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2012 Foreign Direct Investment International Arbitration Moot
Memorial for the Claimant
In the proceedings between:
MAX SOLUTIONS INC.
v. BELA RANO INSULARO
Ad hoc committee for the ICSID Convention
Counsel for the applicant, Baxter
Team Baxter Memorial for the Claimant
CONTENTS Table of Contents List of Authorities List of Abbreviations Statement of Facts Pleadings: PART ONE: The Procedure PROFESSOR IRCAUNDA’S PUBLISHED VIEWS SHOW A 15 MANIFEST LACK OF INDEPENDENCE AND IMPARTIALITY. A. The views advocated, and the strength of the language, in Professor Iracunda’s writings illustrate the strength of commitment to her views and amount to a prejudgment of a pivotal matter in the dispute. I. 1. The content of Professor Iracunda’s writings show a prejudgment of a pivotal matter in the dispute. 2. The vigour with which Professor Iracunda writes shows a manifest lack of impartiality. B. Professor Iracunda’s writings highlight that she would face significant professional embarrassment should she contradict herself in practice. II. PROFESSOR IRACUNDA’S MEMBERSHIP OF WILDERNESS DEMONSTRATES A MANIFEST LACK OF INDEPENDENCE AND IMPARTIALITY 21 2 5 9 10 14
A. Professor Iracunda has morally prejudged the matter and is not impartial, nor independent. 1. The IBA Guidelines substantiate an unacceptable connection to Wilderness. 2. The ‘Suez’ factors demonstrably show a lack of impartiality and independence III. THE TRIBUNAL’S FAILURE TO EXCLUDE DR RANAPUER’S EXPERT REPORT CONSTITUTED A SERIOUS DEPARTURE FROM A FUNDAMENTAL RULE OF PROCEDURE. 23
A. The Belo Rano Rule requiring exclusion is a fundamental rule of procedure 1. As a general principle of law, Article 5(5) is an elementary cornerstone of procedure. B. The Tribunal’s decision not to exclude was a serious departure in the circumstances.
Team Baxter Memorial for the Claimant
1. Dr Ranapuer had no valid reason for failing to attend the oral hearing, requiring the Tribunal to exclude his report. 2. Additionally, there were no exceptional circumstances to negate the substance of Article 5(5) i. The fact that there is a limited pool of experts does not constitute an ‘exceptional’ circumstance. ii. Expediency in utilising Dr Ranapuer’s report should not take precedence over the rights of the party.
PART TWO: The Merits I. THE TRIBUNAL ERRED IN LAW IN INTERPRETING THE DEFINITION OF INVESTMENT, PURSUANT TO ARTICLE 25(1) A. Introduction B. The preamble contained within the ICSID Convention is not representative of the overarching intention C. Alternatively, the contribution requirement should not be considered to be within the definition of “investment” due to the difficulty of ascertaining it 2. THE TRIBUNAL MANIFESTLY EXCESSED THEIR POWERS IN DECLINING JURISDICTION UNDER THE SALINI CRITERIA 32 27
A. The Tribunal was incorrect in not following the award set out in Malaysian Historical Salvors (MHS), and therefore, ultimately, the Salini criteria should not have been applied B. The Tribunal, in any event, erred in law due to the application of the Salini criteria, pursuant to ICSID jurisprudence
Team Baxter Memorial for the Claimant
THE CONTRIBUTION REQUIREMENT CANNOT BE INFERRED FROM THE AGREEMENT BETWEEN THE PARTIES
A. In assessing the Bilateral Investment Treaty, the parties did not agree that the investment must contribute to the economic development of Bela Rano Insularo 2. THE TRIBUNAL ERRED IN FACT AS EVEN IF THE CONTRIBUTION PREREQUISITE IS HELD TO BE ESSENTIAL, THE TRANSACTION MEETS THIS STANDARD A. Introduction B. The Tribunal misinterpreted the threshold in which should be applied C. The statement made by the spokeswoman, and the consequences which resulted, can be used as evidence to suggest that Max Solutions contributed to Bela Rano Insularo ’s economic development D. The fact that the frogs were removed by nature is merely subsidiary to the claim that Max Solutions contributed to Bela Rano Insularo’s development E. The assertion that Max Solutions did not compensate Bela Rano Insularo with revenue from its ventures is not evidence that they did not contribute to the Islands’ economic development F. Conclusion IV. PURSUANT TO ARTICLES 41(2) AND 52(4), THE AD HOC COMMITTEE HAS THE POWER TO DECIDE WHETHER THE TRANSACTION IN QUESTION QUALIFIES AS AN “INVESTMENT” 46 41
A. ON THE OUTSET, THE ANNULMENT COMMITTEE HAS THE POWER TO DETERMINE AS TO WHETHER THE REMOVAL OF THE SIRENO KANTO QUALIFIES AS AN “INVESTMENT” 46
The relevant articles within the ICSID Convention enable the annulment Committee to decide that the transaction qualifies as an investment 46 3. 2007) International Arbitration (5th edition. Carreau. trans. “The Meaning of ‘Investment’: Travaux and the Domain of International Investment Law” 51 Harvard International Law Journal (2010) at 311 5 International Arbitration (2009) Droit international économique (3e edition. 2007) Fouchard. Goldman on International Commercial Arbitration Comparative Law of International Commercial Arbitration (2 ed. Paris. Introduction 46 2. Dalloz.Team Baxter Memorial for the Claimant 1. P. The jurisdiction should go to the Centre. Gaillard. Berti & Ponti. 47 Request for Relief 49 INDEX OF AUTHORITIES Books Born D. Juillard Gaillard Savag Poudret Besson Redfern Hunter Articles JD Mortenson. and not to the Tribunal. 2009) .
Decision on jurisdiction. 14 November 2005.Team Baxter Memorial for the Claimant CH. ICSID Case No. 1993 Report of the Executive Directors on the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States.W. Biwater Gauff (Tanzania) Ltd. 8 November 2010 Alpha Projektholding GMBH v Ukraine. 31 March 2006 CDC Group Public Limited Company v Seychelles. Decision on Challenge to Arbitrator. ARB/07/16. March 19 2010 Bayindir Insaat Turizm Ticaret ve Sanayi A Ş v Pak istan. ICSID Case No. Salacuse N. ICSID Case No.P.” Doc. Sullivan Reports The ICSID Convention: A commentary (2001) “Do BITs Really Work? An Evaluation of Bilateral Investment Treaties and their Grand Bargain” (2005) Harvard International Law Journal “Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. Arb/03/29. 26 April 2005 Alpha Projektholding GMBH v Ukraine. Award. ICSID Case No. Award. ARB/07/5. (2007) 11 ICSID Rep 237 Ceskoslovenska Obchodni Banka AS v Slovakia. 4 August 2011 AES Corporation v Argentina. ICSID/2. Decision on Jurisdiction and Admissibility. 4th August 2011 Abaclat and others v Argentina. ICSID Case No ARB/07/16. ICSID Case No. Schreuer J. ARB/97/4 6 . ICSID Case No ARB/02/14. 1 ICSID Rep (1993) Cases Abaclat and ors v Argentina ICSID Case No ARB/07/5 February 28 2009 Abaclat and ors v Argentina. 1 ICSID Reports. Decision on Annulment. 1965. Decision on Jurisdiction. ICSID Case No ARB/07/5. v Tanzania. ARB/05/22. ARB/02/17. ICSID Case No.
ARB/08/18. v Egypt. 3rd August 2010 Conoco Phillips Company and Others v Venezuela.I. ARB/08/16 (Germany/Ukraine BIT). ICSID Case No. Malaysian Historical Salvors Sdn Bhd v Malaysia.P. Award. ARB/05/3. ICSID Case No. L. ICSID Case No. July 12 2006 Liberian Eastern Timber Corp (“LETCO”) v The Government of the Republic of Liberia. Fraport AG Frankfurt Airport Services Worldwide v Philippines. Arb/03/25. ICSID Case No ARB/97/3. et ASTALDI S. ARB/03/6. ICSID Case No ARB/05/10. MCI Power Group LC and New Turbine Inc. ICSID Case No. The Argentine Republic ICSID Case No. ICSID Case No. ARB/06/18.A. Decision on the Application for Annulment. Decision on jurisdiction and liability. ICSID Case No. Arbitrator. v. ICSID Case no ARB/07/30 February 27 2012 Continental Casualty Company v Argentina. ARB/03/17 Jan de Nul NV and Dredging International NV v Egypt. v. 31 January 2011. v Ecuador. QC. Decision on Jurisdiction (Ancillary Claim).109. 26 July 2007 7 . v The Argentine Republic. despatched 16th September 2011 Enron Corporation and Panderosa Assets. 17 December 2010 GEA Group Aktiengesellschaft v. 16 June 2006 Joseph Charles Lemire v Ukraine. Decision on the Application for Annulment. Award. Award. 2 August 2004. para.E. Decision on Application for Partial Annulment. Decision on Argentina’s Request for Annulment of the Award. Algeria ICSID Case No.Team Baxter Memorial for the Claimant Compañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentina. ICSID Case No.25.p. Decision on Jurisdiction. ICSID Case No. ARB/04/13.p. Award of 31 March 2011 InterAguas Servicios Integrales del Agua S. ARB/01/3.S. L. 14 January 2010. ICSID Case No ARB/03/9. 28th February 2009 Malicorp Ltd. S. ARB/83/2. Ukraine. 31 March 1986.A.A. Decision on the proposal to disqualify L Yves Fortier. ICSID Case no ARB/07/30 February 27 2012 ConocoPhillips Company and Others v Venezuela. para.
ICSID Case No.A. Decision on Challenge to Arbitrator. Romak S. ICSID Case No ARB/03/19. ARB/03/17 October 22. Nidera Handelscompagnie BV (Hague Court of Appeal) (28 April 1998) (1998) XXIII Ybk Comm Arb. ICSID Case No ARB/98/2. Award of 26 November 2009 Salini Costruttori S. v Morocco. 2002 Suez and ors v Argentina. 731. 5th May 2011 Perenco Ecuador Limited v Ecuador and Empresa Estatal Petroleos del Ecuador.A. ICSID Case No ARB/03/19 May 12 2010 Suez and ors v Argentina. ICSID Case No ARB/06/5. Award on Jurisdiction. ICSID Case No ARB/10/14. AA280). Decision on Second Proposal for the Disqualification of a Member of the Arbitral Tribunal. ICSID Case No. ARB/00/4. April 9 2009 Rice Trading (Guyana) Ltd v. ICSID Case No. 2007 Urbaser SA and Consorcio de Aguas Bilbao Bizkaia. Decision on the Application for Annulment of the Award. SGS Société Générale de Surveillance SA v Paraguay. December 19. Islamic Republic of Pakistan .p.Team Baxter Memorial for the Claimant Mitchell v The Democratic Republic of Congo. Sociedad General de Aguas de Barcelona S. ICSID Case No ARB/08/6 December 8 2009 Pey Casado and Président Allende Foundation v Chile. ICSID Case No. ICSID Case No ARB/98/4.A ICSID Case No. Bilbao Biskaia ur Partzuergoa v Argentina. p. ICSID Case No ARB/07/26 August 12 2010 Wena Hotels Limited v Egypt. ARB/01/13.ARB/99/7. (2004) 6 ICSID Rep 129 Statutes and Treaties 8 . Annulment Proceeding. v. Decision on annulment application. 12 February 2010. Arb/07/29. SGS Société Générale de Surveillance v. Award. 27 October 2006 OPIC Karimum Corporation v Venezuela. 12th May 2008 Suez. 16 July 2001. The Republic of Uzbekistan (PCA Case No. September 28 2010 Phoenix Action Limited v Czech Republic.
