Memorial for Claimant TEAM GAJA

KOREAN COMMERCIAL ARBITRATION BOARD (KCAB) INTERNATIONAL

Goliath National Bank JSC

(Claimant)

v.

The Republic of Laoc

(Respondent)

MEMORIAL FOR CLAIMANT

Memorial for Claimant TEAM GAJA

TABLE OF CONTENTS

TABLE OF AUTHORITIES ........................................................................................................ i

TABLE OF ABBREVIATIONS ................................................................................................ xv

STATEMENT OF FACTS ........................................................................................................... 1

EXECUTIVE SUMMARY .......................................................................................................... 3

PLEADINGS ................................................................................................................................. 4

I. MR. MASON SHOULD NOT BE REPLACED AS AN ARBITRATOR ........................ 4

A. There are no justifiable doubts as to Mr. Mason’s independence and impartiality .... 4

i. Mr. Mason‟s previous appointments do not pose an „issue conflict‟ ............................... 5

ii. Mr. Mason‟s social media post is inconsequential .......................................................... 8

iii. Mr. Mason‟s pod-cast interview is outdated and inconsequential................................... 9

iv. The totality of non-issues is still nothing........................................................................ 11

B. Mr. Mason did not breach his duty of disclosure ......................................................... 11

i. Mr. Mason‟s non-disclosure was not likely to raise justifiable doubts.......................... 11

ii. In any event, Mr. Mason‟s subsequent disclosure negated any prejudice ..................... 12

II. THE CLAIMANT HAS STANDING TO BRING A CLAIM OVER MFNB’S

INVESTMENT UNDER THE ASNEC EIT ..................................................................... 13

A. The Claimant’s acquisition of MFNB’s rights is an ‘investment’ under Article I(1) of

the ASNEC EIT (ratione materiae) ................................................................................. 14

i. The Claimant‟s acquisition of MFNB‟s rights is a „kind of asset owned or controlled by

Investors... either directly or indirectly‟ ........................................................................ 14

ii. The Claimant‟s acquisition of MFNB‟s rights includes property rights, stock and equity
participation, and claims to money ................................................................................ 15

iii. The Claimant‟s acquisition of MFNB‟s rights is an „investment associated with an

Economic Activity in the Energy Sector‟........................................................................ 17
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B. The Claimant as the legal successor to MFNB is an ‘Investor’ under Article I(4) of
the ASNEC EIT (ratione personae) ................................................................................ 18

i. The Claimant is an „Investor‟ under Article I(4)(b) of the ASNEC EIT ........................ 19

ii. The doctrine of intuitu personae is inapplicable............................................................ 20

C. The Claimant acquired MFNB’s investment made in 2010 (ratione temporis) .......... 22

D. The Claimant did not abuse its rights ............................................................................ 23

i. The underlying claim is international in nature............................................................. 23

ii. The Claimant did not engage in „treaty shopping‟ ........................................................ 24

III. THE CHALLENGED MEASURE IS ATTRIBUTABLE TO THE RESPONDENT .. 25

A. The Challenged Measure is not attributable to ASNEC under general law .............. 25

i. The Respondent is not an organ nor agent of ASNEC (Article 6 of DARIO) ................ 25

ii. The Respondent was not under ASNEC‟s effective control (Article 7 of DARIO) ......... 27

a. ASNEC did not exercise operational command over the Respondent ........................ 28

b. The Coal Directive is a political act rather than a legal determination .................... 30

B. The Challenged Measure is not attributable to the Respondent under lex specialis . 32

i. There is no special rule of attribution governing REIOs like ASNEC ........................... 32

ii. In any event, the Respondent is not under the normative control of ASNEC ................. 34

a. ASNEC did not possess exclusive competence over energy and environmental matters
..................................................................................................................................... 34

b. ASNEC did not assume responsibility over the Challenged Measure ........................ 35

C. Alternatively, the Challenged Measure is jointly attributable to the Respondent and

ASNEC .............................................................................................................................. 36

IV. THE RESPONDENT TREATED MFNB UNFAIRLY AND INEQUITABLY IN

VIOLATION OF ARTICLE II(1) OF THE ASNEC EIT ............................................... 37

A. The Respondent frustrated MFNB’s legitimate expectations ...................................... 38

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i. The Respondent broke its binding promise of economic stability which induced MFNB
to invest in Ticadia ......................................................................................................... 38

a. The Respondent made binding representations to MFNB .......................................... 38

b. MFNB‟s reliance on such representations were reasonable ...................................... 40

ii. The Respondent failed to provide a stable legal framework .......................................... 41

a. MFNB‟s reliance on the Respondent‟s creation of stable conditions for the coal
industry was reasonable ............................................................................................. 41

b. The Claimant exercised due diligence ........................................................................ 43

B. The Challenged Measure was unreasonable ................................................................. 44

i. Law 66/2016 was not a rational policy .......................................................................... 44

ii. Law 66/2016 was disproportionate ................................................................................ 46

C. The Challenged Measure was discriminatory ............................................................... 48

i. Coal is in a „like circumstance‟ as renewables in Laoc's energy sector........................ 48

ii. Law 72/2016 and Law 66/2016 treat coal less favourably than renewables ................. 48

iii. The Respondent‟s less favourable treatment of coal was unjustified ............................ 49

PRAYER FOR RELIEF............................................................................................................. 51

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TABLE OF AUTHORITIES

Treaties

Abbreviation Citation
ECT Energy Charter Treaty [1994] 2080 UNTS 100
ICJ Statute Statute of the International Court of Justice [1946] 33 UNTS 993
ICSID Convention Convention on the Settlement of Investment Disputes Between States
and Nationals of Other States [1965] 575 UNTS 159
TEU Consolidated Version of the Treaty on European Union [2008] OJ
C115/13
TFEU Consolidated Version of the Treaty on the Functioning of the European
Union [2012] OJ C326/47
UN Charter Charter of the United Nations [1945] 1 UNTS 16
VCLT Vienna Convention on the Law of Treaties [1980] 1155 UNTS 331

Arbitral Decisions

Abbreviation Citation
A11Y A11Y Ltd. v Czech Republic, Award, ICSID Case No. UNCT/15/1
(29.6.2018)
Abaclat Abaclat and others v Argentina, Decision on the Proposal to Disqualify a
Majority of the Tribunal, ICSID Case No. ARB/07/5 (4.2.2014)
AES AES Summit Generation Limited and AES-Tisza Erömü Kft v Hungary,
Award, ICSID Case No. ARB/07/22 (23.9.2010)
African Holding African Holding Company of America, Inc. and Société Africaine de
Construction au Congo S.A.R.L. v Congo, Decision on Jurisdiction and
Admissibility, ICSID Case No. ARB/05/21 (29.7.2008)
Alex Genin Alex Genin, Eastern Credit Limited, Inc. and A.S. Baltoil v Estonia,
Award, ICSID Case No. ARB/99/2 (25.6.2001)
Alpha Alpha Projektholding GmbH v Ukraine, Decision on Respondent‟s

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Proposal to Disqualify Arbitrator Dr Yoram Turbowicz, ICSID Case No.

ARB/07/16 (19.3.2010)
Amco Amco Asia Corporation and others v Indonesia, Decision on Proposal to
Disqualify an Arbitrator, ICSID Case No. ARB/81/1 (24.6.1982)
Amto Limited Liability Company Amto v Ukraine, Final Award, SCC
No.080/2005 (26.3.2008)
Antin Antin Infrastructure Services Luxembourg S.à.r.l. and Energia
Termosolar B.V. v Spain, Award, ICSID Case No. ARB/13/31
(15.6.2018)
Azurix Azurix Corp. v Argentina, Award, ICSID Case No. ARB/01/12
(14.7.2006)
Banro Banro American Resources, Inc. and Société Aurifère du Kivu et du
Maniema S.A.R.L. v Congo, Award, ICSID Case No. ARB/98/7
(1.9.2000)
Bayindir Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v Pakistan, Award,
ICSID Case No. ARB/03/29, (27.8.2009)
Blue Bank Blue Bank International & Trust (Barbados) Ltd. v Venezuela, Decision
on the Parties‟ Proposal to Disqualify the Majority of the Tribunal,
ICSID Case No. ARB/12/20 (12.11.2013)
Burlington Burlington Resources Inc. v Ecuador, Decision on the Proposal for
Disqualification of Professor Francisco Orrego Vicuña, ICSID Case No.
ARB/08/5 (13.12.2013)
Caratube Caratube International Oil Company v Kazakhstan, Decision on the
Proposal for Disqualification of Mr. Bruno Boesch, ICSID Case No.
ARB/13/13 (20.3.2014)
CC/Devas CC/Devas (Mauritius) Ltd. v India, Decision on the Respondent‟s
Challenge to Hon. Marc Lalonde as Presiding Arbitrator and Professor
Francisco Orrego Vicuña as Co-Arbitrator, PCA Case No.2013-09
(30.9.2013)
Charanne Charanne B.V. and Construction Investments S.A.R.L. v Spain, Final
Award, SCC Case No.062/2012 (21.1.2016)

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CME CME Czech Republic B.V. v Czech Republic, Partial Award,

UNCITRAL (13.9.2001)
CMS CMS Gas Transmission Company v Argentina, Award, ICSID Case No.
ARB/01/8 (12.5.2005)
ConocoPhillips ConocoPhillips Company et al. v Venezuela, Decision on the Proposal to
Disqualify L. Yves Fortier, Q.C., Arbitrator, ICSID Case No.
ARB/07/30 (27.2.2012)
Continental Continental Casualty Company v Argentina, Award, ICSID Case No.
Casualty ARB/03/9 (5.9.2008)
Crystallex Crystallex International Corporation v Venezuela, ICSID Case No.
ARB(AF)/11/2 (4.4.2016)
Daimler Daimler Financial Services AG v Argentina, Award, ICSID Case No.
ARB/05/1 (22.8.2012)
Duke Energy Duke Energy Electroquil Partners v Ecuador, Award, ICSID Case No.
ARB/04/19 (18.8.2018)
Eiser Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v
Spain, Decision on the Kingdom of Spain‟s Application For Annulment,
ICSID Case No. ARB/13/36 (11.6.2020)
El Paso EI Paso Energy International Company v Argentina, Decision on
(Jurisdiction) Jurisdiction, ICSID Case No. ARB/03/IS (27.4.2006)
El Paso (Award) El Paso Energy International Company v Argentina, Award, ICSID
Case No. ARB/03/15 (31.10.2011)
Electrabel-I Electrabel S.A. v Hungary, Decision on the Claimant‟s Proposal To
Disqualify A Member of the Tribunal, ICSID Case No. ARB/07/19
(25.2.2008)
Electrabel-II Electrabel S.A. v Hungary, Decision on Jurisdiction, Applicable Law
and Liability, ICSID Case No. ARB/07/19 (30.12.2012)
EnCana EnCana Corporation v Ecuador, Partial Award on Jurisdiction, LCIA
(27.2.2004)
Enron Enron Corporation Ponderosa v Argentina, Award, ICSID Case No.

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ARB/01/3 (22.5.2007)
Energoalliance Energoalliance Ltd. v Moldova, Arbitral Award, UNCITRAL
(23.10.2013)
Energorynok State Enterprise „Energorynok‟ (Ukraine) v Moldova, Final Award, SCC
Arbitration V 2012/175 (29.1.2015)
Fedax Fedax N.V. v Venezuela, Decision of the Tribunal on Objections to
Jurisdiction, ICSID Case [Link]/96/3 (11.7.1997)
Federal Reserve USA and Federal Reserve Bank of New York v Iran and Bank Markazi,
Decision, IUSCT Case No.A28 (19.12.2000)
Glamis Glamis Gold v USA, Award, UNCITRAL (8.6.2009)
Hrvatska Hrvatska Elektroprivreda v Slovenia, Tribunal‟s Ruling regarding the
participation of David Mildon QC in further stages of the proceedings,
ICSID Case No. ARB/05/24 (6.5.2008)
İçkale İçkale İnşaat Limited Şirketi v Turkmenistan, Decision on Claimant‟s
Proposal To Disqualify Professor Philippe Sands, ICSID Case No.
ARB/10/24 (11.7.2014)
LBW Landesbank Baden-Württemberg v Spain, Decision on the “Intra-EU”
Jurisdictional Objection, ICSID Case No. ARB/15/45 (25.2.2019)
Lemire Joseph Charles Lemire v Ukraine, Decision on Jurisdiction and
Liability, ICSID Case No. ARB/06/18 (14.1.2010)
LG&E LG&E Energy Corp., LG&E Capital Corp., and LG&E International,
Inc. v. Argentina, Decision on Liability, ICSID Case No. ARB/02/1
(3.10.2006)
Loewen The Loewen Group, Inc. and Raymon L. Loewen v USA, Award, ICSID
Case No. ARB(AF)/98/3 (26.6.2003)
Maffezini Emilio Agustín Maffezini v Spain, Decision of the Tribunal on
Objections to Jurisdiction, ICSID Case No. ARB/97/7 (25.1.2000)
Mamidoil Mamidoil Jetoil Greek Petroleum v Albania, Award, ICSID Case No.
ARB/11/24 (30.3.2015)
Metalclad Metalclad Corporation v Mexico, Award, ICSID Case No.

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ARB(AF)/97/1 (30.8.2000)
Micula Ioan Micula, Viorel Micula, S.C. European Food S.A.v Romania,
Decision on Jurisdiction and Admissibility, ICSID Case No. ARB/05/20
(24.9.2008)
Mihaly Mihaly International Corporation v Sri Lanka, Award, ICSID Case
[Link]/00/2 (15.3.2002)
Mondev Mondev International Ltd. v USA, Award, ICSID Case No.
ARB(AF)/99/2 (11.10.2002)
MTD MTD Equity Sdn Bhd and MTD Chile S.A. v Chile, Award, ICSID Case
No. ARB/01/7 (25.5.2007)
National Energy National Energy Corporation v Panama, Decision on the Proposal to
Disqualify [Link] [Link], ICSID Case No. ARB/06/19
(7.9.2011)
National Grid National Grid Plc v Argentina, Award, UNCITRAL (3.11.2008)
Parkerings Parkerings–Compagniet AS v Lithuania, Award, ICSID Case No.
ARB/05/8 (11.9.2007)
Paushok Sergei Paushok, CJSC Golden East Company v Mongolia, Award on
Jurisdiction and Liability, UNCITRAL (8.4.2011)
Perenco Perenco Ecuador Ltd. v Ecuador & Petroecuador, Decision on
Challenge to Arbitrator, PCA Case [Link]-2009/1 (8.12.2009)
Phoenix Action Phoenix Action Ltd. v Czech Republic, Award, ICSID Case No.
ARB/06/5 (15.4.2009)
PIP-Sàrl Participaciones Inversiones Portuarias Sàrl v Gabon, Decision on
Proposal to Disqualify an Arbitrator, ICSID Case No. ARB/08/17
(12.11.2009)
Plama Plama Consortium Limited v Bulgaria, Decision on Jurisdiction, ICSID
Case No. ARB/03/24 (8.2.2005)
RREEF RREEF Infrastructure (G.P.) Limited v Spain, Decision on Jurisdiction,
(Jurisdiction) ICSID Case No. ARB/13/30 (6.6.2016)
RREEF RREEF Infrastructure (G.P.) Limited v Spain, Decision on

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(Responsibility) Responsibility and on the Principles of Quantum, ICSID Case No.

