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PROVISIONAL REGISTRATION NO.

: "PR17"

IN THE INTERNATIONAL COURT OF JUSTICE

AT THE PEACE PALACE


THE HAGUE, THE NETHERLANDS

THE CASE CONCERNING


THE COOPERATION AGREEMENT ON THE DEVELOPMENT OF THE PEACEFUL
USES OF NUCLEAR ENERGY

THE REPUBLIC OF ALBROSA & OTHERS,


APPLICANTS

v.
THE PEOPLES DEMOCRACY OF BRISSELANTA,
RESPONDENT

MEMORIAL FOR THE RESPONDENT


6th Dr. PARAS DIWAN MEMORIAL INTERNATIONAL ENERGY LAW MOOT
COURT COMPETITION, 2016

MEMORANDUM ON BEHALF OF THE RESPONDENT

PROVISIONAL REGISTRATION NO.: "PR17"


TABLE OF CONTENTS
A.

TABLE OF CONTENTS.............. i

B.

LIST OF ABBREVIATIONS... ii

C.

INDEX OF AUTHORITIES iii

D.

STATEMENT OF JURISDICTION... ix

E.

STATEMENT OF FACTS... x

F.

ISSUES RAISED... xii

G.

SUMMARY OF ARGUMENTS.............. xii

H.

ARGUMENTS ADVANCED... 1

1.

The ICJ does not have jurisdiction to hear the present case.... 1

2.

Brisselanta, the supplier of nuclear reactor coolant and generators, cannot be liable to
compensate the Applicants for the nuclear disaster......................... 5

2.1. The supplier has no liability under 123 Agreement 5


2.2. There was no fault or defect in the materials supplies by BPPEC.................................. 8
2.3. The judgement passed by the Supreme Court of Albrosa was void 8
3.

Brisselanta is not liable to compensate the Applicants for pollution of their marine
environment..... 10

3.1. Brisselanta is not bound by any obligations under the unratified treaties................... 10
3.2. Brisselanta cannot be held liable for breach of obligations under customary international
law... 12
3.3. Albrosa has failed to exercise due diligence... 14
3.4. Brisselanta is not liable for damage to the economic interests of the Applicants... 16
4.

Albrosas indefinite moratorium on uranium imports from Brisselanta is violative of the 123
Agreement....... 17

4.1. Albrosas indefinite moratorium on uranium imports from Brisselanta is violative of Article

MEMORANDUM ON BEHALF OF THE RESPONDENT


i

XV of the 123 Agreement....... 17


4.2. Albrosas indefinite moratorium fails to fall under the General Exceptions provided in Article
XXX of the 123 Agreement. 19
4.3. The indefinite moratorium is not authorised under the Essential Security Clause of the 123
Agreement....................................... 22
I.

SUBMISSIONS TO THE COURT.............. 26

LIST OF ABBREVIATIONS
Eg.

Example

Pragraph

123

Agreement Cooperation Agreement between the Government of the


Republic of Albrosa and the Government of Peoples Democracy of
Brisselanta on the Development of Peaceful Energy, 2010

Albrosa

The Republic of Albrosa

Art.

Article

BPPEC

Brisselanta Power for Power Electrical Company

Brisselanta

The Peoples Democracy of Brisselanta

CBD

Convention on Biological Diversity

CLNDA

Civil Liability for Nuclear Disaster Act, 2010

CSC

Convention on Supplementary Compensation for Nuclear Damage,1997

Doc.

Document

EIA

Environmental Impact Assessment

FNPP

Floating Nuclear Power Plant

GATT

General Agreement on tariff and trade

IAEA

International Atomic Energy Agency

ICJ

International Court of Justice

ICSID

International Centre for Settlement of Investment Disputes

IMF

International Monetary Fund

no.

Number
ii

MEMORANDUM ON BEHALF OF THE RESPONDENT

OECD

Organisation for Economic Co-operation and Development

PCIJ

Permanent Court of International Justice

SC

Supreme Court

SDR

Special Drawing Right

SIA

Social Impact Assessment

UN

United Nations

UNC

Charter of the United Nations

UNCLOS

United Nations Convention on the Law of Sea

v.

Versus

VCLT

Vienna Convention on the Law of Treaties

INDEX OF AUTHORITIES

Cases, Advisory Opinion and Administrative Rulings


-INTERNATIONAL COURT OF JUSTICE1. Case concerning East Timor, (Portugal v. Australia), ICJ, Judgment, 30 June 1995
2. Corfu Channel case (United Kingdom v Albania) (Judgement) [1949] ICJ Rep 35
3. Democratic Republic of the Congo v. Rwanda, ICJ, Judgement on Jurisdiction and
Admissibility, 3 February 2006
4. Gabcikovo Nagymaros Project (Hungary VS. Slovakia) 1997 I.C.J. 7,
5. Hungary v. Slovakia, 1997 I.C.J. 7.
6. Military and Paramilitary Activities case (Nicaragua v US) [1986] I.C.J.Rep14
7. Nicaragua v. Honduras, ICJ, Judgment, 8 October 2007
8. North Sea Continental Shelf (Federal Republic of Germany VS.Netherlands), ICJ,
Judgement, 26 April 1968
9. Oil Platforms (Iran v US) 2003 ICJ Rep. 161 (Nov 6).
10. Pulp Mills in the River Uruguay Case (Argentina v. Uruguay), ICJ, JUDGEMENT,
20 April 2010

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MEMORANDUM ON BEHALF OF THE RESPONDENT

-PERMANENT COURT OF INTERNATIONAL JUSTICE1.

Case Concerning Certain German Interests in Polish Upper Silesia (Ger. v. Pol.),
1926 P.I.C.J. Ser. A, No. 7, at 29

2.

Case concerning Territorial Jurisdiction of the International Commission of the


River Oder (U.K. v. Pol.), 1929 P.C.I.J. Ser. A, No. 23.

3.

Ger. v. Pol, 1926 P.I.C.J. Ser. A, No. 7

4.

U.K. v. Pol, 1929 P.C.I.J. Ser. A, No. 23

INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES-

1. AES Summit Generation v. Hungary ICSID Case No. ARB/07/22


2. Decision of the Tribunal on Objection to Jurisdiction, 17 October 2006; Saipem
S.P.A. v. The Peoples Republic of Bangladesh, ICSID Case No. Arb/05/07,
3. Decision on Jurisdiction, 14 November 2005; Helnan International Hotel A/S v. The
Arab Republic of Egypt, ICSID Case No. ARB/05/19,
4. Decision on Jurisdiction, 16 June 2006; Bayindir Insaat Turizm Ticaret Ve Sanayi
A.S. v. Islamic Republic of Pakistan ICSID Case No. ARB/03/29,
5. Jan de Nul N.V. Dredging International N.V. v. Arab Republic of Egypt, ICSID
Case No. ARB/04/13,
6. S.p.A. v. Republique Algerienne Democratique at Populaire, Decision on
Jurisdiction, ICSID Case No. ARB/05/3, 12 July 2006;
7. Salini v.Morraco 6 ICSID Rep. 400 (2004)
-OTHER JUDGEMENTS AND ARBITRAL AWARDS 1. Ireland v United Kingdom, (2003) 126 ILR 310
2.

Island of Palmas Case (Netherlands v United States of America) (1928) 2 Rep Intl
Arbitral Awards 831

3. M/V Saiga (St. Vincent v. Guinea), 120 I.L.R. 143.


4. Malay. v. Sing, 126 I.L.R. 487
5. Several British Subjects (Great Britain) v. United States (Iloilo Claims), November
19, 1925
6. St. Vincent v. Guinea, 120 I.L.R. 143
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MEMORANDUM ON BEHALF OF THE RESPONDENT

7. The Megalidis Case (A.A. Megalidis v Turkey) 8 Recueil des Decisions des
Tribunaux Mixtes (1927-1928).
8. Trail Smelter Case (United States v. Canada),3 R.I.A.A. 1965 (1938/1941).
-GATT/WTO PANEL BODY REPORT1. GATT Panel Report, EEC-Quantitative Restrictions against Imports of Certain
Products from Hong Kong (12 July 1983) BISD. 30S/129
2.

GATT Panel Report, Japan: Trade in Semi-conductors, (1989) GATT BISD 35S/116
(adopted 4 May 1988)

3. GATT Panel Report, Japan: Trade in Semi-conductors, (1989) GATT BISD 35S/116
(adopted 4 May 1988).
4. GATT Panel Report, Panel on Japanese Measures on Imports of Leather (15 May
1984) GATT BISD 31S/94 (adopted 15 May 1984)
5. WTO, India Quantitative Restrictions On Imports Of Agricultural, Textile And
Industrial Products- Report Of The Panel- (23 August 1999 ) WT/DS90/AB/R
6. WTO, Argentina-Measures Affecting the Export of Bovine Hides and the Import of
Finished Leather- Report of the Panel (16 February 2001) WT/DS/55/R and Corr. 1.
7. WTO, European Communities Measures Affecting Asbestos And AsbestosContaining Products, Report of the Panel, (12 March 2001), WT/DS135/AB/R
8. WTO, United States Import Prohibition Of Certain Shrimp And Shrimp Products,
Report of the Panel, (15 June 2001), WT/DS58/RW
9. WTO, United States Measures Affecting the Cross-Border Supply of Gambling and
Betting Services - Panel Report, (10 November 2004), WT/DS285/R
-GATT/WTO APPELLATE BODY REPORT1.