e.Team Baxter Memorial for the Claimant IBA Guidelines on Conflicts of Interest in International Arbitration (22 nd May 2004) ICSID Convention Vienna Convention Belo Rano Insularo. eds.. pp. / Arts.g. International Investment agreement Number Page Pages Paragraph Section Sireno Kanto Frogs Versus 9 . Model Rules on the Taking of Evidence in International Arbitration LIST OF ABBREVIATIONS Art. para. p. et seq. ed. ICJ ICSID ICSID Convention Article / Articles Bilateral Investment Treaty Belo Rano Insularo ICSID Convention For example Edition Editors Et sequens (and the following. Ibidem (as above) International Court of Justice International Centre for Settlement of Investment Disputes Convention on the Settlement of Investment Disputes between states and Nationals of other States IIA No.... GASP i. ibid. Sireno Kanto v. BIT BRI [The] Convention e. s.) The Global Athletics Season Preview That is.
neither party was obligated to commence performance of any obligations until January 2006. (hereinafter referred to as the ‘Claimant’) a company from the nation of Oscania entered into an agreement with the Government of Bela Rano Insularo (hereinafter referred to as the ‘Respondent’) to procure from the Respondent State the majority of the population of the native. 10 . 4 See clarification 28. This was the exception of a small number to be confined within a designated nature reserve. On 26 January 2006. the Bela Rano Insularo (‘BRI’) media began circulating stories concerning the Claimant’s operations on the island. in addition to removing the frogs from the island. Consequently. at all times. 2 3 Clarification 97: The Respondent was required by the Council to demonstrate that it provided an effective means of eliminating the problems posed by the island’s frog population however the Council did not specify a particular method for such. As a corollary of those reports. highly poisonous Sireno Kanto frogs (“Sireno Kanto”). 4.4 5.Team Baxter Memorial for the Claimant STATEMENT OF FACTS Factual Background 1. scientists at Bela Rano Insularo Univer sity (‘BRIU’) announced that they had discovered conclusive evidence of a previously unknown disease among the Sireno Kanto. All contractual aspects were agreed to be fulfilled by December 2007.1 Max Solutions. In January 2002. in late 2003 the Respondent State submitted a successful bid to host the 2008 Global Athletics Season Preview (‘GASP’) to the GASP International Competition Council (‘the Council’). On the basis of the aforementioned agreement. 23 3. 2. this disease was expected to impact 95% of the species population fatally within five years. The only caveat specified by the contract was that. Inc. the frogs must be treated ‘humanely’. The constituent contractual term was that the Respondent would pay the Claimant per month on the basis of the quantity of frogs removed from the island. 1 See clarification 21. See clarification 60. Half of those frogs were then to be sold to a pharmaceutical corporation for the purposes of medical research into allergy treatments. Under the terms of the agreement. it was identifying the remaining healthy Sireno Kanto and transporting them to a secure holding location in a nearby country. the company confirmed that. In February 2006.
estimating that by the end of December that year. The Claimant submitted this request pursuant to Article 24 of the Bilateral Investment Treaty (“BIT”) concerning the Encouragement and Reciprocal Protection of Investment between the Government of the Republic of Oscania and the Government of Bela Rano Insularo. a retired academic and experienced commercial and investment arbitrator as chair. the Claimant refused. With the remaining Sireno Kanto. the Claimants had only removed 3% of the island’s Sireno Kanto population. 9. a leading arbitration practitioner as its nominee to the Tribunal and proposed the appointment of Dr. 11 .Team Baxter Memorial for the Claimant The Claimants are contractually entitled to 10% of all royalties which may result from any potential products of this research. the Respondents cancelled the contract with the Claimant. on 13 March 2006. on 9 February 2007. the Claimants announced the intended acceleration of operations. The Respondents requested the opportunity to inspect the Claimant’s newly envisioned operations in order to verify this claim. 7. The contract did not contain any explicit clause obliging the Claimant to specify such uses to the Respondents following clarification 52. the Respondent agreed to the appointment of Dr Honesta as chair of the Tribunal and appointed Professor Alessandra Iracunda as its own nominee for arbitrator. the Claimants confirmed that they were planning to sell recordings of the sounds made by the frogs during their annual croaking season (May-November) after discovering their relaxation qualities. citing inadequate performance. the Claimant appointed Mr Albert Viator. Consequently. 6 See clarification 44. As of that time. Procedural History 8. Subsequently. Neither this use. Humberto Honesta. On 15 December 2006. 5 There is no evidence to suggest that the Claimant was aware of the potential commercial uses of the Sireno Kanto at the time the agreement between the parties were reached.5 6. 80% of the Sireno Kanto population would be removed from BRI. or that specified in the preceding paragraph were ever discussed with the Respondents. On 1 March 2006. The contract between the parties did not contain an explicit choice of forum clause. Accordingly. they are not due to receive any income from either venture. However. On 4 December 20066. following extensive negotiations. the Claimant filed a Request for arbitration to the International Centre for Settlement of Investment Disputes (‘ICSID’) against the Respondent.
Dr. In response. the Respondent filed its submissions in response to the disqualification proposal. Ranapauer for a subsequent date. Ranapauer informed the parties that he would no longer be attending as he had recently joined Wilderness and believed that participating in the arbitration would be tantamount. Accordingly. 8 See clarification 94. The parties agreed that all proceedings of the arbitration would be governed by the Bela Rano Model Rules on the Taking of Evidence in International Arbitration. an initial hearing was held. Iracunda was confirmed by her co-arbitrators on the Tribunal. All nominees had accepted their appointments by February 13 2007 and accordingly the ICSID informed the parties that the Tribunal was deemed to be constituted and the proceedings to have begun on that date.1 of the BRI rules on taking of evidence. or either party. alleging a lack of impartiality and independence. The Tribunal did so 7 Clarification 108: The Respondent notified the Claimant of its intention to rely on such an opinion pursuant to Article 5. ICSID confirmed receipt of the proposal on the same day and declared that the proceedings were suspended indefinitely. On the morning of the initial hearing. On 1 March 2007. Ranapauer was no longer available for cross-examination. The Respondents had prior submitted an Expert Report from Dr. This was voiced in her academic writings “Rethinking ICSID”. The Claimant’s proposal was subsequently dismissed and Dr.7 Dr. the Tribunal requested that the Respondent attempt to secure the attendance of Dr. This report addressed the nature and expected consequences of the disease which afflicted the Sireno Kanto. Iracunda issued a statement in relation to the proposal to challenge her appointment averring that she would perform her role in a fully impartial and independent manner. Irancunda pursuant to Article 57 of the ICSID Convention (‘Convention’). 14. This request was subsequently refused by Dr. 12 . Dr. the Claimant requested the report be rejected on the grounds that Dr. 11. 15. the Claimants filed a proposal to disqualify Dr. 12. the lead scientist at the frog research unit at BRIU. On 7 April 2007. This considered the Claimant’s objections to the Tribunal’s jurisdiction. Ranapauer and thus no further attempts were made by the Tribunal. 13. 8 The Tribunal rejected the Claimant’s motion to exclude the report.Team Baxter Memorial for the Claimant 10. Ranapauer is one of only three scientists worldwide who have a detailed knowledge of these matters. to secure his participation. On 23 March 2007. This was until a decision on the proposal was made in accordance with Arbitration Rule 9 (6). Herbert Ranapauer. In May 2009.
Mr Viator. See clarification 93. The Claimant now requests relief from to the present Committee. He noted that Dr. 9 For example. significantly more evidence on the likely impact of the disease on the Sireno Kanto than was available at that time from any publicly accessible source. The Tribunal considered that the Claimant’s activities did not constitute an “investment” under Article 25 (1) of the ICSID Convention. as they did not contribute adequately to the development of the Respondent State. On 29 July 2009. the Tribunal issued an award declining jurisdiction over the case. dissenting. Iracunda had been closed-minded on the issue throughout the Tribunal’s discussions. stated that the ICSID Convention does not require that an investment contribute to the development of the Host State.9 16. 13 . inter alia. 17. the report included.Team Baxter Memorial for the Claimant on the basis that it should still be considered as it contained information which was not available from any other source.
Article 52(1)(a).Team Baxter Memorial for the Claimant PART ONE: The Procedure 18. ICSID Case No. 2002. 27th February 2012. SA and Consorcio de Aguas Bilbao Bizkaia. Article 14(1) presents the standard to be applied.54.10 19.5 14 See. that those presiding on a Panel shall “. 12 Ibid. v. 12th May 2008. inter alia. 2007 (“Suez Aguas Decision”). para 28.. ICSID Case No ARB/07/26.A.”12 Thus. 13 21.A. ARB/03/19. 15 Suez and ors v Argentina... ICSID Case No. 20. See also.. See also. at para. Suez. It requires. The Argentine Republic . ICSID Case No ARB/03/19. As a preliminary consideration. Ibid. and InterAguas Servicios Integrales del Agua S. ConocoPhillips Company and Others v Venezuela. Decision on Second Proposal for the Disqualification of a Member of the Arbitral Tribunal. The Claimant has applied to the current ad hoc Committee on the basis that the initial challenge against Professor Alessandro Iracunda should have been successful at first instance. Bilbao Biskaia ur Partzuergoa v Argentina. ARB/01/13. ICSID Case no ARB/07/30. it is averred.. the Claimants have approached the present ad hoc Committee under the Article 57 and Article 14(1). within the Claimant’s and Respondent’s understanding of Article 14(1).. on account of any fact indicating a manifest lack of the qualities required by paragraph (1) of Article 14”.. 14 These concepts will be considered distinct in the Claimant’s submissions below. The Argentine Republic . Sociedad General de Aguas de Barcelona S. v.A. ICSID Case No. Decision on Claimant’s Request to Disqualify an Arbitrator. QC.. inter alia. This challenge is pursuant to the dismissal of a proposal by the Claimants. Article 57(1). who may be relied upon to exercise independent judgment. A pertinent observation would also be the inclusion of the traditional concepts of “impartiality”. 28. ARB/03/17 and Suez.. Alpha Projektholding GMBH v Ukraine.11 In turn.. p. 12th August 2010. 15 10 11 ICSID Convention. inter alia.. SGS Société Générale de Surveillance v. dated 1 March 2007. respectively. Arbitrator. rendered the initial Tribunal improperly constituted. October 22.A. This concurrence is also found in case law. and Vivendi Universal S.persons of high moral character . Article 57 states that a party may propose the disqualification of any of the three arbitrators “. 14 . Decision on Claimant’s Proposal to Disqualify Arbitrator of December 19. The failure of the Two Members to disqualify Professor Iracunda from the initial proceedings has. “any” fact that may illustrate a “manifest” lack of the aforementioned qualities would demand the disqualification of Professor Iracunda. para. 13 See. Decision on the proposal to disqualify L Yves Fortier. Decision on the Proposal for the Disqualification of a Member of the Arbitral Tribunal. Sociedad General de Aguas de Barcelona S. para 36. alongside “independence”.. Article 14(1). Islamic Republic of Pakistan .
and the strength of the language. ab initio. She clearly. QC.19 This clearly limits Professor Iracunda’s thought process. alongside other articles. 17 Urbaser SA and Consorcio de Aguas Bilbao Bizkaia.44. and particularly the relevance to that meaning of the contribution of a transaction to the economic development of the Host State. views which clearly militate towards the broad concept of commercial autonomy. ICSID Case no ARB/07/30. The views advocated. Decision on the proposal to disqualify L Yves Fortier. para. limit the scope of what Professor Iracunda can be persuaded as constituting an investment. and especially. 4–77. PROFESSOR IRCAUNDA’S PUBLISHED VIEWS SHOW A MANIFEST LACK OF INDEPENDENCE AND IMPARTIALITY.18 25. 19 The Record.. 23. ‘Re-Thinking ICSID Arbitration’ and several other articles. Decision on Claimant’s Request to Disqualify an Arbitrator. The question to be considered on this matter is whether the opinions expressed by Professor Iracunda are specific and clear enough to give cause for a reasonable and informed third party to find that she may only rely on such opinions without proper consideration of the relevant facts.55. Bilbao Biskaia ur Partzuergoa v Argentina. demonstrably shows that is its “necessary” to move past.6-7. She is demanding adherence to the necessary view that investment can not only be considered under the agreement instrument. This is owing to Professor Iracunda already having prejudged them. addresses the meaning of the term “investment” in Article 25 of the ICSID Convention. pertinently. ICSID Case No ARB/07/16. the ad hoc Committee bear in mind an overarching principle. Redfern and Hunter on International Arbitration 267–68 (5th ed. Professor Iracunda. circumstances and arguments as presented by the parties of the dispute.6-7. the protection of a party’s fundamental rights from partisan and dependent arbitrators. 2009). inter alia. having authored. within the second paragraph. 15 . pp. para. Arbitrator. in Professor Iracunda’s writings illustrate the strength of commitment to her views and amount to a prejudgment of a pivotal matter in the dispute. when contemplating the aforementioned notions of independence and impartiality. an objective third party may see an obvious appearance of a lack of freedom to give an opinion based solely on the facts and circumstances of the case. 16 ConocoPhillips Company and Others v Venezuela. 1. what is unequivocally deemed “dangerous”. has displayed an obvious and clear appearance of a lack of independence. 16 I. It indicates a comprehensive prejudgment on what is a pivotal matter in the present case. ICSID Case No ARB/07/26. 19th March 2010. This is contrary Decision on Challenge to Arbitrator. The content of Professor Iracunda’s writings show a prejudgment of a pivotal matter in the dispute. Nigel Blackaby et al. 27th February 2012. 12th August 2010. 24. pp. paras. 17 In other words. The initial except from Professor Iracunda’s ‘Rethinking ICSID’. The writings of Professor Iracunda display. lines 308-311. The Claimant respectfully submits that.362. the view that an investment can be solely defined under the instrument containing the consent. A. and.Team Baxter Memorial for the Claimant 22. impartiality. 18 The Record. para 35. lines 300.