ARB/13/30 (30.11.2018)
Salini Salini Costruttori S.p.A. and Italstrade S.p.A. v Morocco, Decision on
Jurisdiction, ICSID Case No. ARB/00/4 (16.7.2001)
Saluka Saluka Investments BV (The Netherlands) v Czech Republic, Partial
Award, PCA Case No.2001-04 (17.3.2006)
Southern Pacific Southern Pacific v Egypt, Award, ICSID Case No. ARB/84/3,
(20.5.1992)
SCB Standard Chartered Bank v Tanzania, Award, ICSID Case No.
ARB/10/12 (2.11.2012)
Suez Suez, Sociedad General de Aguas de Barcelona S.A. v Argentina,
Decision on a Second Proposal for the Disqualification of a Member of
the Arbitral Tribunal, ICSID Case No. ARB/03/19 (12.5.2008)
Tadić Prosecutor v Tadić, Appeals Chamber Judgment, ICTY Case [Link]-94–
1-A (15.7.1999)
Tecmed Tecnicas Medioambientales Tecmed S.A. v Mexico, Award, ICSID Case
No. ARB(AF)/00/2 (29.5.2003)
Tidewater Tidewater v Venezuela, Decision on Claimant‟s Proposal to Disqualify
Arbitrator Professor Brigitte Stern, ICSID Case No. ARB/10/5
(23.12.2010)
Tokios Tokios Tokelės v Ukraine, Decision on Jurisdiction, ICSID Case No.
ARB/02/18 (29.4.2004)
Total Total S.A. v Argentina, Decision on Liability, ICSID Case No.
ARB/04/1 (27.12.2010)
Tradex Tradex Hellas S.A. v Albania, Award, ICSID Case No. ARB/94/2
(29.4.1999)
Transglobal Transglobal Green Energy v Panama, Award, ICSID Case No.
ARB/13/28 (2.6.2016)
Universal Universal Compression International Holdings v Venezuela, Decision on
Compression the Proposal to Disqualify Prof. Brigitte Stern and Prof. Guido Santiago

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Tawil, Arbitrators, ICSID Case No. ARB/10/9 (20.5.2011)

Urbaser Urbaser S.A. v Argentina, Decision on Claimants' Proposal to Disqualify
Professor Campbell McLachlan, Arbitrator, ICSID Case No. ARB/07/26
(12.8.2010)
Vannessa Ventures Vannessa Ventures Ltd v Venezuela, Award, ICSID Case No.
ARB(AF)/04/6 (16.1.2013)
Vattenfall Vattenfall v Germany, Recommendation Pursuant to the Request by
(Disqualification) ICSID dated 8.5.2020 on the Respondent‟s Proposal to Disqualify All
Members of the Arbitral Tribunal dated 16.4.2020, ICSID Case No.
ARB/12/12 (6.7.2020)
Vattenfall Vattenfall v Germany, Decision on the Achmea Issue, ICSID Case No.
ARB/12/12 (31.8.2018)
Waste Management Waste Management v Mexico, Award, ICSID Case No. ARB(AF)/00/3
(30.4.2004)
Wirtgen Jürgen Wirtgen, Stefan Wirtgen, Gisela Wirtgen and JSW Solar (zwei)
GmbH & Co. KG v Czech Republic, Final Award, PCA Case No.2014-
03 (11.10.2017)
Yukos Yukos Universal Limited (Isle of Man) v Russia, Interim Award on
Jurisdiction and Admissibility, PCA Case No.AA227 (30.11.2009)

Cases

Abbreviation Citation
Achmea Case C-284/16, Slovakia v Achmea BV [2018] ECR 158
Ahmadou Ahmadou Sadio Diallo (Guinea v Congo), Preliminary Objections
[2007] ICJ 582
Applicability of Applicability of Article VI, Section 22, of the Convention on the
Article VI Privileges and Immunities of the United Nations, Advisory Opinion
[1989] ICJ 177
Armed Activities Armed Activities on the Territory of the Congo (Congo v. Uganda)
[2005] ICJ 168

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Avotinš Avotinš v Latvia, Judgment, ECtHR, Application no.17502/07

(23.5.2016)
Bancaja Bancaja v Spanish Credit and Surety Insurance and Reinsurance
Company, Spanish Supreme Court, STS 6222/2002 (26.9.2002)
Barcelona Traction Barcelone Traction, Light and Power Company (Belgium v Spain),
(Jessup) Separate Opinion of Judge Jessup [1970] ICJ 161
Behrami Behrami and Behrami v France and Saramati v France, Germany and
Norway, Grand Chamber Decision (Admissibility), ECtHR, Application
nos.71412/01 and 78166/01(2.5.2007)
Berić Dušan Berić v Bosnia, Decision (Admissibility), ECtHR, Application
nos.36357/04, 36360/04 and others (16.10.2007)
Bosnia Genocide Application of the Convention on the Prevention and Punishment of The
Crime of Genocide (Bosnia v Serbia), Judgment [2007] ICJ 43
Bosphorus Bosphorus Hava Yollari v Ireland, Judgment, ECtHR, Application
no.45036/98 (30.6.3005)
Commission v Case C-239/03, Commission of the European Communities v France
France [2004] ECRI 9328
Competence to Competence of the General Assembly for the Admission of a State to the
Admission United Nations (Advisory Opinion) [1950] ICJ 4
Costa Case 6/64, Flaminio Costa v ENEL (National Electricity Board) [1964]
ECR 587
Difference Relating Difference Relating to Immunity From Legal Process of a Special
to Immunity Rapporteur of the Commission on Human Rights, Advisory Opinion
[1999] ICJ 62
EC–Biotech WTO, European Communities – Measures Affecting the Approval and
Marketing of Biotech Products, Panel Report,
WT/DS291/DS/292/DS293/R (21.11.2006)
EC–Geographic WTO, European Communities – Protection of Trademarks and
Indications Geographic Indication for Agricultural Products and Foodstuffs, Panel
Report, WT/DS174/R (20.4.2005)

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EC–LAN WTO, European Communities – Customs Classification of Certain

Computer Equipment, Panel Report, WT/ DS62/R, WT/DS67/R,
WT/DS68/R (22.6.1998)
European Case C-316/91, European Parliament v Council of the European Union
Parliament v EU [1994] ECRI 653
Gajić Gajić v Germany, Decision (Admissibility), ECtHR, Application
no.31446/02 (28.8.2007)
Interpretation of Interpretation of Peace Treaties with Bulgaria, Hungary and Romania,
Peace Treaties Advisory Opinion (First Phase) [1950] ICJ 65
Kadi Joined Cases C-402/05P and C-415/05P, Yassin Abdullah Kadi and Al
Barakaat International Foundation v EU [2008] ECR I-6411
Kasumaj Illaz Kasumaj v Greece, Decision (Admissibility), ECtHR, App.
no.6974/05 (5.7.2007)
Kokkelvisserij Cooperatieve Producentenorganisatie van de Nederlandse
Kokkelvisserij U.A. v Netherlands, Decision (Admissibility), ECtHR,
Application no.13645/05(20.1.2009)
Nuclear Weapons in Legality of the Use by A State of Nuclear Weapons in Armed Conflict,
Armed Conflict Advisory Opinion [1996] ICJ 66
M.&Co. M.&Co. v Germany, Decision (Admissibility), ECtHR, Application
no.13258/87 (9.2.1990)
Michaud Michaud v France, Judgment, ECtHR, Application no.12323/11
(6.12.2012)
Mukeshimana- Mukeshimana-Ngulinzira v Belgium, RG Nos. 04/4807/A and
Ngulinzira 07/15547/A, Judgment, Court of First Instance of Brussels (8.12.2010)
Nuclear Tests Nuclear Tests (New Zealand v. France) [1974] ICJ Rep 457
Re UAL In Re UAL Corp., 635 F.3d 312 (7th Cir. 2011)
Reparation for Reparation for Injuries Suffered in the Service of the United Nations,
Injuries Advisory Opinion [1949] ICJ 174
Nicaragua Military and Paramilitary Activities In and Against Nicaragua
(Nicaragua v. USA), Judgment (Merits) [1986] ICJ 14.

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Somalia Maritime Delimitation in the Indian Ocean (Somalia v. Kenya),

Preliminary Objections, Judgment, I.C.J. Reports 2017, p. 3
van Gend Case 26/62, van Gend & Loos v Netherlands [1963] ECR 1

Rules/ Legislations

Abbreviation Citation
German Civil Code German Civil Code (Bürgerliches Gesetzbuch-BGB), Federal Law
Gazette, 2002
Guiding Principles Guiding Principles Applicable to Unilateral Declarations of States
on Unilateral Capable of Creating Legal Obligations, 2006
Declarations
IBA Guidelines IBA Guidelines on Conflicts of Interest in International Arbitration,
2014
Swiss Code Swiss Code of Obligations, Part Five, Swiss Civil Code, 220 Federal
Act, 1911
UNCITRAL United Nations Commission on International Trade Law Arbitration
Rules, 1976

Articles

Abbreviation Citation
Baker [Link] & [Link], „The UNCITRAL Arbitration Rules in Practice:
The Experience of the Iran-US Claims Tribunal‟ [1992] 9 ICSID Review-
Foreign Investment Law Journal 363
Bell [Link], „Reassessing multiple attribution: the International Law
Commission and the Behrami and Saramati decision‟ [2010] 42 New York
University Journal of International Law and Politics 501
Bodeau- P. Bodeau-Livinec, [Link] & [Link], „Behrami & Behrami v
Livinec France; Saramati v France, Germany & Norway‟ [2008] 102 American
Journal of International Law 323

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Douglas [Link], „The Hybrid Foundations of Investment Treaty Arbitration‟

(2003) [2003] 74 British Yearbook of International Law 152
Goh [Link], „The Assignment of Investment Treaty Claims: Mapping the
Principles‟ [2018] 10 Journal of International Dispute Settlement 23
Hoffmeister [Link], „Litigating against the European Union and Its Member States
– Who Responds under the ILC‟s Draft Articles on International
Responsibility of International Organizations?‟ [2010] 21 European Journal
of International Law 723
Kirtley [Link], „The Transfer of Treaty Claims and Treaty-Shopping in
Investor-State Disputes‟ [2009] 10 The Journal of World Investment & Trade
427.
Larsen [Link], „Attribution of Conduct in Peace Operations: the „Ultimate
Authority and Control‟ Test‟ [2008] 19 European Journal of International
Law 509
Mann [Link], „British Treaties for the Promotion and Protection of Investments‟
[1981] 52 British Year Book of International Law 241
Oliver [Link] & [Link], „Strengthening the Rule of Law in the EU: The
Council‟s Inaction‟ [2016] 54 Journal of Common Market Studies 1075
Roberts [Link], „Clash of Paradigms: Actors and Analogies Shaping the
Investment Treaty System‟ [2013] 107 American Journal of International
Law 45

Textbooks

Abbreviation Citation
Amerasinghe [Link], Principles of the Institutional Law of International
Organization (2nd edn, CUP 2009)
Blanke [Link] & [Link], The Treaty on European Union (TEU) A
Commentary (Springer 2013)
Caron [Link] and [Link], The UNCITRAL Arbitration Rules: A
Commentary (OUP 2013)

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Casleiro [Link], The International Responsibility of the European Union:

From Competence to Normative Control (CUP 2016)
Castellarin [Link], La participation de l'Union européenne aux institutions
économiques internationals (Pedone 2017)
Cleis [Link], The Independence and Impartiality of ICSID Arbitrators (Brill
Nijhoff 2017)
Crawford [Link] & [Link], Brownlie's Principles of Public International Law
(8th edn, OUP 2012)
Daele Daele & Karel, Challenge and Disqualification of arbitrators in International
Arbitration (Kluwer Law International 2012)
Dolzer & [Link] & [Link], Principles of International Investment Law (2nd edn,
Schreuer OUP 2012)
Douglas [Link], The International Law of Investment Claims (Cambridge
(2012) University Press 2012)
Guest [Link], Guest on the Law of Assignment (Sweet & Maxwell 2012)
Kläger [Link]äger, Fair and Equitable Treatment‟ in International Investment Law
(CUP 2011)
Kurkela [Link], [Link], Due Process in International Commercial
Arbitration, (2nd ed., OUP 2010)
Malintoppi [Link], „Independence, Impartiality, and Duty of Disclosure of
Arbitrators‟ in [Link], [Link] and [Link] (eds), The Oxford
Handbook of International Investment Law (OUP 2008)
Schreuer & [Link] & [Link], The ICSID Convention: A Commentary (2nd edn,
Malintoppi CUP 2009)
Sornarajah [Link], The International Law on Foreign Investment (4th edn., CUP
2017)
Smith [Link] & [Link], The Law of Assignment (2nd edn, OUP 2013)

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UN/ EU Documents

Abbreviation Citation
Accession to ECHR Opinion 2/13 of the Court, Opinion pursuant to Article 218(11)
TFEU ECLI:EU:C:2014:2454
ARSIWA ILC, Articles on the Responsibility of States for Internationally
Wrongful Acts, A/CN.4/SER.A/2001/Add.1(Part 2), 2001.
Barroso‟s Speech Speech, José Manuel Durão Barroso, President of the European
Commission State of the Union 2012, Address Plenary Session of
the European Parliamant/Stasbourg (12.9.2012)
Declaration 2019 Declaration of the Representatives of the Governments of the
Member States on the Legal Consequences of the Judgment of the
Court of Justice in Achmea and on Investment Protection in the
European Union (15.1.2019)
DARIO ILC, Draft Articles on the Responsibility of International
Organizations, A/CN.4/L.778, 2011.
DARIO Commentaries ILC, Draft Articles on the Responsibility of International
Organizations, with Commentaries, A/66/10, 2011.
European Parliament European Parliament resolution on proposal calling on the
Resolution 2018 Council to determine, pursuant to Article 7(1) of the Treaty on
European Union, the existence of a clear risk of a serious breach
by Hungary of the values on which the Union is founded,
P8_TA(2018)0340, 2018.
EU ETS The EU Emissions Trading System (EU ETS), 2016.
<[Link]
> accessed 16.9.2020
GA Official Records Official Records of the General Assembly, 59th Session, 6th
(2004) Committee, 21st meeting, A/C.6/59/SR.21, 2004
Gaja (2009) [Link], Seventh Report of International Organizations,
A/CN.4/610, 2009
Gaja (2004) [Link], Second Report on Responsibility of International

xiii
Memorial for Claimant TEAM GAJA

Organisations, A/CN.4/541, 2004

ILC Conclusions on ILC, Conclusions of the Work of the Study Group on the
Fragmentation of Fragmentation of International Law: Difficulties arising from the
International Law Diversification and Expansion of International Law,
A/CN.4/L.682, 2006.
Memorandum 1995 Memorandum to the Assistant Secretary-General, Department of
Peacekeeping Operations, United Nations Juridical Yearbook,
ST/LEG/SER.C/33, 1995
Observations 2011 Comments and Observations Received from International
Organizations, A/CN.4/637 and Add.1, 2011
Proposal 2017 Proposal for a Council Decision on the determination of a clear
risk of a serious breach by Poland of the rule of law,
COM(2017)835/F1, 2017.
UNSC Report 2008 United Nations Security Council Report, Report of the Secretary-
General on the United Nations Interim Administration Mission in
Kosovo, S/2008/692, 2008.
UNSC Report 1994 United Nations Security Council Report, Report of the
Commission of Inquiry Established pursuant to Investigate Armed
Attacks on UNOSOM II Personnel, S/1994/653, 1994.

