NCIA MOOT COMPETITION APRIL, 2018 Page 1 of 10
BLACKWATER MINING WAKANDA LIMITED.. (WAKANDA) BLACKWATER (PTY) LTD... FIRST CLAIMANT SECOND CLAIMANT (MARS) WALLSTREET CAPITAL LIMITED.. THIRD CLAIMANT (MARS) AND REPUBLIC OF WAKANDA.. RESPONDENT REQUEST FOR ARBITRATION I. PARTIES 1. The three Claimants in this dispute are: a) Blackwater Mining Wakanda Limited (BMW) (the First Claimant), a company incorporated in Wakanda with registration number W313; (Claimant s Exhibit No. 1) It is located at 1 Labour View Street, Capital City, Wakanda. The telephone and telefax numbers are (5) 2010-2010 and (5) 1986-2010. The email address is office@blackwater.com BMW will be represented by Danny Crane, Advocate at the Court, 90 Court Street, Capital City, Wakanda. Tel. (0) 900-9001; Telefax (0) 9009001; Crane@lawyer.com b) Blackwater (Pty) Ltd (the Second Claimant or Blackwater Mars), a company incorporated in Mars with company number Q667; (Claimant s Exhibit No. 2) It is located at View Street, Bolton City, Mars. The telephone and telefax numbers are (65) 2011-2011 and (65) 1983-2000. The email address is info@blackwaterltd.com Blackwater Mars will be represented by Danny Crane, Advocate at the Court, 90 Court Street, Capital City, Wakanda. Tel. (0) 900-9001; Telefax (0) 9009001; Crane@lawyer.com and: c) Wallstreet Capital Limited (the Third Claimant or Wallstreet), a company incorporated in Mars with company number Z835. (Claimant s Exhibit No. 3)It is located at 1 Melrose Street, Salt Lake City, Mars. The telephone and telefax numbers are (90) 5050-5050 and (100) 1986-2010. The email address is office@wallstreetcapital.com Wallstreet will be represented by Danny Crane, Advocate at the Court, 90 Court Street, Capital City, Wakanda. Tel. (0) 900-9001; Telefax (0) 9009001; Crane@lawyer.com Page 2 of 10
2. BMW is majority (70%) owned by Blackwater Mars and Wallstreet. Blackwater Mars and Wallstreet are wholly owned by Atlantic Corporation (AC), a Chile company listed on the Venture Exchange market of the Santiago Stock Exchange. (Claimant s Exhibit No. 4) 3. The respondent is the Republic of Wakanda (Wakanda or the State). The telephone number is (0) 5678-0123. The telefax number is (80) 432-9876 and the general common address is State@wakanda.com II. FACTS 4. This case is about the nationalization of a mining project at One Tree Hill in Wakanda, home to one of the world's largest undeveloped rare earths elements.(rees) 5. Between 2011 and 2017, Blackwater Mining Wakanda (BMW) and its shareholders spent millions of dollars exploring and defining the resource at One Tree Hill, described by the Managing Director of BMW, Anthony Joshua, as one of the "jewels of the Wakanda resources crown". Mr. Joshua s statement is in Claimant s Exhibit No. 5 6. Prospecting rights in Wakanda are granted under Article 13 of the Extraction of Valuable Minerals Act, 247 Statutes codes of Wakanda (Claimant s Exhibit No. 6). When a party holds a prospecting right, it is entitled to the privileges set out at Article 14 of the Extraction of Valuable Minerals Act (Claimant s Exhibit No. 7). Mr Joshua understood that, to initiate prospecting activities at One Tree Hill, BMW would need to appoint an agent under Article 13(2)(a) of the Extraction of Valuable Minerals Act 7. He also needed an earth scientist to conduct the planned prospecting activities. With this in mind, on 19 February 2011, Mr Joshua wrote to Commissioner Don Williams ( a Commissioner at the Department of Extraction of Valuable Minerals) to ask him if he could recommend any Wakanda extractors, informing the Commissioner that "[w]e hope to be able to lodge our application for Prospecting Rights shortly." (Claimant s Exhibit No. 8) 8. Commissioner Don William's response was supportive: he provided Mr Joshua with the names and contact details of two Wakanda extractors, both of whom had previously worked for the Department of Extraction of Valuable Minerals. (Claimant s Exhibit No. 9) Page 3 of 10
9. According to Article 17 of the Extraction of Valuable Minerals Act where the relevant land has been excluded from prospecting or mining activities, that land can be re-opened by the Commissioner of Extraction of Valuable Minerals. (Claimant s Exhibit No. 10) 10. The Commissioner may then declare that the re-opened land may be prospected and/or mined in accordance with a "special licence" (under Article 17(2)(b)). As One Tree Hill was excluded due to its classification as a nature reserve BMW's application for a prospecting licence was subject to the re-opening procedure set out in Article 17(2)(b) of the Extraction of Valuable Minerals Act (Claimant s Exhibit No. 11) 11. BMW applied for an exclusive prospecting license over the same area covered by the prospecting right. On 4 April 2012, BMW was duly granted a Special Extracting Permit (SEP 256 Claimant s Exhibit No. 12) by Commissioner Michael in accordance with Article 17(2)(b) of the Extraction of Valuable Minerals Act. 12. The licence was classified as "special" because it covered an area that included land which had been re-opened in accordance with Article 17 of the Extraction of Valuable Minerals Act. SEP 256 was stated as valid for a period of two years, effective from 1 April 2012. 13. Under SEP 256, BMW was granted "full and exclusive liberty and license to prospect and explore for ALL MINERALS" in the licenced area and authorized to carry out its proposed work Programme. 