Decision on Jurisdiction and Admissibility. SDN.25 This is supposed issue is swiftly followed by an obvious cry for “What is needed [emphasis added]”. 4th August 2011. and concludes that the term investment “. objectively to others. 28th February 2009.7. “creates” the potential for dozens of ICSID claims which would require impoverished states to divert valuable resources to defend. “The Committee is unable to see what support the Sole Arbitrator could have mustered to sustain the conclusion that the Contract and its implementation did not constitute an investment within the meaning of that Agreement. 25 The Record. 28th February 2009.317. pp. 65 et seq.6. as a policy defence mechanism. ICSID Case No ARB/05/10. On the contrary. p. explicitly states that “by the terms of the Agreement. This is despite the fact that it is agreed in a BIT and it is despite the fact that this should be. para 61. ICSID Case No ARB/07/5.constitutes a contribution which qualifies as “investment” per se under Article 1(1) of the BIT”. lines 351-356. it is clear that the Contract and its performance by the Salvor constitute an investment as that term is defined by the Agreement. other instances.”21 Indeed. (and subject to the consideration noted below in paragraph 81 of this Decision). 16 .22 Thus. ICSID Case No ARB/07/5. para 371. in the penultimate paragraph. 24 The Record. she will tend against any wide definition. the pertinent aforementioned quotations show that Professor Iracunda’s remarks are manifestly partisan. p. Decision on the Application for Annulment. Decision on the Application for Annulment.the contract is an investment.23 It is stated that the previous “dangerous” interpretation of investment. These two paragraphs present irrelevant considerations being considered.. Malaysia. is to save developing countries from ICSID.6.” 20 It continues. and speculative argument. which it is apparently necessary to steer clear of. inter alia. It is evident from the underlying rationale of Professor Iracunda’s writings that she is espousing a ‘floodgates’. such as Abaclat and Others v Argentina show solely an analysis of the BIT in question. the judgment of the Annulment Committee in Malaysian Hisotircal Salvors. reference is made. 21 Malaysian Historical Salvors Sdn Bhd v Malaysia. matters other than that of the sole merits.6-7.Team Baxter Memorial for the Claimant to legal opinions arising from previous ICSID arbitral awards. 26. Decision on Jurisdiction and Admissibility – Dissenting Opinion of Professor Georges Abi-Saab. lines 351. pp. See also.323. Such contentions from Professor Iracunda clearly indicate that no matter the argument or how compelling evidence is. becoming concerned of the overexpansive approaches to ICSID jurisdiction. lines 314... 24 She is markedly militating against wide definitions. within the arbitral system. Indeed. 23 The Record.356. para 61. Abaclat and ors v Argentina. ICSID Case No ARB/05/10. facts and circumstances of the case. 4th August 2011. They show she has prejudged the matter of defining an investment. as presented by the 20 Malaysian Historical Salvors Sdn Bhd v Malaysia.. lines 311. para. 22 Abaclat and ors v Argentina. BHD v. For instance. at least partially. That is. what her arbitral award is founded upon.
Decision on Challenge to Arbitrator. and Phonexic Action v. 28th February 2009. ARB/05/3. Pursuant to Professor Iracunda militating against wide interpretations. to note that there is “.. Decision of 12 July 2006) para 73(iv). v. ICSID Case No ARB/03/19. From a purely objective stance.A.Team Baxter Memorial for the Claimant parties.31 He. ARB/05/3.I. This renders her as manifestly lacking in independent judgement should the Claimant proffer the alternative view. for those disputes under the ICSID Convention. Award. ICSID Case No ARB/06/5.p. et ASTALDI S. Malaysian Historical Salvors.7. 26 This illustrates that Professor Iracunda.32 These prior awards display a clear disparity in interpretation of the matter. Dissenting Opinion of Judge Mohamed Shahabuddeen. argued that the economic prerequisite was an essential characteristic of an investment. the Czech Republic. inter alia. et ASTALDI S. Decision on the Application for Annulment. Algeria (ICSID Case No.A. no reason to accept. Pey Casado and Président Allende Foundation v Chile.E. S. Professor Shahabudeen makes reference to the distinct approaches of the Committee members which illustrate a “titanic struggle between ideas”. both awards dismissed the supposed prerequisite that a contribution to development should be fundamental to interpreting an investment. 28th February 2009.7. line 325.. Decision of 12 July 2006) para 73(iv). contrary to the other members. disagreeing with such. p. Professor Iracunda cannot be more express in presenting a prejudgement in saying that: 26 Perenco Ecuador Limited v Ecuador and Empresa Estatal Petroleos del Ecuador. para 85.A. et ASTALDI S.29 This view is shown to be partial in light of previous awards rendered by ICSID Tribunals. 17 . p. 9th April 2009. 8th December 2009. 30The instance of Malaysian Historical Salvors. Phoenix Action Limited v Czech Republic. the majority in this instance annulled the initial award.E. Professor Iracunda continues. 12th May 2008.27 27. Indeed. Annulment Proceeding. interpretation of “investment” “must” be construed as to contribute to the economic development of the Host State.p.p. S. 29 The Record. in the respective cases of L. Malaysian Historical Salvors Sdn Bhd v Malaysia. cannot be relied upon to give independent judgement in the present instance..S.p.I. L. ICSID Case No ARB/05/10. lines 342-344. Phoenix Action Limited v Czech Republic.S.. Nonetheless.g. Award. See also. 28th September 2010. that.I. she demonstrably shows she lacks independent judgement. Algeria. para 46.A. 9th April 2009.” the purportedly dangerous view that an investment may exist should it satisfy its associated definition in the instrument giving rise to the dispute. ICSID Case No ARB/06/5.A.S. 30 E. para. ICSID Case No ARB/05/10. 28 The Record. 32 L.. 31 Malaysian Historical Salvors Sdn Bhd v Malaysia. Decision on the Application for Annulment – Dissenting Opinion of Judge Mohamed Shahabuddeen.28 Professor Iracunda continues to note most pertinently. Algeria (ICSID Case No. S. from markedly stating her view on the interpretation of investment.p. Decision on Second Proposal for the Disqualification of a Member of the Arbitral Tribunal. ICSID Case No ARB/98/2.A. v. ICSID Case No ARB/08/6. para 29. 62.E.p. v. 27 Suez and ors v Argentina. and aligning with Professor Iracunda. 28. and Professor Iracunda is firmly positioning herself on one side of the debate.
with which Professor Iracunda authors her works present her as manifestly lacking in independent and impartial judgement. Of which. Award of 26 November 2009. 18 . 37 Ibid. but this was “not the right approach” as it presents as contradictory to the ICSID Conventions aims. and choice of words.137–143.37 Thus. The Republic of Uzbekistan (PCA Case No. Decision on Jurisdiction and Admissibility – Dissenting Opinion of Professor Georges Abi-Saab.7. This is manifestly partisan in that it ignores other methods of interpretation of what an investment is. and that “only” new development will suffice.. The style.”33 [Emphasis added] This excerpt expressly states that “only” the Salini criteria can. effectively. It is evident that Professor Iracunda will clearly be influenced by her own pre-made judgement and opinions on the interpretation of investment. the doublebarrelled test. para. para 73. Professor Iracunda’s writings indicate the fundamental framework in which she will narrow. or analysing the BIT in the same way as Article 25 of the Convention. It is acknowledged by 33 34 The Record. 4th August 2011. and manifestly closing her mind and restricting her capacity to be able to consider methods of analysing other than the Salini criteria.180 and para. The vigour with which Professor Iracunda writes shows a manifest lack of impartiality. The Record. be utilised to establish an investment . She has laid down the fundamental principles on which to decide the present dispute. ICSID Case No ARB/07/5. It cannot be ignored that there is an indubitable show of impartiality by Professor Iracunda. on the facts. no matter the facts of individual cases. Award of 31 March 2011. it was most aptly noted in Abaclat. Romak S. paras. 4th August 2011. Professor Iracunda is unashamedly. at note 31.. 30. p. It is clear that she may be influenced by her own research and fiercely voiced opinion. Professor Iracunda has outlined her own overarching principles on which to base a decision. on these questions of law. 35 Ibid. Ukraine. v. GEA Group Aktiengesellschaft v.A. p. only new development can suffice.207. Abaclat and ors v Argentina. ICSID Case No. confine and focus her mind. consideration of the BIT alone. 363-71. determine how beneficial the award is for the claimant or respondent. AA280). 36 Indeed. 2. paragraph 66. be it consciously or unconsciously. ICSID Case No ARB/07/5. 29. and adhere to the policy considerations. 34This is referring to the fundamental basis on which Professor Ircaunda would make a decision.Team Baxter Memorial for the Claimant Only the Salini criteria reflect this reality. inter alia. at note 23. This is from openly stating that only the Salini criteria can be used to negate the aforementioned problems. lines 344-347. 35 For instance. 36 Abaclat and ors v Argentina. The above extracts demonstrably show a lack of independent judgement on matters which go to the heart of the case. that “one approach is the Salini criteria. ARB/08/16 (Germany/Ukraine BIT).7. paras. para 363. and only the inclusion within the Salini criteria of the requirement of a contribution to the development of the Host State fulfills the true purpose of the ICSID Convention Moreover. Thus. lines 344-347. Therefore. Decision on Jurisdiction and Admissibility.
