THE INTERNATIONAL COURT OF ARBITRATION OF THE INTERNATIONAL CHAMBER OF COMMERCE PETER EXPLOSIVE CLAIMANT REPUBLIC OF OCEANIA RESPONDENT

Transcription

1 TEAM MOSLER THE INTERNATIONAL COURT OF ARBITRATION OF THE INTERNATIONAL CHAMBER OF COMMERCE PETER EXPLOSIVE CLAIMANT V. REPUBLIC OF OCEANIA RESPONDENT MEMORIAL ON BEHALF OF CLAIMANT 19 TH SEPTEMEBR 2016 Claimant: Peter Explosive Unicorn Valley 36 Respondent: Republic of Oceania c/o Nicole Blue-Sea, Procurator of the Fairyland Treasury, Ministry of Finance Euroasia Neatstreet 10, 1200 Valhalla, Oceania

2 TABLE OF ABREVIATIONS... IV INDEX OF AUTHORITIES... VII TREATIES, CONVENTIONS AND LAWS... VII RESOLUTIONS... VII CASE LAW... VIII CASES AND AWARDS FROM ARBITRATION TRIBUNALS... viii CASES FROM THE INTERNATIONAL COURTS... ix CASES DECIDED BY NATIONAL COURTS.... ix BOOKS... X JOURNALS AND ARTICLES... XI INTERNATIONAL REPORTS... XV OTHER PUBLICATIONS... XV STATEMENT OF FACTS... XVI CLAIMANT S ARGUMENTS... 1 JURISDICTION THE CLAIMANT IS AN INVESTOR PURSUANT TO ARTICLE 1.2 OF THE EUROASIA BIT NATIONALITY SECESSION Self Determination Use of Force Doctrine of Uti Possidentis TREATY OBLIGATIONS THE CLAIMANT DID NOT HAVE TO ABIDE BY ALL THE PRE-ARBITRAL STEPS IN THE EUROASIA BIT VALIDITY AND ENFORCEABILITY QUESTION OF JURISDICTION i

3 3.0. THE CLAIMANT MAY INVOKE ARTICLE 8 OF THE EASTASIA BIT PURSUANT TO ARTICLE 3 OF THE EUROASIA BIT APPLICATION TO ARBITRATION INTERPRETATION OF MFN ADMISIBILITY CLAIMANT MADE A PROTECTED INVESTMENT, ESPECIALLY IN THE LIGHT OF THE CLEAN HANDS DOCTRINE WITH REFERENCE TO ARTICLE 1.1 OF THE EASTASIA BIT; INAPPLICABILITY OF DOCTRINE OF CLEAN HANDS UNDER ARTICLE 1 OF EASTASIA BIT THE CLAIMANT MADE A PROTECTED INVESTMENT THERE IS NO PROVISION FOR CLEAN HANDS IN THE EUROASIAN BIT IN ALTERNATIVE CLEAN HANDS DOCTRINE APPLIES AT THE POINT OF MAKING OF THE INVESTMENT THE THRESHOLD OF DOCTRINE OF CLEAN HANDS HAS NOT BEEN MET MERITS CLAIMANT S INVESTMENT WAS EXPROPRIATED BY THE RESPONDENT; AND THE RESPONDENT STATE EXECUTIVE ORDER AMOUNTED TO INDIRECT EXPROPRIATION THE CLAIMANT CLAIM MEETS THE REQUIREMENTS FOR INDIRECT EXPROPRIATION The Claimant was Substantially Deprived of Economic Value of his Investment The Respondent is Culpable of Expropriation by Virtue of the Sole Effect Doctrine THE RESPONDENT ACTIONS WERE BEYOND THE POLICE POWERS ACTION OF THE STATE AMOUNTED TO ILLEGAL EXPROPRIATION CLAIMANT DID NOT CONTRIBUTE TO THE DAMAGE SUFFERED BY HIS INVESTMENT RESPONDENT WAS SOLELY RESPONSIBLE FOR THE DAMAGE CAUSED TO THE INVESTMENT LACK OF CAUSATION BETWEEN THE EXPROPRIATION AND ACTIONS OF THE CLAIMANT. 30 ii

4 6.3. THE CLAIMANT IS ENTITLED TO DAMAGES PRAYERS iii

5 TABLE OF ABREVIATIONS / paragraph / paragraphs Section AAA ADR ArbIntl Art. / Arts. Article / BIT Cf Cir. e.g. E.U. ed / eds editor / ed. et al. et seq. FN FTA HL i.e. ICC ICCPR ICESCR ICJ American Arbitration Association Alternative Dispute Resolution Arbitration International Articles Bilateral Investment Treaty Compare Circuit (U.S. Court of Appeals) exemplum gratia (for example) European Union editors edition and others et sequentia (and the following one) footnote Free Trade Agreement House of Lords id est (that is) International Chamber of Commerce International Covenant on Civil and Political Rights International Covenant on Economic, Social and Cultural Rights International Court of Justice iv

6 ICSID IL ILC ILM ILR Inc. Incoterm Ltd. MFN Model Law International Centre for Settlement of Investment Disputes International law International Law Commission International Legal Materials International Law Reports Incorporated International commercial term Limited Most Favored Nation UNCITRAL Model Law on International Commercial Arbitration Model Law on Conciliation UNCITRAL Model Law on International Commercial Conciliation OECD OTP PCA PO SCC U.C.C. U.K. U.S. A UN UNCITRAL UNGA Organization for Economic Cooperation and Development Office of the Prosecutor Permanent Court of Arbitration Procedural Order Stockholm Chamber of Commerce Uniform Commercial Code United Kingdom United States of America United Nations United Nations Commission on International Trade Law United Nations General Assembly v. versus (against) VCLT Vienna Convention on the Law of Treaties v

