25TH D. M.

HARISH MEMORIAL GOVERNMENT LAW COLLEGE INTERNATIONAL MOOT COURT COMPETITION, 20

TEAM CODE: R

25TH D. M. HARISH MEMORIAL GOVERNMENT LAW COLLEGE

INTERNATIONAL MOOT COURT COMPETITION, 2024

BEFORE THE HON’BLE INTERNATIONAL COURT OF JUSTICE

IN THE MATTER OF:

THE REPUBLIC OF ZIMBLIA

(THE APPLICANT)

VS.

THE REPUBLIC OF AVENTARA

(THE RESPONDENT)

WRITTEN SUBMISSION ON BEHALF OF THE APPLICANT

MEMORIAL ON BEHALF OF THE APPLICANT 1

 25TH D. M. HARISH MEMORIAL GOVERNMENT LAW COLLEGE INTERNATIONAL MOOT COURT COMPETITION, 20

TABLE OF CONTENTS

TABLE OF CONTENTS .......................................................................................................................... 2

INDEX OF AUTHORITIES ...................................................................................................................... 3
STATEMENT OF JURISDICTION ........................................................................................................... 7
QUESTIONS PRESENTED ...................................................................................................................... 8
SYNOPSIS OF FACTS ............................................................................................................................. 9
SUMMARY OF ARGUMENTS............................................................................................................... 11
ARGUMENTS ADVANCED ................................................................................................................... 13
I. THE REPUBLIC OF AVENTARA VIOLATED THE PRINCIPLE OF STATE RESPONSIBILITY AND THEY
CANNOT EVADE LIABILITY FOR THE ACTS OF EAGLE EYE. .............................................................. 13
[Link] of Aventara did violate the principle of State Responsibility under International
Law………………………………………………………………………………………………………1
3
[Link] of Aventara cannot evade liability for the acts of Eagle Eye........................................ 15
[2.1] The actions of EagleEye were not autonomous and its actions were foreseen and directly
commanded. ................................................................................................................................. 16
[2.2] The Republic of Aventara is responsible for the acts and were not acts of self defense,
countermeasure or arising out of necessity. ................................................................................ 17
[Link] CAN BE CONSIDERED AS A SOVEREIGN STATE UNDER THE INTERNATIONAL
LAW………………………………………………………………………………………………………..18

[Link] Meets The Criteria Laid Down For Statehood ................................................................. 19

[Link] Satisfies The Montevideo Convention’s Definition Of Being A State .............................. 21
[Link] Holds Enough Economical Significance To Be Recognised As A Sovereign
State………………………………………………………………………………………….................24
[Link] REPUBLIC OF AVENTARA IS OBLIGATED TO REIMBURSE THE REPUBLIC OF ZAMBLIA FOR
THE FINANCIAL LOSSES INCURRED DUE TO THE DEVALUATION OF BITNERO AS A RESULT OF THE
CYBER-ATTACK BY EAGLE EYe. ......................................................................................................... 26
[Link] has breached the principle of State Responsibility ...................................................... 26
[Link] has acted in violation of Sovereignty principle, non-intervention, due diligence duty
and infringement of international cybersecurity norms. ................................................................ 29
[2.1] There is a violation of sovereignty and non intervention principle . ................................. 29
[2.2] There is a breach of due diligence duty .............................................................................. 30
[2.3] There is an infringement of other cybersecurity norms. .................................................... 31

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 25TH D. M. HARISH MEMORIAL GOVERNMENT LAW COLLEGE INTERNATIONAL MOOT COURT COMPETITION, 20

PRAYER ............................................................................................................................................... 33

INDEX OF AUTHORITIES

CASE LAWS

 Gabcikovo-Nagymaros Project (Hungary/Slovakia), Judgment, I.C.J. Rep. 1997 (Sept.

25), p.7.

 Island of Palmas (United States v. Netherlands), 1928 ICGJ 329 (Apr. 4).

 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States

of America), Merits, Judgment, I.C.J. Rep. 1986 (June 27), p. 14.

ARTICLES

 Bannelier, Karine, Et Al. “Laws Of Gravitation: Due Diligence Obligations In

Cyberspace.” Guardian Of The Galaxy: Eu Cyber Sanctions And Norms In Cyberspace,

Edited By Patryk Pawlak And Thomas Biersteker, Euiss, (2019), Pp. 62–69. Jstor.

 Bellavitis, C., Fisch, C., & Momtaz, P. P. (2022). The Rise Of Decentralised

Autonomous Organizations (Daos): A First Empirical Glimpse. Ssrn Electronic Journal.

 Campbell-Verduyn, Malcolm (Ed.) (2018) : Bitcoin And Beyond: Cryptocurrencies,

Blockchains, And Global Governance, Ripe Series In Global Political Economy

 Cox, Robert W. “Multilateralism And World Order.” Review Of International Studies,

Vol. 18, No. 2, 1992, Pp. 161–80. Jstor.

 Haggard, Stephan, And Jon R. Lindsay, “North Korea And The Sony Hack: Exporting

Instability Through Cyberspace.” East-West Center, (2015). Jstor.

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 Holsti, K. J. “The Concept Of Power In The Study Of International Relations.”

Background, Vol. 7, No. 4, 1964, Pp. 179–94.

 Karl P. Mueller Et Al., Precision And Purpose: Airpower In The Libyan Civil War

(Rand Corporation, Santa Monica, Calif., 2015).

 Lake, David A. “Leadership, Hegemony, And The International Economy: Naked

Emperor Or Tattered Monarch With Potential?” International Studies Quarterly, Vol. 37,

No. 4, 1993, Pp. 459–89. Jstor.

 Lapidoth, Ruth. “Sovereignty In Transition.” Journal Of International Affairs, Vol. 45, No.

2, (1992), Pp. 325–46. Jstor.

 Mahdi Farnaghi & Ali Mansourian, Blockchain, An Enabling Technology For

Transparent And Accountable Decentralised Public Participatory Gis, Volume 105,

(2020),102850, Issn 0264-2751.

