MEMORIAL FOR RESPONDENT 014R

THE FOURTH ETHIOPIAN 014R

LAW SCHOOLS ANNUAL
NATIONAL MOOT COURT
COMPETITION 2020

ARBITRATION PURSUANT TO THE RULES OF BAHIR DAR

UNIVERSITY ARBITRATION CENTER

CASE NO. XXX (2020)

IN THE PROCEEDING BETWEEN

POINTER HORTICULTURE COMPANY

(Applicant)

v.

THE FEDERAL DEMOCRATIC REPUBLIC OF ANGOTIA

(Respondent)

MEMORIAL FOR RESPONDENT

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MEMORIAL FOR RESPONDENT 014R

TABLE OF CONTENTS
TABLE OF CONTENTS…………………………………………………………...……i
INDEX OF AUTHORITIES……………………………….………………………...….ii
INDEX OF ABBREVIATIONS…………………………………………………..……iv
STATEMENT OF FACTS…………………………………….…………………...……1
SUMMARY OF PLEADINGS………………………………………………………….3
PLEADINGS…………………………………………………………..…………………..4
A. THIS TRIBUNAL HAS NO JURISDICTION TO HEAR THE
DISPUTE…..............................................................................................................4
(1) APPLICANT FAILED TO EXHAUST ALL AVAILABLE LOCAL
REMEDIES……………………………………………………………………4
(2) IN TERMS OF ITS CONTENTS, APPLICANT’S LETTER DATED JANUARY
17, 2017 IS NOT A REQUEST FOR AMICABLE
SETTLEMENT……………………………………………………….……….4
(3) EVEN ASSUMING, BUT NOT ADMITTING, THAT IT HAS SATISFIED THE
AMICABLE SETTLEMENT OBLIGATION, APPLICANT CANNOT INITIATE
ARBITRATION AT BDUAC BEFORE SUBMITTING ITS DISPUTE TO
RESPONDENT’S LOCAL COURTS…………………………..……...………5
B. THE LOSS ALLEGEDLY INCURRED BY APPLICANT IS NOT
ATTRIBUTABLE TO RESPONDENT…………………………………...…….6
C. PURSUANT TO ART. 7 OF THE ANGOTIA-REALLANDS BIT,
RESPONDENT’S OBLIGATION IS LIMITED TO THE TREATMENT, IF
ANY, ACCORDED TO ITS OWN OR THIRD STATE’S NATIONALS…....7
D. THE OBLIGATION TO PROVIDE FULL SECURITY AND PROTECTION
DOES NOT CREATE ABSOLUTE OR STRICT LIABILITY………….……8
E. IN ANY EVENT, APPLICANT CONTRIBUTED TO THE DAMAGE
SUFFERED BY ITS INVESTMENT……………………………………………9

PRAYER FOR RELIEF.....................................................................................................11

REFERENCES…………………………………………………………………….………12

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MEMORIAL FOR RESPONDENT 014R

INDEX OF AUTHORITIES

A Proclamation on Investment, Proc. No. 769/2012, Fed. Negarit Gazeta, 18th Year No. 63,
Addis Ababa, 17 September 2012

AAPL v. Sri Lanka, Award, 21 June 1990, 4 ICSID Reports 246

Agreement on Encouragement and Reciprocal Protection of Investment between the Federal

Democratic Republic of Angotia and the Kingdom of the Reallands, done at Greenwich,
January 12, 2003

AMT v. Zaïre, Award, 21 February 1997

Biwater Gauff v. Tanzania, Award, 24 July 2008

Elettronica Sicula SpA (ELSI) (United States of America v. Italy), ICJ Reports 1989

Enron v. Argentina, Award, 22 May 2007

ICJ, Interhandel Case, (Switzerland v. United States of America), I.C.J Reports 1959, 6 27.

Land Lease Agreement concluded between Pointer Horticulture Company and the Ministry of
Agriculture of the Federal Democratic Republic of Angotia, February 25, 2006

LG&E v. Argentina, Decision on Liability, 3 October 2006

MCI v. Ecuador, Award, 31 July 2007

Noble Ventures Inc. v. Romania, Award, 12 October 2005

Plama v. Bulgaria, Award, 27 August 2008

Rumeli v. Kazakhstan, Award, 29 July 2008

Salini Costruttori S.P.A. and Italstrade S.P.A. V. Kingdom of Morocco, ICSID, Case No.
ARB/OO/4, Decision on Jurisdiction 42, ILM 609 (2003)

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MEMORIAL FOR RESPONDENT 014R

Saluka Investments BV (The Netherlands) v. The Czech Republic, Partial Award, 17 March 2006

