R - 09 PDF

R-09
INTERNATIONAL CENTRE FOR SETTLEMENT OF

INVESTMENT DISPUTES
IN THE MATTER OF THE ARBITRATION BETWEEN
FUN-FIX...............................................................................................................CLAIMANT
v.
REPUBLIC OF PARADICE................................................RESPONDENT
MEMORIAL FOR RESPONDENT
1ST JINDAL TECHNOLOGY LAW AND POLICY MOOT COURT

COMPETITION, 2016
II
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF ABBREVIATIONS .......................................................................................... IV

LIST OF AUTHORITIES .................................................................................................... VI
STATEMENT OF FACTS ................................................................................................ XIII
STATEMENT OF JURISDICTION ................................................................................ XVI
QUESTIONS PRESENTED .......................................................................................... XVIII
SUMMARY OF ARGUMETS.......................................................................................... XIX
ARGUMENTS ADVANCED .................................................................................................. 1
I.
THE TRIBUNAL HAS JURISDICTION OVER THE DISPUTE ................................................ 1
(A)
There Is No Unqualified Consent To Arbitrate The Claim In Question ................. 2
(B)
This Tribunal Does Not Have Jurisdiction Ratione Materiae Because Claimants
Exploitation Of Patent A And Patent B Is Not An Investment.......................................... 2

1.
Patents A And B Are Not Protected Investments Under Article 25(1) ICSID .... 3
2.
Patents A And B Are Not Protected Investments Under Clause (I) BIT ............. 5
(C)
II.
There Is No Jurisdiction Ratione Temporis:............................................................ 6
RESPONDENT TREATED APPLICANT FAIRLY AND EQUITABLY ...................................... 7
(A)
Respondent Has Met Applicants Legitimate Expectations .................................... 8
(B)
Respondent Has Complied With All Its Other International Obligations ............. 12
(C)
Respondents Acts Do Not Amount To A Denial Of Justice ................................ 15
III. RESPONDENT DID NOT EXPROPRIATE APPLICANT'S INVESTMENT ............................ 19

(A)
Respondent Did Not Directly Expropriate Applicant's Patents ............................. 19
WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT
III
TABLE OF CONTENTS
(B)
Respondent Did Not Indirectly Expropriate Applicant's Patents .......................... 19
1.
Invalidation of Patent B by PPO does not amount to expropriation .................. 20
2.
Grant Of Compulsory License By The PCT Does Not Amount To
Expropriation ............................................................................................................... 22
3.
High Court's Order Does Not Amount To An Act Of Expropriation ................ 27
RELIEF SOUGHT............................................................................................................ XVII
IV
TABLE OF ABBREVIATIONS
Paragraph
Art.
Article
BIT
Bilateral Investment Treaty
CCI
Competition Commission of India
ECJ
Court of Justice European Union
FET
Fair and Equitable Treatment
FRAND
Fair, Reasonable and Non- Discriminatory
ICJ
International Court of Justice
ICSID
International Centre for Settlement of Investment Disputes
IIAs
International Investment Agreements
ILC
International Law Commission
IPR
Intellectual Property Rights
MST
Minimum Standard Treatment
NAFTA
North American Free Trade Agreement
P.
Page number
PCT
Paradice Competition Tribunal
PPO
Paradice Patent Office
V
SEP
Standard Essential Patent
TRIPs
Trade-Related Intellectual Property Rights
UNCITRAL United Nations Commission on International Trade Law