14. In any mining exploration project, the goal is not just to find a viable resource, but to keep it. The right to find is what BMW got when it was awarded its prospecting right under SEP 256. 15. The right to keep was what BMW got in Special Collection Permit 351: (Claimant s Exhibit No. 13) the exclusive right to develop and further explore One Tree Hill over a 21-year period. The significance of the issuance of SCP 351 for BMW cannot be overstated. 16. Through their Santiago-listed parent company Atlantic Corp (AC), on 29 July 2017 the Claimants announced that BMW had discovered "a world class deposit" of Rare Earth Elements (REEs). (Claimant s Exhibit No. 14) 17. Less than a week later, the State revoked BMW's mining licence. The banner headline used by Wakanda newspaper The Wakanda Times sums up this case well: "Minerals Discovery Led to Cancellation of Licences". (Claimant s Exhibit No. 15) Page 4 of 10
18. BMW's mining licence for One Tree Hill was revoked by way of an announcement on Wakanda national television WTV, followed up with a Twitter post by the Ministry of Extraction, Petroleum and Rocks. (Claimant s Exhibit No. 16) 19. There was no prior (or subsequent) notice or compensation. Aside from generally disepaying an utter disregard for the rule of law, the revocation was a direct expropriation in violation of the Mars-Wakanda Bilateral Investment Treaty (the BIT).(Claimant s Exhibit No. 17) 20. The form of the measure, the total absence of due process and the State's egregious lack of respect for the Claimants' legitimate expectations made the revocation a clear violation of the Fair and Equitable Treatment (FET) standard of the BIT. 21. The State's actions also violated the BIT's prohibition against unreasonable measures that impair the use or enjoyment of Mars-owned investments in Wakanda. 22. The State has since said it will develop One Tree Hill itself, under the auspices of the Wakanda Extraction Institute. 23. Having consulted internally and taken legal advice as soon as it became apparent that the State had indeed revoked SCP 351, BMW instituted proceedings in the High Court of Wakanda on 15 August 2017 for judicial review of the Mining Secretary's decision to revoke SCP 351. 24. In its application for judicial review BMW sought orders: (i) quashing the decision of the Mining Secretary to revoke SCP 351; and (ii) prohibiting the Ministry of Extraction, Petroleum and Rocks from taking any further action detrimental to BMW s interests. These local proceedings have been a farce. 25. The Claimants now turn to the Tribunal for justice, in accordance with the right of ICSID arbitration given to them as Mars investors under the BIT. The Claimants seek full reparations, including lucrum cessans III. APPLICABLE LAW 26. Article 42 of the ICSID provides that the Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties. In the absence of such agreement, the Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable. Page 5 of 10
27. The Tribunal may not bring in a finding of non liquet on the ground of silence or obscurity of the law. The said provisions shall not prejudice the power of the Tribunal to decide a dispute ex aequo et bono if the parties so agree. 28. Wakanda, Mars and Chile are all party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) IV. ARBITRATION JURISDICTION 29. Article 8(3) of the BIT provides that, in circumstances of an investment dispute, if "agreement cannot be reached within three months between the parties to [the] dispute through pursuit of local remedies or otherwise, then, if the national or company affected also consents in writing to submit the dispute to the Centre for settlement by conciliation or arbitration under the Convention, either party may institute proceedings by addressing a request to that effect to the Secretary-General of the Centre as provided in Articles 28 and 36 of the Convention". The Claimants have been pursuing local remedies since 2017, without success. The three-month cooling off period prescribed by Article 8(3) of the BIT was therefore satisfied well before the Claimants referred the dispute to ICSID. 30. The Claimants consented in writing to submission of the dispute to ICSID, choosing arbitration (in the exercise of the right expressly given to them under Article 8(3) of the BIT). Both the State and the Claimants have, therefore, provided their written consent to submission of their dispute to ICSID. Jurisdiction ratione voluntatis is present for the purposes of the ICSID Convention. V. CONCLUSION 31. The Claimants have not been paid any compensation for the nationalization of their investments let alone compensation equal to the "genuine value" of their expropriated investments, plus interest, as required under Article 5(1) of the BIT. 32. As the Article 5 conditions for a lawful expropriation are cumulative, the State's failure to meet the compensation condition is alone sufficient to render its measure internationally unlawful. 33. There is consensus that, under a generic FET clause such as the one under Article 2(2) of the Mars-Wakanda BIT, the Contracting States to the BIT are obliged to: a.) refrain from acting in a manner that frustrates the legitimate expectations of an investor; Page 6 of 10