WTO, US Gasoline, Appellate Body Report, (20 May 1996) WT/DS2/9

2.

WTO, India-Measures Affecting the Automotive Sector.-Appellate Body Report (5


April 2002) WT/DS146/AB/R

3.

WTO, Korea Beef, Appellate Body Report, (10 January 2001) DS161, 169

4.

WTO, Brazil Retreaded Tyres, Appellate Body Report. (17 December 2007) DS332
Treaties, Agreements & Conventions

1. Aarhus Convention, 1998, June 25, 1998, 38 I.L.M. 517.


2. Civil Liability in the Field of Maritime Carriage of Nuclear Material, 1971

MEMORANDUM ON BEHALF OF THE RESPONDENT

3. Convention for Supplementary Compensation for Nuclear Damage, 1997, IAEA Doc.
INFCIRC/567 (Sept. 12, 1997).
4. Convention on Biological diversity, 1992, 1992, 31 I.L.M. 818.13
5. Convention on the Settlement of Investment Disputes between States and Nationals of
Other States, 1965, 17 U.S.T. 1270, T.I.A.S. No. 6090, 575 U.N.T.S. 159
6. Paris Convention on Third Party Liability in the Field of Nuclear Energy, 1960
7. Protocols to the Paris and Brussels Convention, 2004
8. Statute of the International Court of Justice, T.S. No. 993 (1945).
9. The Brussels Convention on the Liability of Operators of Nuclear Ships, 1962 and the
Joint Protocol
10. United Nations Convention on Jurisdictional Immunities of States and Their Property,
2004
11. United Nations Convention on the Law of Sea, 1984, 1833 UNTS 3 / [1994] ATS 31 /
21 ILM 1261 (1982)
12. United Nations Framework Convention on Climate Change, May 9, 1992, 1771
U.N.T.S. 107
13. Vienna convention on Civil Liability for Nuclear Damage, May 21, 1963, 1963, 1063
U.N.T.S. 265, 2 I.L.M. 727
14. Vienna Convention on the Law of Treaties, May 23, 1969, 1155 U.N.T.S. 331.
Books, Reports and Articles
-BOOKS1. A.R.Biswas, International Law, Kamal Law House, 1999.
2. Alina Kaczorowska, Textbook On Public International Law, Old Bailey Press, 2002
3. Baris Soyer & Andrew Tettenborn, Pollution at Sea: Law and Liability, Informa Law
from Raouledge (2013)
4. Bernard M. Hoekman And Michel M. Kostecki, The Political Economy Of The World
Trading System, The Wto And Beyond, 3rd ed., The Oxford University Press, 2009
5. D.W. Greig, International Law, 2nd ed., London Bitterworths, 1976
6. Daniel Lovric, Deference to the Legislature in WTO Challenges to Legislation, Kluwer
Law International (2010)
7. Francesco Francioni, Environment, Human Rights and International Trade, Hart
Publishing
8. James Crawford, The International Law Commission's Articles on State Responsibility,
Cambridge University Press
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MEMORANDUM ON BEHALF OF THE RESPONDENT

9. Linda A. Malone, Environmental Law (2nd ed.) Aspen Publishers


10. Louis B. Sohn, John E. Noyes, Cases and Materials on the Law of the Sea, Transnational
Publishers, 2004
11. Nagendra Singh, The Role and Record of the International Court of Justice, Martinus
Nijhoff Publishers
12. Philippe J. Sands, Chernobyl: Law and Communication: Transboundary Nuclear Air
Pollution- The Legal Materials
13. Philippe Sands, Principles of International Environmental Law, (2nd ed.) Cambridge
University Press
14. Ram Prakash Anand, Compulsory Jurisdication of the International Court of Justice,
Asia Publishing House (1961)
15. Robin Rolf Churchill, Alan Vaughan Lowe, The Law of the Sea,(2nd ed.) Manchester
University Press
16. S A Alexandrov, The Compulsory Jurisdiction of the International Court of Justice. How
Compulsory is it? (OUP, Oxford 2006)
17. S Charnovitz, The Moral Exception in Trade Policy(1998) 38 Va. J.Intl L. 689
18. Xue Hanqin, Transboundary Damage in International Law (2003).
-REPORTS1. Case Concerning Armed Activities on the Territory of the Congo (New Application,
2002) (Democratic Republic of the Congo v. Rwanda), Judgement on Jurisdiction and
Admissibility, 3 February 2006, I.C.J. Reports 2006.
2. Christoph H. Schreuer, The ICSID Convention: A Commentary, Cambridge
University Press
3. International Law Commission, First Report on the Legal Regime for Allocation of
Loss in Case of tansboundary Harm Arising Out of Hazardous Activities, , U.N.
GAOR, 55th Sess., U.N. Doc. A/CN.4/531 (Mar. 21, 2003).
4. Report of the Executive Directors on The Convention on the Settlement of Investment
Disputes Between States and Nationals Of Other States adopted on March 18, 1965.
5. Reports Of International Arbitral Awards , Trail smelter case (United States, Canada)
16 April 1938 and 11 March 1941 , Volume III , pp. 1905-1982
6. Riccardo P. Mazzeschi, Forms of International Responsibility for Environmental
Harm, in International Responsibility for Environmental Harm (Francesco Francioni
& Tullio Scovazzi eds, 2001).
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MEMORANDUM ON BEHALF OF THE RESPONDENT

7. Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean
Sea (Nicaragua v. Honduras), Judgment, I.C.J. Reports 2007, p. 659
8. Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean
Sea (Nicaragua v. Honduras), Judgment, I.C.J. Reports 2007.
-ARTICLES1. B Cheng, General Principles of Law as applied by International Courts and Tribunals
125 (Stevens and Sons, Ltd., 1953)
2. Christoph H. Schreuer, The ICSID Convention: A Commentary, (2nd ed.)
Cambridge University Press
3. Eugenia Levine, Amicus Curiae in International Investment Arbitration: The
implications of an Increase in Third-Party Participation, 29 BERKELEY J.INTL
LAW. 200(2001)
4. H Steinberger, Sovereignty, in Max Planck Institute for Comparative Public Law
and International Law, Encyclopedia for Public International Law, vol 10 (North
Holland, 1987) 414
5. Lew, J., Mistelis, L., and Kroll, S., Comparative International Commercial
Arbitration (The HagueLondon-New York : Kluwer Law International, 2003
6. Philippe Sands, Principles Of International Environmental Law 236 (2d ed. 2003).
7. Stoiber, C., A. Baer, N. Pelzer and W. Tonhauser, Handbook on Nuclear Law,
(2003) IAEA Doc. STI/PUB/1160, IAEA, Vienna, Austria
- Dictionaries8. BA Garner, Blacks Law Dictionary (7th edn West Group St. Paul, Minn., 1999)
9. Shorter Oxford English Dictionary (5th edn OUP, oxford 2003)
-Miscellaneous1. Analytical Index: Guide to GATT Law and Practices (Vol 1 World Trade
Organization, Geneva 1995)
2. Harvard Research in International Law, Law of Treaties, 29 A.J.I.L. Supp 653 at 937
(1925).
3. Law of Treaties, Third report by J.L. Brierly, Special Rapporteur, DOCUMENT
A/CN.4/54
4. Nuclear Law Bulletin No. 93/VOL. 2014/1, NEA No. 7181, OECD 2014

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MEMORANDUM ON BEHALF OF THE RESPONDENT

STATEMENT OF JURISDICTION

The Republic of Albrosa, Island States of Bong-Bong and Kolra and the Peoples Democracy
of Briselanta have accepted compulsory jurisdiction of the International Court of Justice.
Further, The Republic of Albrosa and the Peoples Democracy of Brisselanta have entered
into a Special Agreement to submit the disputes to the International Court of Justice.
This Courts jurisdiction is invoked under Article 36(1) and Article 36(2) read with Article
40(1) of the Statute of the International Court of Justice, 1950.