UNCTAD
United Nations Conference on Trade and Development
v-
versus
VCLT
Vienna Convention on Law of Treaties
WIPO
World Intellectual Property Organisation
WTO
World Trade Organization
VI
LIST OF AUTHORITIES
LIST OF AUTHORITIES
CASES REFERRED
Alex Genin, Eastern Credit Limited, INC. and A.S. Baltoil v. Republic of Estonia,
ICSID Case No. ARB/99/2, Award (25 June 2001) .............................................................. 7
Apotex Inc. v. U.S., ICSID Case No. ARB (AF)/12/1, Award on Jurisdiction and
Admissibility, (June 14, 2013), ............................................................................................ 16
Apotex Inc. v. U.S., ICSID Case No. ARB(AF)/12/1, Notice of Arbitration, (Dec. 10, 2008),
............................................................................................................................................. 15
Bernhard von Pezold v. Republic of Zimbabwe (ICSID Case No. ARB/10/15) ..................... 13
Border Timbers Ltd. v. Republic of Zimbabwe (ICSID Case No. ARB/10/25), Procedural
Ord. No. 2, 57 (June 26, 2012).......................................................................................... 13
CCL v. Republic of Kazakhstan, Final Award, 2004, 1 SIAR (2005) ..................................... 24
Ceskoslovenska obchodni banka, A.S. v Slovak Republic, ICSID Case No. ARB/97/4,
Decision on Jurisdiction (24 May 1999)................................................................................ 3
Chattin (U.S.) v. United Mexican States, (Gen. Claims Comm'n, Mex.-U.S. 1927) ............... 16
Duke Energy Electroquil Partners & Electroquil SA v Republic of Ecuador, ICSID Case No
ARB/ 04/19, Award (18 August 2008), ................................................................................. 9
EDF (Services) Limited v Romania, ICSID Case No ARB/05/13, Award (8 October 2009), .. 9
Elizabeth Snodgrass, Protecting Investors Legitimate Expectations: Recognizing and
Delimiting a General Principle, (2006) 21 ICSID RevFILJ ............................................. 9
VII
LIST OF AUTHORITIES
Emmis International Holding, B.V. Emmis Radio Operationg, B.V. Mem Magyar Electronic
Media Kereskedelmi Es Szolgaltato KT v Hungary, ICSID Case No ARB/12/2, Award (16
April 2014) ........................................................................................................................... 21
Grand River Enterprises Six Nations, Ltd. v. United States, Award, 219 (Jan. 12, 2011), .. 13
Huawei Technologies Co. Ltd v ZTE Corp. and ZTE Deutschland GmbH.Case C-170/13
(CJEU) ........................................................................................................................... 14, 15
Joy Mining Machinery Limited v Egypt, ICSID Case No ARB/03/11, Decision on
Jurisdiction (23 July 2001) .................................................................................................... 5
Joy Mining Machinery Limited v Egypt, ICSID Case No. ARB/03/11, Decision on
Jurisdiction (23 July 2001). ................................................................................................... 3
Lauder v. Czech Republic, UNCITRAL (United States/Czech Republic BIT), Award (Final), 3
September 2001 ................................................................................................................... 24
LG&E International, Inc. v. Argentine Republic, ICSID Case No. ARB/02/1, Award (July 25,
2007) .................................................................................................................................... 11
Liman Caspian Oil BV and NCL Dutch Investment BV v. Republic of Kazakhstan, ICSID
Case No. ARB/07/14, Award (22 June 2010) ............................................................... 16, 17
Loewen v United States, ICSID Case No ARB(AF)/98/3, Award (26 June 2003), ................. 16
Marvin Roy Feldman Karpa v United Mexican States, ICSID Case No. ARB(AF)/99/1,
Award (16 December 2002). ............................................................................................... 25
Methanex v. United States, UNCITRAL (NAFTA), Final Award, 3 August 2005 ................. 23
Mondev International Ltd. v. United States of America, ICSID Case No.
ARB(AF)/99/2, Final Award (11 October 2002) ................................................................... 7
VIII
LIST OF AUTHORITIES
Mr. Franck Charles Arif v Republic of Moldova, ICSID Case No. ARB/11/23, Award (8
April 2013). .......................................................................................................................... 28
National Grid plc v. The Argentine Republic, UNCITRAL, Award (3 November
2008). ..................................................................................................................................... 8
Occidental Petroleum Corporation and Occidental Exploration and Production Company v
The Republic of Ecuador, ICSID Case No. ARB/06/11, Award (1 July 2004)................... 25
Parkerings-Compagniet AS v Republic of Lithuania, ICSID Case No ARB/05/8, Award (11
September 2007) .................................................................................................................. 10
Patrick Mitchell v Democratic Republic of the Congo, ICSID Case No ARB/99/7, Decision
on the Application for Annulment of the Award (1 November 2006). ................................. 5
Phoenix Action, Ltd. v Czech Republic, ICSID Case No ARB/06/5 (Israel/Czech Republic),
Award (15 April 2009) .......................................................................................................... 5
Pope & Talbot Inc v Canada, Interim Award (26 June 2000) Ad hoc- UNCITRAL .............. 20
PSEG Global Inc and Konya Ilgin Elektrik Uretim ve Ticaret Limited Sirketi v Republic of
Turkey, ICSID Case No. ARB/02/5, Award (19 January 2007), ......................................... 10
Robert Azinian, Kenneth Davitian, & Ellen Baca v The United Mexican States, ICSID Case
No ARB (AF)/97/2, Award (1 November 1999). .......................................................... 21, 28
Saluka Invests B.V. (The Netherlands) v. Czech Republic, Partial Award, March 17, 2006 ... 23
Tcnicas Medioambientales Tecmed, S.A. v The United Mexican States, ICSID Case No.
ARB (AF)/00/2, Award ....................................................................................................... 23
Telenor Mobile Communications A.S. v The Republic of Hungary, ICSID Case No.
ARB/04/15, Award (22 June 2006). .................................................................................... 26
IX
LIST OF AUTHORITIES
The Loewen Group Inc. and Raymond Loewen v United States of America, ICSID
ARB(AF)/98/3, Award on Merits (26 June 2003) ............................................................... 27
Toto Construzioni Generali SpA v Republic of Lebanon, ICSID Case No ARB/07/12, Award
(7 June 2012) ....................................................................................................................... 11
Toto Construzioni Generali SpA v Republic of Lebanon, ICSID Case No ARB/07/12, Award
(7 June 2012), ........................................................................................................................ 8
BOOKS REFERRED
Alan Redfern and M. Hunter, Arbitration under Investment Treaties Nigel Blackaby and
Constantine Partasides (eds), Redfern and Hunter on International Arbitration (6th edition,
Oxford University Press 2015). ............................................................................................. 3
Andrew Newcombe and Llus Paradell, Law and Practice of Investment Treaties: Standards
of Treatment (Kluwer Law International 2009) ............................................................. 19, 21
Andrew Newcombe, 'Investor misconduct: Jurisdiction, admissibility or merits?' in Chester
Brown and Kate Miles (eds), Evolution in Investment Treaty Law and Arbitration,
(Cambridge University Press, 2011). ..................................................................................... 1
Campbell McLachlan QC, Laurence Shore and Matthew Weiniger, International Investment
Arbitration.
Substantive Principles (Oxford University Press 2007) ...................................................... 10
Emmanuel Gaillard, Identify or Define? Reflections on the Evolution of the Concept of
Investment in ICSID Practice Christina Binder and others (eds), International Investment
Law for the 21st century: Essays in honour of Christoph Schreuer (Oxford University
Press 2009). ............................................................................................................................ 4
X
LIST OF AUTHORITIES
Ian Brownlie, Principles of Public International Law (6th Edition, Oxford University Press
2003). ................................................................................................................................... 23
Ioana Tudor, The Fair and Equitable Treatment Standard in the International Law of Foreign
Investment (2008). ................................................................................................................. 7
Lukas Vanhonnaeker, Intellectual Property Rights as Foreign Direct Investments: From
Collision to Collaboration (Edward Elgar 2015). ............................................................... 22
M. Sornarajah, The International Law on Foreign Investment (Cambridge University Press
1994). ................................................................................................................................... 25
Roland Klger, Fair and Equitable Treatment' in International Investment Law, (Cambridge
University Press 2013 ) .......................................................................................................... 7
Rudolf Dolzer and Christoph Schreur, Principles of International Investment Law (Oxford
University Press, 2008). ....................................................................................................... 19
TJ Grierson Weiler, Investment Treaty Arbitration and International Law, (JurisNet 2008) ... 3
World Intellectual Property Organization, Introduction to Intellectual Property: Theory and
Practice (London: Kluwer Law International, 1997) ........................................................... 13
ARTICLES, JOURNALS AND PAPERS
Antony Taubman, Rethinking TRIPS: Adequate Remuneration for Non-Voluntary Patent
Licensing (2008) 11 Journal of International Economic Law ............................................ 24
B. Weston, Constructive Takings under International Law: A Modest Foray into the Problem
of Creeping Expropriation (1975) 16 Virginia Journal of International Law .................... 25
Carlos M. Correa, Investment Protection in Bilateral and Free Trade Agreements:
Implications for the Granting
of Compulsory Licenses (2004) 26 Michigan Journal of International Law ..................... 24
XI
LIST OF AUTHORITIES
Christopher Gibson, A Look at the Compulsory License in Investment Arbitration: The Case
of Indirect Expropriation (2010) 25 (3) American University International Law Review .. 19
Dan Leskien and Michael Flitner, Intellectual Property Rights and Plant Genetic Resources:
Options for a Sui Generis System (1997), International Plant Genetic Resources Institutes
Issues in Genetic Resources No 6, ....................................................................................... 22
Elizabeth Snodgrass, Protecting Investors Legitimate Expectations: Recognizing and
Delimiting a General Principle (2006) 21 ICSID RevFILJ .............................................. 9
G. Sacerdoti, Bilateral Investment Treaties and Multilateral Instruments on investment
Protection, (1997) RdC 269 ................................................................................................. 7
John P. Gaffney, The Jurisdiction Ratione Temporis Of ICSID Tribunals (2007) 22
MEALEYS International Arbitration Report 1, 2 ................................................................ 6
Kurt M. Saunders, Patent Nonuse and the Role of Public Interest as a Deterrent to
Technology Suppression, (2002) 15 Harvard Journal of Law & Technology ................... 24
Monique Sasson, Substantive Law in Investment Treaty Arbitration The Unsettled
Relationship
Between International and Municipal Law (Kluwer Law International 2010). .................. 20
Paul Champ and Amir Attaran, Patent Rights and Local Working under the WTO TRIPS
Agreement: An Analysis of the U.S. - Brazil Patent Dispute, (2002) 27 Yale J. Int'l L. ... 14
Paul Champ and Amir Attaran, Patent Rights and Local Working Under the WTO TRIPS
Agreement: An Analysis of the U.S.- Brazil Patent Dispute, (2002) 27 Yale J. Int'l L. 365
............................................................................................................................................. 14
XII
LIST OF AUTHORITIES
Ruth L. Okediji, Is Intellectual Property "Investment"? Eli Lilly v.Canada and the
International Intellectual Property System? (2014) 35 (4) University of Pennsylvania
Journal of International Law 1121 ......................................................................................... 6
Tsai-Yu Lin, Compulsory Licenses for Access to Medicines, Expropriation and InvestorState Arbitration Under Bilateral Investment Agreements Are There Issues Beyond the
TRIPS Agreement? (2009) 40 International Review of Intellectual Property and
Competition Law ................................................................................................................. 27
Understanding on Rules and Procedures Governing the Settlement of Disputes art. 1, Apr. 15,
1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869
U.N.T.S. 401 ........................................................................................................................ 12
Zachary Douglas, International Responsibility for Domestic Adjudication: Denial of Justice
Deconstructed (2014) International and Comparative Law Quarterly (ICLQ) 1 ............... 28
STATUTES AND CONVENTIONS
TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, 1869 U.N.T.S.
299, (Apr. 15, 1994)............................................................................................................. 13
XIII
STATEMENT OF FACTS
STATEMENT OF FACTS
1. On 15 June 2009, Republic of Paradice (Respondent) concluded an Agreement with the
Republic of Tech Tonic (Tech Tonic) for the promotion and protection of investment. The
Agreement came into effect on the date of signing and was valid for 10 years. Its provisions
were to continue with respect to the investments made in the first 10 years for another period
of 10 years after the date of termination.
2. Respondent is an island nation in the Pacific Ocean and its primary source of revenue is
tourism and gambling whereas Tech Tonic is a wealthy nation and a technology leader. In
2012 certain amendments were brought into Paradican patent law regime and competition
law regime.
3. Applicant (Applicant) is a company headquartered in Tech Tonic and is known for having
registered a wide range of patents in a number of countries. In 2010, Applicant discovered the
wavelength at which spirits allegedly communicate with each and based on it, it works out a
communication protocol to access spirit communication and to also speak to the willing
spirits (Spookix).
4. The Applicant files two patent applications in Paradice covering Spookix communication
(Patent A) and range of devices implementing the Spookix communication, and methods
attendant thereto (Patent B). The applications were filed on 1.03.2011 and 1.05.2011 for
Patent A and Patent B respectively and was subsequently granted on 1.05.2019 and
5.10.2019 respectively.
5. In May 2012, the Applicant granted an exclusive patent and technology licence to SideKix, a corporation based in an island nation, Pacifix. Why Fix, a company headquartered in
XIV
STATEMENT OF FACTS
Paradice, sought for a licence from the Applicant, however in wake of the exclusive licence
agreement with Side-Kix, the Applicant refused to grant any licence.
6. In September, 2014, Why Fix released a cell phone which could connect with the spirits
and communicate with the willing ones. Consequently, the Applicant brings an action of
patent infringement against Why Fix before the High Court in Paradice. However, as the
Paradican patent law does not offer any remedy to the patent applicants, the action is
entertained only in January, 2020.
7. In May, 2026, the Spirit Society of Paradice (SSP) files an action before the Paradice
Patent Office (PPO) for invalidating Patent B on the ground that the patented technology
offends section 5 of the Paradician patent law as its usage would lead to debilitating
consequences and is against public morality.
8. In June, 2026, Why fix filed a complaint before the Paradice Competition Tribunal (PCT),
alleging that the exclusive arrangement between Applicant and Side-Kix is a violation of
Paradican Competition law. Moreover, it contended that the Spookix standard is an essential
facility and therefore ought to be compulsorily licensed to all interested parties at reasonably
affordable rates.
9. In September, 2028, the High Court in its decision upheld Patent A and Patent B as valid
and found it to be infringed by Why Fix. Further the court found that the patents have not
been worked in the territory of Paradice and therefore refused to grant any injunction or
restraining order against the infringer. Moreover, in light of the fact that Why Fix has been
selling its wares in the market for almost 14 years, the court found the balance of
convenience to be tilting in the favour of Why Fix. Finally, the court determined a fair and
reasonable value, for both past and future infringements of Patent A and Patent B.
XV
STATEMENT OF FACTS
10. In October, 2029, the PPO invalidated Patent B on the ground that the invention offends
public morality and violates the privacy rights of spirits by forcefully intruding in their
soirees.
11. In November, 2029, the PCT ruled that Patent A shall be compulsorily licensed to Why
Fix on terms that had already been set by the Pristine High Court and the same terms shall
apply to any third party interested in accessing the said technology. Furthermore, after
rejecting the Applicants protest, the PCT held that the license agreement and all its terms
must be published by the Applicant.
12. In January, 2030, the Applicant files an investment complaint against Paradice before
ICSID on the ground that each of the actions taken by the Paradician court, PPO and the PCT
in relation to the two patents (Patent A and B) amount to a contravention of several BIT
terms.
XVI
STATEMENT OF JURISDICTION
The dispute is submitted before the tribunal pursuant to Art. 5(2) of the Paradice- Techtonic
Bilateral Investment Treaty together-with Art. 25 of the International Centre for Settlement of
Investment Disputes. The relevant provisions are reproduced below:
Article 5 Settlement of Disputes between Investors of One Party and the Other Party
.
2. Each Party hereby consents to submit a dispute referred to in paragraph (1) of this
Article, to binding arbitration before:
(a) the International Centre for Settlement of Investment Disputes and the Regulations and
Rules
of
the
Centre;
(b) the Additional Facility of the same Centre.