39 They are forceful statements about the direction of ICSID and the fundamental framework of what decision making must be. The use of intense words throughout her works surpass a mere personal style of writing. inter alia. that these select words cogently show she lacks the capacity to decide contrary to those opinions which she adheres to.42 Indeed. Judge Brower. mere showing of opinion. 43 The employment of such superlatives as “must” use a certain view. a manifest illustration of lack of independent judgment. through aligning oneself to a fundamental issue. 44 Ibid. from her own research in coming to this conclusion. it is stated that “only” the Salini criteria can. and “only” would the Salini do. 45 In 38 39 Ibid. 32. to enable one to move away from a “dangerous” alternative presents the author in a bias light.. The Committee in this instance based their reasoning upon. objectively. that there was passionate vocabulary use.7. in that instance.. pp. was disqualified for expression of his opinion in an interview. such rigidity continues.. p. at note 17. para.no reason to accept. but rather a personal framework for her to abide by in deciding upon the facts of each case. in reaching this.6-7. Such absolute words clearly lack flexibility. obvious and reasonable interpretation of such. is not sufficient to sustain a challenge for lack of impartiality. be utilised to establish an investment and that “only” new development will suffice.. 53. However. is down to the parties. it is evident that her opinions transcend mere expression of a view. persuasion that such is a pejorative view to ICSID and the present case. v Ecuador (& Others). being forceful as it was.7.” this aforementioned view. For instance. The Record. para. Professor Iracunda continues to demand that “investment” “must” be construed as to contribute to the economic development of the Host State. lines 308-311. and declaring this the “only” means of analysing a situation. It is sufficient that it is an objective. 19 . 33. This is in that the vocabulary selection.7. Comparison can be drawn to the instance of Perenco Ecuador Ltd.45. and indeed futile.44 Indeed. She narrows her mind to a decision making skeleton which. inter alia. 45 Ibid. Proffering a remedy to the matter. effectively. Despite the contention within her statement that what constitutes development is a matter of fact.41 This illustrates the closed mind of Professor Iracunda. 42 The Record. on the facts of that case. particularly in deeming something dangerous. it was expanded that divining the true interpretation of why Judge Brower used these words is not necessary. at note 23. at note 26. She has evidently shut herself off on this matter and. her comments go further than an opinion. 38 31. Moreover. could not be persuaded otherwise. para 49. 41 The Record. lines 486-491. p. lines 342-344.Team Baxter Memorial for the Claimant the Claimant that. 40 The Record. from this in stating that there is “.. the widely utilised concept that investment may be solely defined under an instrument was expressly denounced as “dangerous” and to move away from it is “necessary”. Her contention is void in that what she writes is not mere legal opinion in the abstract. was enough to constitute evidence of a lack of impartiality or independence.9-10.. much like Professor Iracunda. line 325. lines 344-347. p.. gives the clear and obvious impression. causes for her to manifestly lack impartial and independent judgement. inevitably. p. even if relevant. For Professor Iracunda.40 Indeed. 43 The Record.
and capabilities to temper language. p. In consideration of the aforementioned lack of impartiality and independence. it is evident that academic writing. and language. at note 17. She is a leading proponent in this 46 47 The Record. arguably. and research.. and indeed all written language.9. It is averred that Professor Iracunda has positioned herself as leading and spearheading the school of thought that advocates a “development -inclusive” interpretation of an investment. B. and the ferocity with which this stance is held. that her indirect interest. coupled with Professor Iracunda’s clear and obvious prejudgement of the dispute. Whilst.” 47 In applying this notion.6. it is inevitable criticism may follow. by a direct or indirect interest of the arbitrator in the outcome of the dispute. Ibid. p. It was stated in Urbaser SA (& Others) v. embarrassment should she renege on her own fiercely-advocated views. this is trivialising the matter. She cannot. and artificial contention that Arbitrators and Scholars are two dramatically distinct roles for one person. “For such a challenge to succeed there must be a showing that such opinion or position is supported by factors related to and supporting a party to the arbitration (or a party closely related to such party). or. gives the possibility of a range of intensifying words. Professor Iracunda’s writings highlight that she would face significant professional embarrassment should she contradict herself in practice. When such scholarly opinions are assessed in the context of a particular set of circumstances. Argentina. occasionally. should she reject her own extensive works. it is accepted that an Arbitrator and Scholar can remain in distinct roles. and in the Decision of the Two Members. Professor Iracunda could state that the Salini criteria is convincing but not the only solution. and quite publically and openly renege on her broad overarching views. Indeed. This is fiercely advocated. outline a framework by which to decide arbitral matters pertaining to the interpretation of investment. 34. which quite clearly lay the basis and overriding framework in which to base a judgement 36. can state that the Salini criteria must be the only means of consideration. lines 308-323. lines 440-448. we see that she is more than a mere Scholar. analysing and researching investment law.. as she did. that the mere showing of opinion is not sufficient to disqualify an arbitrator. and implemented. 48 She cannot be seen to issue an award which flies in the face of her very forceful. present an obfuscated. is in ensuring her academic opinions are seen through. opinions 37.46 The aforementioned content.Team Baxter Memorial for the Claimant applying this. be seen to issue a powerful suggestion on the system.. This is for the reasons outlined above. it was noted that. and articles by issuing a contradictory award. on the facts. Professor Iracunda. lines 351-362 20 . or even direct interest.45 48 The Record. and. and professional. it can be seen that. maintain impartiality and independence in these respective roles. However. already written. p. contained within the writings of Professor Iracunda. it can be seen that Professor Iracunda would face significant personal. para.7. 35.
as investigated above.. PROFESSOR IRACUNDA’S MEMBERSHIP OF WILDERNESS DEMONSTRATES A MANIFEST LACK OF INDEPENDENCE AND IMPARTIALITY 39. 50 1. p. at note 17. but when their writings are considered on a spectrum we can see there are acceptable analyses of ICSID and matters. and active supporter. Professor Iracunda as a leading proponent of her views. It is not in black and white as contended by the Two Members. This impartiality. 40. Therefore. consideration of methodology hailing from case law. of an organisation opposed and concerned with the subject-matter of the present dispute. para 2. 51 IBA Guidelines on Conflicts of Interest in International Arbitration. para 52. the removal of the Sireno Kanto frogs. nor independent. has little accompanying guidance from the ICSID convention. perhaps even dogmatic. A.. Thus. the matter cannot be divided as distinctly as the Two Members and Professor Iracunda so declare. para 33. it is evident that a there is a clear nexus in Professor Iracunda being a member. What matters. Professor Iracunda manifestly lacks the ability to independently judge the present dispute in that she has already adjudged the Claimant morally for their actions. and an evident prejudgement of the associated activities of the Claimant. In actively joining an organisation. and Professor Iracunda. and justifiable doubts necessarily exist as to the arbitrator’s impartiality or independence “. This clearly shows a manifest lack of independence and impartiality. at note 27. Professor Iracunda illustrates an unacceptable connection. 22 May 2004.”51 This guidance can be applied with reference to 49 50 Ibid. 41. despite the two roles being distinct. quite clearly cannot retain the capacity to decide contrary to her own dogmatic views. is the context surrounding these opinions. ranging through to unacceptable stances being advocated and vehemently adhered to. advocate of this view. The IBA Guidelines indicate.8. p. considered qualitatively.. Contrary to the Responding view that there is nothing to suggest that Professor Iracunda is partisan or lacks independent judgement. A Scholar can publish extensively. General Standard 2(d). Ibid. and the International Bar Association is apposite.Team Baxter Memorial for the Claimant school of thought. 21 .. She is a strong and consistent. IBA Guidelines on Conflicts of Interest in International Arbitration. 22 May 2004. Professor Iracunda has morally prejudged the matter and is not impartial.3. 49 38. II. pursuant to General Standard 2(c) and (d). Thus. that doubts are justifiable should the possibility arise that an arbitrator may be influenced by facts other than the merits of the case. respectively. para 34.if the arbitrator has a significant financial or personal interest in the matter at stake. and then taking the additional step to provide monetary support for their activities. Professor Iracunda’s membership of Wilderness demonstrably shows a manifest lack of impartiality and independence. The IBA Guidelines substantiate an unacceptable connection to Wilderness.
of which. 54 Thus.. 55 Ibid. The proximity of the connection. This may be considered to be providing the implicit support for the previous activities of the Claimant in the subject-matter of the dispute. This may not be true. save for Professor Iracunda.4. vociferous protests against. 42. objectively. and impartiality as there is a clear moral prejudgment by Professor Iracunda. she has given regular donations on an annual basis.. This renders representations by the Claimant futile. that she supports their strong rebuke of the treatment of the Sireno Kanto frogs.Team Baxter Memorial for the Claimant Professor Iracunda supporting and furthering the aims of wilderness fiscally. This provides a continued support.3. They elucidate the prejudgement of Professor Iracunda. para 35. this indicates that there is a risk of Professor Iracunda considering extraneous matters.8. In turn. 52 Such associations connote a significant personal interest in the matter at stake.8. It is contended that the proximity and intensity of interactions. 54 The Record. are apposite considerations. the intensity of the interactions. It cannot be known. However. Professor Iracunda lacks independence. The Record. it can be consider ed a reasonable interpretation. p. being an interested organisation. it is strikingly clear that a reasonable third party. the degree of dependence for benefits from Wilderness. their protest. could conclude that there is a chance of Professor Iracunda being partisan. The ‘Suez’ factors demonstrably show a lack of impartiality and independence56 43. 57 Ibid. or otherwise manifestly influenced by Wilderness and her own connecting views. can be seen to be intertwined into the subject matter of the dispute. considering Professor Iracunda’s membership. appropriate application can be seen. against the Claimant. but in going one step further and 52 53 The Record. and financial support of. dependent. and the materiality or significance of such benefits. and actively. at note 26. lines 409-413. 57 44. lines 175-180. not only by associating herself. A manifest lack of independent judgment and impartiality is illustrated from Professor Iracunda’s membership in. p. Wilderness.55 It is a reasonable interpretation.53 Substantiation for this can be seen in Dr Ranapuer being approached on the same grounds. 2. 22 . and Professor Iracunda’s membership. It should be noted that the above arguments do not provide the only interpretation of Professor Iracunda’s connection to wilderness. precisely her true state of mind on this matter. are direct and continued. Wilderness. Professor Iracunda has intentionally. lines 155-156. knowing of Wilderness. of Professor Iracunda to Wilderness. but. lines 403-407. 56 Ibid. taken the step to align herself with Wilderness and their associated aims and activities. and by providing personal support for their activities in actively associating her name with the organisation by being a member. para 35. p. Wilderness has staged numerous. para 53. Subsequent to such. such as the consequences of her decision in awarding in favour of the Claimant. p.. Under the factors laid down in Suez pertinent to a relationship with a party. at note 26.
just as Wilderness has. Professor Iracunda does not derive merely financial benefits. Therefore. para 245. Decision on Annulment.. Ranapuer’s Expert Report. by extension. 62 Compañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentina. This is on the grounds that admission of the report constituted a serious departure from a fundamental rule of procedure. Arbitrator. 47. is to be analysed within the confines of the Bela Rano Model rules on the Taking of Evidence in International Arbitration. than jus t a monetary one. as contended below. 59 Ibid. 5th May 2011. and indeed more entrenched in one’s mind. CDC Group Public Limited Company v Seychelles. ICSID Case No ARB/97/3. Then. (d) that there has been a serious departure from a fundamental rule of procedure. Arguably. ICSID Case No ARB/10/14... As can be seen from the materiality of the benefits derived from Wi lderness’s success. partial in judging her award. para 35. Professor Iracunda has a compelling reason to be partial towards Wilderness. Decision on the Proposal to Disqualify Professor Philippe Sands. lines 163-166. 61 Such rules governed the Tribunal’s decision making process in deciding not to exclude Dr Ranapuer’s Expert Report. These factors elucidate the fact that Professor Iracunda has a manifest lack of ability to exercise independent judgment in this matter. 58 45. The application to the present ad hoc Committee is made pursuant to Article 52(1)(d) of the ICSID Convention which states: “(1) Either party may request annulment of the award by an application in writing addressed to the Secretary-General on one or more of the following grounds: . This factor can be construed as. 3rd August 2010. Consideration of this ground for an annulment application. ICSID Case No ARB/02/14. THE TRIBUNAL’S FAILURE TO EXCLUDE DR RANAPUER’S EXPERT REPORT CONSTITUTED A SERIOUS DEPARTURE FROM A FUNDAMENTAL RULE OF PROCEDURE. an emotional gain can be substantially stronger. there is evident moral prejudgement of the Claimant’s actions. 48. 61 The Record. 62 58 OPIC Karimum Corporation v Venezuela. 29th June 23 . para 22.59 46. Therefore. III. 60 Article 52(1)(d) ICSID Convention. it is submitted. at note 26. and the degree of dependence upon a party for benefits. (2007) 11 ICSID Rep 237. by supporting Wilderness. 50.Team Baxter Memorial for the Claimant providing monetary support. but emotional benefits in seeing Wilderness succeed. the Tribunal flew in the face of an obviously fundamental rule of procedure in making a serious departure it. as a significant benefit. Decision on Argentina’s Request for Annulment of the Award.”60 49. The Claimant requests annulment of the Tribunal’s decision not to exclude Dr.