Schering Corp. v. Islamic Republic of Iran, 5 Iran-U.S. Cl. Trib. Rep. 361, 362-63 (1984)

Sea Land Serv. Inc. v. Islamic Republic of Iran, 6 Iran-U.S. CI. Trib. Rep. 149, 166 (1984)

Siag v. Egypt, Award, 1 June 2009

Tecnicas Medioambientales Tecmed S. A. v. The United Mexican States, Award, 29 May 2003,
43 ILM 133 (2004)

The Ambatielos Claim, 12 UNRIAA 83 (1956)

The Constitution of the Federal Democratic Republic of Angotia, FDRA Constitution,

Proclamation No 1/1995, Fed. Negarit Gazette, 1st Year No.1, 1995

The Finnish Ships Arbitration, 3 UNRIAA 1479 (1934)

Wena Hotels Ltd. v. Arab Republic of Egypt, Award, 8 December 2000, 6 ICSID Reports 68

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MEMORIAL FOR RESPONDENT 014R

INDEX OF ABBREVIATIONS

AAPL Asian Agricultural Products Ltd

AMT American Manufacturing and Trading, Inc.

Art. Article

BDUAC Bahir Dar University Arbitration Center

BIT Bilateral Investment Treaty

FDRA Federal Democratic Republic of Angotia

ICSID International Center for Settlement of Investment Disputes

ICJ International Court of Justice

Ltd Limited

Para. Paragraph

PHC Pointer Horticulture Company

v. Versus

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MEMORIAL FOR RESPONDENT 014R

STATEMENT OF FACTS
1. Pointer Horticulture Company (PHC), Applicant, is a horticulture production company
incorporated in the Kingdom of Reallands, a country in Northwestern Europe which
signed a Bilateral Investment Treaty with the Federal Democratic Republic of Angotia
(FDRA), Respondent, on January 12, 2003.
2. Applicant started the horticulture production in Ardorland Regional State after it
concluded a Land Lease Agreement with Angotia's Ministry of Agriculture on February
25, 2006.
3. In 2016, a protest broke out at the place where Applicant’s investment situates. The
protesters were mainly those persons formerly displaced from their lands on which the
Applicant is investing. According to Respondent’s National Investment Commission, the
fact that the Applicant did not even talk with the local people was the source of
dissatisfaction for the residents. Among others, the Company failed to employ the
displaced people to enable them to earn income for their livelihood, build some social
institutes like a hospital and a primary school so as to enable the residents to benefit from
the investment or allow having shares in the PHC.
4. The Regional Investment Bureau repeatedly notified the PHC to discuss and solve its
problems with the society as per the Laws of Angotia. Contrary to these reminders the
management of the Company is still controlled by foreigners mainly from Reallands and
the PHC did not take any measure so far to replace those management members by
Angotian ones.
5. Recent empirical studies have identified that the intensive use of fertilizers and pesticides
as well as the emission of toxic liquid from the Horticulture Company has been polluting
the ground and river waters that the residents have been using for both domestic use and
to water their cattle. The leading national newspapers and big media outlets also revealed
that 200 cows of the local people found below the horticulture farm died of drinking the
polluted river water.
6. The riot was uncontrollable that costs the lives of more than 200 people and ransacked
the properties of private companies and government institutions all over the country. The
government responded to the violence by declaring a State of Emergency, undertaking
reforms and held successive discussions with the youths and the public to address

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MEMORIAL FOR RESPONDENT 014R

grievances and restore order in the country. And, the damage on business establishments
is beyond the capacity of the state to compensate as the case is a nation-wide issue, a
large number of companies have filed for the same claim, and verifying the claims and
value of property lost is difficult for the federal government.
7. By a letter of July 12, 2018, Respondent informed the Applicant that it can present its
claim for any damage suffered by its investments to the Ardorland Regional State.
8. With respect to dispute settlement, the Angotia-Reallands BIT requires a party to settle
any dispute amicably and, should this fail, Applicant is required to submit its dispute to
the competent court of the Respondent.
9. However, Applicant transgressed the aforementioned preconditions and instituted
International Center for Settlement of Investment Disputes (ICSID) arbitration on
September 10, 2019. On September 20, 2019, the Angotian Government sues the PHC
before the Angotian Federal High Court.
10. On September 30, 2019, the Angotian Government and the Pointer Horticulture
Company came to the table, negotiate and agreed to discontinue both the disputes
presented at ICSID and Respondent’s High Court.
11. On October 30, 2019, the Pointer Horticulture Company initiated the arbitral process
against the Angotian Government and communicated its request for arbitration as per the
Bahir Dar University Arbitration Center (BDUAC) Arbitration Rules.
12. On December, 30, 2019, the BDUAC order the Pointer Horticulture Company and the
Angotian Government to submit a formal and duly executed Applicant and Respondent
Memorial respectively.

