FDI INTERNATIONAL ARBITRATION MOOT 2016 TEAM AGUILAR INTERNATIONAL COURT OF ARBITRATION OF INTERNATIONAL CHAMBER OF COMMERCE ICC ARBITRATION CASE NO. 28000/AC PETER EXPLOSIVE CLAIMANT VERSUS THE REPUBLIC OF OCEANIA RESPONDENT MEMORANDUM FOR THE CLAIMANT
ARGUMENTS PART I: JURISDICTION & ADMISSIBILITY 1. WHETHER THE TRIBUNAL MAY EXERCISE ITS JURISDICTION UNDER THE EUROASIA BIT WITH RESPECT TO: 1.1 Claimant is an investor pursuant to Article 1.2 of the Euroasia-BIT. 1.1.1 The Claimant qualifies to be an investor under the Euroasia- BIT. It is no doubt that Claimant has duly acquired Euroasian nationality as per the local laws of Euroasia. 1 Also, investment is made in the territory of Respondent State. 1.1.2 The succession of Fairyland by way of referendum is valid under the international law 2 and a rightful exercise of the right of self determination. 3 1.1.3 Euroasia has the right to assist 4 and in fact, is obliged to promote 5 the right of selfdetermination as it is an erga omnes obligation. 6 Annexation was lawful thereby establishing Claimant s Euroasian nationality and therefore, the rules of succession of treaties apply. 1.2 Claimant was not required to comply with the pre-arbitral steps as provided in the Article 9 of the Euroasia-BIT. 1.2.1 As no specific procedure for amicable consultations is provided, 7 the Claimant s request for negotiation amounts to substantial compliance of Article 9. 8 1.2.2 Having not replied to Claimant s request for negotiation, Respondent must be barred from using an amicable settlement provision to object to the jurisdiction. 9 1.2.3 Alternately, failure to abide by the amicable settlement provision is a non mandatory procedural failing 10 that does not bar jurisdiction of the Tribunal. 11 1 The Nottebohm case (Liechtenstein v. Guatemala), 2 nd phase, 1955 ICJ Reports 4; International Investment Law: Understanding Concepts and Tracking Innovations, OECD Publishing, 14-Mar-2008. 2 Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo, Advisory Opinion, 2010 I.C.J. 404 (July 22) 122. 3 Antonio Cassese, Self-Determination of Peoples (CUP, 1995); Western Sahara, Advisory Opinion, 1975 I.C.J. 12, p. 33, 58. 4 1 L. OPPENHEIM, OPPENHEIM'S INTERNATIONAL LAW 445 ( 9 th ed, 1992). 5 G.A. Res. 2625(XXV), Supp. No. 28, G.A.O.R., U.N. Doc. A/8082 (1970) p. 123-4. 6 Portugal v. Australia, 1995 I.C.J. 90, p. 102. 7 GERHARD WEGEN, DISPUTE SETTLEMENT AND ARBITRATION, IN INTERNATIONAL INVESTMENT DISPUTES: AVOIDANCE AND SETTLEMENT 59, 73 (Christoph Schreur, ed. 1984). 8 Salini Costruttori SpA v. Jordan, ICSID Case No. ARB/02/13, Decision on Jurisdiction Nov. 15, 2004, 20; Tradex v. Albania, ICSID Review, vol. 40, No 1, Spring 1999, at 159, 182. 9 Lauder v. Czech Republic, NAFTA-UNCITRAL Arbitration, Final Award, Sept. 3, 2001, 189. 10 Bayindir Insaat Turizm Tecret Ve Sanayi v. Pakistan, ICSID Case No. ARB/03/29, (2005), 100. 11 Ethyl Corporation v. Government of Canada, UNICTRAL Arbitration, Award on Jurisdiction, June 24, 1998 77-85; S.G.S. S.A. v. Islamic Republic of Pakistan, ICSID Case No. ARB/01/13, Decision on Objections to Jurisdiction, Aug. 6, 2003 184. 1
1.2.4 Requirements of litigation for 24 months as per Art. 9(2) and 9(3) are not mandatory. 12 The use of word may signify that the requirement is optional. 1.3 Claimant may invoke Article 8 of the Eastasia-BIT pursuant to Article 3 of the Euroasia-BIT. 1.3.1 It is submitted that there is no rule under international law which prevents an MFN provision from applying to jurisdictional issues. 13 Article 3 specifically covers all matters regulated under the BIT. Broadly worded MFN clauses, as in the present case, cover dispute settlement. 14 1.3.2 Article 8 of the Eastasia BIT provides favourable dispute settlement mechanism as compared to that of Euroasia BIT 15 and Claimant has complied with the requirements for its invocation. PART II: MERIT 2 HAVING ESTABLISHED THE JURISDICTION OF THE TRIBUNAL: 2.1 The claimant has made a protected investment in the light of clean hands doctrine with reference to Article 1.1 of the Eastasia-BIT. 2.1.1 The BIT needs to be interpreted to provide broad protection to investors and their investments. 16 2.1.2 The investment is protected under various provision of the Eastasia-BIT for fair and equitable treatment, against impairing enjoyment and against expropriation. 17 2.1.3 The shares acquired by the claimant were in accordance with laws and regulations of the host state. 18 The meeting with the President of NEA is totally unrelated with the cause of action. 19 2.1.4 Having granted the necessary license the government officials cannot invoke the clean hands doctrine to escape their liabilities against the investor. 20 12 Euro Petroleum Trading Ltd v Transpetroleum Int l Ltd, 2002 Int l Arb L Rev N-1 (Irish High Ct) 177. 