7 WTO World Trade Organization vi

8 INDEX OF AUTHORITIES TREATIES, CONVENTIONS AND LAWS 1. ICC Rules on Arbitration 2012, Entered into force on 1 st January International Covenant on Civil and Political Rights, 16 December, 1966, 999 UNTS 171 and 1057 UNTS 407 / [1980] ATS 23 / 6 ILM 368 (1967) 3. International Covenant on Economic, Social and Cultural Rights, 16 December 1966, 993 UNTS 3 / [1976] ATS 5 / 6 ILM 360 (1967) 4. UNCITRAL Arbitration Rules, UNCITRAL Conciliation Rules, UNCITRAL Model Law on International Commercial Arbitration, UNCITRAL Model Law on International Commercial Conciliation (2002), Adopted by on 24 June 2002, 24 ILM 1302 (1985) 8. United Nations, Charter of the United Nations, 24 October 1945, 1 UNTS XVI 9. Vienna Convention on the Succession of States in Respect of Treaties (1978), 1946 U.N.T.S. 3, 993 UNTS 3 / [1976] ATS 5 / 6 ILM 360 ( Vienna Convention on the Succession of States in Respect of State Property, Archives and Debts (1983), 22 ILM 306 (1983) / UN Doc A/CONF.117/14 (1983) 11. Vienna Convention on the Law of Treaties, 23 May 1969, UN Doc. A/Conf.39/27 / 1155 UNTS 331 / 8 ILM 679 (1969) / 63 AJIL 875 (1969) RESOLUTIONS 1. United Nations General Assembly Res 2625 (XXV) Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations, Adopted by the General Assembly on 24 th October 1970, A/RES/25/ United Nations General Assembly Resolution 1514 (XV), The Declaration on the Granting of Independence to Colonial Countries and Peoples, Adopted by General Assembly on 14 December 1960, A/RES/1514(XV) vii

9 3. United Nations General Assembly Resolution 3314 (XXIX), Definition of CASE LAW Aggression, Adopted by the General Assembly on 14 December 1974, A/RES/3314 CASES AND AWARDS FROM ARBITRATION TRIBUNALS 1. Agustin Maffezini v. Kingdom of Spain (ICSID No. Apr/97/7), 25 January Apotex, Inc. v. United States of America (ICSID Case No. ARB(AF) 12/1) 3. Award. 12 Apr Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of Egypt, ICSID Case No. ARB/99/6. Award. 4. Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/ Award 5. Cathay Pacific Airways, Ltd. v. Sps. Vazquez, 447 Phil. 306, 321 (2003). 6. EDF (Services) Ltd v Romania, Procedural Order No 2, ICSID Case No ARB/05/13, IIC 393 (2008), 7. Gas Natural SDGA SA V The Argentine Republic, ICSID Case no ARB/03/10, 8. Himpurna California Energy Ltd. v PT. (Persero) Perusahaan Listruik Negara, UNCITRAL Ad Hoc-Award of 4 May Final award of 4 May Hochtief AG v. The Argentine Republic, ICSID Case No. ARB/07/ ICC Case No 10256, Interim Award (12 August 2000) 11. ICC Case No 11490, Final Award (2012) XXXVII 12. ICC Case No 8445, Final Award, (2001) XXVI YB Comm Arb 167; 13. ICC Case No 9977, Final Award (22 June 1999) 14. INA Corporation, Claimant v. The Government of the Islamic Republic of Iran, Respondent (Case No. 161) Award No Iran-US Claims Tribunal, Starrett Housing Corp. v. Iran, 16 IRAN-U.S. C.T.R., at 112 et seq.! Licensor and Buyer v Manufacturer, SCC, Interim Award (17 July 1992) (1997). viii

10 17. Link-Trading Joint Stock Company v. Republic of Moldova, UNCITRAL (Final Award, 18 April 2002); (2002) IIC , 18. Marvin Roy Feldman Karpa v. United Mexican States, ICSID Case No. ARB(AF)/99/ Mr. Patrick Mitchell v. Democratic Republic of the Congo, ICSID Case No. ARB/99/7 20. Philip Morris Brand Sàrl (Switzerland), Philip Morris Products S.A. (Switzerland) and Abal Hermanos S.A. (Uruguay) v. Oriental Republic of Uruguay (ICSID Case No. ARB/10/7) 21. Pope & Talbot v. Canada. In Pope & Talbot, 6 ICSID 567. Page of 172 interim Award. 26 Jun Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8, 3 August Sporrong and Lonnroth v Sweden; ECHR 23 Sep Spyridon Roussalis v Romania, ICSID Case No ARB/06/1, Award (7 December 2011) CASES FROM THE INTERNATIONAL COURTS 1. Case Concerning the Military and Paramilitary Activities in and Against Nicaragua (Nicaragua v. United States of America) 27 June 1986, International Court of Justice 2. East Timor, Portugal v Australia, Jurisdiction, Judgment, [1995] ICJ Rep 90, ICGJ 86 (ICJ 1995), 30th June 1995, International Court of Justice [ICJ] 3. International Court of Justice, Advisory Opinion of 21 June 1971: Legal Consequences for States of the Continued Presence of South Africa in Namibia (South-West Africa) Not Withstanding Security Council Resolution 276 (1970), I.C.J. Rep International Court of Justice, Advisory Opinion of 9 th July 2004: The Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory [2004] ICJ 5. International Court of Justice, Advisory Opinion: Accordance with International Law of the Unilateral Declaration of Independence in respect of Kosovo, 22 July 2010 CASES DECIDED BY NATIONAL COURTS. 1. Copeland v Baskin Robbins USA, 96 Cal App 4th 1251, 1257 (Cal Ct App 2002) ix