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MEMORANDUM ON BEHALF OF THE RESPONDENT

STATEMENT OF FACTS
The Republic of Albrosa (Albrosa), a developing archipelagic island nation is located in a
high-risk seismic zone with a history of cataclysmic natural disasters. The Peoples
Democracy of Brisselanta (Brisselanta) is a developed and technologically advanced nation
which announced plans to build FNPP comprising of small nuclear reactors which are
mounted on barges and are floated in the territorial waters of the installing State. Albrosa also
showed interest in starting the FNPP project. Both the countries appointed experts and carried
out all requisite compliances as per IAEA Nuclear safeguards.
In furtherance of the installation of the FNPPs, both the countries entered into 123 Agreement
on 1st February, 2010 wherein it was agreed that BPPEC would supply the equipment for
establishing 12 FNPPs in Albrosa in phases and provide 8,000 tons of uranium over the
period of next 10 years. Art. V of 123 Agreement which is the liability cause, provided no
fault and exclusive liability of the operator. The parliament of Albrosa objected to this clause
and under article V (3) of the Agreement enacted the CLNDA, 2010 which provided the
operator for a right to recourse against the supplier under sec. 23 of the Act. The BPPEC
refused to supply any nuclear material or equipment to Albrosa as they may be vulnerable to
inflated liability claims, In order to overcome the impasse and to make the 123 Agreement
operational, Brisselanta and Albrosa amended Art. V of the 123 Agreement, taking away the
operators right of recourse against the supplier and made it mandatory for the parties to
ratify the three international conventions.
The new Socialist Government which was sworn in denied the validity of the amendment via
an official notification. Nevertheless, both the parties went ahead with the project and the first
FNPP was installed at Morsin-kkkuyu site after receiving provisional approval from IAEA,
approval from clean alive foundation and the licence from Electricity Market License
Regulation of Albrosa.
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MEMORANDUM ON BEHALF OF THE RESPONDENT

The neighbouring island of Albrosa, the island state of Bong Bong, raised concerns regarding
the Morsin-kkkuyu site as it apprehended that the site posed an imminent danger to them.
Bong Bong asserted that under the Aarhus Convention, public opinion and consultation
before operationalizing a nuclear power which is required, was not complied with. The
concerns were not considered by BPPEC as it was understood that the Bong Bong island has
no authority to intervene in a matter of solemn bilateral Agreement.
On 21st June, 2014, the Bong-Bong Island was hit by an underwater earthquake which lead
to the collision of an aircraft super-carrier with the FNPP at the Morsin-kkkuyu site, which in
turn led to the release of radioactive material into the territorial waters of Bong-Bong, Kolra
and Albrosa, causing deaths, cancer cases and also affecting the marine environment.
Albrosa retorted that the nuclear reactor coolants and generators were not seismically robust.
The BPPEC contended that Albrosa was negligent in not maintaining them which led to
equipment failure. A petition was filed before the SC of Albrosa under section 23 (c) of the
CLNDA and an ex parte judgement was passed against the BPPEC which was asserted to be
void on the grounds of natural justice.
A compensation package arising out of the nuclear insurance pool was apportioned between
the three states on a pro-rata basis and an outstanding compensation under the Right of
Recourse (Section 23 (c) CLNDA) was asked by the states from Brisselanta.
The Government of Albrosa placed an indefinite moratorium on the import of uranium from
Brisselanta under Article XXX of the 123 Agreement which was condemned by Brisselanta
for violating Article XV of the 123 Agreement.
Albrosa, along with the island States of Bong Bong and Kolra, brings a claim before the
International Court of Justice, claiming the outstanding compensation from the Brisselanta
for the nuclear disaster and the pollution of their marine environment.

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MEMORANDUM ON BEHALF OF THE RESPONDENT

ISSUES RAISED
I.

Whether the ICJ has the jurisdiction to hear the present case?

II.

Whether the Respondent, being a supplier of nuclear equipment and material, can
be held liable to compensate the Applicants for the nuclear disaster?

III.

Whether the Respondent is liable to compensate the Applicants for the pollution
of their marine environment that gravely dented their economic interests?

IV.

Is Albrosas indefinite moratorium on uranium imports from Brisselanta violative


of the 123 Agreement?

SUMMARY OF ARGUMENTS
I.

Whether the ICJ has the jurisdiction to hear the present case?

The ICSID has the jurisdiction to hear the present case pursuant to the consent given by
Albrosa and Brisselanta to submit the claim to ICSID. Further, conditions stipulated in the
ICSID Convention are fulfilled by the investment dispute between Albrosa and Brisselanta.
In order to avoid duplicity of proceedings and protect the interests of Bong Bong and Kolra,
they can participate in the proceedings before the Tribunal by way of amicus curie, as they
are only interested parties and not the disputing parties.
II.

Whether the Respondent, being a supplier of nuclear equipment and material,


can be held liable to compensate the Applicants for the nuclear disaster?

Article V (3) of amended 123 Agreement, prima facie, puts an embargo on the operators
right of recourse against the supplier. According to the principles of International Nuclear
law, Albrosa, being the operator of nuclear instalment, is strictly and exclusively liable for
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MEMORANDUM ON BEHALF OF THE RESPONDENT

the nuclear damage. There was no fault in any of the equipment or material supplied by
Brisselanta, as they were duly approved by the competent authorities. Brisselanta is in no way
accountable for the nuclear disaster and therefore is not liable to compensate the Applicants
for the same.

III.

Whether the Respondent is liable to compensate the Applicants for the pollution
of their marine environment that gravely dented their economic interests?

The provisions of unratified treaties cannot be invoked against Brisselanta as it has not given
consent to be bound by them. Article 18 of VCLT imposes moral and interim obligation. The
Respondent complied with its due diligent duty by obtaining all necessary approvals and
immediately fixing the default pointed out by IAEA inspectors. Albrosa infact failed to
exercise due diligence by not maintaining activities within its control and violating CBD.
Thus, it is Albrosa who is liable to pay for damaging the marine environment. Also, Damage
to environment per se, not resulting in any direct loss to proprietary or possessory interests of
individuals or the State is not considered a fit case for compensation.
IV.

Is Albrosas indefinite moratorium on uranium imports from Brisselanta


violative of the 123 Agreement?

The indefinite moratorium is violative of Article XV of the 123 Agreement as it falls within
as it is a restrictive and prohibitive in nature as per the terminology of the Article. The
indefinite moratorium is not covered by any of the exceptions as provided under the Article
XXX as it fails to comply with the tests of the sub-paragraphs as well as the chapeau of the
Article. The measure cannot be justified by taking recourse to the Essential Security Clause
as the material supplied by Brisselanta does not pose any threat to Albrosa.

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MEMORANDUM ON BEHALF OF THE RESPONDENT

PROVISIONAL REGISTRATION NO.: "PR17"


ARGUMENTS ADVANCED
1. The ICJ does not have the jurisdiction to hear the present case
The Dispute Settlement clause of the 123 Agreement provides that the parties shall submit
their legal dispute to the ICSID for arbitration.1 It also provides that the parties must satisfy
the requirements of Chapter II of the ICSID Convention in order to submit the claim to
arbitrate before the ICSID.2 The ICSID Tribunal has jurisdiction over the present dispute if
the following conditions are met:
A. A condition ratione personae;
B. A condition ratione materiae;
C. A condition ratione voluntatis.
The condition ratione personae entails that the Claimants have to be investors of one
Contracting Party and another Contracting Party. Albrosa and Brisselanta are Contracting
Parties as per the definition provided under the ICSID Convention.34 Also, both Albrosa and
Brisselanta are the investors in this case, as they have entered in the 123 Agreement.
Therefore, the conditions ratione personae have been complied with by both Albrosa and
Brisselanta.
The condition ratione materiae necessitates that the dispute must be a legal dispute arising
directly out of an investment made by the Claimants in the territory of the other Contracting

See, Dispute Settlement, 123 Agreement, Ch. 7.

Id. Dispute Settlement (3).

Convention on the Settlement of Investment Disputes between States and Nationals of Other States, opened for

signature Mar. 18, 1965, 17 U.S.T. 1270, T.I.A.S. No. 6090, 575 U.N.T.S. 159 (hereinafter cited as the ICSID
Convention).
4

Clarification to the Compromis, 2.

MEMORANDUM ON BEHALF OF THE RESPONDENT


1

Party. Therefore, ICSID subject-matter jurisdiction has three components5: Firstly, the
requirement of a legal dispute; Secondly, the requirement that the legal dispute must arise
directly out of the underlying transaction; and Thirdly, that such underlying transaction
qualify as an investment.
A dispute concerns the existence or scope of a legal right or obligation, or the nature or extent
of the reparation to be made for breach of a legal obligation.6 A dispute is additionally, a
disagreement on a point of law or fact, a conflict of legal views or interests between parties.7
A dispute involves a minimum of communication between the parties. This communication
must reveal a disagreement on a point of law or fact. The 123 Agreement vests legal rights
and obligations on Albrosa and Brisselanta, as they are Contracting Parties to the Agreement.
This dispute requires the interpretation of this 123 Agreement, therefore, it can be understood
that the dispute is arising directly out the investment. Also, there has been communication of
disagreement between Albrosa and Brisselanta on multiple occasions post the nuclear
disaster.8
Further, for the dispute that has arisen out of the underlying transaction, to be within the
jurisdiction of the ICSID, it has to fall within the definition of investment as per the ICSID
Convention. When interpreting the term investment under Article 25(1) of the ICSID
Convention it is to be done interplay with the definition of investment under the BIT. 9 In
this case, the nuclear equipment and material provided by Brisselanta to Albrosa becomes the
investment, as it is controlled by Albrosa, and provides the gains of nuclear energy to

Christoph H. Schreuer, The ICSID Convention: A Commentary, Cambridge University Press.