(2002) 41 ILM 933. Decision on annulment application. (2004) 6 ICSID Rep 129.. Berti & Ponti. by the ad hoc Committee. (2003) 130 Clunet 167. demonstrably shows that should an Expert fail to appear without valid reason then the Tribunal must disregard their report. in exceptional circumstances. Fouchard. (2004) 6 ICSID Rep 129. 2582–3. Article 5(5) is a fundamental rule of procedure. Article 5(5) is an elementary cornerstone of procedure. This presents a substantial threshold to be attained before allowing the black and white rule to be disapplied. it is cogently argued that in Born.. 53.1 fails without a valid reason to appear for testimony at an Evidentiary Hearing. in and of itself. ICSID Case No ARB/98/4. 2582–3. 64 Ibid. International Arbitration (2009).. that the right to present a case includes the right to make submissions on evidence presented by the opponent. this rule. Gaillard & Savage (eds). It is contained within the agreed rules to govern the procedure with which the parties have submitted themselves to. the Arbitral Tribunal shall disregard any Expert Report by that PartyAppointed Expert related to that Evidentiary Hearing unless. 2005. 65 CDC Group Public Limited Company v Seychelles. (2002) 41 ILM 933. 29th June 2005. See also. 65 This stance is echoed in Wena Hotels. which noted that it was a fundamental rule of procedure for a party to be heard and to produce “. 2007) paras. pursuant to general principles of arbitral law.”64[emphasis added] 52. The Tribunal failed to correctly apply the most pertinent Article of the Belo Rano Model Rules. 66 Wena Hotels Limited v Egypt.. ICSID Case No ARB/02/14. (2007) 11 ICSID Rep 237. Article 5(5) is manifestly a fundamental rule of procedure.will” be subject to an annulment. Article 5(5) is a fundamental rule of procedure. and adducing cross-examination. 1.68 Therefore. pp. Indeed.. 66 Moreover. para 49. 28th January 2002. 947–948.Team Baxter Memorial for the Claimant A. The notion of a Tribunal preventing a party from addressing evidence pitted against them. Gaillard. the Arbitral Tribunal decides otherwise. ICSID Case No ARB/98/4. para 56. para 48.essential fairness of the proceeding”. Decision on Annulment. demonstrably shows a breach of natural justice and is contrary to the “.all arguments and evidence in support” of a defence or claim. International Arbitration (2009). Wena Hotels Limited v Egypt. pp. This leaves little flexibility and shows the gravitas of the rule. Goldman on International Commercial Arbitration (1999). 24 . trans. The Belo Rano Rule requiring exclusion is a fundamental rule of procedure 51. (2003) 130 Clunet 167. As a general principle of law.67 It continues in noting that failure to give such a right means the Tribunal “. 546–554. Poudret & Besson Comparative Law of International Commercial Arbitration (2 ed. Decision on annulment application. para. 57 67 Born. 63 Belo Rano Model Rules on the Taking of Evidence in International Arbitration. Article 5(5)..63 Article 5(5) clearly states as follows: “If a Party-Appointed Expert whose appearance has been requested pursuant to Article 8.. 28th January 2002. 1638. 68 Born. It is contended that. para. pp. The only caveat to such is when exceptional circumstances warrant otherwise.
. as was stated in Wena Hotels. Dr Ranapuer’s reasoning consisted of having being approached by Wilderness and being convinced to provide assistance to the Tribunal. the violation of Article 5(5) was such as that. at note 63.. para 96. The Tribunal departed in a serious manner from Article 5(5) in not immediately excluding Dr.Team Baxter Memorial for the Claimant B. had the Tribunal not considered irrelevant matters. 73They are only tangentially related. The fact that there is a limited pool of experts does not constitute an ‘exceptional’ circumstance. This. 71 1. is not an ‘exceptional’ circumstance warranting admission of the Expert Report. As noted by Professor Iracunda. at note 66.72 This presents an obfuscated understanding of the matter before the Tribunal.” 70 In the present instance. Decision on Application for Partial Annulment. Dr Ranapuer believed such actions which give “. 2. 73 The Record. requiring the Tribunal to exclude his report. 58. Continental Casualty Company v Argentina. the matter does not concern the Sireno Kanto frogs in any means. It is manifestly apparent that. this subjective belief of Dr Ranapuer that participation in the arbitration impinges on his beliefs shows that the Tribunal should have presumed to exclude the report automatically pursuant to Article 5(5).. 72 The Record. then they would have reached a result substantially different from what was awarded.implicit approval” of the Claimant’s supposed treatment of the Sireno Kanto. 56.. Dr Ranapuer had no valid reason for failing to attend the oral hearing. para 58. 69 55. para 37. The Tribunal’s decision not to exclude was a serious departure in the circumstances. ion considering the decision-making procedure of the Tribunal. Ranapuer’s report upon finding out his reasons for his absence. lines 495-499. this 69 70 Ibid. 74 Ibid. objectively speaking.. has impacted detrimentally upon the legal rights of the Claimant and so requires annulment. ICSID Case No ARB/03/9. It is axiomatic that a departure in such circumstances is only serious where it is “substantial and such as to deprive the party of the benefit or protection which the rule was intended to provide. The fact that there is only two other scientists who have detailed knowledge of such matters.74 i. 71 Ibid. lines 177-180. The Tribunal’s decision not to exclude Dr Ranapuer’s report showed a clear and serious departure from Article 5(5) of the Belo Rano Model Rules. 54. they have failed to consider the procedure correctly. despatched 16th September 2011. Thus. there were no exceptional circumstances to negate the substance of Article 5(5) 57. para 96. Additionally. Whilst it is acknowledged that this is a relatively low pool of experts to select from. 25 .
instead of that of another expert. is a fundamental rule of procedure being absolutely breached. 26 . it was. Indeed. 59. Here. Fraport AG Frankfurt Airport Services Worldwide v Philippines. p. No cogent reason is adduced as to why they could not be contacted to assist BRI. it is contended that the decision not to exclude Dr Ranapuer’s report constituted a serious departure from a fundamental rule of procedure.75 ii. Decision on Application for Annulment. Indeed. 731. In addition. bestowed onto them by the Belo Rano Model Rules. Nidera Handelscompagnie BV (Hague Court of Appeal) (28 April 1998) (1998) XXIII Ybk Comm Arb. and time. it is evident that it is misconceived to declare the information to be from no other source when. 60. the Committee in Fraport indicates. this should not be considered to trump the fundamental rights of the Claimant. lines 184-185. Expediency in utilising Dr Ranapuer’s report should not take precedence over the rights of the party. Therefore. 77 This. 17th December 2010. considerations should never be considered superior to a parties access to justice under the ICSID convention. An unequal footing in terms of rights makes a mockery of the ICSID arbitral system. a party was permitted to adduce additional evidence subsequent to the oral hearing. reference to a specific instance of such is made in the Fraport case. 77 Rice Trading (Guyana) Ltd v. and failed to allow the opposing party the opportunity to comment on such. Monetary. in place of Dr Ranapuer. 75 76 The Record.Team Baxter Memorial for the Claimant does not prevent retention of a different expert. 76 to the Rice Trading (Guyana) case. para 200. whilst it may be more expedient to use Dr Ranapuer’s report. ICSID Case No ARB/03/25. in fact.
Introduction 62. require there to be a contribution to the economic development of the host State. It is further clouded by the ICSID Convention’s omission to include the definition of the term “investment”. ARB/08/18. It is submitted that the Tribunal exceeded its power in declining jurisdiction and the definition of the term “investment” does not. Claimant asserts that the Tribunal erred in law in ruling that the term “investment” includes the requirement of contribution to the economic development of the host State. Award. A. This area of law can be difficult to discern and is the most contentious. in law. PURSUANT TO ARTICLE 25(1) 61. 79 27 . between a contracting state…and a national of another contracting state. v Egypt. albeit intentional. Article 25(1) Malicorp Ltd. It was quite explicit in stating that: 78 ICSID Convention.109. which the parties to the dispute consent in writing to submit to the Centre. 63. para.”79 The often cited Report of the World Bank’s Executive Directors attempted to justify as to why the drafters of the ICSID Convention omitted the definition of “investment”. ICSID Case No.”78 (emphasis added) 64. This omission of defining the term “investment” shows the drafters intentions of setting the level of discretion and refrained from including a definition “in order to leave the maximum freedom for its application in practice.Team Baxter Memorial for the Claimant PART TWO: The Merits I. Article 25(1) reads: “The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment. THE TRIBUNAL ERRED IN LAW IN INTERPRETING THE DEFINITION OF INVESTMENT. 31 January 2011.
83 Ibid. According to academics. The former necessitates a deeper understanding of the Salini criteria whilst the latter requires a look at the parties consent. the approach adopted in the Convention gives parties wide discretion to describe the term “investment” and conversely. such as. 2007) 82 Joseph Charles Lemire v Ukraine. Juillard and Carreau. In interpreting the Washington Convention Tribunals employ either an objective or subjective approach. para. 1993.80 65. an examination of equivalent cases by other ICSID Tribunals will assist in determining the approach to be taken and will be shown that the addition of the contribution requirement is inconsistent with the majority of prior case law. gives full discretion on the Tribunal to define “investment”. Paris. pursuant to Article 41. 66. ICSID/2. 81 Therefore. Therefore. ARB/06/18. ICSID Case No. the Tribunal has an obligation to rule on its own jurisdiction (the “Competenz-Competenz”). Moreover. Juillard. It is the Claimants position that the 80 “Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. Moreover. as highlighted in Joseph Charles Lemire v Ukraine. 82 67. 1 ICSID Reports. 83 68.Team Baxter Memorial for the Claimant “No attempt was made to define the term ‘investment’ given the essential requirement of consent by the parties”. Carreau. Therefore. in order to be subject to ICSID jurisdiction. the absence of this definition is due to the fact that the meaning of Investment varies on a case-by-case basis. at note 79. Dalloz. part of the ratione materiae of an investment..26.” Doc. This has been accepted by prior ICSID jurisprudence. ICSID practice under Article 25 derives predominantly from the power of an arbitral Tribunal to decide on its own jurisdiction.98. 23. it is relevant to consider the intentions of the parties at the time of the Bilateral Investment Treaty concerning the Encouragement and Reciprocal Protection of Investment between the Government of the Republic of Oscania and the Government of Bela Rano Insularo (“BIT” or “the Treaty”). there must be an “investment” and the claims put forward by either party must arise directly out of an investment. Decision on jurisdiction and liability. 28 . 14 January 2010. P. 81 D. para. Droit international économique (3e edition. This will be discussed below.