.
Article 25 - Jurisdiction of the Centre
(1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an
investment, between a Contracting State (or any constituent subdivision or agency of a
Contracting State designated to the Centre by that State) and a national of another
Contracting State, which the parties to the dispute consent in writing to submit to the Centre.
When the parties have given their consent, no party may with- draw its consent unilaterally.
(2) National of another Contracting State means:
(a) any natural person who had the nationality of a Contracting State other than the State
party to the dispute on the date on which the parties consented to submit such dispute to
conciliation or arbitration as well as on the date on which the request was registered
XVII
pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not include
any person who on either date also had the nationality of the Contracting State party to the
dispute; and
(b) any juridical person which had the nationality of a Contracting State other than the State
party to the dispute on the date on which the parties consented to submit such dispute to
conciliation or arbitration and any juridical person which had the nationality of the
Contracting State party to the dispute on that date and which, because of foreign control, the
parties have agreed should be treated as a national of another Contracting State for the
purposes of this Convention.
(3) Consent by a constituent subdivision or agency of a Contracting State shall require the
approval of that State unless that State notifies the Centre that no such approval is required.
(4) Any Contracting State may, at the time of ratification, acceptance or approval of this
Convention or at any time thereafter, notify the Centre of the class or classes of disputes
which it would or would not consider submitting to the jurisdiction of the Centre. The
Secretary- General shall forthwith transmit such notification to all Contracting States. Such
notification shall not constitute the consent required by paragraph (1).
XVIII
QUESTIONS PRESENTED
QUESTIONS PRESENTED
I.
WHETHER THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT

MATTER?
II.
WHETHER THE RESPONDENT HAS BREACHED ITS OBLIGATION TO

ACCORD FAIR AND EQUITABLE TREATMENT TO APPLICANT UNDER
BIT ARTICLE 1(2)?
III.
WHETHER
THE
RESPONDENT
EXPROPRIATED
INVESTMENT IN VIOLATION OF ARTICLE 2 OF THE BIT?
APPLICANT'S
XIX
SUMMARY OF ARGUMENTS
SUMMARY OF ARGUMETS
I.
This dispute does not satisfy the requirements of Art. 25(1)of ICSID and Clause (i) of
the BIT. First, there is no unqualified consent to arbitrate the claim in question
because the treaty expired in June 2029 by virtue of Art. 8 of the BIT. Second, the
Tribunal does not have jurisdiction ratione materiae because Applicants exploitation
of Patent A and Patent B is not an investment as per the Salini Test and Clause (i) of
the BIT. Third, there is no jurisdiction ratione temporis. Therefore, the Tribunal has
no jurisdiction over the present matter.
II.
Additionally, Respondent has always treated Claimant in a fair and equitable manner
in consonance with the requirements of customary international law. To the extent
that they are objectively and subjectively reasonable, Respondent has also upheld the
legitimate expectations. Respondent , however, does not subscribe to Claimants
farfetched and overzealous claims for the restraint over Respondents regulatory
powers to change its own laws. Moreover, each the acts of the Respondent are in
compliance with and permitted by TRIPS. Furthermore, Respondent argues that
Claimants claim for denial of justice is inadmissible for want of exhaustion of local
remedies and is untenable since misapplication of municipal law does not amount to a
substantive denial of justice. Lastly, Respondent has acted in a bona fide manner and
has not discriminated against Claimant or its investment.
III.
Each of the acts of the Paradice High Court, PPO and PCT and every measure
adopted by the Respondent constitute legitimate regulatory powers which are TRIPS
compliant. There is no breach of legitimate expectations of the investor and no
substantial deprivation of Claimant's property. Invalidation makes the investment
(patent) invalid ab initio and hence cannot be said to be expropriated. Respondents
issuance of a compulsory license with respect to Claimants patent constitutes a
XX
SUMMARY OF ARGUMENTS
legitimate exercise of regulatory state power to address an anti competitive concern

and does not rise to the level of expropriation. In the absence of a denial to justice
claim, a decision by the Paradice high court cannot amount to expropriation as that
would imply tribunals to be supra national courts of appeal, which they are not.
1
ARGUMENTS ADVANCED
ARGUMENTS ADVANCED
I.
THE TRIBUNAL HAS JURISDICTION OVER THE DISPUTE
The jurisdiction of an investment treaty tribunal generally depends on whether the Claimant
satisfies the four necessary jurisdictional requirements for establishing the existence of
adjudicative power:
1. Unqualified consent to arbitrate the claim in question (ratione voluntatis).
2. Claimant is a covered investor under the treaty (rationae personae)
3. The subject matter of the claim is within the scope of the treaty and there is a covered
investment (ratione materiae)
4. The treaty was in force when the dispute arose (ratione temporis).1
It is averred that the Arbitral Tribunal has jurisdiction pursuant to Art. 25 of the ICSID
Convention, it states:
[A]ny legal dispute arising directly out of an investment, between a Contracting State ...and a
national of another Contracting State, which the parties to the dispute consent ...to submit to
the Centre.
While analyzing these requirements, the Tribunal must consider both the applicable BIT and
the Convention. This analysis leads to the conclusion that the Tribunal does not have
jurisdiction to hear this dispute.
(A) First, there is no unqualified consent to arbitrate the claim in question
Andrew Newcombe, 'Investor misconduct: Jurisdiction, admissibility or merits?' in Chester Brown and Kate
Miles (eds), Evolution in Investment Treaty Law and Arbitration, (Cambridge University Press, 2011).
2
ARGUMENTS ADVANCED
(B) Second, the Tribunal does not have jurisdiction ratione materiae because Claimants
exploitation of Patent A and Patent B is not an investment
(C) Third, there is no jurisdiction ratione temporis
(A)
There Is No Unqualified Consent To Arbitrate The Claim In Question
There is a consent to submit a dispute to binding arbitration before ICSID by the Respondent
by virtue of Art. 5(2) of the BIT. However, this standard offer to arbitrate is no longer
subsisting because the BIT expired on 15 June 2029 and Claimant made an investment
complaint to ICSID in January 2030.
Art. 70 of VCLT which deals with 'consequences of the termination of a treaty' says-
"1. Unless the treaty otherwise provides or the parties otherwise agree, the termination of a
treaty under its provisions or in accordance with the present Convention:
(a) releases the parties from any obligation further to perform the treaty; (b) does not affect
any right, obligation or legal situation of the parties created through the execution of the
treaty prior to its termination."
As a result, the BIT stands terminated as on 15 June 2029, and the Tribunal holds no
jurisdiction to hear the present dispute.
(B)
This Tribunal Does Not Have Jurisdiction Ratione Materiae Because Claimants
Exploitation Of Patent A And Patent B Is Not An Investment
The jurisdiction of the Tribunal is dependent upon the fulfilment of the jurisdictional
requirements of both the Convention and the BIT.
The tribunal in CSOB v Slovakia established the relevant inquiry as follows:
3
ARGUMENTS ADVANCED
[A] twofold test must therefore be appliedwhether the dispute arises out of an investment
within the meaning of the Convention and, if so, whether the dispute relates to an investment
as defined in the Parties consent to ICSID arbitration.2
The Tribunal does not have jurisdiction to hear this dispute because (1) Patents A and B are
not qualified investments under Article 25(1) ICSID, and (2) Patents A and B are not
protected investments under Clause (i) BIT
1.
Patents A And B Are Not Protected Investments Under Art. 25(1) ICSID
Art. 25(1) ICSID provides that ICSID jurisdiction extends to any legal dispute arising out of
an investment. The term investment is not defined under Art. 25(1). The applicable
criteria for finding an investment under Art. 25(1) is set out in the Salini3 award as interpreted
by Joy Mining4. This test embodies the objective approach5 by stipulating a number of
characteristics of an investment needs.
The Salini test requires the investment to possess the following four distinct characteristics:
a contribution in money or other assets, a certain duration, an element of risk and an
operation that makes a contribution to the host State.6
One key factor in such an investment test is to establish the significance of the intellectual
property to the host States economic development.7
Ceskoslovenska obchodni banka, A.S. v Slovak Republic, ICSID Case No. ARB/97/4, Decision on Jurisdiction
(24 May 1999).
3
Salini Costruttori S.p.A. and Italstrade S.p.A. v Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on
Jurisdiction (23 July 2001).
4
Joy Mining Machinery Limited v Egypt, ICSID Case No. ARB/03/11, Decision on Jurisdiction (23 July 2001).
TJ Grierson Weiler, Investment Treaty Arbitration and International Law, (JurisNet 2008)
Alan Redfern and M. Hunter, Arbitration under Investment Treaties Nigel Blackaby and Constantine
Partasides (eds), Redfern and Hunter on International Arbitration (6th edition, Oxford University Press 2015).
4
ARGUMENTS ADVANCED
The exploitation of the Patents by Claimant fails to satisfy the contribution to the host State
criterion which is one of the main characteristics of the Test.
ICSID has addressed the question of economic development for the purpose of IIAs in its
preamble where it states: Considering the need for international cooperation for economic
development, and the role of private international investment therein.
The report from the Executive Directors states that the primary purpose of the Convention is
to stimulate international investment flows, it underlines the bodys desire to address the
interests of both investors and states:
"12. [a]dherence to the Convention by a country would provide additional inducement and
stimulate a larger flow of private international investment into its territories, which is the
primary purpose of the Convention."
The relevant test is whether or not Claimants operation makes a substantial or significant
contribution to the economic development of the host State.
Claimant does not make a significant contribution to the economic development of Paradice.
Claimant is a purely commercial entity whose exploitation of its Patent before the
compulsory license was limited to one license agreement with Side Kix. The devices of
Claimant were only imported and not "worked" in the territory of Paradice. Even after the
issuance of the compulsory license, the Patent was being exploited by no more than Why Fix.
Furthermore, the exploitation of Patent A and B were purely intended for the enrichment of
Claimant and not remotely connected with the economic development of the host State.
Economic development of the host State is a condition of an ICSID investment. If it is not,
there is nothing to separate an ICSID investment from any other kind of investment.
7
Emmanuel Gaillard, Identify or Define? Reflections on the Evolution of the Concept of Investment in ICSID
Practice Christina Binder and others (eds), International Investment Law for the 21st century: Essays in honour
of Christoph Schreuer (Oxford University Press 2009).
5
ARGUMENTS ADVANCED
Therefore Claimants operation needs to satisfy this element in order to be considered an