13 Renta 4 S.V.S.A et al. v Russian Federation, SCC 24/2007 Award on Preliminary Objections, 20 March 2009 67-83. 14 Emilio Agustín Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7, Decision of the Tribunal on Objections to Jurisdiction, Jan. 25, 2000 (2001) 54. 15 Suez, S. G. SA and ISIA SA v Argentina ICSID Case No ARB/03/17; Teinver v Argentina ICSID Case No ARB/09/1. 16 Andrew Newcombe and Lluís Paradell, Law and Practice of Investment Treaties: Standards of Treatment (Wolters Kluwer 2009) p. 116; Tokios Tokelés v Ukraine, Decision on Jurisdiction, ICSID Case No. ARB/02/18 31. 17 S. Schill, Allocating adjudicatory authority: most-favoured-nation clauses as a basis of jurisdiction, J. INT L DISPUTE SETTLEMENT 41 (2011); G.C. Christie, What constitutes a taking of property under International Law, 38 BRIT. YB INT'L L. 307 (1962). 18 CHRISTOPHER R. ROSSI, EQUITY AND INTERNATIONAL LAW: A LEGAL REALIST APPROACH TO INTERNATIONAL DECISION MAKING 173, 251 (1993). 19 Loughran v. Loughran, 292 U.S. 216, 229 (1934) 216, 229; Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240, 245 (1933) 245. 2
2.1.5 In Arguendo, assuming but not conceding that the actions of Claimant were not clean, the gravity of the violation of the Claimant s rights outweighs the severity of his prior iniquitous actions. 21 2.2 The Claimant s investments have been expropriated by the Respondent. 2.2.1 Respondent s action lead to an interference with the enjoyment 22 of the property and renders the owner s rights useless. 23 The actions were discriminatory as targeted solely against Claimant s investment. 24 2.2.2 The expropriation was not conducted with due process and moreover, the Claimant was deprived of a substantive legal right to be heard. 25 The expropriation does not satisfy the test of suitability, necessity and proportionality 26 in order to be excluded for public purpose. 27 2.2.3 In arguendo, even if expropriation was for a public purpose, Respondents cannot be excused from compensating the Claimant 28 and the lack of prompt, adequate and effective compensation makes such action illegal. 29 2.2.4 Action of the Respondent cannot be disguised as regulatory measure as the adoption of unreasonable regulatory regimes is also considered to be amounting to expropriation. 30 2.3 The claimant did not contribute to the losses suffered by his investment. 2.3.1 Sanction imposed was totally uncalled for and was per se illegal as was imposed without any threat to peace or security 31 which is a precondition for imposition of sanctions. 32 2.3.2 The Respondent should not be allowed to escape its obligation under the BIT 33 to protect the investment by invoking principle of contributory fault. 20 T. Leigh Anenson, Treating Equity Like Law: A Post Merger Justification of Unclean Hands, 45 AM. BUS. L.J. 455, 459 (2008) p. 455-459.; Metalclad Corp. v. United Mexican States, ICSID Case No.ARB(AF)/97/1 19-80. 21 Byron v. Clay, 867 F.2d 1049, 1051 (7th Cir. 1989) 1051. 22 IAN BROWNLIE, PRINCIPLES OF PUBLIC INTERNATIONAL LAW 510 (6th Ed. 2003); MALCOLM N. SHAW, INTERNATIONAL LAW 744 (6th ed. 2008). 23 Housing Corp. v. Iran, 4 Iran-U.S. Claims Tribunal Rep. 122,154 (1983), p. 122,154 24 Waste Management v. Mexico, Final Award, 30 April 2004, 43 I.L.M. 967 99 (ICSID), 99; US v. Italy [1989] ICJ Rep 15, p. 15. 25 ADC & ADMC v. The Republic of Hungary, ICSID Case No. ARB/03/16, 432. 26 Tecmed v. Mexico (2003) ICSID Case No. ARB(AF)/00/2, 122. 27 Andenas & Zlepting, Proportionality: WTO Law in Comparative Perspective, 42 TEXAS INT L L. J. 376 (2007). 28 C. D. Santa Elena S.A. v. Republic of Costa Rica, ICSID Case No. ARB/96/1. 29 Amoco Int l Finance Corp. v. Iran, 15 Iran-U.S. Cl. Trib. Rep. 189, 223 (1987); MALCOLM N. SHAW, INTERNATIONAL Law 743 (6th Ed. 2008). 30 Marvin Feldman v. Mexico, ICSID Case No. ARB(AF)/99/1, 103. 31 Article 39, United Nations, Charter of the United Nations, 24 October 1945, 1 UNTS XVI. 32 EDWARD C. LUCK, UN SECURITY COUNCIL PRACTICE AND PROMISE 58 67 (2007). 33 Stephen J. Kobrin, Political Risk: A Review and Reconsideration, 10 J. INT L BUS. STUD. 67 (1979) p. 67. 3
2.3.3 For application of principle of contributory fault the existence of a wrongful act of the state, blamable conduct of the injured party and the causal link between the two aforementioned facts must be present. 34 There is no blamable conduct by the Claimant. 2.3.4 Political scenario should not have an impact on the business of the investor. Claimant can be expected neither to foresee the political situation in Eastasia at the time of making the investment nor the imposition of such sanction by the Respondent. 34 B. BOLLECKER-STERN, LE PRÉJUDICE DANS LA THÉORIE DE LA RESPONSABILITÉ INTERNATIONALE 303 (Paris 1974). 4