Miscalleneous

Abbreviation Citation
Schindler [Link], „Managing the coal phase-out – a comparison of actions in G20
countries‟ (2019) Climate Transparency, < [Link]
[Link]/wp-content/uploads/2019/06/CT-Managing-the-phase-out-
[Link] > accessed 16.9.2020
WCA World Coal Association, Coal <[Link]
accessed 16.9.2020

xiv
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TABLE OF ABBREVIATIONS

Abbreviation Term
ASNEC Association of Sovereign Nations for Economic Cooperation
ASNEC Charter Founding Charter of the Association of Sovereign Nations for
Economic Cooperation
ASNEC EIT Treaty concerning the Encouragement and Reciprocal Protection of
Investments in the ASNEC Region
C-Energy C-Energy v Wellfalcon
CJEU Court of Justice of European Union
Challenged Measure Law 66/2016 and Law 72/2016
Coal Directive Directive (ASNEC) 2016/87 of the Council of 17.2.2016 on the
renewable sources of energy
ECtHR European Court of Human Rights
ECT Energy Charter Treaty
EU European Union
FET Fair and Equitable Treatment
Governor Ji-Yeong, Huan (Governor of Ticadia)
Hewer Plants Hewer Plants JSC v Wellfalcon
ICJ International Court of Justice
ICTY International Criminal Tribunal for the former Yugoslavia
ICSID International Centre for Settlement of Investment Dispute
IAN International Arbitration News
KFOR Kosovo Force
LEU Laocan Environmental Union
LRC Laocan Renewables Company PLC
MFN Most Favourite Nation
MFNB Mercurian First National Bank
Mountaintop Mountaintop Investment LLC
NAFTA North American Free Trade Agreement
NDC Nationally Determined Contributions

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REIO Regional Economic Integration Organisation

T-1 Ticadia-1 Power Plant
T-1 LLC Ticadia-1 LLC
UN United Nations
UNCITRAL Rules UNCITRAL Arbitration Rules 2010
UNSC United Nations Security Council
UNAMIR United Nations Assistance Mission for Rwanda
UNMIK United Nations Interim Administration Mission in Kosovo
UNOSOM II United Nations Operation in Somalia II
WTO World Trade Organization

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STATEMENT OF FACTS

Investment

[1] Pre-2010: Since 1980s, coal has powered up Laoc‟s economy and electricity grids.
Laocan governmental officials actively courted foreign investors to fund infrastructure
projects.

[2] 2009: After visiting Mecuria on numerous occasions to lure investors to build the first
ever coal-fired power plant in Ticadia, the Governor secured the interest of Mountaintop,
a sophisticated and serial investor in energy projects worldwide.

[3] 2010: Protracted negotiations ensued between Laocan local authorities, Mountaintop and
MFNB. During a meeting, the Governor committed towards ensuring that the project will
be „economically beneficial‟ for all parties. He confirmed the commitment in a press
statement. The project was green-lit. Mountaintop incorporated T-1 LLC, a Laocan
subsidiary, to operate the plant. MFNB furnished a loan of USD600 million via a
Financing Agreement. The entire amount was transferred to T-1 LLC. Construction of T-
1 began.

Political Developments

[4] 2012: In February, 13 States including Laoc and Mercuria founded ASNEC (with the
competence over environmental and energy polices). In May, ASNEC and Member
States signed the ASNEC EIT to promote intra-ASNEC investment flows.

[5] 2014: T-1 began operations upon being issued a license by the Governor.

[6] 2015: A pro-environmental party (LEU) gained control of Laoc‟s Parliament for the first
time ever. In December, ASNEC and Member States signed the Seoul Agreement which
aims to combat climate change by reducing greenhouse gas emissions.

[7] 2016: In February, ASNEC acted alone in communicating NDCs for the region. Weeks
later, ASNEC adopted the Coal Directive by majority vote calling for the increase of
renewables and phase-out of coal-fired power plants by end 2028.

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Challenged Measure

[8] 2016: In July, the Respondent‟s Parliament enacted Law 66/2016 to implement the coal
phase-out. This generated public outcry over damage to Laoc‟s economy and electrical
shortages. In December, Parliament enacted Law 72/2016 to grant priority of access and
premium pricing to electricity generators supplied by renewables, and form a
government-funded entity (LRC) to construct such generators.

[9] 2017: T-1‟s market value dipped by 40%. This triggered MFNB‟s request for additional
security. Mountaintop refused, and planned to wind-up T-1 LLC. MFNB commenced
arbitration against Mountaintop as guarantor (lost in 2018). Due to low liquidity, MFNB
assigned its rights under the Financing Agreement to the Claimant for USD150 million.
The entire amount was transferred to MFNB.

Arbitral Proceedings

[10] 2019: In January, the Claimant filed this arbitration, and nominated Mr. Mason as
arbitrator. In March, this Tribunal fixed the matter for hearing. In June, the INA article
disclosed Mr. Mason‟s involvement in the Hewer Plants award. A day later, Mr. Mason
re-tweeted the article. Then, the Respondent filed a challenge to disqualify Mr. Mason.
This Tribunal ordered the challenge to be heard with the main hearing.

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EXECUTIVE SUMMARY

Merits

[1] The Claimant brings forth a simple claim – that the Respondent treated MFNB unfairly
and inequitably by mandating the phase-out of coal-fired power plants by 2028 (vide Law
66/2016) despite promising regulatory stability. The additional incentives accorded to
renewables (vide Law 72/2016) inflicted a double whammy compounding its
disproportionate and discriminatory effects.

Preliminaries

[2] The Respondent raises three issues of its own – each issue taking us farther away from
our centre of gravity. Essentially, the Respondent disputes the status of all actors in this
proceedings – claimant, respondent, and even arbitrator.

[3] First, they deny being the proper respondent. However, they have mischaracterized
ASNEC as being some sort of „hive mind‟ that fully controls and operates the legislative
arm of Member States‟ democratically-elected Parliaments. Such notion is unfounded
under the general rules of attribution, and EU‟s lex specialis on normative control.

[4] Second, they dispute the Claimant as the proper claimant. However, the notion of intuitu
personae cannot be read into the clear text of ASNEC EIT which defines „investments‟
broadly to encompass claims of money changing hands from MFNB to the Claimant.

[5] Third, they doubt Mr. Mason‟s impartiality as an arbitrator. However, mere overlapping
of legal issues with Hewer Plants does not constitute „issue conflict‟. Mr. Mason did not
express any definitive views on the impact of „climate change‟ in investment disputes.

Hearing

[6] Following this Tribunal‟s Procedural Orders, we will address the three preliminary issues
and our substantive claim in reverse order.

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PLEADINGS

I. MR. MASON SHOULD NOT BE REPLACED AS AN ARBITRATOR

[1] In light of the Respondent challenging the Claimant‟s appointment of Mr. Mason as an
arbitrator, the two other members of this Tribunal will decide on the challenge.1

[2] Two broad issues arise: [A] justifiable doubts of his independence and impartiality; and
[B] his duty of disclosure.

A. There are no justifiable doubts as to Mr. Mason’s independence and impartiality

[3] Pursuant to Article X(2) of the ASNEC EIT, this arbitral proceeding is governed by the
UNCITRAL Rules. 2 The applicable legal standard under Article 12(2) is whether
„circumstances exist that give rise to justifiable doubts as to the arbitrator‟s impartiality
and independence‟. Such standard must not be conflated with the test of „grave doubts‟
posited by the Respondent 3 nor „manifest lack‟ under the ICSID Convention. 4 The
standard is objective based on „a reasonable evaluation of the evidence by a third party‟.5

[4] In essence, the Respondent‟s challenge is focused on „issue conflict‟. Due to Mr. Mason‟s
previous appointment in Hewer Plants, the Respondent is concerned that he „has already
formed an opinion on legal and factual issues also at the heart of the present case‟.6

[5] „Impartiality‟ refers to the „absence of bias or predisposition towards a party‟; whereas
„independence‟ is characterized by the „absence of external control‟. 7 Both share a
common overriding object i.e. „protect parties against arbitrators being influenced by
factors other than those related to the merits of the case‟.8

1
Record p.55, ¶6.
2
ibid p.65.
3
ibid p.46.
4
ICSID Convention, art.57, 14(1).
5
Burlington, ¶67; Blue Bank, ¶59; Abaclat, ¶75; Caron, p.210.
6
Record, p.46.
7
Suez, ¶29; ConocoPhillips, ¶54; İçkale, ¶116; Caratube, ¶53; Blue Bank, ¶59; Burlington, ¶66.
8
ConocoPhillips, ¶55; Universal Compression, ¶70; Urbaser, ¶43.

4
Memorial for Claimant TEAM GAJA

[6] As the challenging party, the Respondent bears the burden of proof. 9 The Claimant
categorically disputes each ground of challenge: [i] Hewer Plants award; [ii] Mr.
Mason‟s social media post; [iii] Mr. Mason‟s pod-cast interview; and [iv] totality of
circumstances.10

i. Mr. Mason’s previous appointments do not pose an ‘issue conflict’

[7] The Respondent‟s challenge falls far short of the classic case of repeat appointments.11
Mr. Mason has no personal stake in this dispute. Neither does he have any personal
relationship with parties or counsel 12 – Hewer Plants and C-Energy involve different
investors and different host State (Wellfalcon).13

[8] In Universal Compression, Professor Stern was challenged due to her appointments by
Venezuela in four previous cases.14 In Electrabel, the challenge cited her appointment in
an on-going case concerning the same government, same treaty, and same governmental
measure.15 Even so, the ICSID tribunals dismissed both challenges.

[9] In Tidewater, the unchallenged arbitrators opined that repeat arbitrators are presumed as
„neutral‟ and exercising an „independent arbitral function‟ in every case.16 Conflict only
arises where multiple appointments create: (a) „a relationship of dependence‟ due to
„attendant financial benefits‟; or (b) „material risk that the arbitrator may be influenced
by factors outside the record‟ from „knowledge derived from other cases‟.17

9
Suez, ¶41.
10
Record, p.45-46, ¶¶2,5,6,7.
11
Cleis, pp.64-72.
12
cf National Energy, ¶64.
13
Record, p.52.
14
Universal Compression, ¶¶24-25,107.
15
Electrabel-I, ¶¶40,46.
16
Tidewater, ¶60.
17
ibid ¶62.

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Memorial for Claimant TEAM GAJA

[10] The first type of conflict is non-existent. The Claimant was unaware of Mr. Mason‟s
appointment in Hewer Plants. 18 In fact, the award was made on 1.5.2019 after his
nomination on 31.1.2019.19 Hence, there was no pre-existing quid pro quo involved.

[11] The second type of risk – commonly known as „issue conflict‟ – is narrower and does not
involve a direct bias for or against any party.20 Such conflict „denotes a situation in which
an arbitrator is inappropriately predisposed to favor a particular outcome with respect to
the issues at stake in the proceedings‟21 stemming from the „desire to conform to his or
her own previously expressed view‟.22

[12] Merely expressing views and rendering prior decisions in a specific of law do not per se
justify removal.23 In CC/Devas, Judge Tomka (former ICJ President) formulated this test:

„Thus, to sustain any challenge brought on such a basis requires more than
simply having expressed any prior view; rather, I must find, on the basis
of the prior view and any other relevant circumstances, that there is an
appearance of pre-judgment of an issue likely to be relevant to the dispute
on which the parties have a reasonable expectation of an open mind.‟24

The test has been subsequently adopted in İçkale İnşaat25 and Vattenfall26.

[13] The likelihood of pre-judgment presupposes the existence of similarities of issues

between two cases.27 The evaluation is „a matter of substance, not of mere mathematical
calculation‟.28 The risk of conflict is more acute for factual similarities. In EnCana29 and
Caratube,30 the disqualified arbitrators were privy to documents not on record acquired

18
Record, p.53.
19
ibid pp.7,50.
20
CC/Devas, ¶58.
21
Vattenfall (Disqualification), ¶112.
22
CC/Devas, ¶58.
23
ibid.
24
ibid.
25
İçkale, ¶119.
26
Vattenfall (Disqualification), ¶112.
27
Tidewater, ¶63.
28
Tidewater, ¶59.
29
EnCana, ¶45.
30
Caratube, ¶¶75,89.

6
Memorial for Claimant TEAM GAJA

from previous cases involving the same host State. Such an arbitrator „cannot reasonably
be asked to maintain a “Chinese wall” in his own mind‟.31

[14] In contrast, any factual similarities with Hewer Plants is minimal. A claim based on FET
standard is intrinsically fact-specific.32 The relevant factors include inter alia the host
State‟s representations and legal framework, and the investor‟s conduct and due
diligence. 33 Whilst the Hewer Plants award remains unpublished, 34 one can safely
assume that the situations in Wellfalcon and Laoc cannot be a splitting mirror image.
Even scraps of information on the public domain reveal distinguishing features – both
Hewer Plants and C-Energy concern a lignite-fired power plant35 (lignite is a far dirtier
pollutant36).

[15] Similarities of legal issues are of a lesser concern for „issue conflict‟. In Tidewater, the
tribunal rationalized that the risk of bias lies in the „close interrelationship between the
facts and the parties‟, and less so when the arbitrator is merely „called upon to determine
a question of law which he has previously made a decision‟.37 Similarly, in İçkale İnşaat,
the tribunal was untroubled by Professor Sands‟ exposure to common facts of a „general
and interpersonal character‟ to interpret a common BIT clause.38

[16] Time and again, challenges based on an arbitrator‟s previous legal opinion has proven
futile:
(a) Urbaser (MFN clause and defence of necessity 39)
(b) Vattenfall (scope of „investors‟40)
(c) İçkale İnşaat (MFN clause41)
(d) Electrabel (interpretation of identical legislation, contract and ECT42)

31
EnCana, ¶45; Caratube, ¶¶75,89.
32
Mondev, ¶118.
33
Lemire, ¶¶284-285.
34
Record, p.71, ¶16.
35
ibid p.50.
36
WCA.
37
Tidewater, ¶67.
38
İçkale, ¶119.
39
Urbaser, ¶¶55-58.
40
Vattenfall (Disqualification), ¶¶113-117.
41
İçkale, ¶121.