11 2. Courtney & Fairbairn Ltd v Tolaini Bros (Hotels) Ltd [1975] 1 WLR 297, (English Ct App) 3. Mocca Lounge, Inc v Misak, 94 AD2d 761, 763 (NY App Div 1983) 4. Re Secession of Quebec [1998] 2 SCR Richie Co LLP v Lyndon ins Group Inc, 2001 WL Wah (Aka Alan Tang) & Anor v Grant Thornton International Ltd & Ors [2012] EWHC 3198 (Ch) BOOKS 1. Antonello Tancredi A Normative due process in the Creation of States through secession in James Crawford the Creation of States in International Law (Second Edition, Oxford University Press, 2006) 2. Colin Warbrick, States and Recognition in International Law in International Law, ed. by Malcolm D. Evans, First Edition (New York: Oxford University Press, 2003) 3. D Bowett, The Use of Force for the Protection of Nationals Abroad in A Cassese (ed), The Current Legal Regulation of the Use of Force (Martinus Nijhoff 1986) 4. D.P. O'Connell, The Law of State Succession 6-9 (H.C. Gutteridge et al. eds., Cambridge University Press 1956). 5. Gary B Born, International Arbitration and Forum Selection Agreements: Drafting and Enforcing (4th edn, Wolters Kluwer 2013) 6. Heather A. Wilson, International Law and the Use of Force by National Liberation Movements (New York: Oxford University Press, 1988), pp John Dugard and David Raic; The role of recognition in law and practice of secession in M Kohen, Secession: International Law Perspectives (Cambridge University Press: 2006) 8. Malcolm N. Shaw, International Law, Fifth Edition (Cambridge: Cambridge University Press, 2003) 9. Mathew G. Maloney, Succession of States in Respect of Treaties: The Vienna Convention of 1978, 19 Va. J. Int l L. 885, 911 (1979). 10. S. Jagusch and A. Sinclair, The Limits of Protection for Investments and Investors under the Energy Charter Treaty in C. Ribeiro (ed.), Investment Arbitration and the Energy Charter Treaty (Juris Publishing, 2006) x

12 JOURNALS AND ARTICLES 1. The Jurisdiction of the International Centre for Settlement of Investment Disputes (1979) 19 Indian Journal of International Law 166, Abdala, Manuel A., and Pablo T. Spiller. "Damage valuation of indirect expropriation in international arbitration cases." Am. Rev. Int'l Arb. 14 (2003): Beloof, Douglas E., and Joel Shapiro. "Let the truth be told: proposed hearsay exceptions to admit domestic violence victims' out of court statements as substantive evidence." Colum. J. Gender & L. 11 (2002): Christoph Schreuer with Loretta Malintoppi, August Reinisch et al, The ICSID Convention: A Commentary (2nd edn, Cambridge University Press 2009) Crawford, James, Jacqueline Peel, and Simon Olleson. "The ILC's Articles on Responsibility of States for Internationally Wrongful Acts: Completion of the Second Reading." European Journal of International Law 12, no. 5 (2001): Crawford, James, Pierre Bodeau, and Jacqueline Peel. "The ILC's draft articles on state responsibility: toward completion of a second reading." The American Journal of International Law 94, no. 4 (2000): Doig, Alan, and Stephanie McIvor. "The national integrity system: assessing corruption and reform." Public Administration and Development 23, no. 4 (2003): Dolzer, Rudolf, and Christoph Schreuer. Principles of international investment law. Oxford University Press, Dolzer, Rudolf, and Christoph Schreuer. Principles of international investment law. Oxford University Press, Dolzer, Rudolf. "Indirect Expropriations: New Developments." NYU Envtl LJ 11 (2002): Dugan, Christopher, Don Wallace, Noah Rubins, and Borzu Sabahi. Investor-state arbitration. Oxford University Press, Elizabeth Whitsitt, ICSID Tribunal Confirms that Allegations of Corruption Must Be Substantiated by Clear and Convincing Evidence available at xi

13 13. Fitzmaurice, Malgosia. "Third Parties and the Law of Treaties." Max Planck Yearbook of United Nations Law Online 6, no. 1 (2002): Fortier & Drymer, above n1 at 299; Jason Gudofsky, Shedding Light on Article 1110 of the North American Free Trade Agreement (NAFTA) Concerning Expropriations: An Environmental Case Study (2000) 21 Northwestern Journal of International Law and Business 243 at Fortier, L. Yves, and Stephen L. Drymer. "Indirect expropriation in the law of international investment: I know it when I see it, or caveat investor." ICSID Review 19, no. 2 (2004): Gaja, Giorgio. "Should all references to international crimes disappear from the ILC Draft Articles on State Responsibility?" European Journal of International Law 10, no. 2 (1999): Garcia-Bolivar, Omar E. "Teleology of International Investment Law: The Role of Purpose in the Interpretation of International Investment Agreements, The." J. World Investment & Trade 6 (2005): Griswold, Erwin N. "Renvoi Revisited." Harvard Law Review 51, no. 7 (1938): Guzman, Andrew T. "Why LDCs sign treaties that hurt them: Explaining the popularity of bilateral investment treaties." Va. j. Int'l L. 38 (1997): Habib, Mohsin, and Leon Zurawicki. "Corruption and foreign direct investment." Journal of international business studies 33, no. 2 (2002): Herstein, Ori J., "A Normative Theory of the Clean Hands Defense" (2011). Cornell Law Faculty Publications. Paper House of Commons Library, Recognition of Kosovo, SN/IA/4690, 9 April Hwang, Michael, and Kevin Lim. "Corruption in Arbitration Law and Reality." Asian International Arbitration Journal 8.1 (2012): xii