investment.
Although investment is not defined under Art. 25(1), it does not give total discretion to the
parties to define for themselves what disputes they are willing to submit to ICSID. 8 Thus
logically there needs to be an outer limit to this definition of investment. It is submitted that
the requirement to make a contribution to the host State constitutes this outer limit.
Claimants exploitation is not an investment under Art. 25(1) because Claimant fails to
satisfy the jurisdictional criterion of contribution to the host State. The Salini requirements
are cumulative requirements [where] if one of them is unfulfilled, the [entire] transaction
does not constitute an ICISID investment.9
2.
Patents A And B Are Not Protected Investments Under Clause (I) BIT
Patent A
Although Clause (i) of BIT expressly includes IPR under its definition of investment, this
is not sufficient to bring a dispute within ICSID jurisdiction. The tribunal in Joy Mining
expressly stated that: The parties to a dispute cannot by contract or treaty define as
investment for the purpose of ICSID jurisdiction, something which does not satisfy the
objective requirements of Art. 25 of the Convention. Otherwise Art. 25 and its reliance on the
concept of investment would be turned into a meaningless provision.10 Indeed [w]hile
Phoenix Action, Ltd. v Czech Republic, ICSID Case No ARB/06/5 (Israel/Czech Republic), Award (15 April
2009), 82.
9
Patrick Mitchell v Democratic Republic of the Congo, ICSID Case No ARB/99/7, Decision on the Application
for Annulment of the Award (1 November 2006).
10
Joy Mining Machinery Limited v Egypt, ICSID Case No ARB/03/11, Decision on Jurisdiction (23 July 2001),
para 50.
6
ARGUMENTS ADVANCED
consent of the parties is an essential prerequisite for the jurisdiction of the Centre, consent
alone will not suffice to bring a dispute within the jurisdiction.
Thus, even if Applicants operation constitutes an investment under the BIT, this does not
mean that Applicant can claim automatic jurisdiction under ICSID. As we have established
above, the fact that Applicants operation does not fall within Art. 25(1) means that the
inclusion of the patents in the BIT is irrelevant.
This Tribunal does not have jurisdiction ratione materiae because Applicants operation in
Paradice does not constitute investment under Art. 25(1) and consequently cannot jurisdiction
over this dispute.
Patent B:
Invalidation or revocation of a Patent will automatically mean that the Patent is no longer an
investment.11 Since the PPO invalidated Patent B, it is no longer an investment.
(C)
There Is No Jurisdiction Ratione Temporis:
In the absence of any agreement to the contrary by the contracting parties, an ICSID Tribunal
usually will enjoy jurisdiction ratione temporis in relation to any dispute that has arisen after
the BITs entry into force or indeed any dispute existing at the date of the BITs entry into
force even if that dispute were deemed to have originally arisen prior to that date.12
The treaty was not in force when the claims were brought to the Tribunal. Hence, the criteria
of ratione temporis is not satisfied.
11
Ruth L. Okediji, Is Intellectual Property "Investment"? Eli Lilly v. Canada and the International Intellectual
Property System? (2014) 35 (4) University of Pennsylvania Journal of International Law 1121.
12
John P. Gaffney, The Jurisdiction Ratione Temporis Of ICSID Tribunals (2007) 22 MEALEYS
International Arbitration Report 1, 2.
7
ARGUMENTS ADVANCED
II.
RESPONDENT TREATED APPLICANT FAIRLY AND EQUITABLY
In a attempt to save its patents from lawful compulsory licensing and invalidation, Applicant
argues a violation of FET Standard under BIT. To that extent the burden to prove any such
violation is on the Applicant.13
Scholars argue that the FET Standard is nothing but the conventional form of the minimum
standard of treatment under customary international law which is guaranteed by a State to
aliens (MST).14 In Genin v Estonia, the understood FET to require an international
minimum standard that is, albeit separate from domestic law, but nevertheless a minimum
standard.15 This is mainly because the FET Standard has been interpreted to mean and
encompass varying aspects by different tribunals. Any one usage or interpretation of the FET
Standard has not attained the status of a rule of customary international law. Therefore the
Tribunal should interpret the FET Standard in BIT to mean and bind as the MST. The
minimum standard has been interpreted by tribunals to mean a protection against conduct
reaching the egregious or representing gross misconduct, manifest injustice or an outrage,
bad faith or the willful neglect of duty.16
In the alternative, the Tribunal should make an objective assessment of all the facts and
circumstances of the present dispute towards interpreting the FET Standard. 17 This is because
13
Ioana Tudor, The Fair and Equitable Treatment Standard in the International Law of Foreign Investment
(2008)., p.138
14
G. Sacerdoti, Bilateral Investment Treaties and Multilateral Instruments on investment Protection, (1997)
RdC 269 p.341.
15
Alex Genin, Eastern Credit Limited, INC. and

ICSID Case No. ARB/99/2, Award (25 June 2001) 367.
A.S.
Baltoil
v.
Republic
of
Estonia,
16
Roland Klger, Fair and Equitable Treatment' in International Investment Law, (Cambridge University Press
2013 ) p. 71.
17
See, Mondev International Ltd. v. United