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Memorial for Claimant TEAM GAJA

[17] Here, the issue of whether the Challenged Measure is attributable to ASNEC is a question
of law turning on the interpretation of the ASNEC EIT and ASNEC Charter. 43
Admittedly, this was also a critical issue in Hewer Plants.44

[18] Nevertheless, overlapping legal issues in investment arbitration is only natural. As aptly
put by the Universal Compression tribunal:

„the fact that an arbitrator made a finding of fact or a legal determination

in one case does not preclude that arbitrator from deciding the law and
the facts impartially in another case.‟ 45

[19] Lastly, Mr. Mason has over 30 investment arbitrations under his belt, including 6
appointments as tribunal president.46 Indeed, his repeat appointments may well be a result
of his independence and impartiality, rather than a reason to doubt otherwise.47

ii. Mr. Mason’s social media post is inconsequential

[20] Next, the Respondent takes issue to Mr. Mason‟s social media post which re-shared the
INA article with the caption: „Proud to have served as arbitrator in this ground-breaking
case on #ClimateChange!‟.48

[21] It is a stretch to construe such one-liner as indicative that „Mr. Mason has already formed
a firm opinion on the matters at issue‟.49 The word „ground-breaking‟ must be read in
context of the accompanying article‟s title: „BREAKING: First tribunal rules on ASNEC
climate change measure‟. Making history seems to be his cause of celebration.

[22] Even assuming arguendo that Mr. Mason is inclined to jealously guard the Hewer Plants
award, such strong attachment may fade over time. Human impulse starkly differs
between arbitrators, as illustrated in CC/Devas where two arbitrators were challenged for

42
Electrabel-I, ¶37(d)-(f).
43
Record, pp.27-28, ¶¶12-13.
44
ibid p.50.
45
Universal Compression, ¶83.
46
Record, p.53.
47
Tidewater, ¶61.
48
Record, p.51.
49
ibid p.45, ¶5.

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Memorial for Claimant TEAM GAJA

their participation in cases involving the interpretation of „essential security interests‟

clauses.50

[23] The critical factor was their subsequent reaction towards the annulment of such awards.
Judge Tomka declined to disqualify Hon. Lalonde whose „more limited pronouncements‟
did not take adopt any legal position. 51 Professor Vicuña, who wrote an article to
stubbornly defend his position, was removed since a reasonable observer would not
believe that the challenging party „has a chance to convince him to change his mind‟.52

[24] Here, the subsequent conduct of Mr. Mason is akin to Hon. Lalonde. The unpublished
Hewer Plants award is free from controversy. Further, his one-liner post reveals not an
iota of the tribunal‟s views, what more any strongly-held personal views.

iii. Mr. Mason’s pod-cast interview is outdated and inconsequential

[25] The Respondent‟s third ground of challenge is the pod-cast interview on 9.5.2018.53

[26] First, as a procedural objection, the interview ought to be wholly disregarded due to
delay. Pursuant to Article 13 of the UNCITRAL Rules, a challenging party must notify
all parties and arbitrators within 15 days after the circumstances giving rise to justifiable
doubts „became known‟ to the challenging party. 54 An orderly and fair arbitration
proceeding requires such challenges be made in a timely fashion.55

[27] The Respondent only discovered the interview through the IAN article on 2.8.2019.56
However, that is not the critical date that time starts to run. In Burlington, the tribunal
summarily dismissed grounds of challenge concerning repeat appointments that had been
published on the ICSID website over 4 months before the challenge.57

50
CC/Devas, ¶18.
51
ibid ¶66.
52
ibid ¶¶62,64.
53
Record, pp.48-49.
54
UNCITRAL Rules, art.13(1)-(2).
55
Suez, ¶18; Burlington, ¶72.
56
Record, p.45, ¶6.
57
Burlington, ¶74.

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Memorial for Claimant TEAM GAJA

[28] Here, the interview was publicly available since the Claimant‟s nomination of Mr. Mason
on 31.1.2019. 58 As the challenge was not made within 15 days, this Tribunal should
disregard the interview entirely.

[29] In any event, this ground lacks merit. Generally, extrajudicial public opinions expressed
in the abstract without reference to any particular case is permissible.59 In Perenco, Mr.
Brower was disqualified for insinuating Ecuador as being a „recalcitrant‟ host State
during an interview.60

[30] In contrast, Mr. Mason‟s comments come across as illuminating rather than
incriminating. Firstly, his answer of how „climate change adds anything new to the
debate in investment law‟ 61 was in response to a query on career advice to young
practitioners, and not in the heat of critical legal analysis.62 Second, he added that the
applicability of climate change treaties is still „subject to debate‟.63 Third, his suggestion
for them to „broaden their horizon on the economic plane‟ was to emphasize how there
can be no „one fits all solution‟ in investment disputes.64 In totality, his answer reflects an
objective perspective of an open mind susceptible to change.65

[31] Further, there are strong public policy reasons against lightly disqualifying arbitrators for
offhand statements. First, this would significantly reduce the pool of qualified
arbitrators. 66 Second, this may cast a „chilling effect‟ on their academic freedom to
express their opinions, and diminish the progressive development of law.67

58
Record, p.7.
59
Malintoppi, p.799; Urbaser, ¶54.
60
Perenco, ¶¶48-58.
61
Record, p.49.
62
ibid.
63
ibid.
64
Record, p.52.
65
Urbaser, ¶51; CC/Devas, ¶59; İçkale, ¶121.
66
Urbaser, ¶48; PIP-Sàrl, ¶30; Suez, ¶36.
67
Urbaser, ¶54.

10
Memorial for Claimant TEAM GAJA

iv. The totality of non-issues is still nothing

[32] The Respondent contends that Mr. Mason‟s partiality is proven by the three grounds „in
itself (and even more so taken together)‟.68 However, such cumulative approximation is
misconceived.

[33] If no ground evinces bias on their own, their combination similarly would not. 69 To
paraphrase from Electrabel: 0 multiplied by 3 still remains 0 and not 3.70

B. Mr. Mason did not breach his duty of disclosure

[34] Article 11 of the UNCITRAL Rules requires arbitrators to „disclose any circumstances
likely to give rise to justifiable doubts‟ as to their impartiality.71 However, non-disclosure
per se cannot justify disqualification.72 This is because „non-disclosure does not render
an arbitrator partial; only the facts and circumstances that he did not disclose can do
so.73

[35] Mr. Mason‟s non-disclosure of his prior appointments did not affect his partiality due to
[i] lack of relevance; and [ii] his subsequent conduct.

i. Mr. Mason’s non-disclosure was not likely to raise justifiable doubts

[36] The Suez tribunal listed few factors to evaluate the effect of non-disclosure on an
arbitrator‟s impartiality: whether it was the result of an honest exercise of discretion, and
whether the undisclosed facts raise obvious questions about impartiality.74

[37] First, an arbitrator‟s duty of disclosure does not extend to facts not meeting the threshold
of „justifiable doubts‟ (vide Article 12 of the UNCITRAL Rules). 75 As Mr. Mason‟s

68
Record, p.46, ¶7.
69
Amco, ¶5; Daele, pp.252-254.
70
Electrabel-I, ¶39.
71
Suez, ¶46; Alpha, ¶64; Tidewater, ¶40.
72
Caron, p.226.
73
Tidewater, ¶43; ConocoPhillips, ¶60; IBA Guidelines, Part I, ¶3.
74
Suez, ¶44; Tidewater, ¶47; Baker, p.363.
75
Suez, ¶26; Caron, p.202.

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Memorial for Claimant TEAM GAJA

appointments in Hewer Plants and C-Energy do not raise any „issue conflict‟, 76
disclosure was not warranted.

[38] Second, the IBA Guidelines (which holds persuasive authority77) classifies information
into three Lists.78 Disclosure is mandatory for information on direct conflict under the
„Red List‟ and „Orange List‟. 79 In contrast, „previously expressed legal opinions‟ fall
under the „Green List‟ exempted from disclosure.80

[39] Third, Mr. Mason promptly re-shared the IAN article on social media.81 There cannot be
intent on hiding information that is publicly available.82

[40] Hence, Mr. Mason‟s overall conduct evinces an honest exercise of discretion.83

ii. In any event, Mr. Mason’s subsequent disclosure negated any prejudice

[41] An arbitrator‟s response to a challenge is a relevant factor.84 In Burlington, faced by a

challenge asserted on ethical grounds, Professor Vicuña retorted that the „real ethical
question seems to lie‟ with the challenging party‟s counsel. 85 Such a strongly-worded
riposte „devolving into ad hominin attacks‟86 rightly warranted his disqualification.87

[42] In Tidewater, Professor Stern‟s response that „the fact of whether I am convinced or not
convinced by a pleading depends upon the intrinsic value of the legal arguments and not
on the number of times I hear the pleading‟ reassured the co-arbitrators that her repeat
appointments would not compromise her impartiality.88

76
See [7]-[19] of Memorial.
77
Alpha, ¶56; PIP-Sàrl, ¶24; Hrvatska, ¶19.
78
IBA Guidelines, Part II, ¶1.
79
ibid, ¶2-3.
80
IBA Guidelines, p.25, ¶4.1; Malintoppi, p.799.
81
Record, p.51.
82
Tidewater, ¶55.
83
Suez, ¶48.
84
Vattenfall (Disqualification), ¶¶153-154; Burlington, ¶¶79-80.
85
Burlington, ¶79.
86
Vattenfall (Disqualification), ¶¶153-154.
87
Burlington, ¶80.
88
Tidewater, ¶71.

12
Memorial for Claimant TEAM GAJA

[43] Here, Mr. Mason‟s response was infused with cordiality and circumspection. He offered
a well-reasoned explanation of not disclosing Hewer Plants.89 Moreover, he voluntarily
disclosed his appointment in C-Energy „in the spirit of transparency‟.90

[44] The Claimant is mindful of the possible prejudice. Recently, on 11.6.2020, the Eiser
award was annulled on the basis that an arbitrator‟s undisclosed relationship with an
expert witness may have swayed the co-arbitrators during deliberation and affected the
outcome.91

[45] In contrast, Mr. Mason has already „come clean‟ with the full extent of his involvement
in ASNEC EIT arbitrations. Unlike Eiser, this Tribunal is now fully on guard of any
external information that he may draw, and able to weigh his views during deliberations
with the right balance of deference and caution.92

[46] Hence, any concerns of prejudice on the Tribunal‟s decision-making has been laid to rest.

II. THE CLAIMANT HAS STANDING TO BRING A CLAIM OVER MFNB’S

INVESTMENT UNDER THE ASNEC EIT

[47] The Respondent objects to the Claimant‟s jus standi on the basis that the Claimant cannot
acquire MFNB‟s rights under the ASNEC EIT by assignment. 93 Such jurisdictional
objection can be split into four heads: [A] rationae materiae; [B] ratione personae; [C]
ratione temporis; and [D] abuse of rights.94

89
Record, p.52.
90
ibid.
91
Eiser, ¶¶247-253.
92
ibid ¶¶250-251.
93
Record, pp.26-27, ¶¶4-8.
94
Micula, ¶53.

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Memorial for Claimant TEAM GAJA

A. The Claimant’s acquisition of MFNB’s rights is an ‘investment’ under Article

I(1) of the ASNEC EIT (ratione materiae)

[48] The Respondent‟s first objection is that the Claimant „does not own nor, in fact, has it
ever made any investment‟ under the ASNEC EIT.95

[49] It is trite law that the scope of „investment‟ must be interpreted based on the four corners
of the BIT.96 Concomitantly, the customary rules of interpretation under Articles 31-32 of
the VCLT apply.97 It is improper to imply inchoate requirements that transcend beyond
the textual definition.98

[50] The starting point of our analysis is Article I(I) of the ASNEC EIT. The Claimant‟s
acquisition of MFNB‟s rights falls within the three limbs: [i] general definition; [ii]
enumerated examples; and [iii] association with economic activity in the energy sector.99

i. The Claimant’s acquisition of MFNB’s rights is a ‘kind of asset owned or

controlled by Investors... either directly or indirectly’

[51] The opening text of Article 1(I) of the ASNEC EIT defines „Investment‟ as „every kind of
asset owned or controlled by Investors of a Contracting Party, either directly or
indirectly‟.100

101
[52] Such term has a wide coverage. In construing the term „owned directly or
indirectly‟,102 the Tradex tribunal held that „nowhere requires that the foreign investor

95
Record, p.26, ¶5.
96
Tokios, ¶¶74-77; Fedax, ¶25.
97
Tokios, ¶¶77; Daimler, ¶46; Phoenix Action, ¶¶75-76; Saluka, ¶¶296-300.
98
Tokios, ¶82; A11Y, ¶¶136-138
99
Amto, ¶36.
100
Record, p.62.
101
Saluka, ¶203.
102
Tradex, ¶105.

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has to finance the investment from his own resources‟. 103 Similarly, in Tokios 104 and
A11Y,105 the tribunal rejected incorporating „origin of capital‟ as an additional condition.

[53] Further, the Salini test which incorporates additional qualifying elments (i.e. active
contribution, certain duration, element of risk, and contribution to host State‟s
economy)106 is inapplicable. As succinctly put by Yukos Universal tribunal:

„Principles of international law does not allow an arbitral tribunal to write new,
additional requirements, which the drafters did not include, into a treaty, no
matter how auspicious or appropriate they may appear.‟107

[54] Hence, the fact that MFNB was the original investor funding T-1‟s construction is
immaterial. 108 Nor is the fact that the Claimant paid US$150 million (25% of loan
amount) to acquire MFNB‟s rights.109 All that matters is that the Claimant now indirectly
owns and controls the pledged assets of T-1 under the Financing Agreement.110

ii. The Claimant’s acquisition of MFNB’s rights includes property rights, stock
and equity participation, and claims to money

[55] Next, Article 1(I) of the ASNEC EIT enumerates several categories of „Investments‟. The
nature of the Claimant‟s interest fits squarely in at least three categories.

[56] The first category is „movable and immovable, property, and any property rights such as
[…] pledges‟ (vide paragraph (a)).111 Under the Financing Agreement, the assets of T-1
LLC pledged as security of MFNB‟s loan include „the land plot‟.112

103
ibid ¶109.
104
Tokios, ¶¶80-82.
105
A11Y, ¶137.
106
Salini, ¶52.
107
Yukos, ¶415.
108
Record, p.12.
109
ibid p.23.
110
Tokios, ¶81.
111
Record, p.62.
112
ibid p.12.