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MEMORIAL FOR RESPONDENT 014R

SUMMARY OF PLEADINGS

This tribunal has no jurisdiction to hear the dispute. Applicant failed to exhaust all available local
remedies. In terms of its contents, applicant’s letter dated January 17, 2017 is not a request for
amicable settlement. Even assuming, but not admitting, that it has satisfied the amicable
settlement obligation, applicant cannot initiate arbitration at BDUAC before submitting its
dispute to respondent’s local courts.

The loss allegedly incurred by applicant is not attributable to respondent. Pursuant to Art. 7 of
the Angotia-Reallands BIT, respondent’s obligation is limited to the treatment, if any, accorded
to its own or third state’s nationals. The obligation to provide full security and protection does
not create absolute or strict liability. In any event, applicant contributed to the damage suffered
by its investment.

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MEMORIAL FOR RESPONDENT 014R

PLEADINGS
A. THIS TRIBUNAL HAS NO JURISDICTION TO HEAR THE DISPUTE
(1) APPLICANT FAILED TO EXHAUST ALL AVAILABLE LOCAL REMEDIES

Respondent submits that Applicant’s request for arbitration is premature. Pursuant to Article 9(1)
of the Angotia-Reallands Bilateral Investment Treaty (BIT), Applicant, before instituting
arbitration proceedings, must comply with two pre-arbitral processes. Applicant is duty bound to
resort to the amicable resolution of any dispute. The provision states that “disputes which might
arise between one of the Contracting Parties and an investor of the other Contracting Party
concerning an investment of that investor in the territory of the former Contracting Party shall,
whenever possible, be settled amicably between the parties concerned.” This obliges Applicant
to; first, seek the amicable settlement of its dispute which it failed to comply with.

(2) IN TERMS OF ITS CONTENTS, APPLICANT’S LETTER DATED JANUARY

17, 2017 IS NOT A REQUEST FOR AMICABLE SETTLEMENT

In particular, the letter reads “the Company asked government to pay the compensation for the
damage it sustained, approve repatriation of the compensation value in convertible foreign
currency at the prevailing exchange rate and provide loan to support its effort to rebuild or repair
its Investment.”1 Applicant has not expressed its willingness to amicably resolve its dispute out
of court with respondent particularly on whether its investment has been damaged and, if so,
whether Respondent assumes liability as well as the amount of compensation. In Salini v.
Morocco, the ICSID tribunal stated that the attempt to reach an amicable settlement should
essentially include the existence of grounds for complaint and the desire to resolve these matters
out-of-court.2 This made it difficult for Respondent to consider the letter as an intention to
resolve the dispute amicably as required by the Angotia-Reallands BIT. Applicant, without
complying with this mandatory requirement, wrongly resorted to arbitration to embarrass
Respondent.

1
The Moot Case, Para. 15.
2
Salini Costruttori S.P.A. and Italstrade S.P.A. V. Kingdom of Morocco, ICSID, Case No. ARB/OO/4, Decision on
Jurisdiction 42, ILM 609 (2003), para. 20.

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MEMORIAL FOR RESPONDENT 014R

Second, if the dispute cannot be resolved amicably, Applicant is obliged to bring its claim to the
competent judicial or administrative courts of Respondent.

(3) EVEN ASSUMING, BUT NOT ADMITTING, THAT IT HAS SATISFIED THE
AMICABLE SETTLEMENT OBLIGATION, APPLICANT CANNOT INITIATE
ARBITRATION AT BDUAC BEFORE SUBMITTING ITS DISPUTE TO
RESPONDENT’S LOCAL COURTS

Respondent relies on Art. 9(2)(a) of the Angotia-Reallands BIT which states that:

2) If the dispute has not been settled within a period of six months from the date either
Party to the dispute requested amicable settlement, the dispute shall at the request of
the national concerned be submitted to:
a) The competent court of the Contracting Party in the territory of which the investment
has been made.
Thus, Applicant is obliged to submit its disputes to the competent court of Respondent before its
request for arbitration. Respondent submits the local remedy requirement under the applicable
BIT has explicitly referred to courts. Local arbitrations are also not permitted without first
submitting the dispute to Respondent’s local courts.