Executive Directors Report to the ICSID Convention.

Case concerning East Timor, I.C.J. Reports 1995, pp. 89, 99.

Compromis, 16 17 19.

Ambiente Ufficio S.p.A. and Others and the Argentine Republic Decision on Jurisdiction, 8 February 2013,

448-452.

MEMORANDUM ON BEHALF OF THE RESPONDENT

Albrosa.10 The consent of the Contracting Parties under the BIT to the scope of investment
is of relevance when establishing the meaning of the term under Article 25(1) of the ICSID
Convention11. Although such Parties do not have an unfettered discretion to go beyond what
have been called the outer limits set by the ICSID Convention. The typical features of an
investment under the Conventions are12: The project should have certain duration; there
should be a certain regularity of profit and return; there is typically an element of risk for
both sides; the commitment involved would have to be substantial; the operation should be
significant for the host states development. These features should not necessarily be
understood as jurisdictional requirements but merely as typical characteristics of investments
under the Convention. As mentioned above, the investment in the instant case complies with
all these typical characteristics of investment under the ICSID Convention.
Under the Salini test,13 one of the objective criteria to be satisfied is that the economic
activity must contribute positively and significantly to the economic development of the host
State.14 Reference to the economic development process and to the fact that an adequate
flow of capital may substantially contribute to the development of the country as the object
and purpose of the BIT is made by its Preamble. An indication of the significant nature of the
contribution to the host States economic development is whether the activity serves the
public interest.

10

Definitions,investment, 123 Agreement, Ch. 7; Compromis 3.

11

ICSID Convention, supra note 3, Article 25(1).

12

Helnan International Hotel A/S v. The Arab Republic of Egypt, ICSID Case No. ARB/05/19, Decision of the

Tribunal on Objection to Jurisdiction, 17 October 2006; Saipem S.P.A. v. The Peoples Republic of Bangladesh,
ICSID Case No. Arb/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures, 21 March
2007.
13

Grabowski, Alex (2014) The Definition of Investment under the ICSID Convention: A Defence of Salini,

Chicago Journal of International Law: Vol. 15: No. 1, Article 13.


<http://chicagounbound.uchicago.edu/cjil/vol15/iss1/13>
14

Salini v.Morraco, 6 ICSID Rep.400(2004).

MEMORANDUM ON BEHALF OF THE RESPONDENT

Albrosa would be the host State here as the investment activities were undertaken in Albrosa.
Brisselanta was a country that possessed the technology for nuclear energy and Albrosa was
in want for nuclear energy to expedite economic development in the country. 15 Therefore, the
investment obeys with the Salini test and hence, falls under the definition of investment as
mandated by the ICSID Convention.16Hence, the condition ratione materiae is also complied
with by Albrosa and Brisselanta.
Lastly, the condition ratione voluntatis requires the parties to the dispute have consented that
the dispute be settled through ICSID arbitration. Albrosa and Brisselanta both are parties to
the 123 Agreement and consequently, it can be held that they have consented to submit to the
claim to the ICSID Tribunal and such consent cannot be unilaterally rejected.
In the case concerning Armed Activities on the Territory of the Congo 17, the ICJ held that
where the applicable preconditions had not been met, the treaty could not provide
jurisdiction. The Court made clear that examination of such conditions relates to its
jurisdiction and not to the admissibility of the application. Therefore, here since the
preconditions of submitting the claim to ICSID have not been conformed with the ICJ does
not jurisdiction.
Bong Bong and Kolra being parties that are affected by the nuclear accident can contribute
the proceedings of the ICSID Tribunal in order to protect their interests. This can be done
through Rule 37(2) of the ICSID Convention18 which provides that Tribunals may accept
submissions by non-disputing parties after consulting both parties. Given the unavailability of
15

Compromis, 2,3.

16

Christoph H. Schreuer, The ICSID Convention: A Commentary, (2nd ed.) Cambridge University Press.

17

Case Concerning Armed Activities on the Territory of the Congo (New Application, 2002) (Democratic

Republic of the Congo v. Rwanda), Judgement on Jurisdiction and Admissibility, 3 February 2006, I.C.J.
Reports 2006, 88 (RL-48).
18

ICSID Convention, supra note 3, Rule 37 (2).

MEMORANDUM ON BEHALF OF THE RESPONDENT

intervention in investment arbitration, participation as amicus is a recourse an interested third


party has to participate in the proceedings.19
A non-disputing party is an individual or entity that is not a party to the dispute, but asks the
Tribunals permission to file a written submission in the case.20 The dispute that has arisen in
the current case are by virtue of the 123 Agreement entered into by Albrosa and Brisselanta.
Any claim or breach of obligations arising out of this dispute will only be against either
Albrosa or Brisselanta and therefore, it can be concluded that Bong Bong and Kolra are not
parties to the dispute in the case at hand and are hence, only interested parties in the dispute.
Further, the decision of the ICSID Tribunal in AES Summit Generation v. Hungary21, shows
that an amicus can have a significant, direct, legally protectable interest in the outcome of the
case that the disputing parties have not addressed, or have no incentive to address. Therefore,
Bong Bong and Kolra do not need to file separate proceedings in the ICJ for the protection of
their interests and hence, this will avoid duplication of proceedings.
2. The Respondent, being a Supplier of Nuclear Equipment and Material, cannot be
held liable to compensate the Applicants for the nuclear disaster.
2.1 The supplier has no liability under 123 agreement.
Internationally, one of the founding principles of the nuclear law, i.e. legal channelling of
liability, provides that the operator is solely responsible for an accident 22. There are two

19

Eugenia Levine, Amicus Curiae in International Investment Arbitration: The implications of an Increase in

Third-Party Participation, 29 BERKELEY J.INTL LAW. 200(2001).


<http://scholarship.law.berkeley.edu/cjil/vol29/issl/6>
20

OECD (2005), Transparency and Third Party Participation in Investor-State Dispute Settlement Procedures,

OECD Working Papers on International Investment, 2005/01, OECD Publishing.


<http://dx.doi.org/10.1787/524613550768>
21

ICSID Case No. ARB/07/22.

22

Article 6(b) of the 2004 Paris Convention - "Except as otherwise provided in this Article, no other person

shall be liable for nuclear damage caused by a nuclear incident []".

MEMORANDUM ON BEHALF OF THE RESPONDENT

approaches to channelling: legal channelling, which provides that all liability is channelled
to the nuclear operator and to no other entity, and economic channelling, that provides that
any entity, such as a supplier, may be held legally liable for the damage incurred, but the
economic consequences of that liability are channelled to the operator of the nuclear
installation where the accident occurred23.
Art. V of 123 Agreement is in consonance with the abovementioned principle of nuclear law
and provides for a no-fault liability regime channelling exclusive liability on the operator 24.
In such exclusive liability regime, Albrosa, being the operator of the nuclear installation is
exclusively liable for the nuclear damage25.
Further, interpretation of 123 Agreement as per the Vienna Convention requires that treaties
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 objectives.26 As a result of such
interpretation, under no circumstances can Brisselanta be held liable for the compensation.
The main principle of the exclusive liability of the operator would be defeated if Brisselanta
is asked to compensate for the nuclear disaster.
It is further submitted that of Article V(3) of the amended 123 Agreement places a bar on the
operators right of recourse against the supplier in the event of a nuclear disaster. Amended
123 Agreement is binding upon the contracting states since both the Albrosa and Brisselanta,
evinced their continued interest in operating under the 123 Agreement, disregarding the

Article II(5) of the Vienna Convention 31 "Except as otherwise provided in this Convention, no other person
shall be liable for nuclear damage caused by a nuclear incident. []"
23

NUCLEAR

LAW

BULLETIN

No.

93/VOL.

2014/1,

NEA

No.

7181,

OECD

2014.

<http://www.iaea.org/inis/collection/NCLCollectionStore/_Public/46/109/46109547.pdf>
24
25

Clause 1 of art. V of 123 Agreement.


Stoiber, C., A. Baer, N. Pelzer and W. Tonhauser (2003), Handbook on Nuclear Law, IAEA Doc.

STI/PUB/1160, IAEA, Vienna, Austria, p. 112.


26

Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, 1155 U.N.T.S. 331, Art.

31(1).