 Pernik, Piret, Et Al. “The Early Days Of Cyberattacks: The Cases Of Estonia, Georgia

And Ukraine.” Hacks, Leaks And Disruptions: Russian Cyber Strategies, Edited By Nicu

Popescu And Stanislav Secrieru ,Euiss, (2018) , Pp. 53–64. Jstor.

 Schmitt, M. N. (2017) In tallinn Manual 2.0 On The International Law Applicable To

Cyber Operations. 2nd Edn. Cambridge: Cambridge University Press, Rule 6.

 Stein Schjolberg, The Legal Framework- Unauthorized Access To Computer Systems:

Penal Legislation In 44 Countries.

 Woods, Ngaire (2010) : The G20 Leaders And Global Governance, Geg Working Paper,

No. 2010/59, University Of Oxford, Global Economic Governance Programme (Geg),

Oxford.

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INTERNATIONAL REPORTS

 (1980), Reprinted In 1980 Y.B. Int’l L. Comm’n 13, 69, U.N. Doc.

A/Cn.4/Ser.A/1980/Add.1.

 Directorate-General For Communication (European Commission), The European Union -

What It Is And What It Does," (2022).

 Int'l Law Comm'n, Rep. On The Work Of Lts Seventy-Third Session, U.N. Doc. A/77/10,

(2022).

 Oecd Expert Committee Recommendation, 1973; Resolution No. 3 On The Fight Against

Cyber-Crime.

 Roberto Ago, Addendum To The Eighth Report On State Responsibility, U.N. Doc.

A/Cn.4/318/Add.5–7.

 Sustainable Development Solutions Network ,( 2021), “National Energy And Climate

Plans (Necps).” Annex : Necps, Sustainable Development Solutions Network, Jstor.

 United Nations,E-Government Survey 2022: The Future Of Digital Government (2022).

INTERNATIONAL TREATIES AND CONVENTIONS

 Convention On Cybercrime-Budapest, Ets No. 185, At

Http://[Link]/Gb/Cat/Liv/Htm/1 [Link].

 European Union, Regulation (Eu) No 910/2014 Of The European Parliament And Of The

Council Of 23 July 2014 On Electronic Identification And Trust Services For Electronic

Transactions In The Internal Market And Repealing Directive 1999/93/Ec, 2014 Oj (L 257)

73 (Eu Eidas Regulation).

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 Montevideo Convention On The Rights And Duties Of States, December 26th 1964.

 Responsibility Of States For Internationally Wrongful Acts, G.A. Res. 56/83, Art. 1, U.N.

Doc. A/Res/56/83, Annex (Dec. 12, 2001).

 UN Charter.

 United States Diplomatic And Consular Staff In Tehran, 1980 I.C.J. 3.

BOOKS

 Annan, Kofi. “Peacekeeping, Military Intervention, And National Sovereignty In Internal

Armed Conflict.” In hard Choices: Moral Dilemmas In Humanitarian Intervention , Edited

By Jonathan Moore, 55–71. Lanham, Md: Rowman & Littlefield, (1998).

 C. Christine & B. Freya, Sovereignty, Statehood And State Responsibility 1 - 152, (

Cambridge University Press, 2015).

 He Cambridge Companion To International Law (James Crawford & Martti Koskenniemi

Ed., Cambridge University Press 2012) (Online Version, July 2015),

Https://[Link]/10.1017/Cco9781139035651.

 James R. Crawford, The Creation Of States In International Law (2nd Ed., Oxford

University Press 2007), Https://[Link]/10.1093/Acprof:Oso/9780199228423.001.0001.

 NATO Coop. Cyber Def. [Link] Excellence, Tallinn Manual On The International Law

Applicable To Cyber Warfare (Michael N. Schmitt Ed.).

ONLINE SOURCES

 Joseph Comunale & Ivy Roberts, Article, One world Government - Overview and

movement.

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STATEMENT OF JURISDICTION

The Republic of Aventara (“Aventara”) and the State of Zimblia (Zimblia) respectfully submit the

present dispute to the International Court of Justice, pursuant to article 40, paragraph 1 of the

Statute of the Court . The Parties agree to accept as final and binding the Judgment of this Court

and shall execute it in its entirety and in good faith.

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QUESTIONS PRESENTED

ISSUE I

WHETHER REPUBLIC OF AVENTARA VIOLATED THE PRINCIPLE OF STATE

RESPONSIBILITY AND CAN THEY EVADE LIABILITY FOR THE ACTS OF EAGLE
EYE?

ISSUE II

WHETHER xDAO CAN BE CONSIDERED AS A SOVEREIGN STATE UNDER THE

INTERNATIONAL LAW?

ISSUE IIⅠ

WHETHER THE REPUBLIC OF AVENTARA IS OBLIGATED TO REIMBURSE THE

REPUBLIC OF ZAMBLIA FOR THE FINANCIAL LOSSES INCURRED DUE TO THE
DEVALUATION OF BITNERO AS A RESULT OF THE CYBER-ATTACK BY
EAGLEEYE ?

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SYNOPSIS OF FACTS

Background

The Republic of Zimblia, located in Central America has historically been facing ongoing political

and economic turmoil. This also led to a civil war between the Military Government, supported by

the Republic of Aventara, and various leftist rebel factions. xDAO is a global NGO based in the

Republic of Zimblia dedicated to Human Rights advocacy and is operating as a Decentralized

Autonomous Organization.

The Republic of Aventara operates as a Unitary One-party Socialist system under the leadership

of the AAA. Aventara consistently scores low in global evaluations conducted, relating to

Democracy and related issues, religion, and ethnic groups. While the Aventaran Constitution

proclaims to protect fundamental rights, these claims often fall short in reality, providing limited

defense against the State's punitive actions.

Unfolding of Events

In 2021, the President of Zimblia proposed the introduction of the Bitnero cryptocurrency as a

legal currency, which is a decentralized privacy-enhanced digital currency. Operating on the open-

source EtherX blockchain network, it’s a mathematically-driven peer-to-peer currency devoid of

any central governing body or overarching surveillance. The Bitnero Law was enacted by

Zimblia’s Legislative Assembly (“ZLA”) in June 2021 and Bitnero became a legal tender in

September of the same year.