ARB(AF)/99/2, Final Award (11 October 2002).118.
States
of
America,
ICSID
Case
No.
8
ARGUMENTS ADVANCED
the fair and equitable treatment standard is not a laundry list of potential acts of misconduct .
. and can only be assessed when looking at the totality of the states conduct.18 In Toto v
Lebanon19, an ICSID tribunal stated that [t]he fair and equitable treatment standard of
international law does not depend on the perception of the frustrated investor, but should use
public international law and comparative domestic public law as a benchmark. Therefore,
Applicant has to prove that Respondents action in toto unfair and inequitable.
Respondent contends that Applicant has failed to establish any breach of the FET Standard.
On the contrary, the Respondent has met Applicants reasonable and legitimate expectations
(A); Respondent has not caused any denial of justice (B); Respondent has complied with all
its obligations under international law (C).
(A)
Respondent Has Met Applicants Legitimate Expectations
The MST does not require States to protect investors legitimate expectations. Therefore,
Respondent is not obligated to keep in mind Applicants legitimate expectations inter alia
while changing its legal or regulatory framework. That said, Respondent will argue in the
alternative that Applicants reasonable and legitimate expectations have been met by
Respondent.
Applicant may argue that Respondent has violated its legitimate expectations. In order to
make a fair assessment of investors legitimate expectations, the Tribunal must determine
whether Applicants expectations were objectively and subjectively reasonable. In EDF v
Romania, the tribunal stated that legitimate expectations cannot be solely based on the
18
National
2008).173;
Grid
plc
v.
The
Argentine
Republic,
UNCITRAL,
Award
19
(3
November
Toto Construzioni Generali SpA v Republic of Lebanon, ICSID Case No ARB/07/12, Award (7 June 2012),
166.
9
ARGUMENTS ADVANCED
subjective expectations of the investor.20 Scholars also argue that the essence of investors
legitimate expectations lie in their objective and subjective reasonableness.21 An objective
test will require the Tribunal to assess whether investor, in making the alleged expectation,
has diligently taken into consideration all circumstances surrounding the investment,
including the political, socioeconomic, cultural and historical conditions prevailing in the
host State.22 Therefore it follows that an expectation will be subjectively unreasonable if it
conflicts with the explicit knowledge of the investor with regards of the host states laws and
regulatory landscape.23
Before making the investment in Paradice, Applicant was fully aware of the changes and
developments in Respondents regulatory and policy environment. In particular, Applicant
was aware that Respondents new leader Quick Fix had, announced in 2010 a mammoth
Play in Paradice campaign to spur domestic innovation and manufacturing. This
announcement came before Applicant applied for its patents in 2011. Applicant should have
been aware of the possibility that Respondent will change its legal and regulatory regime to
enact laws to increase local manufacturing and innovation.
In particular, the new Section 15A of the Patent Act, 2000 clearly sets the tone for a healthy
balance between patent protection and Respondents economic development. It is more than
apparent that Respondents insertion of Section 15A is aimed at granting access of
technology to local manufacturers in case where the patent holder itself is not manufacturing
20
EDF (Services) Limited v Romania, ICSID Case No ARB/05/13, Award (8 October 2009), 219.
21
Elizabeth Snodgrass, Protecting Investors Legitimate Expectations: Recognizing and Delimiting a General
Principle (2006) 21 ICSID RevFILJ pp. 35-6
22
Duke Energy Electroquil Partners & Electroquil SA v Republic of Ecuador, ICSID Case No ARB/ 04/19,
Award (18 August 2008), 340, 347.
23
Elizabeth Snodgrass, Protecting Investors Legitimate Expectations: Recognizing and Delimiting a General
Principle, (2006) 21 ICSID RevFILJ, p. 41.
10
ARGUMENTS ADVANCED
in Paradice. Similarly, the amendment to Respondents competition law is a bona fide

attempt to spur domestic innovation by enabling access to essential technology on fair and
reasonable terms. In fact, the necessity and effectiveness of this access for the purpose of
domestic innovation can be seen from the fact that Why-Fix figures out a way of boosting
signals [of the Spookix Technology] such that spirits not ordinarily within the range of
existing devices (currently in the global market) could be accessed and spoken with.24 In the
absence of the competition amendment, such innovation would be sanctioned on grounds of
infringement of the essential patent, even when the innovator has unsuccessfully approached
the patentee for a voluntary license. Therefore Applicant cannot reasonably expect that
Respondent will not change its law in a way and for a purpose which Applicant was aware of
before making its investment.
Legitimate expectations of an investor may be based on specific assurances given to it by the
host state.25 Respondent at no point of time made any specific representation to Applicant
that Respondents legal framework will never change or that Applicants patent will protected
against compulsory licensing for commercial purposes or against invalidation. The Tribunal
in PSEG v Republic of Turkey found no breach of the investors expectations because there
were no identifiable commitments or promises made by the State26. Similarly in Parkerings v
Lithuania27 the Tribunals observed that the respective host states had given to the respective
investors no specific assurances which could create any legitimate expectations that their law
will remain unchanged. On the contrary, Respondent has clearly represented to the Applicant
24
Facts, 11.
25
Campbell McLachlan QC, Laurence Shore and Matthew Weiniger, International Investment Arbitration.
Substantive Principles (Oxford University Press 2007), Pg. 237.
26
PSEG Global Inc and Konya Ilgin Elektrik Uretim ve Ticaret Limited Sirketi v Republic of Turkey, ICSID
Case No. ARB/02/5, Award (19 January 2007), 2423, 250.
27
Parkerings-Compagniet AS v Republic of Lithuania, ICSID Case No ARB/05/8, Award (11 September 2007)
3337.
11
ARGUMENTS ADVANCED
under Section 5 of the Patents Act, 2000 that a patent may be invalidated at any time by the
Patent Office, if it comprises an invention that offends public morality. This makes it
amply clear that a patentee cannot have a legitimate expectation that its patent will never be
restricted or extinguished by the State.
Applicants arguments indirectly advocate a regulatory chill for the Respondent. Such an
expectation is unreasonable mainly because BIT does not contain a stabilization clause to that
effect. In Toto v Lebanon, the Tribunal found no liability on the part of the Respondent in
similar circumstances as the present dispute. It held that:
In the absence of a stabilization clause or similar commitment, which were not granted in
the present case, changes in the regulatory framework would be considered as breaches of
the duty to grant full protection and fair and equitable treatment only in case of a drastic or
discriminatory change in the essential features of the transaction.28
As has been stated earlier, Respondent amended its laws in a bona fide manner for a bona
fide purpose of encouraging local manufacturing and innovation.
It is a largely settled position in international investment law that legitimate expectations, if
any, may arise at the time of making an investment29; and not before that. This requires a
closer interpretation of the term making an investment. In the present dispute, the
investment in question is the registered Patents. While they were applied for in 2011, they
were granted only in 2019. Therefore, Applicants earliest time to possess any legitimate
expectations in relation to its investment can be in 2019. On the other hand Respondent
amended its laws in 2012; a good 7 years prior to Applicants act of making an investment.
28
Toto Construzioni Generali SpA v Republic of Lebanon, ICSID Case No ARB/07/12, Award (7 June 2012) ,
244.
29
LG&E International, Inc. v. Argentine Republic, ICSID Case No. ARB/02/1, Award (July 25, 2007) 130.
12
ARGUMENTS ADVANCED
Therefore the amendments cannot be violation of Applicants legitimate expectation in

relation to its registered patents since they were enacted before Applicant made its
investment.
Applicant may argue that the patent application itself is also an investment; and that by
virtue of that fact its legitimate expectations arise in 2011. Even though this argument is not
accepted, Respondent will engage and show that this will still affect Applicants legitimate
interests. A legitimate expectation in relation to the patent application itself will not
automatically generate any legitimate expectation in relation to the patent grant. This is
because a patent application only gives an expectation of a grant of patent. Any act on part of
Respondent has not affected this expectation; especially insofar as amendments do not affect
in any manner the law and process of making patent applications.
Applicant may also argue that since the patent grant operates retrospectively from the date of
application, its legitimate expectations can be traced back to the date of making the patent
application. Even if this contention is accepted, the fact remains that the patent applicant in
Paradice is entitled to no remedy whatsoever in relation to technology applied for a patent.
Therefore, the gestation period of a patent cannot be considered as an investment within the
meaning of patent grant as an investment. Therefore Applicants legitimate expectation can
arise only after at the time of accrual of patent rights, which is at the date of grant of patent.
(B)
Respondent Has Complied With All Its Other International Obligations
A breach of the TRIPS Agreement cannot be an independent claim in investment treaty

arbitration. This is because the DSM has exclusive jurisdiction in settling disputes over
breaches of WTO law.
30
In Grand River Enterprises Six Nations the Tribunal held that the
30
Understanding on Rules and Procedures Governing the Settlement of Disputes art. 1, Apr. 15, 1994,
Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 U.N.T.S. 401, Article 23
13
ARGUMENTS ADVANCED
FET standard in NAFTA Chapter 11 does not incorporate other legal protections that may
be provided investors or classes of investors under other sources of [international] law
otherwise the standard would become a vehicle for generally litigating claims based on
alleged infractions of domestic and international law.31In another case, the Tribunal held that
the applicable law does not incorporate the universe of international law into the BITs or
into disputes arising under the BITs.32
Applicant may argue that Section 15A of the amended Patent Act, 2005 is a violation of the
non-discriminatory requirements of the TRIPS Agreement under Art. 27(1).
Art. 27 should be read with Art. 7 which sets out the objective of the TRIPS Agreement. Art.
7 expressly states that the protection and enforcement of intellectual property rights should
contribute to the promotion of technological innovation and to the transfer of technology.33
WIPO has noted that actual working of, not just importation, an invention in the within the
territory of the patent granting state is historically seen as the most efficient way of
transferring technology.34
A bare reading of Art. 27(1) will reveal that only discrimination on the basis of importation
or working would be a violation, and not when a Member State makes a bona fide
differentiation. This is because discrimination stands in distinction to differential
31
Grand River Enterprises Six Nations, Ltd. v. United States, Award, 219 (Jan. 12, 2011),
http://www.state.gov/documents/organization/156820.pdf.
32
Bernhard von Pezold v. Republic of Zimbabwe (ICSID Case No. ARB/10/15) and Border Timbers Ltd. v.
Republic of Zimbabwe (ICSID Case No. ARB/10/25), Procedural Ord. No. 2, 57 (June 26, 2012).
33
TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, 1869 U.N.T.S. 299, (Apr. 15,
1994).
34
World Intellectual Property Organization, Introduction to Intellectual Property: Theory and Practice (London:
Kluwer Law International, 1997) pg.146.
14
ARGUMENTS ADVANCED
treatment.35
Discrimination
in
law
ordinarily
consists
of
the
subset
of
differential treatment that is "unjustified" or arbitrary.36 In light of the objective of TRIPS