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Memorial for Claimant TEAM GAJA

[57] The second category is „shares, stock, or other forms of equity participation in a
company‟ (vide paragraph (b)). 113 Under the Financing Agreement, the pledged assets
also include the shares in T-1 LLC owned by Mountaintop.114

[58] The third category is „claims to money […] having an economic value and associated
with an investment‟ (vide paragraph (c)).115

[59] The Respondent contends that any potential claims under the ASNEC EIT „could only be
assigned under international law‟.116 The Claimant fully agrees with international law
being the applicable law for this Tribunal to assess the validity of MFNB‟s assignment
(and not merely Mercurian law).117 However, there exists no international rule explicitly
prohibiting the assignment of investment treaty claims.118

[60] Domestic laws across major jurisdictions allow the assignability of claims, both common
law (UK 119 and US 120 ) and civil law (Germany, 121 Switzerland 122 and Spain 123 ). This
reinforces assignment as a general principle of law recognized by civilized nations.124

[61] Indeed, the transferability of investments from one investor to another is a norm in
international investment practice. In Fedax, the purchase of a financial and credit
instrument qualified as „a claim for money‟.125 In Energorynok, the assignment of a debt
similarly fell within this category.126

[62] Lastly, as a matter of policy, it is worth recalling the Daimler tribunal‟s dicta:

113
ibid p.62.
114
ibid, p.12.
115
ibid, p.62.
116
ibid, p.26, ¶6.
117
Daimler, ¶¶136-138.
118
ibid ¶144; Goh, p.28; Kirtley, p.431.
119
Guest, pp.4–22; Smith, pp.53–61.
120
Re UAL, p.316.
121
German Code, Division V.
122
Swiss Code, art.165
123
Bancaja, p.3.
124
ICJ Statute, art.38(1)(c).
125
Fedax, ¶29.
126
Energorynok, ¶95.

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Memorial for Claimant TEAM GAJA

„As the large and thriving global market for distressed debt attests, most
jurisdictions allow for legal claims to be either sold along with or reserved
separately from the underlying assets from which they are derived. The
reason is that such severability greatly facilitates and speeds the
productive re-employment of assets in other ventures.‟127

[63] Hence, the Claimant‟s acquisition of MFNB‟s rights via assignment is an „investment‟
falling under the ASNEC EIT permitted under international law.

iii. The Claimant’s acquisition of MFNB’s rights is an ‘investment associated

with an Economic Activity in the Energy Sector’

[64] The ASNEC EIT, as per its very title, is a regional treaty exclusively governing the
energy sector – somewhat identical to the ECT ratified by over 50 States in Europe and
Central Asia.128

[65] Article I(1) ends with the proviso that „Investment‟ refers to „any investment associated
with an Economic Activity in the Energy Sector‟.129 Such term closely mirrors the proviso
of the ECT‟s definitional clause of „investment‟.130

[66] Article 1(3) defines the term “Economic Activity in the Energy Sector” as:

„an economic activity concerning the exploration, extraction, refining,

production, processing, utilisation, storage, land transport, transmission,
distribution, trade, financing, marketing, or sale of any energy resources
(including natural resources), materials, installations and products.‟

Interestingly, the equivalent ECT clause enumerates the same activities, except for
„processing‟, „utilisation‟, and „financing‟.131

[67] It is perhaps splitting hairs to analyse whether „economic activity‟ differs between the
ASNEC EIT and ECT. Suffice to say, both treaties are wide enough to encompass
financial-related activities arising from the Energy Sector – more so for the ASNEC EIT

127
Daimler, ¶144.
128
SCB, ¶121.
129
Record, p.62.
130
ECT, art.1(6).
131
ibid art.1(5).

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Memorial for Claimant TEAM GAJA

due to the inclusion of „financing‟. Hence, the assignment of MFNB‟s rights under the
Financing Agreement falls within this proviso.

[68] In Energorynok, the tribunal declined jurisdiction because the investor merely „acquired
a debt, or was authorized to collect a debt, but did not acquire an Investment under the
ECT‟.132 However, the Claimant‟s interests assigned from MFNB is distinguishable.

[69] First, the Claimant not only acquired the rights to commence this claim, but also the right
to enforce the security over T-1‟s land plot and Mountaintop‟s shares in T-1 LLC.133 The
Claimant‟s „true motivation‟ is immaterial.134 It is entirely up to the Claimant to choose
whichever remedy to recover the loan amount as it pleases.

[70] Second, the Claimant‟s choice to pursue this claim rather than enforcing the pledge
avoids T-1 from being foreclosed and decommissioned (especially in light of Law
66/2016 reducing its lifespan from 40 years to 14 years below its 20-year break-even
baseline135).

[71] Third, if the Claimant succeeds, the compensation would pay off the loan and save T-1
LLC from insolvency. This enables T-1 to continue operating and contributing to the
Respondent‟s economy.136

[72] Hence, the Claimant has a valid investment worthy of protection under the ASNEC EIT.

B. The Claimant as the legal successor to MFNB is an ‘Investor’ under Article I(4)
of the ASNEC EIT (ratione personae)

[73] Respondent disputes the Claimant being the legal successor of MFNB‟s rights under the
ASNEC EIT due to intuitu personae. 137 The Claimant will address two issues: [i]

132
Energorynok, ¶101.
133
Record, p.12, ¶5.1.
134
Saluka, ¶209.
135
Record, p.57, ¶12.
136
African Holding, ¶83.
137
Record, p.27, ¶7.

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fulfilment of treaty definition of „Investor‟; and [ii] non-applicability of the intuitu

personae doctrine.

i. The Claimant is an ‘Investor’ under Article I(4)(b) of the ASNEC EIT

[74] Article I(4)(b) of the ASNEC EIT defines an „Investor‟ as „a company […] organized in
accordance with the law applicable in that Contracting Party‟. This is equivalent to „seat
of incorporation‟ test found in many BITs (to be contrasted with the „control‟ test which
pierces the corporate veil to determine the nationality of ultimate shareholders138).

[75] The Claimant is incorporated under the Mercurian law,139 a party to the ASNEC EIT.140 It
is immaterial that the Claimant‟s significant shareholders hail from Europe and US.141

[76] However, the Respondent may contend that only an original investor is protected under
the ASNEC EIT, as evinced by the terms „make Investments‟ in the preamble 142 and
„Making of Investments‟ in the MFN clause (vide Article II(2)).143

[77] Again, treaties must be interpreted according to the VCLT. 144 The Tokios tribunal
declined to impose qualifiers to the definition of „investor‟ not found in the plain text.145
Whilst the preamble provides insight into the context,146 the Federal Reserve tribunal
cautioned that „[a] treaty‟s object and purpose are to be used only to clarify the text, not
to provide independent sources of meaning that contradict the clear text.‟147

138
Tokios, ¶¶30,32; Plama, ¶124; Saluka, ¶240; Yukos, ¶416; Douglas (2012), ¶46.
139
Record, p.5.
140
ibid p.62.
141
ibid p.60.
142
ibid p.62.
143
ibid p.63.
144
Mondev, ¶43; Maffzeini, ¶27.
145
Tokios, ¶36.
146
VCLT, art 31(2).
147
Federal Reserve, ¶58.

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[78] If parties truly intended to disallow indirect investors having no substantial business
activities in the host State from protection, they would insert a „denial of benefits‟
clause.148 The ECT contains such a clause.149 There is none in the ASNEC EIT.

[79] Hence, the Claimant qualifies as an „investor‟ under the ASNEC EIT despite MFNB
being the original investor funding T-1‟s construction.

ii. The doctrine of intuitu personae is inapplicable

[80] Some jurists, notably Schreuer150 and Judge Crawford,151 consider that treaty claims may
be non-assignable due to the notion of intuitu personae. However, their views were
strictly confined to assignments from a national of a contracting State to a national of a
non-contracting State under the classical law of diplomatic protection. In Barcelona
Traction, Judge Jessup opined:

„One of the reasons for the rule on continuity of nationality of claims is the
avoidance of assignments of claims by nationals of a small State to
nationals of a powerful State.‟152

[81] In contrast, BITs are a hybrid platypus-like creature – a cross between public
international law and private international law. 153 In his seminal treatise, Professor
Douglas aptly characterizes a BIT claim as a „direct claim‟ (as opposed to a „derivative
claim‟ under diplomatic protection).154 In short, it is the very private and direct nature of
a BIT claim that allows its assignability.

[82] Scholarship aside, arbitral jurisprudence constante accords with the non-applicability of
intuitu personae to investment treaties.

148
Tokios, ¶¶35-36; Saluka, ¶229; Goh, p.32
149
ECT, art.17(1).
150
Schreuer & Malintoppi (2009), pp.177–190
151
Crawford, p.704.
152
Barcelona Traction (Jessup), ¶48.
153
Roberts, pp.45-46.
154
Douglas (2003), pp.161–184.

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Memorial for Claimant TEAM GAJA

[83] The leading authority is Vannessa Ventures – concerning a joint venture with a
governmental agency to extract gold and copper.155 The contract prohibited assignment
without the counterparty‟s consent.156 Upon discovering the original investor unilaterally
sold its shares to the claimant investor, the agency terminated the mining contract.157

[84] The tribunal rejected Venezuela‟s jurisdictional objection:

„Nonetheless, the intuitu personae character of the contracts does not itself
put Claimant‟s ownership of shares in PDV outside the scope of the
Canada-Venezuela BIT […] The Tribunal‟s view that the participation of
Placer Dome [..] was an essential part of the contractual arrangements
[…] does not, therefore, preclude Claimant‟s ownership of shares in PDV
from satisfying the BIT‟s definition of “investment.”‟158

[85] At the merits, the tribunal held that the termination was justified, and consequently did
not amount to unlawful appropriation and breach of FET.159 The rationale being that the
identity of the investor was critical to the joint venture.

[86] In contrast, T-1 was fully owned and controlled by Mountaintop (via its subsidiary, T-1
LLC). 160 The Claimant‟s investment relates to MFNB‟s loan. 161 Governmental permits
and license of T-1 do not hinge upon MFNB‟s continual financing. 162 There is no
instrument expressly prohibiting assignment of T-1‟s assets. In short, intuitu personae is
irrelevant as to both the issue of jus standi, and also the merits of our dispute.

[87] The second authority is African Holding – concerning the assignment of a debt owed by
Congo between two co-claimants.163 The tribunal drew a colourful analogy:

„Once money or claim leaves one pocket and goes into the other, only that
other pocket can claim or collect […] The pockets may belong to the same
pants, but they are still different pockets.‟164

155
Vannessa Ventures, ¶¶56-61.
156
ibid ¶65.
157
ibid ¶¶93,98.
158
ibid ¶154.
159
ibid ¶¶192-210,221-232.
160
Record, p.57.
161
ibid, pp.23-24.
162
ibid p.57.
163
African Holding, ¶72.

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Hence, the tribunal held that only African Holding (assignee) had standing in the
arbitration, and declined jurisdiction over the claim of SAFRICAS (assignor).165

[88] This effectively rebuts the Respondent‟s reliance on intuitu personae, and their insistence
that MFNB is the proper claimant.166 Hence, the right to bring this treaty claim vests
solely with the Claimant (assignee), as MFNB (assignor) had relinquished their right.167

C. The Claimant acquired MFNB’s investment made in 2010 (ratione temporis)

[89] MFNB‟s assigned its rights to the Claimant in 2017 168 after the alleged breach i.e.
enactment of Law 66/2016 and Law 72/2016 in 2016.169

[90] The „timing of investment‟ raises a possible hurdle of temporal jurisdiction, as noted in
Phoenix Action170 and Transglobal.171 However, such hurdle is easily surmountable.

[91] First, consider the continuity of investment. Article I(1) of the ASNEC EIT stipulates that
„a change in the form in which assets are invested does not affect their character as
investments‟.172 In African Holding, the tribunal construed an identical provision to mean
that an investment does not lose its quality merely because it was assigned.173 Congo‟s
debt to SAFRICAS is still owed, but to a different beneficiary, African Holdings. 174
Similarly, the El Paso, 175 Fedax 176 and Energoalliance 177 tribunals recognized that the
original debt remains alive despite transfer of hands.

[92] Second, consider the doctrine of severability. In Daimler, the tribunal rejected the notion
of „continuous ownership‟ depriving jurisdiction over an investment sold before
164
ibid ¶70 (unofficial English translation).
165
ibid ¶73.
166
Record, p.26.
167
Daimler, ¶145.
168
Record, pp.23-24
169
ibid, pp.18-20.
170
Phoenix Action, ¶136.
171
Transglobal, ¶103.
172
Record, p.62.
173
African Holding, ¶¶75-76.
174
ibid ¶78.
175
El Paso (Jurisdiction), ¶135.
176
Fedax, ¶29.
177
Energoalliance, ¶¶214-215.

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commencement of arbitration.178 Instead, the tribunal adopted the „better view‟ that BIT
claims are „in principle separable from their underlying investments‟.179

[93] Ultimately, the essence of ratione temporis is to prevent the absurdity of holding a host
State liable for a breach even before an investment is made.180 Here, the investment was
made way back in 2010 when MFNB‟s loan was utilized to purchase the land plot and
construct T-1.181 The assignment is not a new investment itself, but merely a transfer of
an existing investment to the Claimant. Hence, this Tribunal has temporal jurisdiction to
hear a claim premised upon a breach occurring subsequently in 2016.