14 24. Isakoff, Peter David. "Defining the scope of indirect expropriation for international investments." Global Business Law Review 3, no. 2 (2013). 25. Jason Gudofsky, Shedding Light on Article 1110 of the North American Free Trade Agreement (NAFTA) Concerning Expropriations: An Environmental Case Study (2000) 21 Northwestern Journal of International Law and Business 243 at Kaushal, Asha. "Revisiting history: how the past matters for the present backlash against the foreign investment regime." Harv. Int'l LJ 50 (2009): Klaus Peter Berger, Law and Practice of Escalation Clauses (2006) 28. Kolo, Abba, and Thomas W. Walde. "Renegotiation and Contract Adaptation in International Investment Projects-Applicable Legal Principles and Industry Practices." J. World Investment 1 (2000): Kriebaum, Ursula. "Regulatory Takings: Balancing the Interests of the Investor and the State." The Journal of World Investment & Trade 8, no. 5 (2007): Law and Practice of Investment Treaties: Standards of Treatment 31. Leebron, David W. "Game Theoretic Approach to the Regulation of Foreign Direct Investment and the Multinational Corporation, A." U. Cin. L. Rev. 60 (1991): Meshel, Tamar, The 2012 ICC Arbitration Rules Enhanced Practices and New Features (July 1, 2012). 21(1) Canadian Arbitration and Mediation Journal, Spring/Summer 33. Moloo, Rahim, and Alex Khachaturian. "The Compliance with the Law Requirement in International Investment Law." Fordham International Law Journal 34 (2011): Moore, Michael O. "Determinants of German manufacturing direct investment: " Weltwirtschaftliches archiv 129, no. 1 (1993): Mortenson, Julian Davis. "The Meaning of Investment': ICSID's Travaux and the Domain of International Investment Law." Harvard International Law Journal 51.1 (2010). 36. Mostafa, Ben. "Sole Effects Doctrine, Police Powers and Indirect Expropriation under International Law, The." Austl. Int'l LJ 15 (2008): 267. xiii

15 37. Newcombe, Andrew Paul, and Lluis Paradell. Law and practice of investment treaties: standards of treatment. Kluwer Law International, OECD (2004), "Indirect Expropriation" and the "Right to Regulate" in International Investment Law, OECD Working Papers on International Investment, 2004/04, OECD Publishing Petersmann, Ernst-Ulrich. "International rule of law and constitutional justice in international investment law and arbitration." Indiana Journal of Global Legal Studies 16, no. 2 (2009): Png, Ivan PL. "Optimal subsidies and damages in the presence of judicial error." International Review of Law and Economics 6, no. 1 (1986): Ranjan, Prabhash, and Pushkar Anand. "Determination of Indirect Expropriation and Doctrine of Police Power in International Investment Law: A Critical Appraisal." Available at SSRN (2016). 42. Ripinsky, Sergey, and Kevin Williams. Damages in international investment law. BIICL, Simon Chapman, Multi-Tiered Dispute Resolution Clauses: Enforcing Obligations to Negotiate in Good Faith (2010) 27J Int l Arb 44. Sornarajah, Muthucumaraswamy. The international law on foreign investment. Cambridge University Press, Spinedi, Marina. "From one Codification to Another: Bilateralism and Multilateralism in the Genesis of the Codification of the Law of Treaties and the Law of State Responsibility." European Journal of International Law 13, no. 5 (2002): Uluc, Inan, "Corruption in International Arbitration" (2016). SJD Dissertations.Paper Wagner, above n6 at 536; Rudolf Dolzer & Felix Bloch, Indirect Expropriation: Conceptual Realignments? (2003) 5 International Law Forum 155 at 164;). 48. Wälde, Thomas W., and Borzu Sabahi. "Compensation, Damages and Valuation in International Investment Law." Transnational Dispute Management (TDM) 4, no. 6 (2007). xiv

16 49. Weiler, Todd. International investment law and arbitration: leading cases from the ICSID, NAFTA, bilateral treaties and customary international law. Cameron May, Williams, John Fischer, and H. Lauterpacht, eds. International Law Reports. Vol. 1. Cambridge University Press, Yearbook of the international Law Commission, 1978, Vol. II, Part Two, INTERNATIONAL REPORTS 1. Draft Articles on the Responsibility of States for Internationally Wrongful Acts, Report of the ILC on the Work of its Fifty-third Session, UN GAOR, 56th Session, Supp No 10, p 43, UN Doc A/56/10 (2001) 2. ILC, Report of the International Law Commission on the Work of its fifty-eighth Session (1 May-9 June and 3 July-11 August 2006) UN Doc A/61/10, Chapter IV, 33. OTHER PUBLICATIONS 1. B. Legume Defining Investment and Investor: Who is Entitled to Claim? presentation at the Symposium Making the Most of International Investment Agreements: A Common Agenda co-organized by ICSID, OECD and UNCTAD, 12 December 2005, Paris. 2. Black s Law Dictionary Bryan A. Garner (ed), Black's Law Dictionary (7th ed., St. Paul Minnesota, West Publishing Corporation: 1999) 3. Retrieved on 11/9/16 4. Oxford Dictionary of Law, ed. by Elizabeth A. Martin (Oxford: Oxford University Press, 2003) xv