b.) refrain from the arbitrary revocation of permits relied upon by investors for their business; c.) treat investors in a consistent manner; d.) be transparent and reasonable in their dealings with foreign investors; and e.) treat investors in a way that is just and fair. VI. RELIEF REQUESTED 34. The Claimants seek the following reliefs from the Tribunal: i. A declaration that, by unlawfully expropriating the Claimants' investments, the State has violated Article 5 of the BIT and international law and an order that the State pay monetary damages to the Claimants ii. A declaration that, in its treatment of the Claimants and their investments, the State has violated the FET standard at Article 2(2) of the BIT and an order that the State pay monetary damages to the Claimants iii. A declaration that the State has violated its obligation under Article 2(2) of the BIT by impairing the Claimants investments through unreasonable or discriminatory measures and an order that the State pay monetary damages to the Claimants iv. An order that the State pays the Claimants costs of these proceeding; and v. Any other relief as maybe deemed just and appropriate by the Tribunal Respectfully submitted on behalf of the Claimants on 1 st April, 2018 (Signed) Danny Crane Page 7 of 10
BLACKWATER MINING WAKANDA LIMITED.. (WAKANDA) BLACKWATER (PTY) LTD... FIRST CLAIMANT SECOND CLAIMANT (MARS) WALLSTREET CAPITAL LIMITED.. THIRD CLAIMANT (MARS) AND REPUBLIC OF WAKANDA.. RESPONDENT STATEMENT OF DEFENCE 1. As indicated in the Request for Arbitration, The Republic of Wakanda s contact number is (0) 5678-0123. The telefax number is (80) 432-9876 and the general common address is State@iWakanda.com 2. One Tree Hill is located within the Republic of Wakanda. 3. The State will be represented by its Counsel, Edward Poole, 15 Melrose Place, Boulevard, Wakanda. His telephone number is (20) 20 20 67. His telefax number is (8) 31 24 55 and his e-mail address is Edward@lawyer.com 4. The State hereby submits its Rejoinder on the Merits in accordance with Article 31(1)(b) of the ICSID Arbitration Rules 5. The Claimants' claims should be denied on the merits because the Claimants have failed to demonstrate any breach of the BIT between the Mars and Wakanda (the "Mars-Wakanda BIT"). The Claimants have, in particular, failed to establish that their purported mining licence, SCP 351, was expropriated. 6. When considering liability it is important to identify the alleged investment the Claimants claim has been taken. The Claimants have asserted a number of different alleged investments in these proceedings i.e, the prospecting licence SEP 256 and the purported mining licence SCP 351. 7. However, it is only SCP 351 that the Claimants allege was summarily revoked. Although the Claimants place much reliance on the prospecting licence SEP 256, it is important for the Page 8 of 10
Tribunal to note that this purported prospecting licence is not alleged to have been revoked. 8. The Claimants wholly fail to engage with the simultaneous establishment of the independent Commission, which was constituted to review the legality of all licences purportedly issued between January and May 2012, following which only seven licences, not including the Claimants' licence SCP 351, were revoked. 9. These facts are completely at odds with both the Claimants' case that there was a revocation of SCP 351 prior to the Task Force review, and that BMW was specifically singled out and targeted by the State.(Respondent Exhibit No. 1 Excerpt of the Task Force Report) 10. The decision by the High Court of Wakanda (Respondent s Exhibit No. 2 Excerpt of the High Court s decision) that the Claimant s purported license was void ab initio (as confirmed by the Court of Appeal of Wakanda), does not constitute an expropriation since SCP 351 was not taken as a result of the ruling of the Wakanda High Court following the judicial review proceedings which they themselves commenced. 11. The Claimants have also failed to make out any case for a breach of the fair and equitable treatment standard. They have put forward no evidence of any discrimination. It is also clear from both the Commission review and the proceedings in the Wakanda Courts brought by the Claimants, that due process was guaranteed throughout. Moreover, in view of its clear illegality, SCP 351 cannot give rise to legitimate expectations and the Claimants remain unable to point to any evidence of their reliance upon any such expectations. 12. For the reasons set out above, the State respectfully requests that the Claimants' claims be dismissed with costs. ARBITRATION JURISDICTION 13. The State objects to jurisdiction ratione materiae on the basis that the Claimants violated or failed to comply with certain Wakanda laws and regulations in the making and performance of their investments. 14. Second, the State alleges that the Claimants procured SCP 351 by corrupt means this is an objection to jurisdiction ratione materiae and still unparticularised ("and/or") challenge to admissibility. 15. The jurisdiction of the Tribunal is strongly opposed by the State. Page 9 of 10
RELIEF REQUESTED 16. The State seek the following reliefs from the Tribunal: i. A dismissal of the Claimant s case in its entirety ii. An order that the Claimants pays the State costs of these proceeding; and iii. Any other relief as maybe deemed just and appropriate by the Tribunal Respectfully submitted on behalf of the State on 10 th April, 2018 (Signed) Edward Poole Page 10 of 10