D. The Claimant did not abuse its rights

[94] Lastly, the Claimant is mindful that some arbitral tribunals have (seemingly) declined
jurisdiction over assignment of claims. However, the true raison d'etre is the prevention
of abuse of rights, namely [i] treaty shopping; and [ii] internationalization of a domestic
claim.

i. The underlying claim is international in nature

[95] In Loewen, the tribunal declined jurisdiction over a claim against US by a Canadian
company which underwent bankruptcy and emerged as a US company:182

„The format of NAFTA […] was not intended to and could not affect the
rights of American investors in relation to practices of the United States
that adversely affect such American investors.‟ 183

[96] In Phoenix Action, the tribunal declined jurisdiction over a claim by an Israeli company
(fully owned by a Czech citizen with dual Israeli nationality) which bought over two

178
Daimler, ¶¶141-142.
179
ibid ¶145.
180
Phoenix Action, ¶68.
181
Record, pp.57,68.
182
Loewen, ¶220.
183
ibid ¶223.

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Memorial for Claimant TEAM GAJA

Czech companies „already burdened with the civil litigation‟.184 The tribunal deemed the
purchase as not a bona fide investment and abusive of the ICSID system:

„This alleged investment was not made in order to engage in national economic
activity [..] The unique goal of the “investment” was to transform a pre-existing
domestic dispute into an international dispute subject to ICSID arbitration under
a bilateral investment treaty.‟185

[97] Clearly, our dispute is worlds apart. The assignment was made between two separate
entities at arm‟s length. 186 More importantly, MFNB would have a valid treaty claim
against the Respondent under the ASNEC EIT if not of the assignment. In short, the
assignment did not transform a domestic dispute into an international one.

ii. The Claimant did not engage in ‘treaty shopping’

[98] Mihaly is often (but wrongly) cited as an authority on the non-assignability of investment
claims.187 The decision must be appreciated in light of its factual context – Mihaly (US)
filed an ICSID claim against Sri Lanka arising from rights assigned by Mihaly (Canada)
over a proposed power project in Sri Lanka.188

[99] The tribunal declared that the assignment was essentially a „treaty shopping‟ device:

„It follows that as neither Canada nor Mihaly (Canada) could bring any
claim under the ICSID Convention, whatever rights Mihaly (Canada) had
or did not have against Sri Lanka could not have been improved by the
process of assignment with or without, and especially without, the express
consent of Sri Lanka, on the ground that nemo dat quod non habet or
nemo potiorem potest transfere quam ipse habet.189

184
Phoenix Action, ¶¶136-137
185
ibid ¶142.
186
Record, p.60.
187
Goh, p.37.
188
Mihaly, ¶11.
189
ibid ¶24.

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[100] Here, both Claimant and MFNB are incorporated in Mercuria. 190 Unlike Mihaly, the
Claimant is not obtaining a „better title‟ to jurisdiction than what MFNB already had.191
Hence, there is no exceptional circumstance precluding this Tribunal‟s jurisdiction.192

III. THE CHALLENGED MEASURE IS ATTRIBUTABLE TO THE RESPONDENT

[101] Aside from denying the Claimant‟s status as the proper claimant, the Respondent also
denies being the proper respondent. To succeed, the Respondent must demonstrate that
responsibility of the Challenged Measure „lies solely with ASNEC‟.193

[102] The Claimant‟s submission is three-fold: [A] general rules of attribution (Articles 6-7 of
DARIO194); [B] specific rules of attribution (lex specialis195); and [C] dual attribution.196

A. The Challenged Measure is not attributable to ASNEC under general law

[103] Article 120 of the ASNEC Charter stipulates that „attribution of conduct, as between the
Member States and the Association, shall be governed, in particular, by Articles 6 and 7
of [DARIO]‟.197

[104] Further, ILC Special Rapporteur Gaja opined that „there is no need to devise special rules
on attribution‟ to govern the responsibility of REIOs (even EU).198 Hence, the applicable
law should solely focus on [i] Article 6; and [ii] Article 7 of DARIO.

i. The Respondent is not an organ nor agent of ASNEC (Article 6 of DARIO)

[105] Article 6 of DARIO provides that the „conduct of an organ or agent of an international
organization‟ performing its functions „shall be considered an act of that
organization‟.199

190
Record, p.23.
191
Mihaly, ¶24.
192
Banro, ¶¶23-26.
193
Record, pp.27-28.
194
DARIO, art.6-7.
195
ibid art.64.
196
DARIO Commentaries, art.5 cmt.4.
197
Record, p.33.
198
Gaja 2004, ¶11.

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[106] An „organ‟ refers to any „entity which has that status according to the rules of the
organization‟.200 Prime examples within the UN framework is the UNGA, UNSC and
ICJ.201 For instance, the ICJ‟s answer to the request for an advisory opinion constitutes an
act attributable to the UN.202

[107] An „agent‟ is defined more liberally as an „entity […] charged by the organization with
carrying out […] one of its functions, and thus through whom the organization acts‟.203

[108] In practice, the distinction between an „organ‟ and „agent‟ of international organizations
is blurry.204 Unlike States, organizations do not „possess a general competence‟ and are
instead vested with specific functions by Member States.205 The scope of its functions is
determined based on „rules of the organization‟206 and „established practice‟.207

[109] Ultimately, what matters most is the de facto function of the organ or agent, rather than
their de jure status.208 There must exist a „functional link‟ between the organ or agent and
the international organization.209

[110] First, from a textual analysis, Article 120 of the ASNEC Charter stipulates that ASNEC
„implements its legal acts through the organs of its Member States‟. 210 The provision
does not add words such as „on behalf of ASNEC‟ or „binding on ASNEC‟. Hence,
Respondent‟s implementation of the Coal Directive remains an independent sovereign
act.

199
DARIO, art.6(1).
200
ibid art.2.
201
UN Charter, art.7(1).
202
Difference Relating to Immunity, ¶29; Peace Treaties, p.71.
203
DARIO, art.2; Reparation for Injuries, p.177.
204
DARIO Commentaries, art.6 cmt.5.
205
Nuclear Weapons in Armed Conflict, ¶25.
206
DARIO, art.6(2).
207
ibid art.2(b). Nuclear Weapons in Armed Conflict, ¶¶19,21.
208
Difference Relating to Immunity, ¶66; Applicability of Article VI, ¶48.
209
Gaja (2004), ¶17; Amerasinghe, p.241.
210
Record, p.33.

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[111] Second, from a functional analysis, ASNEC‟s legal acts are adopted by a majority of
three-fourths of Member States.211 In essence, the Coal Directive resulted from a political
process at a horizontal level between Member States (rather than direct delegation at a
vertical level from ASNEC to Member States).212 Hence, the Respondent was merely
carrying out an act requested by other States, and not mandated by ASNEC.

[112] In sum, the Respondent‟s Parliament enacted Law 66/2016 and Law 72/2016 on its own
accord, and not as an organ nor agent of ASNEC.

ii. The Respondent was not under ASNEC’s effective control (Article 7 of
DARIO)

[113] Article 7 of DARIO provides:

„The conduct of an organ of a State […] placed at the disposal of [an]

international organization shall be considered under international law an
act of the […] organization if the organization exercises effective control
over that conduct.‟213

[114] Unlike the ARSIWA which uses the term „control‟,214 Article 7 specifically adopts the
term „effective control‟. The additional word is critical. This slices cleanly through the
legal „Gordion knot‟ conundrum between the ICJ test of „effective control‟ in
Nicaragua215 and ICTY test of „overall control‟ in Tadić.216

[115] The criterion of effective control is unfulfilled due to absence of two constituent
elements: [a] operational control; and [b] legal sanction.

211
ASNEC Charter, art.115.
212
Gaja (2004), ¶11; EC–LAN, ¶7.553.
213
DARIO, art.6(1).
214
ARSIWA, art.8.
215
Nicaragua, ¶115.
216
Tadić, ¶131.

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Memorial for Claimant TEAM GAJA

a. ASNEC did not exercise operational command over the Respondent

[116] Effective control refers to „factual control‟ 217 or „operational command‟. 218 In Bosnia
Genocide, the ICJ reiterated that the exercise of effective control must be proven „in
respect of each operation in which the violations occurred, not generally in respect of the
overall actions by the perpetrators‟.219

[117] Unfortunately, the ECtHR has somewhat muddied the waters. In Behrami, the criterion
was framed as whether the UNSC „retained ultimate authority and control so that
operational command only was delegated‟.220 The same approach was taken to attribute
the conduct of KFOR national contingents (Kasumaj 221 and Gajić 222 ) and High
Representative in Bosnia and Herzegovina (Berić223) to the UN.

[118] Nevertheless, most scholars favour the „operational command‟ test because „ultimate
authority‟ hardly implies a role in an act. 224 Gaja finds the ECtHR‟s approach of
attributing „conduct which the organization has not specifically authorized and of which
it may have little knowledge or no knowledge at all‟ as „unconvincing‟.225 Even the UN
Secretary-General in the 2008 UNMIK report clarified that the international
responsibility of UN „will be limited to the extent of its effective operational control‟.226

[119] To illustrate the test of „operational command‟ with greater clarity: if a troop is required
to receive orders from national authorities before executing orders of UN, their
operations cannot be attributable to UN (i.e. UNOSOM II227 and UNAMIR228). On the

217
DARIO Commentaries, art.7 cmt.4.
218
ibid, art.7 cmt.9; Behrami, ¶139.
219
Bosnia Genocide, ¶400.
220
Behrami, ¶139.
221
Kasumaj, ¶1.
222
Gajić, ¶1.
223
Berić, ¶27.
224
Bell, p.501; Bodeau-Livinec, p.509; Larsen, pp.521–522.
225
Gaja (2009), ¶30.
226
UNSC Report 2008, ¶¶21-25
227
UNSC Report 1994, ¶¶243–244.
228
Mukeshimana-Ngulinzira, ¶38.

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contrary, if the order was executed pursuant to a UNSC resolution without the authority
of the home State, the operation is attributable to UN (i.e. UNMIK229).

[120] In sum, the test is whether the State maintains „operational command‟ over the conduct,
and not whether the international organization holds „ultimate authority‟.

[121] First, the ASNEC Charter distinguishes several legal acts (vide Article 115). A
regulation230 and direction231 are „binding in its entirety‟. A directive is only binding „as
to the result to be achieved‟ and leaves to national authorities to decide „the choice of
form and methods‟.232

[122] Second, consider the step-by-step priorities of the Coal Directive:

(a) Goal – promoting renewable forms of energy.233

(b) Target – to achieve the Goal, ASNEC Member States shall ensure their share of
renewable energy exceeds 75% of gross final energy consumption in 2030.234

(c) Restriction – to reach the Target, Member States shall reduce their final gross
energy production from coal-fired plants to 0 by 31.12.2028.235

[123] Third, Law 66/2016 was a direct implementation of the Restriction (rather than the Goal
and Target) as envisaged by the Coal Directive.236

[124] In totality, the only „binding‟ aspect of the Coal Directive is the increase of renewables
(vide Law 72/2016), and not elimination of coal (vide Law 66/2016). In terms of
attribution, the non-binding Restriction falls within the „operational command‟ of the
Respondent, and not ASNEC. Hence, even taking the Respondent‟s case at its highest,
only Law 72/2016 is directly authorised by ASNEC, but not Law 66/2016.

229
Behrami, ¶133.
230
ASNEC Charter, art.115(1).
231
ibid art.115(3).
232
ibid art.115(2).
233
Coal Directive, preamble.1.
234
ibid art.2.
235
ibid art.7.
236
Record, p.18.

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Memorial for Claimant TEAM GAJA

b. The Coal Directive is a political act rather than a legal determination

[125] Assuming arguendo that the Coal Directive was binding in entirety, ASNEC still did not
wield „effective control‟ over the Respondent.

[126] As aptly noted by Gaja:

„The fact that a member State may be bound towards an international

organization to conduct itself in a certain manner does not imply that
under international law conduct should be attributed to the organization
and not to the State.‟237

This conforms with the views of the European Commission of Human Rights (CJEU
judgments),238 and CJEU239 and UN Office of Legal Affairs240 (UNSC resolutions).

[127] The ECtHR in Bhosphorus opined that EU Member States remain responsible for the
conduct of their organs „regardless of whether the act or omission in question was a
consequence of domestic law or of the necessity to comply with international legal
obligations‟ mandated by EU regulations. 241 This view was recently affirmed in
Kokkelvisserij,242 Avotinš,243 and Michaud.244

[128] At first blush, the EU framework resembles the ASNEC framework. Nevertheless, there
are material differences which renders ASNEC‟s acts carrying lesser legal weight.

[129] First, the EU differ from ASNEC in terms of legal order.245 It is well-recognised that EU
law is a sui generis self-contained regime whereby Member States have limited their
sovereign rights. 246 In contrast, such recognition is absent in the text of the ASNEC
Charter.

237
Gaja (2004), ¶13.
238
M.&Co., p.143.
239
Kadi, ¶314.
240
Memorandum 1995, pp.464-465
241
Bosphorus, ¶153.
242
Kokkelvisserij, ¶3.
243
Avotinš, ¶101.
244
Michaud, ¶102.
245
Electrabel-II, ¶4.117.
246
van Gend, p.12; Costa, p.593; EC–Geographic Indication, ¶4.15; Accession to ECHR, ¶157.

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Memorial for Claimant TEAM GAJA

[130] Second, the EU differs from ASNEC in terms of internal mechanism.247 In EU, the CJEU
operates as the „ultimate guardian‟ and „gatekeeper‟ 248 vested with wide exclusive
jurisdictional competence, 249 including the interpretation of EU law 250 and reviewing
Member States‟ compliance thereof.251 ASNEC has no such judicial body.

[131] Third, the only internal mechanism that EU and ASNEC share in common – sanctions –
is purely a political process.252 Article 124 of the ASNEC Charter closely mirrors Article
7 of TEU (limited to human rights violations).253 The Respondent will only face sanctions
when all such procedural steps are met:

(a) Proposal by one-third majority of Member States on the existence of a serious

and persistent breach (including failure to enforce a legal act);254

(b) Determination of breach by all Member States;255

(c) Decision by four-fifth majority of Member States to suspend the Respondent‟s

rights (including voting rights) and/or impose a penalty on the Respondent.256

[132] Till today, no EU Member State has ever been sanctioned – not even Hungary257 nor
Poland258 despite their flagrant human rights violations. EU Member States worry that
activating this „nuclear option‟ (in the own words of former President Barroso259) may
backfire, or worse, fracture the EU into squabbling factions.260

[133] Lastly, consider that the EU is a regional institution existing for over 60 years. The
ASNEC has not even celebrated its tenth anniversary.
247
Electrabel-II, ¶¶4.160-4.162.
248
ibid ¶4.146.
249
TFEU, art.256-281.
250
ibid art.267.
251
ibid art.258-259.
252
Blanke, p.361.
253
TEU, art.7.
254
ASNEC Charter, art.124(3).
255
ibid.
256
ibid art.124(4)(a)-(b).
257
European Parliament Resolution 2018.
258
Proposal 2017.
259
Barroso‟s Speech, ¶3(b).
260
Oliver, p.1081.

31
Memorial for Claimant TEAM GAJA

[134] Put simply, the risk of the Respondent being sanctioned for non-compliance of the Coal
Directive is quite remote. The lack of judicial oversight dilutes its binding force (if any at
all). Hence, ASNEC‟s loosely-integrated framework261 does not exert „effective control‟
over the Respondent.

B. The Challenged Measure is not attributable to the Respondent under lex

specialis

[135] Notwithstanding Articles 6 and 7 of DARIO, the Respondent may resort to special rules
of attribution (lex specialis) as an alternative basis of attribution.

[136] The Claimant does not deny possible recourse to extrinsic sources. First, Article X of the
ASNEC EIT requires this Tribunal to decide this dispute in accordance with „applicable
rules and principles of international law‟262 (identical to ECT 263 ). Second, the words
„governed, in particular, by Articles 6 and 7 of [DARIO]‟ in Article 120 of the ASNEC
Charter indicate that other articles remain relevant. 264 Third, Article 64 of DARIO
recognizes „special rules of international law‟ (modelled from ARSIWA265).

[137] The critical question, however, is to what extent there exists any special rule of
attribution governing ASNEC. The Claimant‟s position is that [i] no such rule exists; and
[ii] alternatively, such rule does not attribute the Challenged Measure to ASNEC.

i. There is no special rule of attribution governing REIOs like ASNEC

[138] The only special rule on attribution that has entered legal discourse is the EU framework.
The EU has declared that the conduct of Member States‟ organs in implementing its
binding acts are attributable to EU – even further suggesting that the same would apply to
„other potentially similar organizations‟.266

261
cf Accession to ECHR, ¶172.
262
Record, p.65.
263
ECT, art.26(6).
264
Record, p.33.
265
ARSIWA, art.55.
266
GA Official Records, ¶18.