17 STATEMENT OF FACTS 1. The Claimant is a national of Euroasia and resident of Fairyland, which is a province that was formerly part of Eastasia and is now a region of Euroasia. 2. On 1 January 1992, the Respondent and the Republic of Euroasia ( Euroasia ) concluded the Agreement for the Promotion and Reciprocal Protection of Investments (the Euroasia BIT ). The Euroasia BIT came into force on 23 October On 1 January 1992 The Respondent and the Republic of Eastasia ( Eastasia ) concluded the Agreement for the Promotion and Reciprocal Protection of Investments (the Eastasia BIT ). The Eastasia BIT came into force on 1 April The Claimant invested in the Republic of Oceania in February 1998 by purchasing 100% of the shares in the company, Rocket Bombs Ltd, and subsequently became its president and sole member of its board of directors. Rocket Bombs Ltd specialised in arms production. 5. The company was a decrepit enterprise as it had lost its environmental license necessary for arms production operations. The suspension of arms production had also caused massive redundancies, leaving a lot of workers from the local town of Valhalla without a means to make a living. 6. The Claimant managed to improve Rocket Bombs Ltd from its state of operations at the time of purchase. He started to modernise the production line to meet the requirements of the Respondent s Environment Act of On 23 July 1998, the claimant obtained an environmental license from the Respondent s National Environment Authority, which allowed for the commencement of arms production at Rocket Bombs Ltd. Subsequently, the Claimant managed to obtain a number of contracts for arms production. The most crucial contract was concluded with the Ministry of National Defence acting on behalf of the Republic of Euroasia on 23 December 1998, effective as of 1 January On 28 February 2014, Rocket bombs limited and Ministry of National Defence acting on behalf of the Republic of Euroasia concluded a contract, effective of 1 April 2014, for a period of another six years. 8. Historically, the region of Fairyland had been part of the Republic of Euroasia. However, due to multiple wars over the last 100 years, the province found itself within Eastasian territory. On 1 November 2013, the residents of Fairyland decided, in a referendum, that xvi

18 9. Fairyland should be reunited with its homeland the Republic of Euroasia. On 1 March 2014, the region of Fairyland was peacefully re-united with the Republic of Euroasia. On 23 March 2014, the Republic of Euroasia officially declared that Fairyland had been returned to the motherland and formed a Euroasian region. 10. On 1 March 2014 Euroasia introduced an amendment to its Citizenship Act, which allowed all residents of Fairyland to apply for Euroasian nationality. The Citizenship Act does not allow Euroasian nationals to possess dual nationality. On 23 March 2014, Euroasian authorities recognised the claimant as a national of the Republic of Euroasia, and he was subsequently issued a Euroasian identity card and passport. 11. The Respondent did not accept the reunification of Fairyland to Euroasia. It subsequently imposed sanctions on all entities operating within the territory of the Republic of Oceania that had any contractual relationship with the Republic of Euroasia, even though no violation of international law by Euroasia in this regard has been adjudicated and the people of Fairyland were merely exercising their right of self-determination. Sanctions were imposed on Rocket Bombs Ltd and The Claimant. 12. Consequently, the claimant became unable to sell his shares in Rocket Bombs Ltd. Furthermore, the value of shares was reduced almost to zero. All contracts with entities operating in the territory of the Republic of Oceania were terminated by virtue of the Executive Order of the President of the Republic of Oceania of 1 May 2014 on Blocking Property of Persons Contributing to the Situation in the Republic of Eastasia. The Executive Order caused a complete standstill in arms production, as all suppliers of Rocket Bombs Ltd were operating within the territory of the Republic of Oceania. 13. On 11th September 2015, the claimant made a Request for Arbitration to the International Chamber of commerce pursuant to Article 8 of the Eastasia BIT. This is after the Claimant had notified the respondent s Ministry of Foreign Affairs (with copies to the Ministry of Finance, Ministry of Defence and Ministry of Environmental Protection) of his dispute with them and of his intention to initiate arbitral proceedings against the Respondent if they fail to negotiate with the Claimant. Hitherto no response has been given by the respondent. 14. On 30 th of September the Respondent replied to the request declaring that it rejected all claims and allegations made by the Claimant in the Request for Arbitration as false and xvii

19 unsubstantiated. Furthermore, the Respondent denied that the Arbitral Tribunal has jurisdiction over this case. xviii

20 CLAIMANT S ARGUMENTS JURISDICTION 1.0. THE CLAIMANT IS AN INVESTOR PURSUANT TO ARTICLE 1.2 OF THE EUROASIA BIT. 15. The claimant avers that he is an investor as per Article 1.2 of the Euroasia BIT. The Euroasia Bit expresses under this Article that an investor is any natural or legal person of one Contracting Party who invests in the territory of the other Contracting Party. 1 This definition is central to the jurisdiction of the arbitral tribunal established pursuant to investment agreements since the scope of application rationae personae may depend directly on what investor means, i.e. being an investor of a state party to the treaty is a necessary condition of eligibility to bring a claim. In addition, the scope of application rationae materiae depends on the definition of investment and in particular with respect to the jurisdiction of this tribunal, as it extends to any dispute arising out of an investment. 16. In order to answer whether the claimant is an investor, this tribunal will have to establish the following issues; 1.1. Nationality 17. There are two types of investors: natural and legal persons. For natural persons, investment agreements generally base nationality exclusively on the law of the state of claimed nationality. It is a firmly established principle in international law that the nationality of the investor as a natural person is determined by the national law of the state whose nationality is claimed The claimant s nationality is safeguarded by the principle of nationality, which was established in the Nottebohm case. This principle is the binding provision granting the right of diplomatic protection. The claimant may invoke such protection as he possesses a 1 Procedural Order no 1 2 B. Legum Defining Investment and Investor: Who is Entitled to Claim? presentation at the Symposium Making the Most of International Investment Agreements: A Common Agenda co-organised by ICSID, OECD and UNCTAD, 12 December 2005, Paris. 1