The Republic of Aventara has built and deployed EagleEye, an AI to detect, investigate, and

neutralize threats to national security. On 13th August, 2023, EagleEye detected that the operators

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of Crimson Road, an online darknet market, were using Bitnero. EagleEye algorithms predicted

that there was a high probability that Bitnero was being misused by criminal entities for money

laundering and financing of terrorism at a global level. EagleEye launched a series of sophisticated

cyber-attacks and brought down the EtherX network and permanently corrupted all Bitnero data.

This attack also led to the de-anonymization of xDAO members’ data, identities & transactions of

Bitnero users.

Dispute

A week after the attack, the Government of Zimblia in an official social media post claimed that

Aventara had launched the sophisticated cyber-attack as a retaliation for the shutdown of Aventara

Mining Corporation's operations and reducing the reliance on the Aventara Dollar by making

Bitnero, a legal tender. The post claimed that Aventara must reimburse Zimblia for the losses they

incurred on the basis state responsibility, due diligence duty and prohibit the use of force. Two

days later, Aventara's Government issued an official social media post claiming that they were not

liable for the losses that Zamblia incurred, as acts of the AI were independent and autonomous and

they could take the shield of necessity, self-defense and countermeasures. Further, xDAO also

claims that it must be considered as a sovereign state on the grounds of Evolution of Statehood,

the criteria outlined in the Montevideo Convention.

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SUMMARY OF ARGUMENTS

1. THE REPUBLIC OF AVENTARA VIOLATED THE PRINCIPLE OF STATE RESPONSIBILITY AND

THEY CANNOT EVADE LIABILITY FOR THE ACTS OF EAGLEEYE.

The Republic of Aventara violated the principle of State Responsibility under the Responsibility

of States for Internationally Wrongful Acts, 2001. The cyber attack launched falls within the ambit

of “internationally wrongful act” and entails attribution to the State and breach of an obligation

that is applicable to the State. Further, Aventara cannot evade liability as they were actions not

totally independent of the State and the State is therefore responsible for such acts. The Republic

of Aventara will have to claim liability, and exceptions of countermeasure, necessity and self

defense cannot be invoked unless the acts are attributable to the State.

2. XDAO SHOULD BE CONSIDERED A SOVEREIGN STATE UNDER INTERNATIONAL LAW.

The argument contends that in the digital era, the evolution of statehood allows entities to surpass

traditional territorial constraints, likening them to ancient city-states defined by shared objectives

rather than expansive territories. Furthermore, xDAO aligns with the Montevideo Convention,

citing a permanent digital population, designating its blockchain or digital space as territory,

identifying code and smart contracts as governing entities, and framing interactions with other

entities as diplomatic engagements with fellow 'States.' Lastly, xDAO emphasizes its economic

influence, suggesting that its substantial resources could grant it comparable international

influence to smaller states, historically granting economically powerful entities a platform in

global deliberations.

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3. THE REPUBLIC OF AVENTARA IS OBLIGATED TO REIMBURSE THE REPUBLIC OF ZAMBLIA

FOR THE FINANCIAL LOSSES INCURRED DUE TO THE DEVALUATION OF BITNERO AS A

RESULT OF THE C YBER-ATTACK BY EAGLEEYE.

It is humbly submitted that the Republic of Aventara is obligated to reimburse the Republic of

Zamblia for the financial losses incurred due to the devaluation of Bitnero as a result of the cyber-

attack by EagleEye on the following grounds; firstly, Aventara has breached the principle of State

Responsibility, secondly, It has acted in violation of Sovereignty principle, due diligence duty and

infringement international cybersecurity norms.

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ARGUMENTS ADVANCED

I. THE REPUBLIC OF AVENTARA VIOLATED THE PRINCIPLE OF STATE

RESPONSIBILITY AND THEY CANNOT EVADE LIABILITY FOR THE ACTS

OF EAGLE EYE.

The Republic of Aventara violated the principle of State Responsibility under the Responsibility

of States for Internationally Wrongful Acts, 2001 (herein referred to as “RSIWA”) The cyber

attack launched falls within the ambit of “internationally wrongful act” and entails attribution to

the State and breach of an obligation that is applicable to the State. Further, Aventara cannot evade

liability as they were actions not totally independent of the State and the State is therefore

responsible for such acts. The Republic of Aventara will have to claim liability, and exceptions of

countermeasure, necessity and self defense cannot be invoked unless the acts are attributable to

the State. Therefore, the Republic of Aentara is responsible for the internationally wrongful act

and cannot invade liability by claiming non-attribution and invoking the defences.

1. Republic of Aventara did violate the principle of State Responsibility under

International Law

As per Article 11 of the Responsibility of States for Internationally Wrongful Acts, 2001 every

internationally wrongful act of a State entails the international responsibility of that State. Under

customary international law of state responsibility, states bear responsibility for any act that is

attributable to the state that is a breach of an international legal obligation applicable to that state. 2

1
Responsibility of States for Internationally Wrongful Acts, G.A. Res. 56/83, art. 1, U.N. Doc. A/RES/56/83, Annex
(Dec. 12, 2001); [hereinafter RSIWA 2001]
2
Art 1-2, RSIWA 2001.

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Further, there is said to be a breach of an international obligation by a State when an act of that

State is not in conformity with what is required of it by that obligation, regardless of its origin or

character as per Art 123. The Republic of Aventara has an obligation and duty to protect the

sovereignty of other nations and the cyber attack launched was a breach of Zimblia’s sovereignty.4

The two main elements that constitute an internationally wrongful act of a State as given under Art

25 of RISWA includes elements of attribution and breach of obligations.