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Memorial for Claimant TEAM GAJA

[139] The high water mark of EU law is none other than Achmea whereby the CJEU held that
investors in intra-EU BITs are precluded from arbitrating matters falling within its
jurisdictional competence.267 In 15.1.2019, EU Member States issued a joint declaration
extending the Achmea prohibition to intra-EU ECT arbitrations.268

[140] However, the primacy of EU law is far from settled. Since Achmea, ECT tribunals in
Vattenfall,269 RREEF,270 and LBW271 have firmly held that the ECT prevails over EU law.
Whatever happens in EU, matters to ASNEC. This is because if EU law cannot gain
ascendancy even in its own backyard, then its lex specialis on attribution cannot be
waved as the gold standard for REIOs worldwide.

[141] At the jurisdictional phase, the RREEF tribunal observed that „EU law does not and
cannot “trump” public international law‟.272 Later, at the merits, the tribunal opined:

„If the European Commission considers that an EU Member State has

violated EU law […] that is an internal matter for EU law that does not
affect the application of international law by the Tribunal instituted on the
basis of the ECT.‟273

Similarly, the Vattenfall tribunal deemed EU law irrelevant in determining the legality of
an EU host State‟s implementation of a binding EU decision.274

[142] In sum, there is no lex specialis rule which attributes the conduct of States implementing
an REIO‟s binding mandate to the REIO. Any „incompatible commitments‟ with the
ASNEC Charter is purely a matter for the Respondent to resolve with ASNEC inter se,
and does not concern this Tribunal instituted under the ASNEC EIT.275

267
Achmea, ¶60.
268
Declaration 2019.
269
Vattenfall, ¶229.
270
RREEF (Jurisdiction), ¶74.
271
LBW, ¶¶193-194.
272
RREEF (Jurisdiction), ¶87.
273
RREEF (Responsibility), ¶213.
274
Vattenfall, ¶¶230-231.
275
RREEF (Responsibility), ¶212.

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Memorial for Claimant TEAM GAJA

ii. In any event, the Respondent is not under the normative control of ASNEC

[143] Assuming arguendo that there exists such a special rule on attribution, such rule would
refer to the criterion of „normative control‟ peculiar to EU jurisprudence.

[144] There is a scarcity of judicial precedents defining this criterion. During the drafting of
DARIO in 2011, the EU observed:

„Member States have transferred competences […] on a range of subject

matters to the [EU] […] This requires special rules of attribution and
responsibility in cases where [EU] Member States are in fact only
implementing a binding rule of the international organization. In other
words, the [EU] exercises normative control of the Member States who
then act as [EU] agents rather than on their own account when
implementing [EU] law.‟276

[145] Prominent EU scholars i.e. Hoffmeister, 277 Castellarin 278 and Casteleiro 279 shape their
theories around two key concepts: [i] competence; and [ii] assumption of responsibility.

a. ASNEC did not possess exclusive competence over energy and

environmental matters

[146] The EU framework recognizes 3 types of competences between EU and Member States:

(a) Exclusive (e.g. customs, monetary and competition);280

(b) Shared (e.g. agriculture, fisheries, transport, environment and energy);281

(c) Supporting (e.g. culture, sports, tourism and education)282

276
Observations 2011, p.167
277
Hoffmeister, p.745.
278
Castellarin, p.113.
279
Casteleiro, pp.204-206.
280
TFEU, art.3.
281
ibid art.4.
282
ibid art.6.

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Memorial for Claimant TEAM GAJA

[147] In Commission v France, the EU formulated legislations on marine pollution, but not
specifically on discharges of fresh water and alluvia.283 The CJEU held that both EU and
France share competence on this field.284

[148] The ASNEC Charter encompasses environmental285 and energy policies.286. However, the
Council can only adopt legal acts „to exercise the Association‟s competences‟ through a
majority vote of three-fourth of Member States287. Such competence should be deemed
shared between ASNEC and Member States due to the „essentially bilateral character of
the cooperation‟.288

[149] Further, normative control rests on the concept of „executive federalism‟. 289 In EU,
Member States are required to „adopt all measures of national law necessary to
implement legally binding Union acts‟.290 The CJEU is vested with powers of judicial
review.291 According to Hoffmeister, normative control is present where EU law governs
both the „substantive legality‟ and „available remedies‟ for a specific measure.292

[150] As adumbrated above, ASNEC lacks any legal internal mechanism to determine the
validity of directives passed by the Council, and to enforce effective remedies against
Member States for non-compliance.293 Hence, the Coal Directive is incapable of exerting
„normative control‟ over Member States.

b. ASNEC did not assume responsibility over the Challenged Measure

[151] Some international tribunals have held EU responsible for domestic measures taken by
Member States. Nevertheless, such cases share one common thread (absent in our
dispute) – assumption of responsibility.

283
Commission v France, ¶30.
284
ibid ¶31.
285
ASNEC Charter, art 61-62
286
ibid art 75.
287
ibid art 115.
288
European Parliament v EU, ¶33.
289
Casteleiro, p.42.
290
TFEU, art.291(1).
291
ibid art.258-259.
292
Hoffmeister, p.742.
293
See [130]-[131] of Memorial.

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Memorial for Claimant TEAM GAJA

[152] In EC–Biotech, the complaint was issued directly against EU, rather than individual
Member States. The WTO panel further noted that:

„The European Communities never contested that, for the purposes of this dispute,
the challenged member State measures are attributable to it under international
law and hence can be considered EC measures.‟294

Similarly, in EC–LAN, the WTO panel accepted EU‟s concession that it „was ready to
assume its international obligations‟.295

[153] In Electrabel, the ECT tribunal found Hungary‟s act to comply with an EU decision did
not entail Hungary‟s international responsibility. 296 However, earlier, the tribunal
acknowledged EU‟s submission that:

„the responsibility for preventing unlawful State aid lies with the European Union
and not with EU Member States; and therefore the Respondent is the wrong party
named by the Claimant…‟ 297

[154] In sum, EU‟s assumption of responsibility was the basis that discharged its Member
State‟s responsibility, and not because of any attribution of conduct to EU.298

[155] Here, ASNEC did not assume responsibility of the Challenged Measure (unlike EU in
WTO), nor intervene in this proceeding to assert itself as the proper respondent (unlike
EU in Electrabel). Hence, responsibility cannot be shifted to ASNEC.

C. Alternatively, the Challenged Measure is jointly attributable to the Respondent

and ASNEC

[156] As noted by Gaja, the „attribution of a certain conduct to an international organization

does not imply that the same conduct cannot be attributed to a State‟.299

294
EC–Biotech, ¶7.101.
295
EC–LAN, ¶4.15.
296
Electrabel-II, ¶6.72.
297
ibid, ¶4.170.
298
DARIO Commentaries, Chapter II cmt.2-3.
299
ibid Chapter II cmt.4.

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Memorial for Claimant TEAM GAJA

[157] The inescapable fact is that the Challenged Measure was enacted by the Respondent‟s
Parliament, a state organ. 300 Hence, the Respondent remains responsible for such
conduct, solely or jointly.

IV. THE RESPONDENT TREATED MFNB UNFAIRLY AND INEQUITABLY IN

VIOLATION OF ARTICLE II(1) OF THE ASNEC EIT

[158] Finally, we arrive to the centre of gravity of our dispute. The Claimant‟s case on the
merits is simple – that the total phase-out of coal-fired power plants (vide Law 66/2016)
was a sudden and radical change of the Respondent‟s legal framework constituting an
unfair and inequitable treatment against MFNB.301 Further, Law 72/2016‟s privileges to
renewables exacerbated its discriminatory treatment.302

[159] Traditionally, tribunals have circumscribed the terms „fair‟ and „equitable‟ to words like
„even-handed‟, „unbiased‟, „legitimate‟ and „idiosyncratic‟.303

[160] Today, the prevailing view is that the FET standard is an „autonomous‟ treaty standard.304
Concomitantly, our evaluation should conform closely to the treaty text construed in
accordance to the VCLT.305 This Tribunal should not be concerned with applying the
„minimum, maximum or average standard‟ under customary international law.306

[161] The Respondent violated the FET standard under Article II(I) of the ASNEC EIT on three
alternative bases: [A] legitimate expectations; [B] unreasonableness; and [C]
discrimination.

300
ARSIWA, art.4.
301
Record, p.6, ¶¶12-13.
302
ibid p.6, ¶14.
303
Saluka, ¶¶303-308; Waste Management, ¶98.
304
Lemire, ¶284; National Grid ¶¶170-172; Total, ¶107; Saluka, ¶294; Antin, ¶533.
305
Azurix, ¶364; Enron, ¶¶258-259; CMS, ¶284; Total, ¶108
306
Mann, p.244; Sornarajah, p.411; Glamis, ¶615.

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Memorial for Claimant TEAM GAJA

A. The Respondent frustrated MFNB’s legitimate expectations

[162] „Legitimate expectations‟ is not explicitly found in the text of Article II(1) of the ASNEC
EIT. 307 Yet, according to Dolzer and Schreuer, such protection is „firmly rooted in
arbitral practice‟.308 The Saluka tribunal even characterised it as the „dominant element‟
of the FET standard.309

[163] Legitimate expectations are to be evaluated on an objective standard310 at the time the
investment was made.311 Bad faith is not a pre-requisite.312 Such expectations can arise
through two ways: [i] binding promise;313 or [ii] legal framework.314

i. The Respondent broke its binding promise of economic stability which

induced MFNB to invest in Ticadia

[164] In Parkerings, the tribunal opined that an expectation is legitimate if an investor received
an explicit or implicit promise from the host State, upon which the „investor took into
account in making the investment‟.315

[165] Concomitantly, two issues arise: [a] whether the Respondent made a binding promise;
and [b] whether MFNB‟s reliance on such promise was reasonable.

a. The Respondent made binding representations to MFNB

[166] Mere political statements are insufficient to legally bind a State.316 For an assurance to be
„legally relevant‟, the representation must „amount to a clear and identifiable
commitment‟. 317 The tribunals in Total, 318 Crystallex, 319 and Wirtgen 320 critically

307
Record, p.63.
308
Dolzer & Schreuer, p.134
309
Saluka, ¶302.
310
Charanne, ¶495.
311
Tecmed, ¶157; LG&E, ¶127; Duke Energy, ¶340; Enron, ¶264; CMS, ¶275.
312
Duke Energy, ¶341; CMS, ¶280; Azurix, ¶372: Enron, ¶263.
313
Parkerings, ¶331; Waste Management, ¶98.
314
Duke Energy, ¶340; Charanne, ¶494.
315
Parkerings, ¶331.
316
Mamidoil, ¶643.
317
El Paso(Award), ¶378; Continental Casualty, ¶261.
318
Total, ¶121.

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Memorial for Claimant TEAM GAJA

examined the form, content and intent of the representation. Guidance can be drawn from
the customary rules of unilateral declaration.321

[167] First, consider the authority of the representor. 322 Statements made by governmental
officials „in areas falling within their competence‟ are deemed binding.323

[168] Here, the Governor wielded wide authority over the regulatory approval of T-1‟s
construction and operations.324 He signed-off the license to operate.325 He was heavily
involved in the negotiations with representatives of Mountaintop and MFNB. 326 His
office was a key „contact point‟ to facilitate communications with local authorities.327

[169] Second, consider the specificity of content.328 The test is whether the official expressed
statements „manifesting the will to be bound‟.329 The context and circumstances in which
the statements were made are relevant factors.330

[170] Here, the Governor gave clear and unequivocal pledges, privately and publicly. In a
meeting with parties‟ representatives, he emphasised being „committed to do everything
in his power to ensure that operation of the plant would be economically beneficial both
for Ticadia and Mountaintop‟.331 In a media statement, he reiterated his commitment „to
ensuring we maintain favourable conditions for foreign investors‟.332 His constant usage
of the pronoun „we‟ exemplifies his „mantle of Governmental authority‟.333

[171] Such continual pledges, coupled with actual action, evince a legally binding commitment
of the Respondent to ensure economic stability of MFNB‟s investment.
319
Crystallex, ¶547.
320
Wirtgen, ¶409.
321
Total, ¶¶131-133.
322
Armed Activities, ¶173.
323
Guiding Principles on Unilateral Declarations, Principle 4.
324
Record, p.10.
325
ibid p.30.
326
ibid p.14.
327
ibid p.67.
328
Guiding Principles on Unilateral Declarations, Principle 7.
329
ibid Principle 1; Total, ¶121.
330
Nuclear Tests, ¶53; Total, ¶133.
331
Record, p.10.
332
ibid p.14.
333
Southern Pacific, ¶82.

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Memorial for Claimant TEAM GAJA

b. MFNB’s reliance on such representations were reasonable

[172] Next, MFNB‟s reliance on the Governor‟s representation was reasonable in the
circumstances. 334 There was a transformation of „a subjective hope into objective
expectations‟ both in the mind of MFNB and through the eyes of a third party
observer.335

[173] The Respondent actively sourced for foreign investors to build a power plant in Ticadia.
The Governor frequently travelled to Mercuria, and delivered 15 talks to stakeholders in
the energy and investment sectors. 336 This was not a routine fly-by-night business
venture, but a long-term utility project with complex financial variables.337

[174] There is no reason for MFNB to doubt the Governor‟s credibility. In Laoc, Regional
Governors are directly appointed by and act on behalf of the central executive.338 They
are entrusted to solicit foreign investment for infrastructure projects, and supervise
municipal authorities.339

[175] The Claimant is mindful that „investors should not be shielded from the ordinary business
risk of the investment‟340 and „industry‟s regular patterns‟.341

[176] At the time when MFNB funded T-1 in 2010, there was nothing erratic about the coal
industry in Laoc. The Governor was simply promising that the status quo which has
lasted for the past 25 years342 would remain. It was reasonable for MFNB to expect that
Laoc‟s long and proud legacy of coal production would continue powering up its
economy.

334
Dolzer & Schreuer, p.148; Duke Energy, ¶340; National Grid, ¶175; Saluka, ¶305.
335
Mamidoil, ¶643.
336
Record, p.67.
337
Total, ¶122.
338
Record, p.67.
339
ibid.
340
National Grid, ¶175.
341
LG&E, ¶130.
342
Record, p.9.

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Memorial for Claimant TEAM GAJA

ii. The Respondent failed to provide a stable legal framework

[177] The ASNEC EIT preamble envisages „the need to encourage and create stable,
equitable, favourable and transparent conditions for Investors‟.343

[178] In AES, the tribunal noted that the term „encourage and create… stable conditions‟ in
Article 10(1) of the ECT fell short of a stabilisation clause (i.e. „a covenant not to change
the relevant law, usually for a certain period‟).344

[179] Nevertheless, a host State‟s right to regulate does not extend to „completely dismantling
the very legal framework constructed to attract investors‟345 nor causing an „evisceration
of the arrangements in reliance upon which the foreign investor was induced to invest‟.346
In Antin, the tribunal held that the ECT ensures stability of legal framework.347

[180] In Parkerings, the ECT tribunal observed:

„In principle, an investor has a right to a certain stability and predictability

of the legal environment of the investment. The investor will have a right
of protection of its legitimate expectations provided it exercised due
diligence and that its legitimate expectations were reasonable in light of
the circumstances.‟348

[181] Hence, regulatory stability turns on two factors: [a] reasonableness; and [b] due diligence.

a. MFNB’s reliance on the Respondent’s creation of stable conditions for

the coal industry was reasonable

[182] In Duke Energy, the tribunal opined that reasonableness takes into account the „facts
surrounding the investment‟ and „political, socioeconomic, cultural and historical
conditions prevailing in the host State‟.349

343
ibid p.62.
344
AES, ¶¶ 9.3.25,9.3.29.
345
LG&E, ¶139.
346
CME, ¶155; National Grid, ¶173.
347
Antin, ¶533.
348
Parkerings, ¶333.
349
Duke Energy, ¶340.