Additionally. The preamble contained within the ICSID Convention is not representative of the overarching intention 71. Decision on jurisdiction. which states: “A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.86 in expanding upon the Salini hallmarks. 72. ICSID Case No. In addition. the Claimants contend that the concept of investment should be conformed within the Bilateral Investment Treaty. it is relevant to address the preamble contained within the ICSID Convention. The preamble.84 69. Award. ICSID Case No.”85 70. v Czech Republic. exclude there to be the requirement of contribution within the definition. the Tribunal in Phoenix Action Ltd. This approach should be the prerequisite when interpreting the definition of “investment” within the Convention.” 84 See AES Corporation v Argentina. It states: “Considering the need for international cooperation for economic development. ARB/02/17. on the outset. 85 86 29 . As the intention of the parties needs to be considered in order to seek an investment and ultimately. elucidates what the Convention is set out to achieve. B. ARB/06/05. Article 31 of the Vienna Convention Phoenix Action Ltd v Czech Republic. 9 April 2009. 26 April 2005. and the role of private international investment therein. pursuant to Article 31 of the Vienna Convention on the Law of Treaties (“Vienna Convention”).Team Baxter Memorial for the Claimant ad hoc Committee should adopt a subjective view and should not be one of a restrictive nature. added that the assets be invested in accordance with the laws of the host State and that only bona fide investments can be protected. The preamble summarises the object and purpose of the Convention and the aims in which it would like to pursue.
it is the Claimants submission that the preamble should only be treated as persuasive. the latter does not specify as to what the development is for. it is submitted that as this approach cannot and should not be used to interpret the Convention. such an omission implies that there is no obligation to consider the condition. 74. which was constructed under the guise of “object and purpose”. Therefore. Such a synopsis cannot be a strong interpretation of what the ICSID Convention desires and the extrapolation of the condition from this meagre phrase does not represent the overarching theme of the Convention. the words of the preamble themselves are too broad to correlate to the characteristics of the condition. actually “vitiates” precisely the bargain which ICSID was designed to enable. However. 75.Team Baxter Memorial for the Claimant 73. suggesting that such an approach is not what the drafters of the Convention intended. at best. 87 Therefore. This preamble based interpretation. In addition. 30 . the realisation of the words “economic development” cannot be used to infer that the definition of “investment” requires a contribution to the economic development of the host State. It is too broad in nature to come to a conclusion. Moreover. from the mere appearance of the term “economic development” within the Convention’s preamble. the variability of ICSID jurisprudence with the omission of any language suggesting economic development is further evidence that the drafters of the Convention did not intend to include a mandatory and strict condition. However. 78. the preamble cannot be used as precedent to rely upon what the Convention is set out to achieve. 77. In analysing the preamble. it doesn’t necessarily mean that it is a condition 87 Julian Davis Mortenson. even though the preamble has clear intentions in requiring future ICSID cases to consider the “economic development”. Consequently. the t erm “economic development” is stated within both the condition and the preamble. Therefore. The respondents will most likely contend that it is evident that investment requires some sort of contribution to the host State. can be quite problematic. in addition. Even though. 76. one would be questioning that an objective approach. “The Meaning of ‘Investment’: Travaux and the Domain of International In vestment Law” 51 Harvard International Law Journal (2010) at 311.
Award. For example. 89 90 31 . Alternatively. C.Team Baxter Memorial for the Claimant in which should be abided by. Generally.p. ICSID Case No. Award. in support of the Tribunals decision in Pey Casado v Chile89. most of these cases have one thing in common: they have rejected the criterion due to the difficulty or impossibility to ascertain it. Furthermore. ICSID Case No. it is submitted that the Respondents extrapolated this requirement from the Preamble which is misrepresentative of what the drafters intended. the contribution requirement should not be considered to be within the definition of “investment” due to the difficulty of ascertaining it 81. S. it is submitted that the Tribunal should not use the preamble based interpretation to define “investment”.I. While it is accepted that the Preamble refers to the prerequisite of “economic development”.I S.S. The reasoning behind the Tribunal in such a case was due to the fact that the requirement was difficult to ascertain. ARB/98/2.A.88 the Tribunal deliberated the Conventions preamble and concluded that the requirement of contribution to the economic development was referred in the preamble but as a consequence not as a condition.S.p.A. et ASTALDI S. in L.p. 79.A v Algeria. as aforementioned. 4 November 2008. Evidently.90 the Tribunal deemed it unnecessary that the investment 88 Pey Casado and President Allende Foundation v Republic of Chile. ARB/05/3. In Pey Casado v Chile. but it does not produce a separate criterion in which has to be satisfied. it is the Applicant’s alternative submission that it is accepted that the requirement forms part of the purpose and aim of the Convention. Therefore.E. the Tribunal should not rule that the requirement is a condition in which needs to be satisfied as it is a consequence. v Algeria.E. these cases have the same resulting view and conclude that the condition is implicitly integrated within the three previous elements. Therefore. 82. Even if it is found that the preamble can be used as a device to interpret the condition.p. Some Tribunals have taken a diverse approach regarding the criterion of economic development of the host state.A et ASTALDI S. ibid L. it would be disproportionate to attribute a meaning which is not ostensible from the phrasing. 80.
58. 14 November 2005.p. para.” 84. A. The Tribunal was incorrect in not following the award set out in Malaysian Historical Salvors (MHS). [phoenix] See Salini Costruttori S. It is a condition which is difficult to establish and that it was “already included in the three classical conditions set out in the ‘Salini test’”91 83. ARB/00/4. Decision on Jurisdiction. THE TRIBUNAL MANIFESTLY EXCESSED THEIR POWERS IN DECLINING JURISDICTION UNDER THE SALINI93 CRITERIA 85. Claimant asserts that the Tribunal erred in law in adopting the Salini criteria and consequently using the test to produce jurisdictional characteristics. 28 February 2009. 93 94 Malaysian Historical Salvors Sdn Bhd v Malaysia. Therefore. 16 July 2001.Team Baxter Memorial for the Claimant contributed to the economic development of the host State. ICSID Case No.A..92 It was accepted that the requirement of the contribution to the economic development of the host state was a criterion within the ICSID Convention but refused its applicability due to that it “is impossible to ascertain – the more so as there highly diverging views on what constitutes development. Another example is that of the Tribunals decision in Phoenix Actions Ltd v Czech Republic. v Morocco. (Citing LESI v Algeria). the Claimants contend that the condition of contributing to the economic development of the host State should not be a criterion in which it is possible to define the term “investment” due to the impossibility of ascertaining it. para. Arb/03/29. Moreover. 2. Decision on the Application for Annulment.94 and therefore. the contribution requirement is integrated within the other three criteria and it is therefore impossible to conclude that the contribution requirement is a separate criterion in which has to be satisfied. ARB/05/10. at note 86.137. the Salini criteria should not have been applied 91 Bayindir Insaat Turizm Ticaret ve Sanayi A Ş v Pakistan. ICSID Case No. ultimately. ICSID Case No. 92 Ibid. 32 .
25. ICSID Case No. 96 ibid. v The Argentine Republic. It is further submitted that.Team Baxter Memorial for the Claimant 86. ARB/83/2. The Claimants submit that “every case must be examined in the lights of its own circumstances”95 and in this instance. doesn’t solely focus on Article 25. the Tribunal was incorrect in distinguishing Malaysian Historical Salvors. it is nonetheless instructive to consider their interpretations. Moreover. 33 . ARB/01/3. it concluded that the previous Tribunal’s failure to apply the UK-Malaysia BIT constituted a manifest excess of power. it was ruled in MHS98 that the BIT’s lack of conflict with Article 25(1) of the Washington Convention allowed it to assign the definition of “investment” which was contained within the applicable BIT. Decision on Jurisdiction (Ancillary Claim). it is contended that the approach which the Tribunal took 95 Enron Corporation and Panderosa Assets.”101 Therefore. at note 94. produces weight that this decision should be followed. 31 March 1986. In addition. Albert Viator’s dissenting opinion. In agreeing upon Dr. ibid ibid ibid ibid 97 98 99 100 101 Liberian Eastern Timber Corp (“LETCO”) v The Government of the Republic of Liberia.96 87. The Tribunal in the LETCO case found that though it was “not bound by the precedents established by other ICSID Tribunals. ICSID Case No. L. stating that the approach is “consonant with the intention of the Parties to the ICSID Convetion” and therefore. Award.99 89.. 88. although it is agreed that there is no obligation to follow precedence within ICSID arbitration. The Tribunal in Malaysian Historical Salvors97 declined the applicability of the Salini criteria. 90. 2 August 2004. this itself does not preclude Tribunals from following past awards. the decision in Malaysian Historical Salvors100 was made by “both a former President of the International Court of Justice and the current Vice-President” and therefore. para.P.
it is contended that the ad hoc Committee should accept this pragmatism in defining an “investment” under the Convention and also under the applicable BIT. Ibid. at note 93. Therefore. The Salini criteria can be traced back to Professor Christoph Schreuer in which he described and elucidated characteristics typical of investments found to satisfy the Convention’s jurisdictional criterion. If one criterion has not been established. 92. it does not expressly limit this binding force to the specific dispute settled through an award. 102 in refusing the application of the Salini criteria. there is a sliding scale in which the criteria can be applied. the contributions would not qualify as an investment under Article 25. in adopting a more pragmatic approach in defining the term “investment”.105 but in conjunction with the circumstances of the case. even though Article 53(1) of the ICSID Convention states that an “award shall be binding on the parties…”103. In addition.. 91. at note 94. 106 The Tribunal is relying upon these criteria in its decision of finding the lack of jurisdiction in such a matter. Moreover. If the claimant was to fail the Salini criteria. 94. However. the rest must be strongly applied. erred in law due to the application of the Salini criteria. some Tribunals have applied this test mandatorily and cumulatively and therefore. Ibid. The Tribunal. and therefore there is not an investment under Article 25 as the other criterions have been met tenuously. 103 104 105 106 34 . Schreuer. pursuant to ICSID jurisprudence 93. the economic development of the host State. at note 94. in any event. the Tribunal in MHS104 stated that such an approach would take in consideration the features identified in Salini.. The Tribunal has declined to establish the last criterion. The ICSID Convention: A commentary (2001). B. Article 53(1) of the ICSID Convention. is to be considered. Christoph H. The Claimants contend that the Tribunal erred in the 102 Ibid..Team Baxter Memorial for the Claimant in Malaysian Historical Salvors.
should not be the sole mechanism in 107 Ibid. v Tanzania. 96. Ibid Biwater Gauff (Tanzania) Ltd. Therefore. This approach. goes against the Tribunals approach in Salini v Morocco107 and the views of Professor Schreuer. ARB/05/22.”110 97. 95. make a contribution to the economic development of Bela Rano Insularo..Team Baxter Memorial for the Claimant application of the Salini criteria and alternatively. The Tribunal continued to state: “…even if the Republic could demonstrate that any. From considering prior case law and ICSID jurisprudence. para. this would not necessarily be sufficient – in and of itself – to deny jurisdiction. Firstly. they erred in fact (discussed below). arguing that the purpose of Article 25 is not interrelated with the applicable BIT. Max Solution did. as used by the Tribunal. it should be noted that the Tribunal has declined jurisdiction only on the basis of not being able to establish one criterion within the Salini criteria.. v Tanzania109 refused to find any connection between the party’s consent under the BIT and the protection within Article 25 stating: “Article 25 of the ICSID Convention was not premised on any particular internal rate of return threshold or any conception of economic return. in fact. 108 109 110 111 35 . even if it was right to do so. many Tribunals have taken an approach in which they reflect upon the parties’ agreement and thus shifted the focus mainly on the BIT. at note 93. the Claimants submit that the Tribunal should not have considered the Salini criteria. ICSID Case No. 31 March 2006.108 The Tribunal in Biwater Gauff Ltd.318. or all. Award. Ibid. of the Salini criteria are not satisfied in this case. para.A3.”111 98. This would then supersede the ICSID Convention and is in replace of imposing a stringent autonomous definition. Ibid. It is submitted therefore. Therefore. as in Salini. that the Tribunal has treated these criterions as jurisdictional requirements and not characteristics of an investment and ultimately..
application of the five Salini criteria in each case. ICSID Tribunals should not impose one.Team Baxter Memorial for the Claimant assessing as to whether there is an investment.. Ibid. Moreover. This is an approach which is contradictory to the intentions of the drafters of the Convention as was stated in Alpha Projektholding v 112 Ibid. The BIT therefore should be considered as the second partite with Article 25 being the first. The analysis of the Treaty shall be addressed below. 99. Ibid. para. Furthermore.. whilst some ICSID cases have concluded that the last criterion.8. In support of the above. v Tanzania112 that “there is no basis for a rote. Ibid.2. the application of the Salini criteria is not consistent and does not offer a viable legal framework. a case heavily relied upon in the Tribunal’s decision. the criteria themselves are not a necessity in any dispute regarding the definitio n of “investment”. 113 114 115 36 . 1. It was stated in Biwater Gauff Ltd.”113 The Tribunal continued to accept this standing and asserted that the criteria “are not fixed or mandatory as a matter of law”114 It concluded that since the Convention did not provide a strict objective definition of the term “investment”. It was stated: “One may add the contribution to the economic development of the host State of the investment as an added condition. Therefore. at note 93. it is submitted that there is no obligation to apply the criteria and should not have been applied in the current case.312. some have gone to the extremities that applying the Salini criteria produces a universal definition of “investment”. Supplementary to the above. is integrated within the other requirements. the specific term of “economic development” was addressed in the case of Salini v Morocco115.” (emphasis added) 100. or overly strict. Moreover. contribution to the economic development of the host State. the mere rejection of one characteristic of an investment does not preclude the Tribunal from declining jurisdiction.