Besides, Respondent asserts that the exhaustion of local remedies rule have attained the status of
Customary International Law, from which no derogation is possible. In the Interhandel case, the
International Court of Justice (ICJ) stated that “the rule that local remedies must be exhausted
before international proceedings may be instituted is a well-established Customary International
Law.”3 The Court observed that the local remedies rule is such a fundamental principle of
international law that it cannot be excluded except by express words having that effect. The rule
was also recognized by the tribunals as a relevant rule of international law in both the Finnish
Ships Arbitration4 and the Ambatielos Claim5. These examples show that most of the recent
history of the rule has been concerned with the decisions of international tribunals or organs
rather than the diplomatic practice of the states. Thus, local remedies rules are preconditions to
arbitration.

3
ICJ, Interhandel Case, (Switzerland v. United States of America), I.C.J Reports 1959, 6 27.
4
The Finnish Ships Arbitration, 3 UNRIAA 1479 (1934).
5
The Ambatielos Claim, 12 UNRIAA 83 (1956).

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MEMORIAL FOR RESPONDENT 014R

B. THE LOSS ALLEGEDLY INCURRED BY APPLICANT IS NOT ATTRIBUTABLE

TO RESPONDENT

Respondent did not involve in causing the alleged damage to Applicant’s investment.
Accordingly, Respondent is responsible only where the actors are governmental authorities or
agents of the government. The Tribunal in Sea-Land Service, Inc. v. Islamic Republic of Iran
found that the government was legally responsible for losses only if "there was deliberate
governmental interference ... the effect of which was to deprive Sea-Land of the use and benefit
of the investment."6 Similarly, in Schering Corp. v. Islamic Republic of Iran, Schering alleged
that a taking had occurred when the Islamic Worker's Council forced a local manager to sign an
agreement giving the workers a veto power over all payments the subsidiary made.7 However,
the Tribunal found that the Islamic Worker's Council was not acting pursuant to any
governmental order; therefore, the government was not responsible.8

Similarly, in Asian Agricultural Products Ltd (AAPL) v. Sri Lanka,9 the Tribunal refused to grant
a remedy under this provision seeing that there was no conclusive proof that the losses were
incurred as a consequence of acts committed by government forces. The Tribunal said:

… it has to be noted that the foreign investor who invokes the applicability of said Article
4.(2)10 assumed a heavy burden of proof, since he has, …, to establish: (i) that the
governmental forces and not the rebels caused the destruction;
… there is no convincing evidence produced which sufficiently sustains the Claimant's
allegation that the firing which caused the property destruction came from the governmental
troops, and no reliable evidence was adduced to prove that the shrimps were lost due to acts
committed by the security forces; … Therefore the Arbitral Tribunal finds that the first
condition required under Article 4.(2) cannot be considered fulfilled in the present case, due

6
Sea Land Serv. Inc. v. Islamic Republic of Iran, 6 Iran-U.S. CI. Trib. Rep. 149, 166 (1984)
7
See Schering Corp. v. Islamic Republic of Iran, 5 Iran-U.S. Cl. Trib. Rep. 361, 362-63 (1984)
8
Id. at 368.
9
AAPL v. Sri Lanka, Award, 21 June 1990, 4 ICSID Reports 246.
10
See the Bilateral Investment Treaty between Sri Lanka and the United Kingdom. Art. 4 (2) states:
Without prejudice to paragraph (1) of this Article, nationals and companies of one Contracting Party who in any of
the situations referred to in that paragraph suffer losses in the territory of the other Contracting Party resulting
from
(a) requisitioning of their property by its forces or authorities, or
(b) destruction of their property by its forces or authorities which was not caused in combat action or was not
required by the necessity of the situation, shall be accorded restitution or adequate compensation. Resulting
payments shall be freely transferable.

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MEMORIAL FOR RESPONDENT 014R

to the lack of convincing evidence proving that the losses were incurred due to acts
committed by the governmental forces.11

C. PURSUANT TO ART. 7 OF THE ANGOTIA-REALLANDS BIT, RESPONDENT’S

OBLIGATION IS LIMITED TO THE TREATMENT, IF ANY, ACCORDED TO
ITS OWN OR THIRD STATE’S NATIONALS

The applicable provision reads:

Nationals of one Contracting Party who suffer losses in respect of their investments in the
territory of the other Contracting Party owing to war or other armed conflict, revolution, a
state of national emergency, revolt, insurrection or riot shall be accorded by the latter
Contracting Party treatment, as regards restitution, indemnification, compensation or other
settlement, no less favorable than that Contracting Party accords to its own nationals or to
nationals of any third State, whichever is more favorable to the nationals concerned.12
Clauses of this type do not create substantive rights to restitution or compensation beyond non-
discrimination vis-à-vis host State nationals or nationals of third countries. In other words, their
effect depends on measures taken by the host State in relation to these investors.13 Respondent
submits that Applicant is not the only businessperson to suffer loss as a result of the national
crisis. The damage on business establishments is beyond the capacity of the state to compensate
as the case is a nation-wide issue, a large number of companies have filed for the same claim,
and verifying the claims and value of property lost is difficult for the federal government.14
Accordingly, Applicant is not entitled to a protection which has not been accorded to other
businesses.