under Art. 7, it would be a legitimate differentiation not amounting to discrimination if a
Member State required local working for the purpose of technological development or to
ensure smooth transfer of technology.37 At present, it is more than apparent that Respondents
amendment of its patent law is aimed at securing better dissemination and access to
technology within Respondents territory. This is also in line with Respondents policy
attitude towards encouragement of local manufacturing. Such a bona fide differentiation
cannot be determined by the Tribunal to be a violation of TRIPS.
Applicant may argue that the competition amendment is in violation of the TRIPS
Agreement. Under Art. 40, TRIPS Agreement provides ample discretion on its Member
States in defining and dealing with anti-competitive usage of IPRs. Its provides as follows:
National antitrust agencies have, in the past determined in that the certain licensing of
essential patents may amount to an abuse of dominant position. Recently, Recently in
Huawei Technologies Co. Ltd38, the ECJ ruled that a refusal to license standard essential
technology on FRAND terms may, with certain exceptions, amount to an abuse of dominant
position under Art. 102 of the Treaty for the Functioning of the European Union (TFEU).
Similarly, in Intex Technologies v Telefonaktiebolaget LM Ericsson the CCI was of the prima
facie view that forcing a party to execute NDA and imposing excessive and unfair royalty
35
Paul Champ and Amir Attaran, Patent Rights and Local Working Under the WTO TRIPS
Agreement: An Analysis of the U.S.- Brazil Patent Dispute, (2002) 27 Yale J. Int'l L. 365.
36
Ibid 389
37
Paul Champ and Amir Attaran, Patent Rights and Local Working under the WTO TRIPS
Agreement: An Analysis of the U.S. - Brazil Patent Dispute, (2002) 27 Yale J. Int'l L. 365, 389.
38
Huawei Technologies Co. Ltd v ZTE Corp. and ZTE Deutschland GmbH.Case C-170/13 (CJEU)
15
ARGUMENTS ADVANCED
rates prima facie was abuse of dominance....The CCI observed that EP holders are under an
obligation "to license the SEPs to every party under FRAND terms39.It is apparent that a
special legislative provision is not required to find an abuse of dominance in relation to
licensing of standard essential technology. Respondents insertion of Section 10A, which is
not only unnecessary but positively arbitrary, is a discriminatory measure against a class of
standard technology holders.
In light of the high possibility of anticompetitive use of SEPs, Respondent exercised its
discretion towards including any refusal to grant an SEP as an abuse of dominant position.
The Tribunal cannot therefore hold this as a violation of BIT.
(C)
Respondents Acts Do Not Amount To A Denial Of Justice
Applicant may argue that Respondents actions amount to a denial of justice. Before
venturing into a claim for denial of justice, the Tribunal must first satisfy itself that each of
the Respondents actions had achieved judicial finality.
For instance, the Tribunal in Apotex v US was faced with a claim for denial of justice on
grounds that the US courts rendered manifestly unjust decisions by misapplying domestic
law to issues of approval for generic versions of certain pharmaceutical drugs. 40 The Tribunal
dismissed this claim, among all others, on the grounds that the Applicant had failed to
exhaust its local legal remedies.41 It explained that the national court system must be given a
chance to correct its errors before there it is adjudicated as an international wrong.42
39
40
Ibid, 6.
Apotex Inc. v. U.S., ICSID Case No. ARB(AF)/12/1, Notice of Arbitration, (Dec. 10, 2008), 63
41
Apotex Inc. v. U.S., ICSID Case No. ARB (AF)/12/1, Award on Jurisdiction and Admissibility, (June 14,
2013), 135
42
ibid 281-282.
16
ARGUMENTS ADVANCED
Applicant may rely on Art. 26 ICSID to establish that there is no requirement for an investor
to exhaust its local remedies. Respondent contends that the local remedies requirement
should still be applicable. In Loewen v United States, the ICSID tribunal upheld this
requirement even in the presence of an express waiver to domestic proceedings as a condition
of bringing a claim before an investor-state tribunal.43 The tribunal asserted that the rule of
'judicial finality' afforded the State the opportunity of redressing through its legal system the
inchoate breach of international law occasioned by the lower court decision'.44 Further, the
tribunal concluded that local remedies still ought to have been exhausted when a breach of
law was caused by a judicial act.45
In
only
any
when
conscience"
case,
Respondent
there
of
has
been
reasonable
argues
a
that
"manifest
people
or
denial
injustice"
when
an
that
alien
of
justice
would
has
exists
"shock
been
the
denied
access to the judicial system entirely.46 There cannot be a denial of justice solely on the
grounds of misapplication of national law.47
It is a settled principle of international law that tribunals are not supposed to act as appellate
courts reviewing decisions upon very fine points of national law.48 To that extent even gross
43
Loewen v United States, ICSID Case No ARB(AF)/98/3, Award (26 June 2003), 161.
44
ibid, 156.
45
ibid 164.
46
Chattin (U.S.) v. United Mexican States, (Gen. Claims Comm'n, Mex.-U.S. 1927)
4 R.I.A.A. 282, 286-87.

47
Liman Caspian Oil BV and NCL Dutch Investment BV v. Republic of Kazakhstan, ICSID Case No.
ARB/07/14, Award (22 June 2010) .
48
Brownlie, Principles of Public International Law ( 7th ed., Oxford University Press,2008 ), p. 530
17
ARGUMENTS ADVANCED
or notorious injustice... is not a denial of justice merely because the conclusion appears to be
demonstrably working in substance....49 In Liman Caspian v Kazakhstan, tribunal noted that:
... an international arbitration tribunal is not an appellate body and its function is not to
correct errors of domestic procedural or substantive law which may have been committed by
the national courts. The Tribunal stresses that the threshold of the international delict of
denial of justice is high and goes far beyond the mere misapplication of domestic law.50
Therefore it is clear that the Applicant may not challenge the merits of the orders passed by
the High Court and the PCT.
Applicant may argue that the Patent Office and the High Court caused an undue delay in
granting the patent and delivering the judgment on the infringement suit respectively.
Respondent urges that the assessment of an undue delay in the context of administrative and
judicial procedures must be made on a case-by-case basis.
Respondent is a member of TRIPS. Art. 41 of the TRIPS Agreement provides a special
protection for Member States with respect to enforcement of IPRs. It states that,
Respondent has a heavily backlogged and under-resourced patent office and court system.
Furthermore, the timelines for resolution of legal disputes in Paradice as outlined in the facts
above are broadly consistent with how the patent office, courts and other dispute resolution
authorities in Paradice resolve matters in other similar cases. In such circumstances, the
Tribunal should not return a finding a denial of justice as Respondent is protected by the
provisions of Art. 41 of the TRIPS Agreement.
49
Paulsson p. 65
50
Liman Caspian Oil BV and NCL Dutch Investment BV v. Republic of Kazakhstan, ICSID Case No.
ARB/07/14, Award (22 June 2010) at 274.
18
ARGUMENTS ADVANCED
19
ARGUMENTS ADVANCED
III.
RESPONDENT DID NOT EXPROPRIATE APPLICANT'S INVESTMENT
Each of the acts of the High Court, PPO and PCT and every measure adopted by the
Respondent constitute legitimate, non-discriminatory, regulatory activities with the aim of
protecting morality or addressing anti-competitive issues and thus is lawful under the BIT
and does not merit compensation.
(A)
Respondent Did Not Directly Expropriate Applicant's Patents
While Applicant may argue that Respondent directly expropriated its investment when it
issued the compulsory license, this cannot be considered a direct expropriation. Direct
expropriation involves the de jure transfer of title and physical possession of the property
from an investor to the state.51 The investor is deprived of its property rights and the state
acquires these rights.52
A compulsory license does not result in a de jure transfer of the legal title. Applicant is still
the owner of the patent. It maintains title to the property, and the option to commercialize the
product, albeit non-exclusively.53 Respondent did not acquire any right and particularly did
not become the patent owner by issuing the compulsory license. Respondents issuance of the
compulsory license, thus, cannot be considered a direct expropriation.
(B)
Respondent Did Not Indirectly Expropriate Applicant's Patents
Indirect expropriation involves total or near-total deprivation of an investment but without a