MEMORANDUM ON BEHALF OF THE RESPONDENT

official notification dated 2nd February, 201127 which denied the validity of the amendment
to 123 Agreement. Arguendo, even if the abovementioned official notification was in effect,
the principles of international law do not permit the provision of internal law or any
amendment in the domestic law to be invoked as justification for its failure to perform the
treaty28. Albrosa cannot breach its duty under 123 Agreement by issuing the notification that
denies the validity of the amendment unilaterally. The Agreement must be observed by
Albrosa in good faith. The act of holding the supplier liable for the compensation would bring
about non-fulfilment of this contractual obligation and consequently, violation of the
principle of pacta sunt servanda29.
It is also submitted that Albrosa has no valid or effective grounds to claim compensation
from Brisselanta for the nuclear disaster. The conditions under which the operator shall have
a right of recourse, enshrined in all the conventions are, only, if such right is expressly
provided for in a contract in writing or if the nuclear incident is the result of an act or
omission of an individual done with the intent to cause nuclear damage30. The facts on record
shows that article V (3) of the amended 123 Agreement expressly takes away the right to
recourse from Albrosa. Correspondingly, Brisselanta had not done any act causing the
nuclear accident, or had any intention to do so.
The aforementioned conditions whose existence is mandatory to exercise the right to recourse
are not met and therefore Albrosa has no reasonable grounds to claim compensation from the
supplier.

27

Compromis, 12.

28

Vienna Convention on the Law of Treaties, supra note 26, Art. 27.

29

Id. Art. 26.

30

Convention for Supplementary Compensation for Nuclear Damage, 1997, art.10, IAEA Doc. INFCIRC/567

(Sept. 12, 1997); Vienna Convention on civil liability for nuclear damage.,1963, art.10, May 21, 1963, 1063
U.N.T.S. 265; Convention on Third Party Liability in the Field of Nuclear Energy, 1961, Art. 6 (f).

MEMORANDUM ON BEHALF OF THE RESPONDENT

2.2 That there was no fault or defect in the materials and equipments supplied by
BPPEC.
It is humbly submitted that there was no fault or latent defect in the nuclear reactor coolant
and generators supplied by BPPEC. The nuclear reactor coolant and generators supplied by
them had been duly approved by the IAEA and the Clean & Alive foundation. In fact,
Albrosa was negligent in performing its duty as an operator, as the Morsin-kkkuyu site was
understaffed and lacked trained technicians which led to the wear and tear, subsequently
resulting into an equipment failure.31
Also, Albrosa has grossly violated the Responsibility Principle32 and Continuous Control
Principle33, according to which, the operator involving nuclear energy is primarily
responsible for ensuring safety and security and to continually monitor nuclear activities to be
certain that they are carried out safely and securely, consistent with the terms of the
authorization. For the neglectful activity of Albrosa, Brisselanta cannot be held accountable
to pay the compensation for the nuclear accident.
2.3 That the judgement passed by the Supreme Court of Albrosa is void.
2.3.1 The judgement passed by the SC of Albrosa is against the sovereignty of
Brisselanta.

31

Compromis, 16.

32

Handbook on nuclear law / C. Stoiber ... [et al.]. Vienna : International Atomic Energy Agency

2003, page 7, 2.
33

Id, page 8, 2.

MEMORANDUM ON BEHALF OF THE RESPONDENT

The principle of sovereign equality of States is a well-established principle of international


law34 that denotes the basic international legal status of a state that is not subject, within its
territorial jurisdiction to the judicial jurisdiction of a foreign state or to foreign law other than
public international law35. It is an important ground for the establishment and development of
international relations36. ICJ has pointed out that Sovereignty in the relations between States
signifies independence37 and this independence of the Peoples Democracy of Brisselanta
cannot be curtailed by making the judgement of SC Albrosa, a foreign judgement, binding
upon it.
2.3.2 The judgement is against the concept of Sovereign Immunity.
Another important principle of international law which is based on the equality of States is
the Sovereign Immunity38. Article 5 of United Nations Convention on Jurisdictional
Immunities of States and Their Property, 2004 provides that A State enjoys immunity, in
respect of itself and its property, from the jurisdiction of the courts of another State. In this
regard, Brisselanta cannot be compelled to submit to the jurisdiction of Albrosa.
2.3.3 The decision of SC of Albrosa is void.
It is further submitted that decision of the SC of Albrosa is void and untenable. The said
judgement is predisposed and is arbitrarily and erroneously arrived at.

34

Such principle is recognized by the Charter of the United Nations (adopted June 26 1945, entered into force

October 24 1945) 1 UNTS 16, Article 2(1); furthermore this principle is reaffirmed in the UNGA Res 2625
(XXV) (24 October 1970), annex, preamble.
35

H Steinberger, Sovereignty, in Max Planck Institute for Comparative Public Law and International Law,

Encyclopedia for Public International Law, vol 10 (North Holland, 1987) 414.
36

Corfu Channel case (United Kingdom v Albania) (Judgement) [1949] ICJ Rep 35.

37

Island of Palmas Case (Netherlands v United States of America) (1928) 2 Rep Intl Arbitral Awards 831.

38

Lew, J., Mistelis, L., and Kroll, S., Comparative International Commercial Arbitration (The HagueLondon-

New York : Kluwer Law International, 2003)Page 744.

MEMORANDUM ON BEHALF OF THE RESPONDENT

It is clearly a default judgement in view of Article 23 of UN Convention on Jurisdictional


Immunities of States and Their Property which makes the service of process to the state
against whom the proceedings are initiated mandatory. Otherwise, such default judgement
shall not be rendered against the State39.
Here, in the present case, the respondent was not given any opportunity to assign reasons for
their non-appearance and instead of adjourning the case; an ex parte judgment was passed.
Evidently, the default judgement violated the tenets of natural justice, namely audi alterem
partem and could not be rendered against Brisselanta.
Furthermore, the Court by providing the right to recourse to Albrosa is totally erroneous since
there can be no right of recourse against the supplier as per the clause 3 of Article V of the
amended 123 agreement.
Thus, Brisselanta contends that the decision of SC of Albrosa is not binding on Brisselanta
and it cannot be compelled to abide by the decision and compensate the applicants for the
nuclear disaster.
3. Brisselanta is not liable to compensate Albrosa for the pollution of their marine
environment that gravely dented their economic interests.
3.1.Brisselanta is not bound by any obligations under the unratified treaties
A treaty only creates law as between the States which are parties to it.40 By simple signature
without ratification, a treaty cannot bind a State due to lack of consent to be bound by that
State.41 Brisselanta has signed but not ratified the UNCLOS, Brussels Convention, Protocol

39

Article 23 of United Nations Convention on Jurisdictional Immunities of States and Their Property,2004.

40

Case Concerning Certain German Interests in Polish Upper Silesia (Ger. v. Pol.), 1926 P.I.C.J. Ser. A, No. 7,

at 29.
41

Vienna Convention on the Law of Treaties, art.14(1)(a), May 23, 1969, 1155 U.N.T.S. 331.

10

MEMORANDUM ON BEHALF OF THE RESPONDENT

to the Paris and Brussels Convention, 2004 and Aarhus Convention, 1998.42 The provisions
of these unratified treaties cannot be invoked against Brisselanta as it has not ratified to the
treaties. Brisselanta did not give express or implied consent to be bound by the treaties. 43
3.1.1. Brisselanta has not violated its interim obligations under Article 18 of VCLT
A signatory of a treaty is obliged to refrain from acts which would defeat the object and
purpose of a treaty...until it shall have made its intention clear not to become a party to the
treaty.44 As the title of Article 18 itself provides, the rule contemplates a situation prior to a
treatys entry into force. Thus, the underlying idea of Article 18 imposes an interim
obligation until the treaty has entered into force.
3.1.2 Article 18 of the VCLT does not impose affirmative duty on signatories.
From the plain wording of Article 18 of the VCLT, it is seen that there is no affirmative duty
upon a signatory to do certain acts or to carry out specific provisions of the treaty, but to do
nothing which may be prejudicial to the Treaty. This rule was echoed by Iloilo Claims case 45,
in which the arbitral tribunal refused to impose the affirmative obligation of keeping order
upon the United States in the Philippines during the interval between the signing of the
Treaty of Peace and its entry into force. Brisselanta is not obliged to perform affirmative duty
provided in the unratified treaties. Brisselanta has not performed any act which is prejudicial
to the treaty. It has in fact complied with all requirements diligently.
3.1.3. The obligation imposed by Article 18 is a duty of good faith and not a legal
obligation.

42

Compromis, ANNEXURE-II.

43

Vienna Convention on the Law of Treaties, art.12, May 23, 1969, 1155 U.N.T.S. 331.

44

Vienna Convention on the Law of Treaties, entered into force Jan.27,1980, art.18, 25,1155 U.N.T.S. 331.

45

Several British Subjects (Great Britain) v. United States (Iloilo Claims. November 19, 1925. Pages 403-405).