41
Memorial for Claimant TEAM GAJA

[183] Tribunals are attuned towards the fragility of developing States, such as Mongolia
(„country at an early stage of economic and institutional development‟)350 and Estonia
(„a renascent independent state, come rapidly to grips with the reality of modern
351
financial, commercial and banking practices‟). In Parkerings, the tribunal
acknowledged Lithuania in 1998 was „a country in transition from its past being part of
the Soviet Union to candidate for the European Union membership‟352. The tribunal held
that the claimant „took the business risk to be faced with changes of laws‟ and „could (and
with hindsight should) have protect its legitimate expectations by introducing into the
investment agreement a stabilisation clause‟. 353

[184] In contrast, Laoc is a developed democratic republic 354 with a growing economy
traditionally powered by coal-mining and energy generation (20% of total GDP).355

[185] On 10.12.2010, a governmental task force cited the carbon emissions from coal plants as
a probable cause for the annual floods inflicting property damage in Laoc.356 However,
the report lacked empirical evidence. Further, despite being published before T-1‟s
construction began on 15.12.2010,357 no Laocan official sounded any warning. Instead,
T-1 LLC was issued with a 40-year licence 3 years later on 25.9.2014.358

[186] MFNB was not walking blindfolded into unchartered territory. Law 66/2016 resulted
from a perfect storm of supervening events – formation of ASNEC (2012), ASNEC‟s
ratification of the Seoul Agreement (2015), and ASNEC‟s Coal Directive (2016). When
MFNB invested in 2010, all was still calm in Laoc.

350
Paushok, ¶302.
351
Alex Genin, ¶348.
352
Parkerings, ¶335.
353
ibid ¶336.
354
Record, p.56.
355
ibid p.9.
356
ibid p.31.
357
ibid p.14.
358
ibid p.30.

42
Memorial for Claimant TEAM GAJA

[187] Hence, MFNB had an objective expectation rather than a mere subjective hope that
Laoc‟s legal framework will remain stable.359 The effect of Law 66/2016 cutting short T-
1‟s operational lifespan from 40 to 14 years frustrated such expectation.

b. The Claimant exercised due diligence

[188] Corollary to the element of reasonable reliance is the investor‟s duty of due diligence.360
In Mamidoil, the Albanian port authorities strongly advised the claimant to suspend
works until an environmental study was completed and policies were formulated. 361
Failure to heed such red flags negated any expectation of stability.362

[189] Here, before investing in Laoc, MFNB undertook an extensive review process, such as
regulatory due diligence and financial projections by external consultants. 363 Any
regulatory concerns were assuaged by the Governor‟s written commitment.

[190] In Parkerings, since the Lithuanian political environment was already changing pre-
investment, the tribunal held that the claimant‟s failure to seek information on possible
legislative reform precluded any legitimate expectations.364 In contrast, the seeds of Law
66/2016 were not planted yet in 2010.

[191] Hence, MFNB took reasonable steps to review all possible business risks. No-one in
2010 could have reasonably foreseen the total phase-out of coal in Laoc triggered by a
directive of a (yet-to-exist) supra-national body.

359
Mamidoil, ¶731.
360
Parkerings, ¶333; MTD, ¶127; Lemire, ¶285.
361
Mamidoil, ¶659.
362
ibid ¶663.
363
Record, p.11.
364
Parkerings, ¶¶342-345.

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Memorial for Claimant TEAM GAJA

B. The Challenged Measure was unreasonable

[192] Article II(I) of the ASNEC EIT stipulates that „no Contracting Party shall in any way
impair by unreasonable […] measures their [Investments‟] management, maintenance,
use, enjoyment or disposal‟.365

[193] Faced with an identical ECT provision, the AES tribunal explained:

„A rational policy is taken by a state following a logical (good sense)

explanation and with the aim of addressing a public interest matter […] A
challenged measure must also be reasonable. That is, there needs to be an
appropriate correlation between the state‟s public policy objective and the
measure adopted to achieve it.‟366

[194] Hence, the test contains two elements: [i] rational policy; and [ii] reasonableness.367

i. Law 66/2016 was not a rational policy

[195] Rational policy relates to public interest,368 including economic, social and environmental
matters.369 Both interests of investor and host State must be evenly balanced.370

[196] Law 66/2016 is a one-page instrument with a single operative provision: „All coal-fired
power plants on the territory of Laoc shall be phased out by 31 December 2018‟.371

[197] The preamble reads:

„Following the enactment of [Coal Directive] on renewable sources of

energy and recognising the importance of the compliance of [Laoc] with
its international obligations under ASNEC legal framework, having
carefully assessed the economic conditions of the operation of coal-fired
power plants in [Laoc].‟372

365
Record, p.63.
366
AES, ¶¶10.3.8-10.3.9.
367
ibid ¶¶10.3.7,10.3.36.
368
Saluka, ¶305; Lemire, ¶285; AES, ¶10.3.8.
369
Mamidoil, ¶¶614, 617.
370
Saluka, ¶¶300-301; Lemire, ¶285.
371
Record, p.18.
372
ibid.

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[198] Such technical jargon is bound to leave layman readers in the dark. What international
obligations? What economic conditions? Oddly, the word „environment‟ is nowhere
found, whilst „renewables‟ is merely mentioned in passing in the Coal Directive‟s title.
Diving deeper into the treaties merely exposes more glaring inconsistencies.

[199] Under the ASNEC Charter, environmental policies aim inter alia to protect the
environment and human health, and combat climate change.373 Energy policies aim inter
alia to ensure energy security and efficiency, and development of renewable energy.374

[200] The Seoul Agreement aims to combat climate change by States undertaking to reduce
greenhouse gas emissions.375 On 13.12.2015, ASNEC ratified the treaty.376 On 3.2.2016,
ASNEC communicated its NDCs (without acting jointly with Member States).377

[201] On 17.2.2016, after brief deliberation, ASNEC adopted the Coal Directive by majority
vote. 378 The binding Goal and Target is the increase of renewables, whilst the non-
binding Restriction focuses on eliminating coal production.379

[202] The totality of circumstances reveals several subtle facts, and grave inferences:

Fact Inference
(a) The Coal Directive was adopted by The Coal Directive was a deceptive „bait
virtue of ASNEC‟s energy and switch‟ because ASNEC‟s
competence (vide Article 75) ratification of the Seoul Agreement and
NDCs were based on its environmental
competence (vide Articles 61-62). This
allowed ASNEC to circumvent the need

373
art.61-62.
374
art.75.
375
Record, pp.35-36.
376
ibid p.38.
377
ibid pp.58,72.
378
ibid p.58.
379
ibid pp.16-17.

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to consider inter alia scientific data and

socioeconomic development.380
(b) The Coal Directive was adopted 14 The adoption process was rushed, and
days after ASNEC‟s unilateral NDC gave little time for the Respondent to
submission (and a month after Laoc‟s react
ratification of the Seoul Agreement381)
(c) The Seoul Agreement does not The Coal Directive‟s coal phase-out
specifically target any energy source without compensation is an over-kill
(d) Law 72/2016 addresses the Coal Law 72/2016 which should be the
Directive‟s Goal and Target (increase measure to achieve the Coal Directive‟s
renewables), whilst Law 66/2016 primary aim was only passed 5 months
addresses the Restriction (eliminate after Law 66/2016.
coal production).

[203] To be clear, the Claimant does not seek to invalidate the Coal Directive and Laocan law
(which lie beyond this Tribunal‟s jurisdiction). Rather, the Claimant merely questions the
rational basis behind their adoption. Similar in AES, this Tribunal has to examine the true
motivation of policy-makers in order to determine whether their exercise of public
powers undermined the rights of investors under the cloak of public interest.382

[204] Ultimately, the Claimant‟s position is simple – that Law 66/2016 was driven more by
politics rather than science.

ii. Law 66/2016 was disproportionate

[205] Proportionality is a fundamental face of justice 383 increasingly adopted by investment

tribunals.384 As the Electrabel tribunal opined:

380
ibid.
381
ibid p.58.
382
AES, ¶¶10.3.12-10.3.19.
383
Kläger, p.236.
384
Tecmed, ¶122; Azurix, ¶¶312-313; LG&E, ¶195; MTD, ¶109; Continental Casualty, ¶232; Lemire, ¶285.

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„The test for proportionality […] requires the measure to be suitable to

achieve a legitimate policy objective, necessary for that objective, and not
excessive considering the relative weight of each interest involved‟.385

[206] The balancing test is between the Respondent‟s regulatory interest to reduce greenhouse
gas emission, and the commercial interest of coal investors. Such evaluation should not
only focus on their bilateral relations in isolation, but rather viewed through the larger
lens of the Respondent‟s economy and multilateral trade relations.386

[207] The test of proportionality is also enshrined in the treaty text:

(a) ASNEC EIT: „Such measures shall […] not nullify or impair any benefit […] to
an extent greater than is strictly necessary to the stated end‟387

(b) ASNEC Charter: „The Council shall establish the measures necessary to achieve
the objectives in [Article 75(1)]‟388

[208] First, the ultimate aim of the Seoul Agreement and Coal Directive is to reduce
greenhouse gas emissions. Ironically, Law 72/2016 which directly addresses such aim
was adopted only as an afterthought to quell public outcry against Law 66/2016 for
hurting Laoc‟s economy and causing electricity shortages.389

[209] Second, ASNEC effectively imposed a blanket ban on coal. This is an unprecedented
move, even in eco-friendly EU. A more effective and less intrusive regime is the EU‟s
Emissions Trading System 390 or carbon sink technology. 391 A survey of G20 States
demonstrate that a coal phase-out is only viable if adequately supported by financial
incentives.392 Prohibition of compensation would invariably be self-defeating.

[210] Hence, Law 66/2016 was a disproportionate measure to combat climate change.

385
Electrabel-II, ¶179.
386
Total, ¶123.
387
Record, p.65.
388
ibid p.33.
389
ibid p.72.
390
EU ETS.
391
Seoul Agreement, art.4(1).
392
Schindler, p.12.

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C. The Challenged Measure was discriminatory

[211] Article II(I) of the ASNEC EIT protects investments from being impaired by
„discriminatory measures‟. 393 Discrimination arises when the host State „benefited or
harmed someone more in comparison with the generality‟. 394 Aside from nationality,
discrimination can also be sectoral.395

[212] The test of discriminatory treatment involves a three-step analysis: [i] like circumstance;
[ii] less favourable treatment; and [iii] justification.396

i. Coal is in a ‘like circumstance’ as renewables in Laoc’s energy sector

[213] The first step is to ascertain whether coal is comparable with renewables in a „like
circumstance‟.397

[214] In Laoc, electricity grids are integrated to power plants from different sources of energy,
including coal, natural gas, nuclear, and renewables.398 Hence, all power generators are in
a „like circumstance‟, including T-1 and LRC.

ii. Law 72/2016 and Law 66/2016 treat coal less favourably than renewables

[215] Next, this Tribunal must evaluate whether coal producers were afforded a less favourable
treatment than renewables producers in Laoc.399

[216] Law 72/2016 provides two special privileges to renewables: priority of access to
electricity grids, and receipt of premium price.400 This further adds salt to T-1‟s injury.
Coal-fired power plants are already crippled by Law 66/2016‟s mandatory phase-out.401

393
Record, p.63.
394
AES, ¶10.3.53.
395
Waste Management, ¶98; Glamis, ¶559.
396
Bayindir, ¶399
397
Parkerings, ¶371; Total, ¶210.
398
Record, p.69.
399
Total, ¶344; Bayindir, ¶399.
400
Record, p.19.
401
ibid p.18.

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[217] Hence, such a double whammy not only disrupts the level playing field in Laoc‟s energy
sector, but effectively deals a killing blow to coal investors, including MFNB.

iii. The Respondent’s less favourable treatment of coal was unjustified

[218] Lastly, the Tribunal must evaluate the enactment of Law 72/2016 and Law 66/2016 was
justified.402

[219] To avoid repetition, the Claimant recalls its arguments on „reasonableness‟ as adumbrated
above.403 Two additional observations will be made.

[220] First, the Seoul Agreement recognises „the principle of common but differentiated
responsibilities and respective capabilities, in the light of different national
circumstances‟. 404 Coal forms the bedrock of Laoc‟s economy. In contrast, the other
ASNEC Member States transitioned into renewables since 2008. 405 The Respondent
should have sought special exemption (i.e. phase-out extension) from the ASNEC
Council.

[221] Second, whilst the Respondent‟s vote against the Coal Directive failed to prevent its
adoption,406 the matter should not end there. The ASNEC EIT provides a mechanism for
States to consult on environmental matters. 407 Instead, the Respondent rushed to
implement the Coal Directive without exhausting all avenues. Put simply, the Respondent
overreacted.

[222] In this modern era, it is a norm for States to be tangled in a web of overlapping and
conflicting treaties. 408 Ultimately, it is fully within the Respondent‟s sovereignty to
undertake onerous international obligations detached from economic realities.

402
Bayindir, ¶399
403
See [192]-[210] of Memorial.
404
Record, p.35.
405
ibid, p.9.
406
ibid, p.27.
407
ibid, p.64.
408
ILC Conclusions on Fragmentation of International Law.

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[223] It is not fair, however, to pass on the burden to foreign investors. As opined in Lemire, a
host State only has the „sovereign right to pass legislation […] for the protection of its
public interests‟ to the extent that „they do not provoke a disproportionate impact on
foreign investors‟.409

[224] Here, the Claimant simply seeks to restore the equilibrium of mutual economic relations
between parties in the spirit of fairness and equity.410 If the Respondent chooses to bite
more than they can chew by mechanically following ASNEC‟s idealistic decrees, it is
entirely the Respondent‟s own bitter pill to swallow.

409
Lemire, ¶285.
410
Saluka, ¶¶300-301.

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PRAYER FOR RELIEF

The Claimant respectfully requests the Tribunal to adjudicate and declare that:

1. Mr. Mason should not be replaced as an arbitrator;

2. The Claimant has standing to bring this claim under the ASNEC EIT;

3. The Challenged Measure is attributable to the Respondent;

4. The Respondent violated the FET standard under Article II(1) of the ASNEC EIT.

On behalf of the Claimant

Team Gaja

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