26 July 2007. v Ecuador. The Tribunal has only listed Malaysian Historical Salvors118 a case which disagreed with the Salini criteria and concluded not to follow the award. as it mostly reflects the consequences of the other criteria. at note 94.A2. Decision on Jurisdiction. there is a need to refer to prior case law. 117 Due to the uncertainty of such an approach. ARB/04/13. 103. there are many other types of precedent in which support the view of such cases. 118 Ibid. It then proceeded to apply the Salini criteria.Team Baxter Memorial for the Claimant Ukraine. Power Group L. 16 June 2006. Decision on Jurisdiction and Admissibility. Award. 120 Abaclat and others v Argentina. found that the contribution requirement is of little value. The Tribunal in this instance notices this and states in the award: “It is only appropriate that ICSID Tribunals attempt to interpret vague terms in the Convention in the way that is most consistent with prior case law. 4 August 2011.C. 116 Alpha Projektholding GMBH v Ukraine. the Tribunal in M.311-312 117 Jan de Nul NV and Dredging International NV v Egypt. para. paras..” 120 Therefore. as mentioned above.C.I. ICSID Case No.119 noted that the elements within the Salini criteria “must be considered as mere examples and not necessarily as elements that are required for” the existence of an “investment” for purposes of Article 25 of the ICSID Convention. v Ecuador. para.” 102. 101. 119 MCI Power Group LC and New Turbine Inc. It is further submitted that the criteria should be considered in their totality and not individually. the Respondents contend that the Salini criteria “determine the out er limits of ICSID’s jurisdiction with regard to the nature of the disputes. moreover. ARB/07/16. 37 . This justification of using the criteria was not righteous. para. In addition. such an argument precludes any party from giving a broad definition of the term “investment”.116 The Tribunal. ICSID Case No. 8 November 2010. For example. However. ICSID Case No. Award. ICSID Case No.91. ARB/07/5.341. ARB/03/6.
Article 31(1) of the Vienna Convention should be abided by. ICSID Case No. 38 . it is contended that no reasonable inference can be drawn that the parties agreed that there was to be contribution to the economic development of the host State.. As mentioned above.76. para. Arb/03/25.123 once Article 25 has been looked upon. If this approach shall be adopted. ICSID Case No. The term “investment” is characterised within the Treaty and needs to be loo ked at “because that instrument is the medium through which the Contracting States involved have given their consent to the exercise of jurisdiction of ICSID. Therefore. 17 December 2010. it is submitted that in interpreting the Treaty. 122 106. para. THE CONTRIBUTION REQUIREMENT CANNOT BE INFERRED FROM THE AGREEMENT BETWEEN THE PARTIES 104. the Tribunal erred in not assessing the Treaty. Under the Bipartite test. 107. ICSID case law have commonly looked upon the consent of the parties and in doing so defined the term “investment”.Team Baxter Memorial for the Claimant III. Claimant asserts that the Bilateral Investment Treaty does not give rise to the presumption that an “investment” requires there to be contribution to the economic development of the host State.58. as expounded in CSOB v Slovakia. 123 Ceskoslovenska Obchodni Banka AS v Slovakia. “the “double barrelled” test does 121 Ibid. a deeper understanding of the consent of the parties and an analysis of the applicable Treaty is needed. A. the parties did not agree that the investment must contribute to the economic development of Bela Rano Insularo 105. On the outset.” 121 Moreover. at note 94. Decision on the Application for Annulment. Therefore. [malay] 122 Fraport AG Frankfurt Airport Services Worldwide v Philippines. In assessing the Bilateral Investment Treaty. a Tribunal manifestly excesses its powers if it does not apply the relevant rules of interpretation governing its competence properly. ARB/97/4. it is relevant to consider the Bilateral Investment Treaty in which both parties agreed upon. Moreover.
12 February 2010. para. para. that an assessment of the phrasing within the BIT. inadvertently erred in not using the Treaty as a mechanism to conclude that the contribution requirement is not a condition in which to be satisfied. namely the one deriving from the spirit of the ICSID Convention.93. In addition. Award on Jurisdiction. Therefore the language of the BIT shall be considered and moreover. does not define the term “investment”. 111. 28 (1993) 39 . Arb/07/29. 28. 127 Report of the Executive Directors on the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States. It merely provides examples of different types of investments. The award given by the Tribunal did not analyse the Treaty but only stipulated relevant articles. not consented upon by the parties. does not give rise to an inference that the condition of contributing to the economic development of the host State is not contained within the definition of “investment” and likewise.Team Baxter Memorial for the Claimant not mean that one definition…has to fit into the other definition. The Claimants submit that the Tribunal erred in finding that the contribution to the economic development of the host State was a prerequisite to the definition of an “investment” and moreover. therefore.305. even if defined as such in a BIT. at note 120.127 124 Ibid.126 “one would not say that a simple contract for the sale of goods…would const itute an investment within the meaning of Article 25(1).. In support of this.351.125 This shows the pertinence of addressing the BIT and highlights the Tribunals incompetence in not doing so. ICSID Case No. it is essential to reflect upon the wording of the Treaty and such an approach necessitates the consent of the parties at the time of the contract.”124 108. In adopting an example used in SGS v Paraguay. ibid. para. analogous to Article 25. 109. [aba] 125 126 SGS Société Générale de Surveillance SA v Paraguay. at note 120. 1965. 1 ICSID Rep. it has been suggested by some that a BIT requiring consent precludes the need to define investment. the Treaty would act as a lex specialis with regard to Article 25 ICSID Convention. It is contended that the BIT. ” Therefore. 110.. the BIT’s aptness in being considered is further applicable due to the inconclusive remark that anything can be an investment if is agreed by the States in the BIT. It is submitted.
Furthermore. This further supports that this. Therefore. it is axiomatic that the parties did not agree upon contributing to the economic development of the host State. Salacuse and N.W. However. 129 J. para. allegedly most important criterion.. or the assumption of risk” (emphasis added). the phrases “every asset” and “Forms that an investment may take include” (emphasis added)] and thus. 113. as can be seen. in an attempt to analyse the list of definitions in Article 1. there is no mention of the necessity of contribution to the economic development of the host State. Moreover. is an added condition. In addition. at 67.P. including such characteristics as the commitment of capital or other resources. the majority of BITs include “the area of the investment’s economic activity.” 129 Therefore. A BIT should be used supplementary to the Convention and ought to confine and clarify the definition contained within Article 25. according to some commentato rs. At the outset. it should be noted that the definition of investment contained within the BIT cannot expand the ICSID Convention but it is possible for it to confirm or restrict an ICSID notion. 128 Ibid. Article 1 continues to state: “…that has the characteristics of an investment. at note 86. in defining the investment. 115. is not the object of a bilateral arrangement between two contracting States. Sullivan. Article 1 mentions characteristics of an investment by stating requirements which are included within the Salini criteria. “Do BITs Really Work? An Evaluation of Bilateral Investment Treaties and their Grand Bargain”. There is no indication that an investment would include contribution and nor is there any focus towards the host States economy. (2005) Harvard International Law Journal. 40 . evidence in which further proves that this BIT is a minority and is inconsistent with previous Treaties.96.Team Baxter Memorial for the Claimant 112. the expectation of gain or profit. This begs the question that how can one agree upon something which was not stipulated within the BIT. 114.128 It is contended that the non-exhaustive list contained in Article 1 of the Treaty is an attempt to broaden the Convention [hence.
The Tribunal misinterpreted the threshold in which should be applied 119. THE TRIBUNAL ERRED IN FACT AS EVEN IF THE CONTRIBUTION PREREQUISITE IS HELD TO BE ESSENTIAL. Applying a high threshold precluded the Tribunal from satisfying the criterion and moreover. the case of Patrick Mitchell v Congo stated: 130 Ibid. is of Article 1(6) of the Energy Charter Treaty which defined investment as “every kind of asset” but then continued on to refer to any investment “associated with an economic activity in the energy sector. 41 . at note 122. 120. para.Team Baxter Memorial for the Claimant 116. in the alternative. 2. Claimant asserts that.84. Therefore. 130 B. Introduction 118.” This omission suggests that such a requirement is not included within the definition of “investment” and since this lapse in the wording cannot be integrated within Article 25. In support of the above. the ad hoc Committee should find that the definition does not include contribution. A. a Tribunal should consider and analyse the factual records only to the extent that it is necessary to consider its own jurisdiction. to the contrary. It is agreed. It is contended that the test to be applied to such a criterion is not one of significance. An example. THE TRANSACTION MEETS THIS STANDARD 117. The Claimants contend that the transaction carried out by Max Solutions was to eradicate the Sireno Kanto from Bela Rano Insularo and did so to satisfy the criterion contained within Salini. however. that it must be clear on the outset to be satisfied.. the Tribunal erred in fact as the transaction within question satisfies the standard to be applied. limited the method in which the Tribunal in Salini intended.
The Tribunal in Patrick Mitchell132continued to conclude that the criter ion does not have to be “sizeable or successful” and therefore. The ICSID Convention: A commentary (2001).ARB/99/7. the Tribunal added that “extensive scrutiny” is not necessary.135 held that six elements should be taken into account when determining if an investment is protected by the ICSID Convention and named the pertinent requirement as: “an operation made in order to develop an economic activity in the host State. 27 October 2006.33.” Subsequently. a lower threshold needs to be applied when interpreting Max Solutions’ activities and whether they in fact contributed to Bela Rano Insularo’s economic development. The statement made by the spokeswoman. In addition.. Even though the above states that the criterion is essential.”131 (emphasis added) 121. para.91. and the consequences which resulted. 123.. at note 94. 133 134 135 136 42 . at note 86. the case of Phoenix. can be used as evidence to suggest that Max Solutions contributed to Bela Rano Insularo’s economic development 131 Mitchell v The Democratic Republic of Congo. para.. at note 93. Therefore. a mere appearance of any action carried out by Max Solutions which seemingly contributed to Bela Rano Insularo’s economic development would satisfy the condition. the contribution must impact positively on Bela Rano Insularo’s development. 132 ibid Ibid. the quotation supports the view that the criterion does not need to be met with sufficiency. at 125. Christoph H. Decision on the Application for Annulment of the Award. 122. Schreuer. Ibid.Team Baxter Memorial for the Claimant “Contribution to the economic development of the host state characteristic of an investment is an essential – although not sufficient – characteristic or unquestionable criterion of the investment. Ibid. ICSID Case No. 133 in building upon the articulation of Salini134 in Jan de Nul.136 C. Nevertheless.