21 national identification card and passport from Euroasia pursuant to their recognition of him as a national of Euroasia The right to grant and withdraw nationality of natural persons remains part of the sovereign domain. The question before tribunals has been whether and to what extent a state can refuse to recognize the nationality of a claimant. International law practice on questions of nationality has developed primarily in the context of diplomatic protection. 20. In the Nottebohm case referred to earlier the ICJ held that even though a state may decide on its own accord and in terms of its own legislation whether to grant nationality to a specific person, there must be a real connection between the state and the national. 21. The claimant avers that his connection to the state of Euroasia is primarily denoted from the roots that they have exerted before the annexation of the territory of Fairyland to Eastasia in and that the vast majority of people living in Fairyland are of Euroasian origin as historically it was a part of the territory of Euroasia. Further they do not identify with Eastasia and preferred to be re-united with Euroasia However, in today s circumstances of the modern world it has been extremely difficult if not impossible to demonstrate effective nationality following the Nottebohm, i.e. the person s attachment to the state through tradition, interests, activities or family ties. Amerasinghe opines that: There is a distinction between diplomatic protection and jurisdiction for the purposes of the [ICSID] Convention [E]ven if the Nottebohm Case were to be used as an applicable precedent, it is arguable that an effective link is relevant to negating the existence of nationality only in the particular circumstances of that case, or at any rate, in very limited circumstances The International Law Commission s (ILC) Report on Diplomatic Protection also recognised the limitations presented by the Nottebohm ruling in the context of modern economic relations: 3 Procedural order no 2 4 Procedural Order no 3 5 Statement of uncontested facts at paragraph 14 6 The Jurisdiction of the International Centre for Settlement of Investment Disputes (1979) 19 Indian Journal of International Law 166, 203 2

22 [ ] it is necessary to be mindful of the fact that if the genuine link requirement proposed by Nottebohm was strictly applied it would exclude millions of persons from the benefit of diplomatic protection as in today s world of economic globalisation and migration there are millions of persons who have moved away from their State of nationality and made their lives in States whose nationality they never acquire or have acquired nationality by birth or descent from States with which they have a tenuous connection Therefore, this tends to show that the recognition of The Claimants by the Authorities of Euroasia on 23 rd March 2014 was legal and in accordance with International Law Principles Secession 25. The claimant submits that the secession is a valid secession, which include: a democratically exercised right of self-determination, lack of military coercion from foreign states and adherence to the principle of Uti Possidentis. This principle states that a territory remain with its possessors after a conflict, and thus justifies Euroasia s authority over Fairyland. 8 The Eastasian constitution does not provide on secession and thus this cannot be taken to mean that it is illegal. 26. The supreme court of Canada in its ruling on the matter concerning the case of secession of Quebec gave the opinion that international law "does not specifically grant component parts of sovereign states the legal right to secede unilaterally from their 'parent' state." The Supreme Court of Canada opinion stated that the right of a people to selfdetermination was expected to be exercised within the framework of existing states, by negotiation, for example. Such a right could only be exercised unilaterally under certain circumstances, under current international law ILC, Report of the International Law Commission on the Work of its fifty-eighth Session (1 May-9 June and 3 July-11 August 2006) UN Doc A/61/10, Chapter IV, Article 1, International Covenant on Civil and Political Rights, 16 December, 1966, U.N.T.S. vol. 999, page 171 [hereinafter ICCPR]; Article 1, International Covenant on Economic, Social and Cultural Rights, 16. December 1966, U.N.T.S. 933, page 3. 9 Re Secession of Quebec [1998] 2 SCR Declaration of Principles of International Law; Kosovo advisory Opinion; see also John Dugard and David Raic; The role of recognition in law and practice of secession in Kohen above n 2, 102; Antonello Tancredi A Normative due process in the Creation of States through secession in Kohen above n 2, 188; James Crawford the Creation of States in International Law (Second Edition, Oxford University Press, 2006) 5 3

23 28. The court stated in its opinion that under international law, the right to secede was meant for peoples under a colonial rule or foreign occupation. Otherwise, so long as a people have the meaningful exercise of its right to self-determination within an existing nation state, there is no right to secede unilaterally. 29. The referendum conducted by the people of Fairyland was legitimate as provided for in the constitution of Eastasia. The referendum was a valid and democratic means for the Fairyland people to re-unite with their original homeland Euroasia. 30. The Claimant further submits that The Claimant is a national of Euroasia and can rely on the Euroasia BIT pursuant to Article 15 of the Vienna Convention on Succession of States to Treaties. Article 15 carries a proviso that the extension of those treaties should only take place when such application would not be incompatible with the object and purpose of the treaty or would radically change the conditions for its operation. 31. International law defines a succession of States as "the replacement of one State by another in the responsibility for the international relations of territory." 11 More simply, State succession involves the transfer of a territory from one State (the predecessor State) to another State (the successor State). As such, State succession may take different forms Self Determination 32. Article 1(2) of the UN Charter, which is a part of the Chapter I dealing with the principles and purposes of the UN, refers to the concept of self-determination while laying down one of the four purposes of the body. In addition, in the Article 55, the self-determination of peoples is cited as a principle on which peaceful and friendly relations among nations are conceived to be based The Declaration on the Granting of Independence to Colonial Countries and Peoples 13 adopted by the GA in 1960 by eighty-nine votes in favour, none against with nine 11 See article two, common to the Vienna Convention on the Succession of States in Respect of Treaties (1978), 1946 U.N.T.S. 3, and to the Vienna Convention on the Succession of States in Respect of State Property, Archives and Debts (1983), UN Doc. A - CONF Heather A. Wilson, International Law and the Use of Force by National Liberation Movements (New York: Oxford University Press, 1988), pp United Nations General Assembly Resolution 1514 (XV) 4