11

MEMORANDUM ON BEHALF OF THE RESPONDENT

Article 18 of the VCLT contemplates merely a duty of good faith and not a legal obligation.
This is proven by the travaux preparatoires of the VCLT. The ICJ has made recourse to
travaux preparatoires in the past.46
The interim obligations are concerned with only a duty of good faith rather than international
law.47 The article contemplates a moral rather than a legal obligation.48 This Court has found
that, good faith is not in itself as source of obligation where none would otherwise exist.49
Thus Albrosa may not invoke Article 18, an obligation of good faith, to impose a legal
obligation upon Brisselanta.
3.2. Brisselanta cannot be held liable for breach of obligations under customary
international law.
3.2.1. Brisselanta has not violated its obligations under customary international law
The obligation not to cause trans boundary harm has been acknowledged as customary
international law.50 Even if the trans boundary harm exists, the inobservance of the due
diligence obligation on the part of the accused State must be established.51 In the present
case, Nuclear reactor coolant and generators supplied by BPPEC were duly approved by the
IAEA and Clean & Alive foundation. Based on these approvals, the Electricity Market

46

Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean Sea (Nicaragua v.

Honduras), Judgment, I.C.J. Reports 2007, p.659.


47

Harvard Research in International Law, Law of Treaties, 29 A.J.I.L. Supp 653 at 937 (1925), Art. 19.

48

Law of Treaties, Third report by J.L. Brierly, Special Rapporteur, DOCUMENT A/CN.4/54.

49

Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean Sea (Nicaragua v.

Honduras), Judgment, I.C.J. Reports 2007, p.659.


50

Stockholm Declaration on the Human Environment, Principle 21, UN Doc. A/CONF. 48/14/Rev.1 (1973);

Rio Declaration on Environment and Development, Principle 2, UN Doc.A/CONF. 151/26 (1992); CBD,
Principle 3, 31 I.L.M. 818 (1992); Trail Smelter Arbitral Decision (U.S. v. Can.), 3 R.I.A.A. 1965 (1938/1941).
51

Pulp Mills in the River Uruguay Case (Arg. v. Uru.), 2010 I.C.J. at 55-56.

12

MEMORANDUM ON BEHALF OF THE RESPONDENT

License Regulation of Albrosa issued the electricity production license. 52 Thus, Brisselanta
has complied with its due diligence duty.
3.2.2. Albrosa has violated customary international law
The principle that States should prevent activities within their jurisdiction from causing trans
boundary harm was first enunciated in the Trail Smelter Arbitration. 53 The responsibility of
Canada in the Trail Smelter Arbitration54 did not result from any intentional action, but
flowed simply from its breach of a duty to prevent activities within its jurisdiction from
causing harm to persons, property, and the environment of the United States. ICJ, in its
opinion, stated that, The existence of the general obligation of states to ensure that activities
within their jurisdiction and control respect the environment of other states or of areas
beyond national control is now part of the corpus of international law relating to the
environment.55 The disaster occurred within the territory of Albrosa itself harming Bong
Bong and Kolra Island. The ICJ recognized in the Gabcikovo Case that it is a wellestablished rule of international law that an injured State is entitled to obtain compensation
from the State which has committed an internationally wrongful act for the damage caused
by it.56 This rule was reaffirmed by the International Tribunal for the Law of the Sea in its
first full opinion, The M/V Saiga Case.57 This principle is also codified as Principle 17 of the
1992 Rio Declaration. Thus, it is Albrosa who is liable for not managing activities under its

52

Compromis, 13.

53

Trail Smelter Case (United States v. Canada) 16 April 1938 and 11 March 1941.

54

Trail Smelter Case, Supra note 53.

55

1996 ICJ Advisory Opinion on the Legality of the Threat or Use of Nuclear Weapons, paragraph 29

of the Judgement in ICJ Reports 1996, page 225.


56

Gabcikovo Nagymaros Project (Hung. v. Slovk.), 1997 I.C.J. 7, 53 (Sept. 25).

57

M/V Saiga (No. 2) (St. Vincent v. Guinea), 120 I.L.R. 143, 170 (Intl Trib. L. of the Sea

1999).

13

MEMORANDUM ON BEHALF OF THE RESPONDENT

jurisdiction which led to the disaster resulting in loss of life pollution to the environment.58
3.2.3 Activities within Albrosas jurisdiction affected areas beyond its jurisdiction
The Stockholm Conference59 formally adopted the no-harm principle for environmental
damage.60 It confirmed the Trail Smelter holding in Principle 21 which was again confirmed
in the Principle 2 of Rio Declaration.61 The ICJ said explicitly in 1996 that the general
obligation of states to ensure that activities within their jurisdiction and control respect the
environment of other states or of areas beyond national control is now part of the corpus of
international law relating to the environment.62 The no-harm rule is incorporated in Article
194(2) of the 1982 U.N. Law of the Sea Convention and in the Preamble of the 1992 U.N.
Framework Convention on Climate Change, which states that States have the sovereign right
to exploit their own resources pursuant to their own environmental and developmental
policies, and the responsibility to ensure that activities within their jurisdiction or control do
not cause damage to the environment of other States or of areas beyond the limits of national
jurisdiction.63 Also, Under the CBD, States have responsibility to ensure that activities
within their jurisdiction or control do not cause damage to the environment of other States.64
In the present case, Albrosa being the operator of the FNPP65, had license to operate and
control the FNPP.

58
59

Compromis, 13, 15.


U.N. Conference on the Human Environment, June 5-16, 1972, Declaration of Principles, U.N. Doc.

A/CONF.48/14 (June 16, 1972) [hereinafter Stockholm Declaration].


60

G.A. Res. 2581, 2, U.N. GAOR, 24th Sess., Supp. No. 30, U.N. Doc. A/7630 (Dec. 15,

1969).
61

U.N. Conference on Environment and Development, June 3-14, 1992, supra note 59.

62

Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion, 1996 I.C.J. 226, 241-42, (July 8). See

also Gabcikovo Nagymaros Project (Hung. v. Slovk.), 1997 I.C.J. 7, 53 (Sept. 25).
63

United Nations Framework Convention on Climate Change Preamble, May 9, 1992, 1771 U.N.T.S. 107.

64

Convention on Biological diversity, 1992, Art.3, 31 I.L.M. 818.13.

65

Compromis, 6, Chapter 7 of 123 Agreement.

14

MEMORANDUM ON BEHALF OF THE RESPONDENT

3.3. Albrosa has failed to exercise due diligence


Due diligence refers to the effort made by a state to take reasonable, appropriate and timeous
measures to ensure that trans boundary harm is prevented.66 In other words, a state has to do
everything to maintain and regulate all activities within its jurisdiction as to not cause harm
to the environment of another state. Due diligence has been defined to mean what a
responsible government should do under normal conditions in a situation with its best
practicable and available means, with a view to fulfilling its international obligation.67
When an activity bears a significant risk of trans boundary damage the government must
take all necessary measures to prevent such damage.68 Albrosa did not appoint enough
skilled technicians and manpower at the site and also violated duty to co-operate by not
releasing the reports in public domain.
3.3.1. Albrosa violated due diligence requirement under CBD
Contracting Party must notify immediately potentially affected States of imminent or grave
danger or damage originating under its jurisdiction or control to biological diversity within
the area under jurisdiction of other States69 and also facilitate the exchange of information
including result of technical, or socio-economic research.70 Bong-Bong, a potentially affected
State was not notified of the grave danger and further, the EIA and Criticality Assurance

66

Report of the ILC, 53rd Session, 159, UN Doc. A/56/10 cited in Stephens. The report is a commentary on the

Draft Articles of Prevention, considered a codification of customary international law.


67

Xue hanqin, Transboundary damage in international law 163 (2003).

68

Id.

69

Convention on Biological diversity, supra note 64, Article 14(1)(d).

70

Convention on Biological diversity, supra note 64, Article 17.

15

MEMORANDUM ON BEHALF OF THE RESPONDENT

Report were not released in the public domain by the Albrosa.71 Albrosa was bound by the
obligations under CBD which Albrosa violated.72
3.3.2. Albrosa was negligent in supervising activities mandated by UNCLOS
A state has the obligation to supervise activities within its jurisdiction or control, so that such
activities do not cause significant environmental harm either to the territory or resources of
other States.73 Albrosa was negligent in not maintaining the FNPP which lead to equipment
failure as the plant was understaffed. This was clearly in contravention with Article 194 of
UNCLOS which imposes a duty on the States to take measures to minimize to the fullest
extent pollution from devices and other installations operating in the marine environment by
ensuring safety of operations at sea, regulating equipment and manning of such installation of
devices.74
3.4. Brisselanta is not liable for damage to the economic interests of the Applicants.
The damage that the applicants have suffered is, including other things, a decline in its
tourism levels and halt in the fishing industry which is not sufficient to in itself make the
Respondent liable under customary international law because the trans boundary damage for
which a state is liable does not include economic and financial activities.75 The respondent is
not liable to pay for the pollution of marine environment of the Applicants which has dented
their economic interests.
Damage to persons and property is generally compensable. Damage to environment or
natural resources within the jurisdiction or in areas under the control of a State is now well
71

Compromis, 14.

