. 2 Douglas, Zachary,The International Law of Investment Claims, (2009)CUP. 3 Lanco International INC v The Argentina Republic,ICSID Case No. ARB/97/6, Decision of October 14,1997. 1
ii. Exact investment as defined by the BIT in light of BIT Art.1.1 B. Admissibility 1. Composition of Claimant s claims a. Interest damages b. Loss and sale c. Moral damages 2. Within the scope of investment damage and the protection of BIT a. Interest damages i. Composition: the value difference of Claimant s interests in FBI before and after the measures adopted by Ruritania ii. Included in the investment of the BIT b. Loss of sales i. Composition: indirect investment loss resulting from FBI s cessation of operations ii. Subsidiaries are controlled by the Claimant4 iii. Claimant is conformed with the definition of investor in BIT Art.1.3 c. Moral damages i. Composition: reputation damage of FBI 5 and the individual compensation of Messrs Goodfellow and Straw ii. Within the scope of the protection by BIT (aa) Reputation as the definition of good will in BIT Art.1.1(e) 6 (bb) Conformed with the definition of investor in BIT Art.1.3 II. THE LOSS OF SALES BY CAM S SUBSIDIARIES LOCATED OUTSIDE OF RURITANIA TO FBI CONSTITUTES SHALL BE A RECOVERABLE ITEM OF DAMAGES 4 B.V. et al. v. Bolivarian Republic of Venezuela, ICSID CASE NO. ARB/07/27,Decision of June 10, 2010. 5 Noble Ventures, Inc. v. Romania, ICSID Case No. ARB/01/11, Decision of October 12, 2005. 6 [[Japan]wa ga zi ma sake <New Law Dictionary>[M](NEW).China university of political science and law press,1991,p208]. 2
A. Composition of claimant s investment in ruritania 1. Claimant s direct investment in Ruritania a. Contifica Spirit acquired all the shares from Ruritania State Property Fund by a Share Purchasing Agreement. 7 b. FBI s Shares has transferred from Contifica Spirit to Claimant during the intra-group restructuring. 8 2. Claimant s supporting-investment for FBI a. Claimant s subsidiaries and branches are a part of investment for FBI. After the measures restricting container and label were adopted by Ruritania, Claimant s subsidiaries and branches were forced to implement a comprehensive and massive reconfiguration for FREEBREW beer. 9 Such matched industries shall be regarded as a part of the investment in host state. 10 b. Pursuant to BIT Article1 and Article8 (1), there are no restrictions on nationality of investment. 11 In present case, there is nothing in the language of BIT Article1, which allows an investor to bring proceeding on behalf of subsidiaries. 3. The loss of FBI s increased value of investment shall be an investment under BIT. a. Integrating FBI into Contifica Croup s global procurement network reduces the cost of purchasing and help FBI evade tax legally which increases liquid asset and the value of FBI s investment. b. Increased value of investment yielded by an investment shall be regarded as a part of original investment under BIT. 12 B. Compensation claim by claimant as reflective loss 1. FBI, Claimant and its subsidiaries constituting an interest whole. a. Claimant owns controlling Investment and shares in subsidiaries and FBI. i. FBI is direct investment owned by Claimant in Ruritania. ii. Claimant s subsidiaries and branches as materials suppliers are supporting investment set up for FBI. 7 Statement of Facts and Circumstance Giving Rise to the Claim, para. 7. 8 Statement of Facts and Circumstance Giving Rise to the Claim, para. 9. 9 Statement of Facts and Circumstance Giving Rise to the Claim, para. 12. 10 Framework Agreement on the ASEAN Investment Area, AIA Agreement 1998. 11 EXHIBIT NO.1, page 15. 12 Sistem Mühendislik İnşaat Sanayi ve Ticaret AŞ v Kyrgyzstan, Award, ICSID Case No ARB(AF)/06/1, IIC 589 (2009), despatched 9th September 2009, [ICSID]. 3
b. Damages of Claimant s subsidiaries and FBI have rising to the loss of Claimant s investment in Ruritania. The whole interest of Claimant will decrease no matter whether Claimant s subsidiaries will receive compensation from FBI. i. If Claimant s subsidiaries receive compensation from FBI, the loss from FBI will shift from FBI to Claimant itself ultimately. ii. If not, the whole interest of Claimant will still decrease. In conclusion, Claimant is a controlling shareholder of its subsidiaries who has major legitimate interest in them. In many of these cases, Tribunal gave parent companies or shareholders a right to institute a proper derivative action against Respondent. 13 C. Casual relationship between loss of sales by claimant s subsidiaries and respondent. 1. Loss of sales by Claimant s subsidiaries was caused by FBI. a. FBI is unable to continue purchasing agreements with Claimant s subsidiaries caused. 14 b. For the reason that subsidiaries core business is specialize for FBI, FBI is unable to remedy subsidiaries loss because of its dull of sale. 2. FBI s cessation of operations is triggered by Respondent. After a series of measures adopted by Respondent to FBI, FBI s output of FREEBREW beer declined sharply; and FBI equivalently lost control of normal production and management. 13 Johnson v. Gore Wood & Co. [2000] UKHL 65; [2001] 1 All ER 481; [2001] 2 WLR 72 (14th December, 2000). 14 Statement of Facts, Relief Sought, para. 30. 4