24 abstentions 14, stated that; all peoples have the right to self-determination; by virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development There have also been numerous ICJ opinions which can be taken into consideration while studying the implementation of self-determination. As H. Wilson notes; the ICJ acknowledged the right to self-determination in its Namibia opinion (1971) as a principle in international law as enshrined in the Charter and its further development in the Declaration on Colonialism (1514(XV)), which refers to a right to self determination. Moreover, the ICJ considered the principle of self-determination in the Western Sahara case as a legal one in the context of such territories. As Shaw points out; the Court moved one step further in the East Timor (Portugal v. Australia) case by stating that Portugal s allegation that the self-determination has an erga omnes nature, is irreproachable. The Court also defined the right of self-determination as one of the essential principles of contemporary international law Finally, it is worthy to note that the Additional Protocol I to the Geneva Conventions of 1949 (1977) clearly recognized the self-determination in its Article 1(4) as a right in international law Use of Force 36. According to the principle concerning the non-use of force in international relations, as elaborated in the United Nations General Assembly Res 2625 (XXV), The territory of a State shall not be the object of acquisition by another State resulting from the threat or use of force. In the same document, it is also emphasized that No territorial acquisition resulting from the threat or use of force shall be recognized as legal, corollary recognized by the International Court of Justice as reflecting customary international law, 18 as well as the remaining text of Resolution 2625 (XXV) concerning the prohibition of the threat or use of force Abstaining states were Australia, Belgium, the Dominican Republic, France, Portugal, Spain, South Africa, the UK, and the US (Wilson, p. 68). 15 Malcolm N. Shaw, International Law, Fifth Edition (Cambridge: Cambridge University Press, 2003), p Malcolm N. Shaw, International Law, Fifth Edition (Cambridge: Cambridge University Press, 2003), p Ibid. 18 See the Advisory Opinion on the Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory [2004] ICJ Rep 136, para 87. Also according to art 5(3) of the UN General Assembly s Res 3314 (XXIX) 5

25 37. According to Article 2 of the UN General Assembly s Definition of Aggression, aggression consists in the use of armed force by a State in contravention of the Charter, while according to its Article 6, a military action undertaken in self-defense under Article 51 of the UN Charter does not constitute an act of aggression. And indeed, in the practice, there are cases in which military intervention to protect nationals abroad has been classified as a form of self-defense pursuant to Article 51 of the UN Charter. The claimant avers that the officials in Fairyland acted from the responsibility to be protected by the Euroasia military. Moreover, it must be remembered that to be validly given, consent must be issued by a competent body authorized to do so on behalf of the State It is clear that the intervention was bloodless and no use of force by the Euroasian military was reported thus negates the argument of aggression. Further the help had been asked from the officials in Fairyland and thus it was a motive for the responsibility to protect Doctrine of Uti Possidentis 39. Oxford Dictionary of Law defines uti possidetis, which means as you possess in Latin, as follows: A principle usually applied in international law to the delineation of borders. When a colony gains independence, the colonial boundaries are accepted as the boundaries of the newly independent state The ICJ described uti possidetis as a general principle, which is logically connected with the phenomenon of obtaining independence, wherever it occurs In no case, however, does the practice of States as a whole suggest that the act of promulgating a declaration of independence or secession was regarded as contrary to international law. On the contrary, State practice points clearly to the conclusion that international law contained no prohibition of declarations of independence. 23 A great many new States have come into existence as a result of the exercise of this right. There on the Definition of Aggression No territorial acquisition resulting from aggression is or shall be recognized as lawful 19 Case Concerning Military and Paramilitary Activities in and against Nicaragua [1986] ICJ Rep 14, para International Law Commission s commentary to art 20 ARSIWA (n 36) 175, para Oxford Dictionary of Law, ed. by Elizabeth A. Martin (Oxford: Oxford University Press, 2003), p Colin Warbrick, States and Recognition in International Law in International Law, ed. by Malcolm D. Evans, First Edition (New York: Oxford University Press, 2003), p Retrieved from on 11/9/16 6

26 were, however, also instances of declarations of independence outside this context. The practice of States in these latter cases does not point to the emergence in international law of a new rule prohibiting the making of a declaration of independence in such cases. 42. In the present proceedings the claimant submits that, in every instance only as a secondary argument, that the population of Fairyland had the right to create an independent State or join Euroasia either as a manifestation of a right to selfdetermination or pursuant to what could be described as a right of remedial secession in the face of the situation in Eastasia. 43. On 22 July 2010, the (ICJ) in gave its Advisory Opinion on the question of the "Accordance with international law of the unilateral declaration of independence in respect of Kosovo". Kosovo unilaterally declared its independence from Serbia on 17 February Since then, its statehood has been recognized by 75 countries. Serbia sought international validation and support for its stance that the 2008 Kosovo declaration of independence is "illegal" at the General Assembly. 24 On 8 October 2008, the General Assembly of the United Nations adopted resolution 63/3 in which, referring to Article 65 of the Statute of the Court, it requested the Court to render an advisory opinion on the following question: Is the unilateral declaration of independence by the Provisional Institutions of Self-Government of Kosovo in accordance with international law? Initially, the ICJ considered the legality of declarations of independence under general international law against the background of the prohibition of the use of force and the principle of territorial integrity finding that the scope of the principle of territorial integrity is confined to the sphere of relations between States. 45. The Court thus concluded by ten votes to four that the adoption of the declaration of independence of 17 February 2008 did not violate general international law, Security Council resolution 1244 (1999) or the Constitutional Framework [adopted on behalf of UNMIK by the Special Representative of the Secretary-General], and that 24 House of Commons Library, Recognition of Kosovo, SN/IA/4690, 9 April International Court of Justice, Advisory Opinion: Accordance with International Law of the Unilateral Declaration of Independence in respect of Kosovo, 22 July