The State of Aventara has an obligation under Art 2(4)6 of the UN Charter to refrain in their

international relations from the threat or use of force against the territorial integrity or political

independence of any state, or in any other manner inconsistent with the Purposes of the United

Nations. In the cyber context, states have an obligation to prevent their cyber infrastructure from

being used by others to harm another state.7 Cyber attacks are considered a form of attack under

international law. States may become responsible at customary international law for acts ex post

facto.8 Article 11 of the International Law Commission's Draft Articles on State Responsibility

(Draft Articles) recognizes that acts of private persons shall be attributed to the state "to the extent

that the State acknowledges and adopts the conduct in question as its own." In this respect there

3
U.N. Charter art 12.
4
Compromis, ❡ 27.
5
Art 2, RSIWA 2001.
6
U.N. Charter art 2(4).
7
NATO COOP. CYBER DEF. [Link] EXCELLENCE, TALLINN MANUAL ON THE INTERNATIONAL
LAW APPLICABLE TO CYBER WARFARE (Michael N. Schmitt Ed.)
[hereinafter TALLINN MANUAL], available at [Link]
8
International Law Commission, Draft Articles on Responsibility of States for Internationally Wrongful Acts,
November 2001, Supplement No. 10 (A/56/10), [Link].E.1, [Link]
[hereinafter Draft ARSIWA] ; United States Diplomatic and Consular Staff in Tehran, 1980 I.C.J. 3 [hereinafter
USDCS 1980]; Lighthouses Arbitration (1956) R.I.A.A., xii, 155.

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must be more than a mere endorsement or acknowledgement. 9 In the present case, the Republic of

Aventara has deployed and built the AI, EagleEye and have also conducted further arrests of the

members of the xDAO in furtherance of the attack which signifies State involvement.

2. Republic of Aventara cannot evade liability for the acts of Eagle Eye

Since the early 1990s, rapidly evolving state practice has established a customary prohibition on

cybercrime. Prohibitions on unlawful access to and/or interference with computer data have now

been enacted in at least thirty-eight states.10 The most recent multilateral development is the

Convention on Cybercrime 2001 11, which has already attracted the signatures of thirty-two states

since being opened for signature in November 2001.12 The evident willingness of states to rapidly

assume international legal obligations in this field is compelling evidence of both the momentum

and extent of state practice and convergent opinio juris. Such opinio juris is also expressed by

those transnational institutions that emphasize the need to fight cybercrime. 13 The action of the AI,

EagleEye cannot be said to be autonomous as there was an extent of State involvement which gave

rise to liability to the Republic of Aventara. The exceptions to state liability of wrongful acts can

be invoked, provided the State claims responsibility and liability for the acts which are attributable

to it.

9
USDCS 1980; Draft ARSIWA
10
Stein Schjolberg, The Legal Framework-Unauthorized Access to Computer Systems: Penal Legislation in 44
Countries, at [Link]/info/legal/html (last visited Oct. 4, 2002).
11
Convention on Cybercrime-Budapest, ETS No. 185, at [Link] [Link] (last
visited Oct. 4, 2002)
12
Convention on Cybercrime-Budapest, ETS No. 185 at [Link]
13
OECD Expert Committee Recommendation, 1973; Resolution No. 3 on the Fight Against Cyber-Crime.

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[2.1] THE ACTIONS OF EAGLEEYE WERE NOT AUTONOMOUS AND ITS ACTIONS WERE

FORESEEN AND DIRECTLY COMMANDED.

According to Art 814 of the RSIWA, the conduct of a person or group of persons shall be considered

an act of a State under international law if the person or group of persons is in fact acting on the

instructions of, or under the direction or control of, that State in carrying out the conduct. It is

categorically mentioned that the Republic of Aventara has built and deployed EagleEye, a cutting-

edge Artificial Intelligence (AI) system designed to detect, investigate, and neutralize threats to

national security. 15 The very fact that the Republic of Aventara had built and deployed the said AI

brings the actions of the EagleEye under the control of the Republic of Aventara. Further, this

attack also led to the de-anonymization of xDAO members’ data, identities & transactions of

Bitnero users and arrest of the members of the xDAO 16.

Under customary international law of State responsibility supplies the standards for attributing acts

to States, which can be applicable to activities in cyberspace. In this respect, States cannot escape

legal responsibility for internationally wrongful cyber acts by perpetrating them through proxies.

The functions of the AI included border security, counter terrorism, cybersecurity, all of which are

acts taken by the State to prevent such internationally wrongful acts. Any step taken by the AI is

in furtherance of the State's obligation;. States will remain sovereign in cyberspace. As set forth in

the Island of Palmas case 17, the principle of “sovereignty in the relations between States signifies

independence.

14
Art 2, RSIWA 2001.
15
Compromis, ❡ 17.
16
Compromis, ❡ 25.
17
Island of Palmas (United States v. Netherlands), 1928 ICGJ 329 (Apr. 4).

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Independence in regard to a portion of the globe is the right to exercise therein, to the exclusion of

any other State, the functions of a State.” The acts of the NGO xDAO cannot be therefore targeted,

as the State of Zamblia enjoys soverignty over its functions.

[2.2] THE REPUBLIC OF AVENTARA IS RESPONSIBLE FOR THE ACTS AND WERE NOT ACTS

OF SELF DEFENSE, COUNTERMEASURE OR ARISING OUT OF NECESSITY.

In the cyber domain, a host-state that has both the capability to prevent a cyber attack emanating

from its territory, causing harm in another state, and fails to take action to prevent that harm has

failed to fulfill its duty under Article 2(4) 18 of the U.N. Charter.

A cyber operation that constitutes a use of force under Article 2(4) is an internationally wrongful

act. According to Art 25 of the RISWA19, necessity may not be invoked by a State as a ground for

hiding behind the garb of a wrongful act which is not in conformity with an international obligation

of that State, unless it was the only way for the State to act and does not seriously impair an

essential interest of the State or States towards which the obligation exists, or of the international

community as a whole.

The two activities consistently proscribed in both domestic and international legal provisions on

cybercrime are unlawful access to, and interference with, data. These prohibitions therefore

represent the irreducible core of customary law.20 Here, the attack also led to the de-anonymization

18
Supra note 6.
19
Art 25, RSIWA 2001.
20
See Convention on Cybercrime-Budapest, supra note 39; Art. 3211-3321 of the French Penal Code; German Penal
Code §§ 203, 303(a), (b); Electronic Commerce Act, ch. 426 (2002) (Malta); Republic Act No. 8792, sec. 33 (2000)
(Phil.).

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of xDAO members’ data, identities & transactions of Bitnero users21 which is a breach of

customary international law.