72

Convention on Biological diversity, supra note 64, Article 34; Compromis, Annexure-II.

73

Riccardo P. Mazzeschi, Forms of International Responsibility for Environmental Harm, in International

Responsibility For Environmental Harm (Francesco Francioni & Tullio Scovazzi eds, 2001).
74

United Nations Convention on the Law of the Sea, art.194(3)(d), Dec. 10, 1982, 1833 U.N.T.S. 397.

75

North Sea Continental Shelf (Federal Republic of Germany VS.Netherlands), ICJ, Judgement, 26 April 1968.

16

MEMORANDUM ON BEHALF OF THE RESPONDENT

accepted. However, compensation in such a case is limited to costs actually incurred on


account of prevention or response measures as well as measures of restoration. Where actual
restoration of damaged environment or natural resources is not possible, costs incurred to
introduce equivalent elements could be reimbursed; Damage to environment per se, not
resulting in any direct loss to proprietary or possessory interests of individuals or the State is
not considered a fit case for compensation. Similarly, loss of profits and tourism on account
of environmental damage are not likely to get compensated.76 Also, Albrosas growth has
been forecasted by the IMF from 5% in 2015 to 6.5% in 2016 which is clearly contrary to the
claim that their economic interests are dented.
4. Albrosas indefinite moratorium on uranium imports from Brisselanta is violative of
the 123 Agreement.
Article 31 of VCLT provides that any relevant rules of international law applicable in
relations between the parties shall also be taken into account77. In the instant case, the
relevant rule of international law applicable in relations between the parties is GATT since
the Applicants and Respondent, both are members of the WTO78 and therefore, 123
Agreement should be interpreted in the light of provisions of GATT. Further, Article XV and
Article XXX of the 123 Agreement are in pari materia with Article XI and Article XX of the
GATT respectively and therefore reliance can be placed on the aforementioned articles of
GATT for the interpretation of the 123 Agreement.
4.1 Albrosas indefinite moratorium on uranium imports from Brisselanta is violative of
Article XV of the 123 Agreement
76

International Law Commission, First Report on the Legal Regime for Allocation of Loss in Case of

tansboundary Harm Arising Out of Hazardous Activities, 88, U.N. GAOR, 55th Sess., U.N. Doc. A/CN.4/531
(Mar. 21, 2003) (prepared by Pemmaraju Sreenivasa Rao, Special Rapporteur)
77

Vienna Convention on the Law of Treaties, art.31.3 (c) , May 23, 1969, 1155 U.N.T.S. 331.

78

Clarification to the Compromis, 3.

17

MEMORANDUM ON BEHALF OF THE RESPONDENT

It is humbly submitted that Albrosa had imposed an indefinite moratorium on the import of
Uranium from the Respondent. The said action would not only impair the volume of trade79
but also affect the investment plans between the two nations. Thus, the indefinite
moratorium violates Art. XV:1 of the 123 Agreement, which states that no restriction or
prohibition can be instituted against the exportation or importation of the goods.
In order to prove the violation of Art.XV:1 of the 123 Agreement, it is imperative to prove
that the indefinite moratorium constitutes an other measure under the Art. XV:1.
It is humbly submitted that the Panel in the Argentina-Hides and Leather80 case held that only
governmental measures fall within the ambit of Art. XI:1 of the GATT; with an express
exclusion of duties, taxes or other charges81. Facts on record indicate that the indefinite
moratorium was imposed by The Socialist Government of Albrosa, vide an official
notification dated 3rd February, 201582. Hence, it constitutes a governmental measure that
falls within the ambit of other measures which violates Art.XV:1 of the 123 Agreement.
The fact that the indefinite moratorium was imposed by the Socialist Government of Albrosa
makes its implementation both mandatory and obligatory. This is sufficient to constitute an
other measure that violates Art. XV:1 of the 123 Agreement.83 In fact, all restrictions of a
de facto nature84 fall within the broad residual category of other measures85.

79

GATT Panel Report, Panel on Japanese Measures on Imports of Leather (15 May 1984) GATT BISD 31S/94

(adopted 15 May 1984) 47.


80

WTO, Argentina-Measures Affecting the Export of Bovine Hides and the Import of Finished LeatherReport

of the Panel(16 February 2001) WT/DS/55/R and Corr. 1.


81

GATT Panel Report, Japan: Trade in Semi-conductors, (1989) GATT BISD 35S/116 (adopted 4 May 1988)

104.
82
83

Compromis, 19.
WTO, India-Measures Affecting the Automotive Sector.-Appellate Body Report (5 April 2002)

WT/DS146/AB/R.
84

Japan Trade in Semi-Conductors (n 4) 105.

18

MEMORANDUM ON BEHALF OF THE RESPONDENT

Thus, the prohibition on the import, imposed by the Government of Albrosa falls within the
ambit of other measures appearing in article XV of the said agreement and cannot be
justified under any of the grounds. Such prohibition is arbitrary and not in accordance with
the introductory clause of Art. XV of the Agreement.
It is further submitted that the legal status of the indefinite moratorium is not a sine qua non
for constituting an other measure under Art. XV:1 of the 123 Agreement. Art. XI:1 of
GATT, does not refer to laws or regulations but broadly to measures.

86

Therefore, any

measure instituted or maintained by a contracting party which restricted the


exportation/importation or sale for exports/imports of products was covered by this provision,
irrespective of the legal status of the measure87.
Arguendo, that the measure by Albrosa on import was not mandatory, it would still violate
the Article XV of 123 Agreement. A non-mandatory measure may constitute a restriction
when there were incentives or disincentives for it to take effect and when it operated in a way
essentially dependant on Government action or intervention. 88
It is humbly asserted that such ban put by Albrosa on the import, irrespective of being
mandatory or non-mandatory is violative of Article XV:1 of 123 Agreement. Owing to the
indefinite nature of the moratorium, Albrosa has a sweeping discretion to exercise its will
and the discretionary systems by their very nature operate as limitation on action since
imports may not be permitted89, thereby, violating Art. XV:1 of the Agreement.

85
86

Argentina -Hides and Leather (n 3) 11.17.


Panel Report, India Quantitative Restrictions, 5.129.

87

Analytical Index: Guide to GATT Law and Practices (Vol 1 World Trade Organization, Geneva 1995)315.

88

Japan Trade in Semi-Conductors (n 4).

89

Panel Report, EEC-Quantitative Restrictions Against Imports of Certain Products from Hong Kong GATT

BISD. 30S/129 (adopted 12 July 1983) 31.

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MEMORANDUM ON BEHALF OF THE RESPONDENT

4.2. Albrosas indefinite moratorium does not fall under the General Exceptions as
provided under Article XXX of the 123 Agreement.
In order to be justified under Article XXX, the inconsistent measure must go through a twotier test: Firstly, the measure at issue must fall under one of the exceptions sub-paragraphs
(a) to (j) listed under Article XXX; and, Secondly, the measure must be applied in a manner
that satisfies the requirements of the Chapeau of Article XX.90
The assessment of an Article XXX claim always starts with the analysis with the particular
exceptions invoked by a party and only after the measure at issue has been found to be falling
within the scope of the claimed exceptions, should it be considered whether the application of
the measure satisfies the conditions of the Chapeau.91
The measure of indefinite moratorium taken by Albrosa does not fall under any of the
exceptions provided under Article XXX. The only possible exception that Albrosa could
resort to is the protection of human, animal, or plant life or health. But the measure must meet
two elements to fall under the scope of the Article XXX(b) exception: Firstly, the policy in
respect of the measure for which the provision is invoked must fall within the range of
policies designed to protect human, animal, or plant life or health; and Secondly, the
inconsistent measure for which the exception is invoked must be necessary to fulfil the policy
objective.
In order to determine whether a measure pursues a policy objective of protecting human and
animal life and health, it should first be considered whether a risk to human and animal life
and health exists. If a risk is found to exist, it should further be determined as to whether the
policy objective underlying the measure is to reduce that risk.

90

US Gasoline, Appellate Body Report, 22.

91

EC Asbestos, Panel Report, 6.20; US Shrimp, Panel Report, 5.27-5.28.