27 consequently the adoption of that declaration did not violate any applicable rule of international law Treaty Obligations 46. From a theoretical standpoint, two doctrines must be distinguished: 27 The doctrine of "universal succession" (also known as doctrine of continuity) provides that the rights and obligations of the predecessor State, relating to the territory transferred, are transmitted to the successor State and that of clean slate. Thus, the successor State inherits the treaty rights and obligations of the predecessor State relating to the territory transferred. As well, the successor State inherits public property and debts belonging to the predecessor State relating to the territory transferred. Indeed, the "universal succession doctrine provides that the successor State ensures the continuation of the predecessor State's sovereignty over the territory transferred. In order to clarify some of the rules relating to succession to treaties, the International Law Commission drafted the Vienna Convention of the Succession of States in respect of Treaties. 28 The Convention was concluded in It entered into force in The general solution which is embodied in this convention is based on a distinction between State succession arising out of colonial cases and State succession arising out of non-colonial cases. According to this distinction, newly independent States, i.e. States born out of the decolonization process, do not automatically inherit treaty rights and obligations previously concluded on their behalf by colonial powers (art. 16). However, they may unilaterally choose to succeed to multilateral treaties to which the predecessor State is a party (art. 17). However, for those not newly born the application continues unless formally terminated. Therefore, if these principles are to apply it would automatically mean that the annexation of Fairyland by Euroasia was legal and based on known principles of International law. 26 Ibid 27 D.P. O Connell, The Law of State Succession 6-9 (H.C. Gutteridge et al. eds., Cambridge University Press 1956). 28 Mathew G. Maloney, Succession of States in Respect of Treaties: The Vienna Convention of 1978, 19 Va. J. Int l L. 885, 911 (1979). 8

28 47. The claim by the Respondent that the annexation was unlawful is ill-founded. The Claimant submits that Peter Explosive is a national of Euroasia and can therefore rely on the Euroasia BIT as his private rights still subsist even after the cession of Fairyland to Euroasia. The imposed sanctions by the Republic of Oceania violate his private rights under the investment contrary to human rights principles and Article 2 of the Euroasia BIT. 48. It is based on the principle of nationality and Fairyland s valid secession that the claimant submits he fits the description of an investor in article 1.2 of the Euroasia BIT THE CLAIMANT DID NOT HAVE TO ABIDE BY ALL THE PRE-ARBITRAL STEPS IN THE EUROASIA BIT. 49. By dint of Article 9 of the Euroasia BIT disputes under it will be settled amicably to the farthest extent possible, and should be submitted to domestic courts before resorting to arbitration. As the claimant did not go to the domestic courts, the respondent contends that the tribunal lacks jurisdiction, until this step is fulfilled. This assertion is mala fides and against the rules on pacta sunt servanda The claimant submits its claim on the basis of Art.6 of the ICC Arbitration rule of 2012 and the Euroasia BIT. Under the Euroasia BIT, there is no provision which requires the claimant to submit the claim to other judicial bodies before bringing it to this tribunal. Art.9 (1) provides that disputes between investors and contracting parties shall be settled through amicable consultations to the extent possible. From the measures the government of Oceania has taken, it s clear that seeking amicable settlement is a futile pursuit. Moreover, the submission of the dispute to judicial or administrative courts is only optional. 51. The claimant submits that he complied with the pre-arbitral steps stipulated in the BIT to the farthest extent possible. Prior to filing his request for arbitration, the claimant informed the respondent of his intention to initiate arbitral proceedings against them if they failed to negotiate with him but they failed to respond. The Claimant has attempted, but Respondent denied, settling the dispute amicably. The Claimant has requested the Respondent for amicable settlement of the dispute by issuing a letter to the Respondent s 29 Article 26 on the Vienna Convention on law of treaties 9

29 Ministry of Foreign Affairs with copies to the Ministry of Finance, Ministry of Defense and Ministry of Environmental Protection. 52. In any case the requirement was futile. The Apotex case, propositioned the the obvious futility threshold which requires an actual unavailability of recourse or recourse that is proven to be manifestly ineffective. 30 The executive order explicitly prohibited any claims pursuant to its application. Section 9 of the order reads; This order is not intended to, and does not; create any right or benefit, substantive or procedural, enforceable at law by any party against the Republic of Oceania. 53. In as much as the Oceanian Constitutional Tribunal may set aside any legal act, including an executive order, if it finds it unconstitutional, given the Tribunal s historic deference to the executive branch in the conduct of foreign policy, it seems rather unlikely that it would set aside the Executive Order of 1 May Even if it did, it would be an extremely lengthy process, taking up to 3 or 4 years There are neither competent reliefs nor a genuine prospect of it offered by the domestic courts. Furthermore, there is existing prejudice against the claimant in the form of criminal proceeding against the claimant. Lastly any insistence that the claimant should have pursued the local courts is unrealistic. Claims directly brought under international treaties may not be adjudicated by the Oceanian national courts neither in accordance with the international law nor in accordance with the Oceanian national law. 55. International arbitration provisions are frequently accompanied by or contained within so-called multi-tier dispute resolution clauses or escalation clauses 32. Most commonly, the arbitration clause, in a contract or investment treaty, will provide for the parties to negotiate (sometimes for a specified period of time and sometimes with specified company representatives) in order to resolve their differences before initiating an arbitration 33. Alternatively, in the context of investment arbitration, both bilateral investment treaties and investment agreements often impose both these requirements and additional requirements for the exhaustion of local remedies, by litigation in domestic 30 Apotex, Inc. v. United States of America (ICSID Case No. ARB(AF) 12/1) 31 Procedural Order no 3 32 BIT between China and Cote d Ivoire (2002), Art 9(3), in Christoph Schreuer with Loretta Malintoppi, August Reinisch et al, The ICSID Convention: A Commentary (2nd edn, Cambridge University Press 2009) See ICC Case No 9977, Final Award (22 June 1999) in Figueres (n 2) 84; Gary B Born, International Arbitration and Forum Selection Agreements: Drafting and Enforcing (4th edn, Wolters Kluwer 2013) 100 1; Chapman (n 2); 10