Further, there is only one legitimate goal for any self-defense response: to stop or prevent an attack.

Any response that creates the impression that the action was intended to punish, embarrass or teach

some broader lessen rather than to stop or prevent an attack, will be viewed as disproportionate 22.

Here in the present case it is imperative to look at the backdrop under which the attack was

initiated. The Government of Zimblia in an official social media post claimed that the sophisticated

cyber-attack was a retaliation for the shutdown of Aventara Mining Corporation's operations, and

reducing the reliance on the Aventara Dollar by making Bitnero a legal tender. 23.

As per Article 51, the countermeasures taken must commensurate with the injury suffered, taking

into account the gravity of the internationally wrongful act and the rights in question. Further, Art

49 sets forth the limits and objectives of countermeasures, mainly being to compile another State

to perform its obligations. However in the present case, there was no non-performance of an

obligation on behalf of Zimblia.

II. XDAO CAN BE CONSIDERED AS A SOVEREIGN STATE UNDER THE

INTERNATIONAL LAW.

It is contended that the evolution of statehood in the digital era permits entities to transcend

conventional territorial limitations, drawing analogies to ancient city-states characterised by shared

objectives and values rather than extensive territories. Secondly, xDAO aligns itself with the

21
Supra Note 16.
22
Roberto Ago, Addendum to the Eighth Report on State Responsibility, U.N. Doc. A/CN.4/318/Add.5–7.
(1980), reprinted in 1980 Y.B. INT’L L. COMM’N 13, 69, U.N. Doc. A/CN.4/SER.A/1980/Add.1.
23
Compromis, ❡ 25.

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criteria delineated in the Montevideo Convention24, affirming the presence of a permanent digital

population, designating the blockchain or digital space as its defined territory, identifying its code

and smart contracts as its governing entities, and characterising its interactions with other entities

as diplomatic engagements with other 'States.' Lastly, xDAO underscores the significance of its

economic influence, suggesting that its substantial financial resources could yield comparable

influence to smaller states, historically affording entities with economic prowess a platform in

international deliberations.

1. xDAO Meets The Criteria Laid Down For Statehood

In the swiftly progressing digital epoch, nations and international entities are progressively

recognizing the paramount significance of digital identity. Authoritative documents, including the

United Nations e-Government Survey25 and the European Union's eIDAS Regulation26,

underscore the legal and global importance of digital identity.

The traditional definition of statehood has evolved in contemporary international law, and that a

new approach is needed to accommodate the emergence of new entities, such as DAOs, that

challenge the conventional notions of sovereignty and statehood.27

According to The Cambridge Companion to International Law, statehood is posited not as a

universally acknowledged legal definition but as a pivotal organising concept that has undergone

24
Montevideo Convention on The Rights and Duties of States, December 26th 1964.
25
United Nations,E-Government Survey 2022: The Future of Digital Government (2022).
26
European Union, Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on
electronic identification and trust services for electronic transactions in the internal market and repealing Directive
1999/93/EC, 2014 OJ (L 257) 73 (EU eIDAS Regulation).
27
C. CHRISTINE & B. FREYA, SOVEREIGNTY, STATEHOOD AND STATE RESPONSIBILITY 1 - 152, (
Cambridge University Press, 2015)

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evolution throughout history. The book further proposes the existence of diverse conceptions and

models of the state, highlighting the foundational nature of analogies such as state-individual and

international system-domestic state within traditional international law. 28

In the article titled "Political Realities of Recognition of States Contrary to the Bindings of

International Law," the argument is presented that the acknowledgment of a novel entity as a state

is an independent action contingent upon the political realities and interests of the recognizing

states, rather than being bound by the legal criteria of statehood. The article further scrutinizes

instances such as Kosovo, South Ossetia, and Abkhazia, examining the role of recognition in either

exacerbating or resolving conflicts.

Similarly, in "The Creation of States in International Law," a thorough and authoritative

examination is provided on the emergence of new states during the 20th century. The book delves

into the legal principles and practices governing the recognition and admission of these states into

the international community. Additionally, it explores complex issues surrounding self-

determination, secession, dissolution, and succession, shedding light on the consequential impact

of new states on both international law and organisation. 29

Throughout history, the acknowledgment of statehood was predominantly linked to territorial

dominance. Nevertheless, contemporary international law has pivoted towards assessing not only

territorial control but also the competence and efficacy of a government. The legitimacy of a

government and its capacity to govern and deliver services to the populace now carry substantial

28
THE CAMBRIDGE COMPANION TO INTERNATIONAL LAW (James Crawford & Martti Koskenniemi ed.,
Cambridge University Press 2012) (online version, July 2015), [Link]
29
JAMES R. CRAWFORD, THE CREATION OF STATES IN INTERNATIONAL LAW (2nd ed., Oxford
University Press 2007), [Link]

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weight. Amidst the civil war in Libya in 2011, certain nations acknowledged the National

Transitional Council as the rightful government. This recognition underscored the council's

effectiveness in representing the Libyan people, notwithstanding its incomplete territorial control

at the time. 30

The European Union (EU) functions as a supranational entity, possessing distinct institutions and

policies that exert influence over the sovereignty of its member states. This poses a challenge to

the traditional conception of statehood, which traditionally hinges solely on territorial control. 31

The traditional concept of a state has long been associated with territorial boundaries.

Nevertheless, in the contemporary age of global digital interconnectedness, there is the potential

for states to undergo a transformation, becoming non-territorial entities bound by shared

objectives, values, or digital governance. This shift mirrors historical city-states, which, in ancient

times, were defined more by cultural and governance ties than expansive geographical territories.

Given the substantial evolution of statehood beyond its conventional parameters, it is crucial to

carefully consider the implications of such transformations. The aforementioned instances serve

as illustrations that entities like xDAO, though diverging from traditional state definitions, merit

contemplation for statehood recognition, drawing on precedents set in various comparable cases.