Team Baxter Memorial for the Claimant 124. D. the Applicant contends that Max Solutions did in fact contribute to the economic development of Bela Rano Insularo. that these announcements resulted in the government opening bids for the construction of hotels and resorts and consequently. Therefore. Bela Rano Insularo received a significant amount of money. It is submitted that this is a twist from the truth. Therefore. The Tribunal have concluded that Max Solutions activities cannot be attributed to the extinction of the Sireno Kanto as they were removed by nature and not by the actions of Max Solutions. albeit de minimis. it is ostensible from the outset that Max Solutions contributed to Bela Rano Insularo’s development immediately upon agreeing to enter into the contract. 127. in the alternative. It is therefore contended. Therefore. It is already been stated that 3% of the Sireno Kanto had been removed. However. This was on the basis of inadequate performance. The Tribunal has justified their inability to satisfy the criterion from stating that the spokeswoman’s comments were merely for “politically-motivated optimism”. It is agreed upon that the spokeswoman made such comments to entice more viewers and ultimately. It is essential to note that the government of Bela Rano Insularo had cancelled the contract only twelve days after Max Solutions declared that it extended its operations and declined the government’s request in inspecting there operations. The fact that the frogs were removed by nature is merely subsidiary to the claim that Max Solutions contributed to Bela Rano Insularo’s development 126. 125. It has already been contended by the Claimants that the standard in which needs to be set is lower than the one applied – that is that the criterion must be ‘clear and significant’. it is the Claimants view that the refusal of the 43 . all that needs to be proven is that Max Solution contributed to Bela Rano Insularo’s economic development. There must be some appearance of contribution and therefore. such “politically-motivated optimism” did in fact contribute to the economic development of Bela Rano Insularo. 128. However. It cannot be contended that these politically optimistic statements were speculative and that they materialised nothing. more tourists. on the outset. the GASP International Competition Council (“Council”) allowing Bela Rano Insularo to host the Olympic games can be deemed favourable to the activities of Max Solutions.
In the alternative. proves that Bela Rano Insularo prevented Max Solutions from carrying out the activities in which they were agreed to carry out. the purpose of foreign consumption was to increase knowledge of Bela Rano Insularo. Regarding the selling of the frog symphonies. Therefore. In addition. The additional rejection of this criterion is based on Max Solutions not providing the government of Bela Rano Insularo with any of this revenue and thus there is no contribution. The assertion that Max Solutions did not compensate Bela Rano Insularo with revenue from its ventures is not evidence that they did not contribute to the Islands’ economic development 130. it is submitted that the distribution of these opuses did in fact.Team Baxter Memorial for the Claimant inspection does not give rise to the cancellation of the contract and ultimately. this precludes any contention that Max Solutions’ actions cannot be attributed to the development of the economic development of Bela Rano Insularo as the Sireno Kanto frogs became extinct due to the poisonous disease contained within them. contribute to Bela Rano Insularo’s economic development. Therefore. Max Solutions confirmed that they were planning to sell these symphonies to overworked people from around the world. namely. it is submitted that any future revenue in which Max Solutions obtains from selling the frog symphonies cannot be used as an inference that Max Solutions was not going to share the profits with the government of Bela Rano 44 . and ultimately. Moreover. it is submitted that Max Solutions would have removed 80% of the Sireno Kanto population by the end of December 2006. It seems unjust that the government of Bela Rano Insularo would cancel the contract so soon. 131. E. selling symphonies which the Sireno Kanto produced and selling healthy Sireno Kanto to a pharmaceutical company. Max Solutions have removed 3% of the Sireno Kanto population. it is interesting to note that the contract required performance from January 2006 and two months later. however. increase tourism. The Tribunal attempted to vindicate that there was no contribution to Bela Rano Insularo’s development because Max Solutions obtained income from their ventures. 129. if the contract was not cancelled at such a time. 132. It is accepted that Bela Rano Insularo is a small island nation with a problem relating to the lack of tourism.
as previously stated. It is inconsequential that the Sireno Kanto died by nature as Max Solutions had already removed some frogs and therefore met the low threshold in which should be applied. This was used for “medical research for the development of allergy immunity treatments. conclusively. Max Solutions were merely in the planning stage of the distribution as the contract was cancelled two months before the croaking season starts (May-November). Moreover. lines 83-89. More importantly. Conclusion 135. would have provided contribution to Bela Rano Insularo’s economic development by other means. it is immaterial that the government of Bela Rano Insularo would not receive any income as Max Solutions themselves would have obtained any return in the distant future and ultimately.Team Baxter Memorial for the Claimant Insularo. Ibid. 138 45 . 134. In adopting the claimant’s accepted example in Malaysian Historical Salvors. Therefore. 137 The Record. the treatment would have had to be discovered. The whole purpose of the contract was to eradicate a problem in which the island sustained. a reasonable inference can be drawn that this research was going to be used to treat the potential tourists who would arrive at Bela Rano Insularo. 133. In addition. It is impossible to state. It is apparent from the outset that Max Solutions contributed to Bela Rano Insularo’s economic development. it is immaterial that the pharmaceutical company was at a nearby country due to the mere nature of the development of Bela Rano Insularo. F. treated. that the government would not obtain any revenue in the near future. approved by the regulatory authority and accepted by the market. it is likely that they would not have such a facility. at note 94.138 before Max Solutions could receive any profit and return. it is submitted that Max Solutions has yet to receive any income from the medical research in which the pharmaceutical organisation was to carry out..” 137 Therefore. As they do not have the capability to remove frogs from their island. the Tribunal did not address the purpose of what the pharmaceutical organisation was to do with the healthy Sireno Kanto.
ON THE OUTSET. 140 2. it is contended that the ad hoc Committee has full discretion as to whether to annul an award and should do in this instance. Ibid.A.Team Baxter Memorial for the Claimant IV.’ 138. Schreuer. ‘The ICSID Convention: A Commentary’. Following the initial Tribunal’s decision to decline jurisdiction139. This shall be determined as a preliminary question. 140 Compania de Aguas Aconquija S. not of the Tribunal. 48. and Compagnie Generale Des Eaux v Argentina. Article 52(2) effectively 139 See paragraph 190 of the Uncontested Facts. Article 52 (4) of the ICSID Convention provides that: ‘The provisions of Articles 41-45. for example ‘references to “the Tribunal” must be read as “the ad hoc Committee”’. pursuant to Articles 41(2) and 52(4). THE ANNULMENT COMMITTEE HAS THE POWER TO DETERMINE AS TO WHETHER THE REMOVAL OF THE SIRENO KANTO QUALIFIES AS AN “INVESTMENT” 136. the Claimant submits that the present Committee has the power.143 For the purposes of the Claimant’s submission. The Claimant’s make this submission on the basis that it is an issue which goes to the jurisdiction of the Centre. 142 143 46 . and does so in such a case. para. Decision on Annulment. PURSUANT TO ARTICLES 41(2) AND 52(4). The relevant articles within the ICSID Convention enable the annulment Committee to decide that the transaction qualifies as an investment 139. 53 and 54. Page 1042. 3 July 2002. Moreover. the effect of this subsection is that necessary revisions must be made to the way in which the specified provisions are read in order to make them ‘suitable’ 142 and thus applicable to the present Committee. Christopher H.66. 1. and of Chapters VI and VII shall apply mutatis mutandis to proceedings before the Committee. Introduction 137. 141 Article 52 (4) ICSID Convention. pursuant to Articles 41 (2) and 52 (4) of the ICSID Convention (‘the Convention’) to determine whether the transaction between the parties constitutes an “investment” under the provisions of the Convention.’141 As the present panel will appreciate. 49. Claimant asserts that the ad hoc Committee has the power. only. to decide as to whether the transaction qualifies as an investment. THE AD HOC COMMITTEE HAS THE POWER TO DECIDE WHETHER THE TRANSACTION IN QUESTION QUALIFIES AS AN “INVESTMENT” A.
(…)”148 144 Article 41 (2) ICSID Convention. in order for the Centre to have jurisdiction. p.’144 By way of this section. 26 April 2005. It is widely accepted that as the Convention does not define the term ‘investment’ that ‘a broad approach to the interpretation of this term in Article 25 is warranted’ 146 and further in AES v. Ukraine. F. in any event. Argentina. four conditions must be met. The jurisdiction should go to the Centre. 148 Report of the Executive Directors on the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States. the Claimant submits that the question of whether the dispute is within the jurisdiction of the Centre shall be determined by the present ad hoc Committee. International Bank for Reconstruction and Development. if the dispute does not arise directly out of an investment. The ICSID Convention. Venezuela. or for other reasons is not within the competence of the Tribunal. Vol. it is outside of the authority of ICSID. Three of these conditions derive from Article 25 itself and the other results from the general principle of law of nonretroactivity. Decision on Jurisdiction. 143. Article 41 (2) states that: ‘Any objection by a party to the dispute that that dispute is not within the jurisdiction of the Centre.’145 Therefore. 18 March 1965. Decision on Jurisdiction and Liability . 141. As the present Committee will undoubtedly be aware. 166-227. 47 . Decision on Jurisdiction. when saying in paragraph 22: “the term “jurisdiction of the Centre” is used in the Convention as a convenient expression to mean the limits within which the provisions of the Convention will apply and the facilities of the Centre will be available for conciliation and arbitration proceedings. decide as to whether there is an existence of an “investment”. Following the above proposition. pursuant to these Articles. Amerasinghe: “The Jurisdiction of the International Centre for the Settlement of Investment Disputes”. Argentina that the terms used should not be ‘given a restrictive interpretation’. it is contended that the ad hoc Committee can. at 181.147 144. 1979. 147 AES Corporation v. 11 July 1997 referencing C. has supremacy over the Tribunal and cannot be stated otherwise. 14 January 2010. The Report of the Executive Directors addressed this broad interpretation to the term. shall be considered by the Tribunal which shall determine whether to deal with it as a preliminary question or to join it to the merits of the dispute. 140.Team Baxter Memorial for the Claimant grants the present ad hoc Committee the power conferred upon the arbitral Tribunal under Article 41(2).43. and not to the Tribunal. 145 146 Fedax v. 142. The condition which is most pertinent at present is ‘a condition ratione materiae: the dispute must be a legal dispute arising directly out of an investment. Therefore. Joseph Charles Lemire v. 3. 19. Indian Journal of International Law.
accordingly. 48 .151 It is worth noting that consent alone will not suffice to bring a dispute within its jurisdiction.’149 146. Decision on Jurisdiction. the Committee must look at the contractual agreements as a whole and not just at certain aspects. under Article 25 of the ICSID Convention. ARB/98/5. 149 H&H Enterprises Investments v. this consent may be on a conditional basis. The parties have agreed that the claim should go to arbitration. 5 June 2012.150 147. The Claimant submits that the in determining whether there was an investment for the purposes of jurisdiction. 11 July 1997 150 151 Report of the Executive Directors of the International Bank for Reconstruction and Development on the Convention. Fedax v. ICSID Case No. investments may also be of an indirect character. Decision on Respondent’s Objections to Jurisdiction. 8 August 2000. therefore. Moreover. Egypt. the second requirement mentioned by Article 25 is that of the consent to arbitration. Venezuela. ‘Directly’ relates to dispute and not to investment. In the AUCOVEN case. this condition. From the outset. It is apparent that the term “directly” relates in this Article to the “dispute” and not to the “investment”. ‘Determining whether there is an inv estment is a matter of substance and not form. 18 March 1965. pursuant to Article 25 of the Treaty and that this consent is the cornerstone of the jurisdiction of the centre. ICSID did not have jurisdiction until a condition subsequent had been satisfied.Team Baxter Memorial for the Claimant 145.152 as has been discussed. 152 See Eudoro Armando Olguin v Republc of Paraguay. is that the transaction within question is an investment. in this instance. consent is apparent as the agreement between the parties is contained within the Bilateral Investment Treaty. In addition.
Ranapuer’s Expert Report. contributes to the development of Belo Rano Insularo. The annulment Committee has the power to decide whether the transaction in question is indeed an investment. Respectfully submitted on the 27 September 2012 by BAXTER On behalf of the Claimant 49 . d. as this concerns the Centre’s jurisdiction.Team Baxter Memorial for the Claimant REQUEST FOR RELIEF 1. the Tribunal exceeded its powers. The Tribunal was properly constituted subsequent to a dismissed challenge against Professor Iracunda. in a serious manner. removal of the Sireno Kanto. the above transaction. from a fundamental rule of procedure in admitting Dr. In declining jurisdiction. meets this standard. under the aforementioned. The Claimant humbly requests for relief. e. b. The Tribunal did not depart. The ICSID Convention demonstrably does not required that an “investment”. as she possesses the qualities required under the ICSID Convention. in that: a. so -called. c. Even if contribution to BRI is considered essential.
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