formal transfer of title or outright seizure. On the issue of the level of interference, although
51
Rudolf Dolzer and Christoph Schreur, Principles of International Investment Law (Oxford University Press,
2008).
52
Andrew Newcombe and Llus Paradell, Law and Practice of Investment Treaties: Standards of Treatment
(Kluwer Law International 2009)
53
Christopher Gibson, A Look at the Compulsory License in Investment Arbitration: The Case of Indirect
Expropriation (2010) 25 (3) American University International Law Review 357.
20
ARGUMENTS ADVANCED
there is no single formulation of the relevant test, there is more or less a consensus that the
threshold is one of "substantial deprivation". 54 It is submitted that neither of the actions taken
by the court, patent office and the competition authority in relation to Patents A and B
amount to indirect expropriation and each of the three acts are only in exercise of legitimate
regulatory powers of the state.
1.
Invalidation of Patent B by PPO does not amount to expropriation
Firstly, invalidation of patent by the PPO cannot be claimed as expropriation as invalidation

makes the investment itself nonexistent. In any way, the order is based on Paradice's
domestic law which was in existence at the time of investment and is TRIPS compliant.
a. Invalid patent is not a property capable of expropriation
The first step in the expropriation analysis is to determine the existence, nature, and scope of
the property rights alleged to have been taken. It is submitted by the Respondent that there
must be an investment in the first place for it to get expropriated.
International law classifies the property rights that are protected, while municipal law
supplies the substantive aspects of these rights. The substantive aspects include the existence
as well as the legality of a property right. An investors legal entitlement is based on a legal
interest which must be assessed under a set of rules and international Law does not provide
these rules.55 Hence the nature and scope of property rights are determined by the law of the
54
Pope & Talbot Inc v Canada, Interim Award (26 June 2000) Ad hoc- UNCITRAL
55
Monique Sasson, Substantive Law in Investment Treaty Arbitration The Unsettled Relationship
Between International and Municipal Law (Kluwer Law International 2010).
21
ARGUMENTS ADVANCED
state in which the property is located (the lex situs).56 As a natural consequence, if there is no
property right at domestic law, then there is nothing that can be taken.57
Emmis v. Hungary is one such instance where it was observed that to determine whether an
investor holds property or asserts capable of constituting an investment it is necessary in the
first place to refer to host State law. Public international law does not create property
rights.58
Pursuant to section 5 of the Paradican Patent Law, the Applicants patent B was held to be
invalid as it offended public morality and it is to be considered invalid ab initio. Therefore, it
is submitted that when the domestic law determines that the claimed domestic investment
was invalid, the expropriation analysis cannot even exist because there is no property interest
that can be taken.
b. In arguendo, invalidation of the patent is in compliance with the domestic law and
TRIPS Agreement
It is argued that when the IPR invalidation is enacted in accordance with the Host state's
national law which was already in place at the time the investment was made, and it was not
arbitrary or discriminatory, such a measure would likely constitute a valid form of regulatory
activity. Thus when assessing the regulatory measure in light of the legitimate expectations of
the investor, it is likely that the measure will be considered as a legitimate regulatory activity
and that the investor's legitimate expectation will be analysed in light of the fact that he
56
(Kluwer Law International 2009)
57
Robert Azinian, Kenneth Davitian, & Ellen Baca v The United Mexican States, ICSID Case No ARB
(AF)/97/2, Award (1 November 1999).
58
Emmis International Holding, B.V. Emmis Radio Operationg, B.V. Mem Magyar Electronic Media
Kereskedelmi Es Szolgaltato KT v Hungary, ICSID Case No ARB/12/2, Award (16 April 2014) 161 -162.
22
ARGUMENTS ADVANCED
should have been aware of the pre existing grounds for invalidation.59 In this case,
additionally, the Applicant's patents of communicating with ghosts and devices used for the
same were known to have generated a fair amount of controversy.
The Applicant may argue that the invalidation of patent on the ground of public morality is
inconsistent with Art. 27 (2) of the TRIPS agreement. While invalidating a patent TRIPS
requires the state invalidating a patent to establish how the commercial exploitation of such a
patent was required to be prevented to protect public interests.
It has been held, however, that TRIPS does not require an actual ban of the
commercialization as a condition for exclusions; only the necessity of such a ban is required.
In order to justify an exclusion under Art. 27 (2) TRIPS, a Member state would therefore
have to demonstrate that it is necessary to prevent by whatever means the commercial
exploitation of the invention. Yet, the Member would not have to prove that under its national
laws the commercialization of the invention was or is actually prohibited. 60
It must be understood that morality is dependent for the purposes of this Article, on the
particular culture of a country or region and it is relative to the values prevailing in a society.
Therefore, discretion heavily vests with the domestic authorities to evaluate and determine
what would affect public morality in its state. In the instant case, the act of invalidating the
patent by the PPO was to prevent commercialization as it was against public morality.
2.
Grant Of Compulsory License By The PCT Does Not Amount To Expropriation
Compulsory licensing is considered as an obvious and inherent limitation to intellectual

property rights when they are granted. The right to issue such licenses is undisputedly
59
Lukas Vanhonnaeker, Intellectual Property Rights as Foreign Direct Investments: From Collision to
Collaboration (Edward Elgar 2015).
60
Dan Leskien and Michael Flitner, Intellectual Property Rights and Plant Genetic Resources: Options for a Sui
Generis System (1997), International Plant Genetic Resources Institutes Issues in Genetic Resources No 6, 15.
23
ARGUMENTS ADVANCED
recognized to be within the regulatory powers of the state. In the instant case, the grant of
compulsory license does not substantially deprive the Applicant's economic investment.
a. Respondent legitimately exercised its regulatory powers by granting compulsory
license
The right of a state to regulate and even to expropriate and cause economic damage in the
public interest is not disputed under international law.
61
As Brownlie has stated, state
measures, prima facie a lawful exercise of powers of governments, may affect foreign
interests considerably without amounting to expropriation.62
This general rule of international law has been endorsed by a majority of investment tribunals
that take into account the purpose pursued by a host state when ascertaining whether an
indirect expropriation has occurred. According to the tribunal in Methanex, as a matter of
general international law, a non-discriminatory regulation for a public purpose...is not
deemed expropriatory.63 Similarly, the tribunal in Saluka held that the principle that a State
does not commit an expropriation and is thus not liable to pay compensation to a
dispossessed alien investor when it adopts general regulations that are commonly accepted
as within the police power of States forms part of customary international law today.64
The tribunal in Lauder explicitly held that [p]arties to [the Bilateral] Treaty are not liable for
economic injury that is the consequence of bona fide regulation within the accepted police
61
Tcnicas Medioambientales Tecmed, S.A. v The United Mexican States, ICSID Case No. ARB (AF)/00/2,
Award (29 May 2003).
62
Ian Brownlie, Principles of Public International Law (6th Edition, Oxford University Press 2003).
63
Methanex v. United States, UNCITRAL (NAFTA), Final Award, 3 August 2005
64
Saluka Invests B.V. (The Netherlands) v. Czech Republic, Partial Award, March 17, 2006
24
ARGUMENTS ADVANCED
powers of the State.65 Tribunals have even decided to exclusively rely upon the intention of
the government in order to determine whether a governments conduct amounted to an
indirect expropriation. 66
In TRIPS, on the one hand, a compulsory license may be authorized pursuant to a states
police power, such as in emergency circumstances dictated by national security or public
health concerns .On the other hand, 31(k) and 40 of TRIPS recognize the license may be
authorized to correct anti-competitive behavior so that a particular patent does not
undesirably constrain competition between firms.67
Despite the centrality of exclusive rights within the intellectual property system, the
compulsory license claims to provide a safety valve for occasions where there is an
overriding public interest.68 There may be little doubt that a compulsory license granted to
address a public health emergency or anti-competitive practices is "in the public interest."69
Accordingly, Respondents purpose for granting of the compulsory license constitutes a
legitimate exercise of regulatory state power and not an indirect expropriation as it was done
to curb anti competitive practices.
A very significant factor in characterising a government measure as falling within the
expropriation sphere or not, is whether the measure refers to the States right to promote a
65
Lauder v. Czech Republic, UNCITRAL (United States/Czech Republic BIT), Award (Final), 3 September
2001
66
CCL v. Republic of Kazakhstan, Final Award, 2004, 1 SIAR (2005)
67
Antony Taubman, Rethinking TRIPS: Adequate Remuneration for Non-Voluntary Patent Licensing (2008)
11 Journal of International Economic Law 927, 935.
68
Kurt M. Saunders, Patent Non-use and the Role of Public Interest as a Deterrent to Technology Suppression,
(2002) 15 Harvard Journal of Law & Technology 389.
69
Carlos M. Correa, Investment Protection in Bilateral and Free Trade Agreements: Implications for the
Granting
of Compulsory Licenses (2004) 26 Michigan Journal of International Law 331, 340.
25
ARGUMENTS ADVANCED
recognised social purpose or the general welfare by regulation. 70Non-discriminatory