2. xDAO Satisfies The Montevideo Convention’s Definition Of Being A State

xDAO meets the criteria of statehood as defined by the Montevideo Convention of 1933, which

states that a state should possess a permanent population, a defined territory, a government, and

30
KARL P. MUELLER ET AL., PRECISION AND PURPOSE: AIRPOWER IN THE LIBYAN CIVIL WAR
(RAND Corporation, Santa Monica, Calif., 2015).
31
DIRECTORATE-GENERAL FOR COMMUNICATION (EUROPEAN COMMISSION), THE EUROPEAN
UNION - WHAT IT IS AND WHAT IT DOES," (2022)

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the capacity to enter into relations with other states. It also further submits that it can invoke or

rely on customary international law, which is an aspect of international law that derives from “a

general practice accepted as law”. 32

In accordance with the Montevideo Convention of 1933, delineating the prerequisites for

statehood, xDAO asserts its alignment with fundamental elements: a permanent population, a

defined territory, a government, and the capability to engage in relations with other states.

Additionally, it posits its reliance on customary international law, founded on "a general practice

accepted as law."33

The enduring populace of xDAO comprises its global members, the holders of its native crypto

token. This token, granting voting rights on pivotal DAO matters, also provides access to public

goods and services, fostering a shared identity among members with a common vision and values.

Cryptocurrency communities, such as those surrounding Bitcoin and Ethereum, exemplify

characteristics of global membership, contributing to the evolution of the digital landscape. 34

For xDAO, its defined territory manifests within the Ethereum blockchain. Operating as a

distributed ledger, this blockchain records and verifies transactions and governance processes.

Accessible to anyone with an internet connection, the Ethereum blockchain ensures transparency

and verifiability through a network of nodes. The recognition of blockchain as a decentralised and

32
Montevideo Convention on The Rights and Duties of States, December 26th 1964, art . 1
33
Int'l Law Comm'n, Rep. on the Work of lts Seventy-Third Session, U.N. Doc. A/77/10, (2022)
34
CAMPBELL-VERDUYN, MALCOLM (ed.) (2018) : BITCOIN AND BEYOND: CRYPTOCURRENCIES,
BLOCKCHAINS, AND GLOBAL GOVERNANCE, RIPE Series in Global Political Economy, ISBN 978-1-315-
21190-9, Routledge, Taylor & Francis Group, London, [Link]

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secure technology across various sectors, including finance and supply chain, illustrates the

broadening concept of defined territory. 35

The decentralized computer program within xDAO functions as its governing entity. Driven by

algorithms executing smart contracts, this program embodies principles of autonomy,

transparency, and immutability. Oversight and feedback mechanisms from DAO members ensure

accountability, allowing for proposals, votes, and implementations of changes. Decentralised

autonomous organisations like MakerDAO exemplify the operational governance of blockchain-

based entities, challenging conventional centralised structures.36

xDAO asserts its capacity for international engagement through its program, protocol, and token.

Participation in trade, diplomacy, and humanitarian efforts, while upholding recognized principles

of international law, underscores its commitment to sovereign practices. The acceptance of

cryptocurrency payments by nations and the involvement of blockchain-based projects in

international collaborations highlight the evolving landscape of global interactions beyond

traditional statehood.

In conclusion, xDAO presents a compelling argument for statehood, drawing parallels from real-

life examples that transcend conventional notions of territorial recognition. As digital entities

35
MAHDI FARNAGHI & ALI MANSOURIAN, BLOCKCHAIN, AN ENABLING TECHNOLOGY FOR
TRANSPARENT AND ACCOUNTABLE DECENTRALISED PUBLIC PARTICIPATORY GIS, Volume 105,
(2020),102850, ISSN 0264-2751, [Link]
36
BELLAVITIS, C., FISCH, C., & MOMTAZ, P. P. (2022). THE RISE OF DECENTRALISED AUTONOMOUS
ORGANIZATIONS (DAOS): A FIRST EMPIRICAL GLIMPSE. SSRN Electronic Journal.
[Link]

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increasingly shape global dynamics, the acknowledgment of entities like xDAO in international

affairs reflects the evolving landscape of governance and collaboration.

3. xDAO Holds Enough Economical Significance To Be Recognised As A

Sovereign State

In the contemporary landscape, the xDAO emerges as a formidable entity, commanding economic

influence that rivals that of smaller states. The accumulation of substantial economic resources by

the xDAO necessitates a reassessment of its role in international affairs, aligning with entities

traditionally acknowledged for their economic prowess.

Entities wielding significant economic clout have historically assumed prominent roles on the

international stage.37 The World Economic Forum serves as a prime illustration, showcasing how

a non-governmental organisation, propelled by economic influence, garners a central position in

shaping global discourses. Similarly, the xDAO, with its considerable economic resources,

warrants contemplation for active engagement in international affairs. 38

The allocation of economic resources by the xDAO signifies more than a showcase of financial

strength; it represents an avenue for driving meaningful societal change. By channelling its

economic might towards supporting humanitarian initiatives and advocating for environmental

sustainability, the xDAO can actively participate in addressing pressing global challenges,

transcending conventional statehood boundaries.

37
HOLSTI, K. J. “THE CONCEPT OF POWER IN THE STUDY OF INTERNATIONAL RELATIONS.”
Background, vol. 7, no. 4, 1964, pp. 179–94. JSTOR, [Link] Accessed 12 Dec. 2023.
38
Joseph Comunale & Ivy Roberts, Article, One world Government - Overview and movement (21 November
2023)

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Nations possessing substantial economic power exert significant influence globally. This financial

strength enhances a state's ability to shape global economic policies, actively participate in

international organisations, and engage in diplomatic negotiations. 39 Economic prowess is

instrumental in fostering participation in global trade and alliances, making states with robust

economies attractive partners for trade and investment. This economic engagement contributes to

their recognition by other nations. 40 Financially robust states are also better positioned to provide

humanitarian aid and contribute to global development, positively influencing their international

reputation. Moreover, economic strength impacts a state's eligibility and influence within

prestigious international organisations like the G7 or G20, reinforcing their role as key players in

global governance.41

In summary, the substantial economic resources of the xDAO establish it as a formidable player

in the international arena. Recognizing its economic impact becomes crucial when evaluating its

global influence. The xDAO's potential to foster positive change, coupled with its economic

standing, underscores the imperative to grant it an audience in international matters. In doing so,

the international community not only acknowledges the economic prowess of the xDAO but also

embraces the opportunity to harness this power for the betterment of the global community.