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MEMORANDUM ON BEHALF OF THE RESPONDENT

The nuclear disaster that caused damage to the environment of Albrosa was not solely due to
the FNPPs being constructed. It was due to the negligence of Albrosa, as an operator, and
therefore, it can be seen that the FNPP or the import of uranium in Albrosa as such does not
pose any threat or risk to the human, animal and plant life in Albrosa.
In order to determine, whether a measure is necessary within the meaning of Article XXX,
it should be understood as being inevitable, indispensable or of absolute necessity.92
The necessity test involves a process of weighing and balancing a series of relevant
factors, in particular: The contribution made by the measure to the achievement of its
objection; the importance of the interests or values at stake; the trade-restrictiveness of the
measure.
In order to determine the trade-restrictiveness of the measure, it has to be compared with
possible available alternatives, which may be less trade restrictive while providing an
equivalent contribution to the achievement of the objective pursued.93 In order to qualify as
an alternative, a measure must be not only less trade restrictive than the measure at issue, but
should also preserve for the responding Member its right to achieve its desired level of
protection with respect to the objective pursued.94
As mentioned earlier the term indefinite moratorium means an indeterminate delay,
therefore, now even if the issue of FNPPs and the current nuclear disaster between Albrosa
and Brisselanta is resolved, Albrosa can refuse from performing its obligations as established
under the 123 Agreement, to import uranium. Therefore, the trade restrictiveness of this
measure is in excess of the objective that it is pursuing. Also, Albrosa has other alternatives

92

Korea Beef, Appellate Body Report, 161.

93

Brazil Retreaded Tyres, Appellate Body Report.

94

United States Measures Affecting the Cross-Border Supply of Gambling and Betting Services (the Panel

Report) WT/DS285/R, 10 November 2004.

21

MEMORANDUM ON BEHALF OF THE RESPONDENT

available to protect its interest such as defining the period or the conditions based on which
the moratorium may be lifted etc.
In order to justify a measure under Article XXX, it must also be shown that the measure
meets the requirements of Article XXX chapeau. It must be demonstrated that the measure is
not a means of arbitrary or unjustifiable discrimination between countries where the same
conditions prevail; or a disguised restriction on international trade.
This, being a bilateral treaty there is no other country where the same conditions prevail;
therefore, the first point is not relevant in this case. In order to establish that it is not a
disguised restriction on international trade it should be determined that the measure applied
would not constitute a misuse or an abuse of the exceptions of Article XXX.95 Therefore, the
measure undertaken must be exercised in good faith.96 A balance must be struck between the
right of a Member to invoke an exception under Article XX and the duty of that same
Member to respect the treaty rights of the other Members while interpreting the chapeau.97
If we look at the series of events that took place in the country of Albrosa before the
construction of the first FNPP at the Morsin-kkkuyu site, it is clear that the actions of the
Democratic Government while entering into the 123 Agreement was not positively
accepted.98 Further, Albrosa had failed to provide properly trained technicians to the first
FNPP99 and therefore, they have realised that they will be unable to perform their obligations
as an operator of the FNPP. Therefore, from the above it can be inferred that the measure
undertaken by Albrosa is with a mala fide intention of not wanting to construct further FNPP
and therefore, escaping their obligations under the 123 Agreement.
95

US Shrimp, Appellate Body Report, 157.

96

US Shrimp, Appellate Body Report, 158; Brazil Retreaded Tyres, 224.

97

US Shrimp, Appellate Body Report.

98

Compromis, 10, 11.

99

Compromis, 13.

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MEMORANDUM ON BEHALF OF THE RESPONDENT

4.3. The indefinite moratorium is not authorised under the essential security clause
of the 123 agreement
It is humbly submitted that the countermeasure adopted by Albrosa cannot be justified under
the essential security clause of the 123 agreement. Applicants cannot cite the destruction
from the nuclear accident as a justification for enforcing the countermeasure since Brisslenta
cannot be held accountable for negligence and none of the materials supplied by the
Brisselanta were defective. Hence, no purported action of Brisselanta threatens Applicants
essential security. It is further submitted that since the contracting parties are the members of
WTO, Article XXI of GATT can be relied upon for the further interpretation of essential
security clause of 123 Agreement.
4.3.1 The Essential Security Clause is not self-judging in nature and is therefore,
subject to Courts interpretation.
It is humbly submitted that the essential security clause is subject to an objective and not a
subjective interpretation. There is no state practice or agreement among parties100 which
could justify the subjective interpretation of the essential security clause under Art. 31(3)
(b) of the VCLT101.
ICJ in the case of Friendship Commerce and Navigation Treaties, has held that the invocation
of the national security clause102 does not deprive the court of its jurisdiction. It is humbly
submitted that the contracting parties taking measures under Article XXI of the GATT must

100

RE Browne, Revisiting "National Security" in an Interdependent World: The GATT Article XXI Defence

After Helms-Burton(1997) 86 Geo. L.J. 405at pg. 422-23.


101

HL. Schloemann & S Ohlhoff, "Constitutionalization" and Dispute Settlement in the WTO: National Security

as an Issue of Competence (1999) 93 Am. J. Int'l L. 424 at pg. 437.


102

Oil Platforms case (Iran v United States) (n 26) at 803, 811; Military and Paramilitary Activities case

(Nicaragua v US) [1986] I.C.J.Rep14.

23

MEMORANDUM ON BEHALF OF THE RESPONDENT

notify other contracting parties.

103

In this regard, no reasons were furnished by the

Applicants before invoking the essential security clause. Albrosa cannot unilaterally
determine the application of the essential security clause. The binding effect of Albrosas
self-judging application of the said clause would vitiate the legal effect of the 123
Agreement.
4.3.2 Brisselanta cannot be held accountable for any negligence or for defects in the any
of the materials and equipments supplied; that could threaten Albrosas essential
security
It is humbly submitted that there was no action taken by Brisselanta which could jeopardize
the essential security of Albrosa. All the nuclear reactor coolant and generators supplied by
Brisselanta had been duly approved by the IAEA and the Clean & Alive foundation 104.
Thus, no negligence could be attributed on the part of Brisselanta which could be said to
threaten Albrosas essential security.
There has to be a proximate nexus between the ban put on the import of Uranium and the
essential security of the Applicants. Uranium, per se, could not be detrimental to the essential
security of the Applicants. The principle of proportionality must be observed in the instant
case. The burdens imposed on the persons concerned must not exceed the steps required in
order to meet the public interest involved. If therefore, a measure imposes on certain
categories of persons, a burden which is in excess of what is necessary- which must be
appraised in the light of the actual economic and social conditions and having regard to the
means available- it violates the principle of proportionality105.

103

Decision Concerning Article XXI of the General Agreement, Nov. 30, 1982, GATT B.I.S.D. 29S/ 23 (1983).

104

Compromis, 16.

105

Case C- 114/76, Bela- Muhle Josef Bergmann KG v Grows- Farm GmbH, 1977 ECR 1211, 1232 (opinion of

Advocate General Capotorri)

24

MEMORANDUM ON BEHALF OF THE RESPONDENT

The test of proportionality cannot be met solely by demonstrating that the actions were taken
in response to an aggressive act, but also required evidence that these actions were necessary
and proportional.106 The said requirement is strict and objective, leaving no room for any
measure of discretion. Hence, Albrosa cannot discretionally enforce the countermeasure,
without justifying its proportionality and necessity.
It is further submitted that the use of the word essential signifies the intent of the drafters of
the Agreement to implicate a higher standard of security to justify the clause. Had the drafters
intended otherwise they would have simply used the word security. Therefore,
classification in part as essential must meet some higher standard in relation to other,
normal security interests107. To affect the essential security interest of a State there must be
a grave and imminent peril which threatened that interest108; which is not present in the
instant case.
It is humbly submitted that, Albrosa has not acted in good faith109 and abused its rights (abus
de droit)110 by arbitrarily being a sole judge in applying the said clause; without proving
how any action of Brisselanta is detrimental to its national security, prejudicing the interests
of Brisselanta and violating its rights under 123 Agreement.

106
107

Oil Platforms (Iran v US) 2003 ICJ Rep. 161 (Nov 6).
HL Schloemann & S Ohlhoff, "Constitutionalization" and Dispute Settlement in the WTO: National

Security as an Issue of Competence 93 Am. J. Int'l L. 424 (1999) at pg. 443.


108

Gabckovo-Nagymaros Project case (Hungary v Slovakia)[1997] ICJ Rep at 40 52-58.

109

WTO, United States-Import Prohibition of Certain Shrimp and Shrimp Products-Appellate Body Report, (12

October 1998) WT/DS58/AB/R 158.


110

B Cheng, General Principles of Law as applied by International Courts and Tribunals (Stevens and Sons,

Ltd., 1953) 125.

25

MEMORANDUM ON BEHALF OF THE RESPONDENT

SUBMISSIONS TO THE COURT

For the foregoing reasons, The Peoples Democracy of Brisselanta, respectfully requests the
Court to adjudge and declare that:
1. This Honourable Court does not have jurisdiction to hear the present case;
2. The Respondent is not liable to compensate the Applicants for the nuclear disaster;
3. The Respondent is not liable to compensate the Applicants for the pollution of their
marine environment that gravely dented their economic interests; and
4. Albrosas indefinite moratorium on uranium imports from Brisselanta is violative of
the 123 Agreement.

All of which is respectfully submitted


Agent for the Respondent
__________________________
__________________________
THE PEOPLES DEMOCRACY OF BRISSELANTA

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MEMORANDUM ON BEHALF OF THE RESPONDENT