measures related to anti-trust, consumer protection, securities, environmental protection, land
planning are non-compensable takings since they are regarded as essential to the functioning
of the state.71 Thus the issue of compulsory license by the PCT was in exercise of legitimate
regulatory powers and in consonance with the TRIPS Agreement.
b. Applicant's property has not been substantially deprived
Whenever the investors were deprived of certain promised rights but the remainder of their
investment remained unaffected, tribunals denied that an expropriation had occurred. In
Occidental v Ecuador72the tribunal stated that since there had been no deprivation of the use
or expected economic benefit of the overall investment, there was no substantial deprivation.
Further, in Feldmen v Mexico73, the tribunal rejected the argument that expropriation had
occurred when the Applicant's export activities of cigarettes were only affected while
alcoholic beverages and photographic supplies were not. Among other reasons, it held that
the investor was still in control of the enterprise, the investor was still able to export other
products and that the investor could not have had legitimate expectations regarding the
continuing possibility to export cigarettes.
70
B. Weston, Constructive Takings under International Law: A Modest Foray into the Problem of Creeping
Expropriation (1975) 16 Virginia Journal of International Law 103, 112.
71
M. Sornarajah, The International Law on Foreign Investment (Cambridge University Press 1994).
72
Occidental Petroleum Corporation and Occidental Exploration and Production Company v The Republic of
Ecuador, ICSID Case No. ARB/06/11, Award (1 July 2004).
73
Marvin Roy Feldman Karpa v United Mexican States, ICSID Case No. ARB(AF)/99/1, Award (16 December
2002).
26
ARGUMENTS ADVANCED
Newcombe & Paradell74 explain the parcel as a whole approach as one where the property
owner cannot divide its bundle of property rights and argue that the strand affected by the
regulation has been taken. In Telenor Mobile v Hungary75the tribunal adopted the parcel as a
whole approach and rejected a claim of expropriation.
In Pope & Talbot, a U.S. lumber corporation brought an expropriation claim against Canada
as it had adopted the Canadian Export Control Regime, which imposed a fee on lumber
exports in excess of statutory levels. Here, the arbitral tribunal ruled for Canada, finding that
the regulation did not result in a substantial deprivation of Pope & Talbots business
interests
because
the
limitations on exports did not interfere with the management or operations of Pope &
Talbots investment. In short, a mere reduction in profits does not rise to the level of
expropriation because it is not a substantial deprivation of the investors use and enjoyment
of the investment.
Because the compulsory license targets use, it does not, strictly speaking, deprive the
owner of ownership rights over the protected intellectual property.19 The mere fact that a
measure has an adverse economic effect on an investment, standing alone, does not establish
that a de facto or indirect expropriation has occurred. Moreover, if the compulsory license is
the development of the legitimate exercise of the State's regulatory power, there is no
indication that the measure has an illicit purpose or it is discriminatory, and compensation is
available, then the measure could not be objected to.
74
(Kluwer Law International 2009).
75
Telenor Mobile Communications A.S. v The Republic of Hungary, ICSID Case No. ARB/04/15, Award (22
June 2006).
27
ARGUMENTS ADVANCED
IPR when viewed from the perspective of bundle of rights theory, an issue of compulsory
license only takes away one straw from the larger bundle of rights. The issue of compulsory
license does not lead to any substantial deprivation by the Applicant as it is still the owner
and controls the patent.
The government in exercise of regulatory powers will frequently change the laws or
regulations in response to changing economic or social considerations and provisions on
compulsory licensing can be found in most national patent laws and are recognized as
legitimate at the WTO level if certain conditions are fulfilled. In this backdrop, it is asserted
that the application of compulsory license will not necessarily contravene the reasonable and
justifiable expectations backed by investment on part of the patent holder.76
3.
High Court's Order Does Not Amount To An Act Of Expropriation
BIT must be accessed through the use of domestic legislation of the host country. It is
primarily submitted by the respondent that the Paradice court's decision at issue is neither in
violation of international law nor domestic law . The only rule of customary international law
that relates to the acceptability of domestic court determinations of domestic rights is the rule
against denial of justice which is absent in this case. It is established that a judicial measure in
question cannot amount to an expropriation in the absence of a denial of justice as was held
in Loewen.77
Further, where judicial expropriation has been alleged, tribunals have not had regard to
whether the judicial decision breached some other rule of international law. In Arif v.
76
Tsai-Yu Lin, Compulsory Licenses for Access to Medicines, Expropriation and Investor-State Arbitration
Under Bilateral Investment Agreements Are There Issues Beyond the TRIPS Agreement? (2009)
40 International Review of Intellectual Property and Competition Law 152, 171.
77
The Loewen Group Inc. and Raymond Loewen v United States of America, ICSID ARB(AF)/98/3, Award on
Merits (26 June 2003) 126.
28
ARGUMENTS ADVANCED
Moldova, the tribunal found that court decisions invalidating contracts did not constitute an
expropriation, despite finding that court conduct breached a Fair and Equitable Treatment
obligation under the governing BIT. 78The Fair and Equitable Treatment breach was not even
mentioned as relevant to the courts expropriation analysis.
Foreign nationals do not have a general right to reparation for damage caused when States to
[sic] do not comply with their international obligations to other States. The obligations to
accord various minimum standards of treatment to foreign nationals in general international
law and investment treaties do not operationalize such a general right. 79
In Azinian v. United States of America the tribunal explained that : the possibility of holding a
State internationally liable for judicial decisions does not, however, entitle a Applicant to
seek international review of the national court decisions as though the tribunal has plenary
appellate jurisdiction.
80
This means that, the Applicant cannot expect a tribunal to sit in
review over the decisions passed by the domestic courts in applying their domestic law and
conclude an expropriation. Therefore, it is submitted that the Applicant cannot attach the
judgement of the High Court on the grounds of its legality or otherwise.
78
Mr. Franck Charles Arif v Republic of Moldova, ICSID Case No. ARB/11/23, Award (8 April 2013).
79
Zachary Douglas, International Responsibility for Domestic Adjudication: Denial of Justice

Deconstructed (2014) International and Comparative Law Quarterly (ICLQ) 1, 34.
80
Robert Azinian, Kenneth Davitian, & Ellen Baca v The United Mexican States, ICSID Case No ARB
(AF)/97/2, Award (1 November 1999).
XVII
RELIEF SOUGHT
RELIEF SOUGHT
In light of the submission made above, the Respondent respectfully this Tribunal to find as
follows:
a. That it does not have jurisdiction to hear this dispute; and
b. That Respondent has not violated any of its obligations under the Paradice- Tech Tonic
BIT.

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INTERNATIONAL CENTRE FOR SETTLEMENT OF

IN THE MATTER OF THE ARBITRATION BETWEEN

MEMORIAL FOR RESPONDENT

1ST JINDAL TECHNOLOGY LAW AND POLICY MOOT COURT

TABLE OF ABBREVIATIONS .......................................................................................... IV

THE TRIBUNAL HAS JURISDICTION OVER THE DISPUTE ................................................ 1

There Is No Unqualified Consent To Arbitrate The Claim In Question ................. 2

Exploitation Of Patent A And Patent B Is Not An Investment.......................................... 2

There Is No Jurisdiction Ratione Temporis:............................................................ 6

RESPONDENT TREATED APPLICANT FAIRLY AND EQUITABLY ...................................... 7

Respondent Has Met Applicants Legitimate Expectations .................................... 8

Respondents Acts Do Not Amount To A Denial Of Justice ................................ 15

III. RESPONDENT DID NOT EXPROPRIATE APPLICANT'S INVESTMENT ............................ 19

Respondent Did Not Directly Expropriate Applicant's Patents ............................. 19

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

Respondent Did Not Indirectly Expropriate Applicant's Patents .......................... 19

Invalidation of Patent B by PPO does not amount to expropriation .................. 20

Grant Of Compulsory License By The PCT Does Not Amount To

High Court's Order Does Not Amount To An Act Of Expropriation ................ 27

RELIEF SOUGHT............................................................................................................ XVII

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

Bilateral Investment Treaty

Competition Commission of India

Court of Justice European Union

Fair and Equitable Treatment

Fair, Reasonable and Non- Discriminatory

International Court of Justice

International Centre for Settlement of Investment Disputes

International Investment Agreements

International Law Commission

Intellectual Property Rights

Minimum Standard Treatment

North American Free Trade Agreement

Paradice Competition Tribunal

Paradice Patent Office

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

Standard Essential Patent

Trade-Related Intellectual Property Rights

UNCITRAL United Nations Commission on International Trade Law

United Nations Conference on Trade and Development

Vienna Convention on Law of Treaties

World Intellectual Property Organisation

World Trade Organization

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

(b) the Additional Facility of the same Centre.

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WHETHER THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT

WHETHER THE RESPONDENT HAS BREACHED ITS OBLIGATION TO

INVESTMENT IN VIOLATION OF ARTICLE 2 OF THE BIT?

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

legitimate exercise of regulatory state power to address an anti competitive concern