39
COX, ROBERT W. “MULTILATERALISM AND WORLD ORDER.” Review of international studies, vol. 18,
no. 2, 1992, pp. 161–80. JSTOR, [Link] Accessed 12 Dec. 2023.
40
LAKE, DAVID A. “LEADERSHIP, HEGEMONY, AND THE INTERNATIONAL ECONOMY: NAKED
EMPEROR OR TATTERED MONARCH WITH POTENTIAL?” International Studies Quarterly, vol. 37, no. 4,
1993, pp. 459–89. JSTOR, [Link] Accessed 12 Dec. 2023.
41
WOODS, NGAIRE (2010) : THE G20 LEADERS AND GLOBAL GOVERNANCE, GEG Working Paper, No.
2010/59, University of Oxford, Global Economic Governance Programme (GEG), Oxford,

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III. THE REPUBLIC OF AVENTARA IS OBLIGATED TO REIMBURSE THE

REPUBLIC OF ZAMBLIA FOR THE FINANCIAL LOSSES INCURRED DUE TO

THE DEVALUATION OF BITNERO AS A RESULT OF THE CYBER-ATTACK

BY EAGLE EYE.

It is humbly submitted that the Republic of Aventara is obligated to reimburse the Republic of

Zamblia for the financial losses incurred due to the devaluation of Bitnero as a result of the cyber-

attack by EagleEye on the following grounds; firstly, Aventara has breached the principle of State

Responsibility, secondly, it has acted in violation of Sovereignty principle, due diligence duty and

infringement international cybersecurity norms.

1. Aventara has breached the principle of State Responsibility

As per Article 1 of Responsibility of a State for its internationally wrongful acts :

“Every internationally wrongful act of a State entails the international

responsibility of that State.”42

Further under Article 5 it is stated that :

“The conduct of a person or entity which is not an organ of the State under

article 4 but which is empowered by the law of that State to exercise elements of

the governmental authority shall be considered an act of the State under

international law, provided the person or entity is acting in that capacity in the

particular instance.”43

42
Supra Note 8.
43
Art 5, Draft ARSIWA 2001.

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 25TH D. M. HARISH MEMORIAL GOVERNMENT LAW COLLEGE INTERNATIONAL MOOT COURT COMPETITION, 20

It is respectfully that the basic principle of state responsibility under international law holds states

accountable for internationally wrongful acts and conduct of entities that is empowered to exercise

governmental authorities like national security regulation shall also be considered as act of state .

Aventara, as a state, may be held responsible for the actions of EagleEye as it comes under the

ambit of Article 5. EagleEye is an AI system built and deployed by state of Aventara to detect,

investigate , and neutralize threats to its national security. 44The EagleEye’s system is empowered

to exercise elements of governmental authorities like regulating cybersecurity ,border security,

counterterrorism and critical infrastructure monitoring for safeguarding the national infrastructure.

Thus EagleEye is constitutes an entity under article 5 and its sophisticated cyberattacks brought

down EtherX network and permanently corrupted all Bitnero data 45.

This series of attack directly caused the Biterno market price to fall headlong from $30,000 to

[Link] attacks further led to de-anonymization of xDao members data, identities and

transanctions of Bitnero [Link] is to be noted that Bitnero is the accepted legal tender of Zimblia

since June 2021 and it reduced the reliance of Aventara dollar in the country. Thus this

cyberattacks by the EagleEye, clearly implies an act of retaliation by Aventara towards Zimblia

for the shut down of Aventara Mining Corporation’s operations and diminishing dependency on

Aventara Dollars.48

44
Supra note 15.
45
Compromis, ❡ 24.
46
Ibid at 44.
47
Supra note 15.
48
Compromis, ❡ 26.

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Even if EagleEye’s actions were autonomous and not directly commanded , it’s system was

empowered automatically deploy measures by the state of Aventara. While deploying such a self-

automated system Aventara should have had forseen the consequences of it’s action especially as

it function in the realm of national security and not just an intra-state matter. Aventara, by

developing and deploying EagleEye, engaged in a cyber-attack that directly impacted the

economic well-being of Zimblia by crashing the market price of it’s legal tender de-anonymization

of identities and transanctions of Bitnero users. This constitutes an internationally wrongful act for

which Aventara should be held responsible.

Under Article 31, The responsible State is under an obligation to make full reparation for the injury

caused by the internationally wrongful act and injury includes any damage, whether material or

moral, caused by the internationally wrongful act of a State.49 The forms of reparation is prescribed

in form of restitution, compensation and satisfaction, either singly or in combination. 50

Article 36 states Compensation by the state responsible :

“1. The State responsible for an internationally wrongful act is under an

obligation to compensate for the damage caused thereby, insofar as such

damage is not made good by restitution.

2. The compensation shall cover any financially assessable damage including

loss of profits insofar as it is established.”51

49
Art 31, Draft ARSIWA 2001.
50
Art 34, Draft ARSIWA 2001.
51
Art 36, Draft ARSIWA 2001.

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Therefore it’s humbly submitted that Aventara’s EagleEye is a entity under Article 5 and Aventara

can be held responsible for its action under the principle of State [Link] is further

submitted that cyber-attack caused substantial financial harm to Zimblia by destroying the value

of Bitnero, affecting not only the national reserves but also the financial well-being of individuals,

businesses, and investors in Zimblia.

The significant devaluation of Bitnero, resulting in financial losses for Zimblia, is a direct

consequence of Aventara's actions. The economic impact on Zimblia, as claimed by the Zimblian

government, should be thoroughly [Link], it’s humbly submitted that under Article 36,

Zimbalia should be reimbursed for the financial losses due to devaluation of Bitnero by the

Aventara.

2. Aventara has acted in violation of Sovereignty principle, non-intervention, due

diligence duty and infringement of international cybersecurity norms.

Aventara is liable to reimburse for the financial losses incurred by Zimblia due to the devaluation

of Bitnero as it has infringed Zimblia's sovereignty and non-intervention principles, breached due

diligence duty in cybersecurity, and violated other cybersecurity norms, including Tallinn Manual

and ITU regulations.

[2.1] THERE IS A VIOLATION OF SOVEREIGNTY AND NON INTERVENTION PRINCIPLE .

The ICJ held in Gabčíkovo-Nagymaros Project Case52 ,that principle of sovereignty is upheld in

connection to the principle of non intervention in the internal affairs of states. The non-intervention

rule restricts the ability of outside nations to interfere with the internal affairs of another

52
Gabcikovo-Nagymaros Project (Hungary/Slovakia), Judgment, I.C.J. Rep. 1997 (Sept. 25), p.7.

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53
[Link]-sponsored cyber attacks has wide impact on sovereignty of the victim state .In

Nicaragua v. United States54,the ICJ set precedence restricting a state’s action that impact the

sovereignty of another state. Under the principle, state can generally control all activities within

territory over which it has sovereignty55 and involves financial sovereignty to manage it’s

economic policies and matter without exterior interventions.

Aventara's actions, through EagleEye, have violated the sovereignty of Zimblia. As sovereignty

includes the right of a state to exercise control over its economic and financial matters without

interference.56The cyber-attack on Bitnero and the corresponding economic fallout implies a

breach of Zimblia's sovereignty, as Aventara interfered with Zimblia's chosen currency and

financial system. Thus Aventara is liable to compensate financial losses due to devaluation of

bitnero caused due to it’s intervention into the sovereignty of Zimblia.

[2.2] THERE IS A BREACH OF DUE DILIGENCE DUTY .

Under international law, a state's failure to take reasonable and appropriate steps in order to

prevent, mitigate, or respond to malicious cyber actions emanating from its territory or carried out

by actors under its control is referred to as a breach of due diligence duty in the context of

cybersecurity. This responsibility is founded on the idea that governments have a duty to keep their

53
Pernik, Piret, et al. “The Early Days of Cyberattacks: The Cases of Estonia, Georgia and Ukraine.” HACKS,
LEAKS AND DISRUPTIONS: RUSSIAN CYBER STRATEGIES, edited by Nicu Popescu and Stanislav Secrieru
,EUISS, (2018) , pp. 53–64. JSTOR, [Link]
54
Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Merits,
Judgment, I.C.J. Rep. 1986 (June 27), p. 14.
Annan, Kofi. “Peacekeeping, Military Intervention, and National Sovereignty in Internal Armed Conflict.”
55

IN HARD CHOICES: MORAL DILEMMAS IN HUMANITARIAN INTERVENTION , edited by Jonathan Moore,

55–71. Lanham, MD: Rowman & Littlefield, (1998).
56
Lapidoth, Ruth. “Sovereignty in Transition.” JOURNAL OF INTERNATIONAL AFFAIRS, vol. 45, no. 2, (1992),
pp. 325–46. JSTOR, [Link]

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 25TH D. M. HARISH MEMORIAL GOVERNMENT LAW COLLEGE INTERNATIONAL MOOT COURT COMPETITION, 20

territory free from uses that could endanger neighbouring [Link] interconnected nature of

cyberspace means that states have a responsibility to prevent their territory from being used to

launch cyber attacks that could cause significant harm to other states.58 Thus in the instant case,

Aventara has breached the duty of due diligence by developing and deploying EagleEye in its

territory without regulated restrictions on its functioning . Hence Aventara failed to prevent harm

to Zambila by it’s national security system and therefore is liable to reimburse for the financial

loss subsequently occurred.

[2.3] THERE IS AN INFRINGEMENT OF OTHER CYBERSECURITY NORMS.

Under article (a) (2) (d) of EU's Clean IT regulations it prohibit:

"… serious harm to vital infrastructures, systems or services; or serious

disruption of them; serious damage to the country's economy or environment,

or damage to the environment that has caused or is liable to cause serious

economic harm." 59

According to the Tallinn Manual, states bear accountability for any internationally wrongful

activities that can be linked to them. A state may be held accountable for its cyberattacks if they

57
Bannelier, Karine, et al. “LAWS OF GRAVITATION: Due Diligence Obligations in Cyberspace.” GUARDIAN OF
THE GALAXY: EU CYBER SANCTIONS AND NORMS IN CYBERSPACE, edited by Patryk Pawlak and Thomas
Biersteker, EUISS, (2019), pp. 62–69. JSTOR, [Link]
58
Haggard, Stephan, and Jon R. Lindsay, “North Korea and the Sony Hack: Exporting Instability Through
Cyberspace.” EAST-WEST CENTER, (2015). JSTOR, [Link]
59
Sustainable Development Solutions Network ,( 2021), “National Energy and Climate Plans (NECPs).” ANNEX
II –: NECPs, SUSTAINABLE DEVELOPMENT SOLUTIONS NETWORK, JSTOR,
[Link]

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result in financial losses for another state60. Under international law, cyberattacks that cause a large

amount of financial damage may be regarded as uses of force.61

Therefore it is humbly submitted before the honourable court that with respect to all the above

contentions, the Republic of Aventara by deploying EagleEye is responsible for the cyberattacks

launched by it and thus it is s obligated to reimburse the Republic of Zamblia for the financial

losses incurred due to the devaluation of Bitnero .

60
Schmitt, M. N. (2017) in Tallinn Manual 2.0 on the International Law Applicable to Cyber Operations. 2nd edn.
Cambridge: Cambridge University Press, Rule 6.
61
Ibid.

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PRAYER

Wherefore in light of the issues raised, arguments advanced and authorities cited, it is humbly

prayed that this Hon’ble Court may be pleased to hold, adjudge and declare that;

1. The Republic of Aventara violated the principle of state responsibility and they cannot

evade liability for the acts of EagleEye.

2. xDAO can be considered a sovereign state under international law.

3. The Republic of Aventara is obligated to reimburse the Republic of Zamblia for the

financial losses incurred due to the devaluation of bitnero as a result of the cyber-attack by

EagleEye.

and pass any other order it may deem fit in the interest of justice, equity, and good conscience.

All of which is humbly prayed,

Counsel for the Applicant

MEMORIAL ON BEHALF OF THE APPLICANT 33