In CMS v. Argentina the Tribunal said with respect to a similar provision (compensation for
damages or losses) in Article IV(3) of the Argentina-US BIT:

The plain meaning of the Article is to provide a floor treatment for the investor in the context
of the measures adopted in respect of the losses suffered in the emergency, not different from
that applied to nationals or other foreign investors. The Article does not derogate from the
Treaty rights but rather ensures that any measures directed at offsetting or minimizing losses
will be applied in a non-discriminatory manner.

11
AAPL v. Sri Lanka, supra note 9, at paras. 58-60.
12
Agreement on Encouragement and Reciprocal Protection of Investment Between the Federal Democratic Republic
of Angotia and the Kingdom of the Reallands, done at Greenwich, January 12, 2003, Art. 7.
13
See AAPL v. Sri Lanka, supra note 9, paras. 65-67; LG&E v. Argentina, Decision on Liability, 3 October 2006,
paras. 243, 244; Enron v. Argentina, Award, 22 May 2007, para. 320.
14
Moot case, para. 16.

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MEMORIAL FOR RESPONDENT 014R

D. THE OBLIGATION TO PROVIDE FULL SECURITY AND PROTECTION DOES

NOT CREATE ABSOLUTE OR STRICT LIABILITY

The full security and protection standard has to be interpreted narrowly so as not to include
liability that might have been caused to an investment by a third party. Moreover, Respondent
submits that the full security and protection standard is one of “due diligence.”15 Respondent
took all possible measures to stop the anti-government protests. Among the comprehensive
reform measures are the election of a new Prime Minister in April 2018.16 In addition,
Respondent declared a State of Emergency and held successive discussions with the youths and
the public to address grievances and restore order in the country.17 This was followed by
economic reforms to stabilize the country’s economy. The riot was uncontrollable that resulted in
the death of more than 200 people and destruction of the properties of private companies and
government institutions all over the country.18 Although respondent took all the aforementioned
measures, it was difficult and beyond its capacity to avert the losses incurred throughout the
country. Therefore, Respondent would not be responsible for uncontrollable damages and its
obligation is limited to its capacity. In AAPL v. Sri Lanka19 the Tribunal rejected claimant's
argument that the provision granting “full protection and security” had created a strict or absolute
liability. The Tribunal said:

... the Tribunal declares unfounded the Claimant's main plea aiming to consider the
Government of Sri Lanka assuming strict liability under Article 2.(2) of the Bilateral
Investment Treaty, without any need to prove that the damages suffered were attributable to
the State or its agents, and to establish the State's responsibility for not acting with “due
diligence”.20

15
This refers to only a reasonable degree of vigilance. Generally see Elettronica Sicula SpA (ELSI) (United States of
America v. Italy), ICJ Reports 1989, p.15, para.108. See also Tecnicas Medioambientales Tecmed S. A. v. The
United Mexican States, Award, 29 May 2003, 43 ILM 133 (2004) at para. 177; Noble Ventures Inc. v. Romania,
Award, 12 October 2005, para. 164; Wena Hotels Ltd. v. Arab Republic of Egypt, Award, 8 December 2000, 6
ICSID Reports 68, para.84; Saluka Investments BV (The Netherlands) v. The Czech Republic, Partial Award, 17
March 2006, para. 484; MCI v. Ecuador, Award, 31 July 2007, paras. 245-246; Plama v. Bulgaria, Award, 27
August 2008, para. 181; Biwater Gauff v. Tanzania, Award, 24 July 2008, paras. 725, 726; Rumeli v. Kazakhstan,
Award, 29 July 2008, para. 668; Siag v. Egypt, Award, 1 June 2009, para. 447.
16
Moot case, para. 12.
17
Moot case, para. 16.
18
Moot case, para. 16.
19
AAPL v. Sri Lanka, supra note 9, paras. 45-53.
20
Id. at para. 53.

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MEMORIAL FOR RESPONDENT 014R

In the same sense the Tribunal in Wena v. Egypt said about the interpretation of the full
protection and security clause in the BIT between Egypt and the United Kingdom:

In interpreting a similar provision from the bilateral investment treaty between Zaïre and the
United States, another ICSID panel has recently held that "the obligation incumbent on [the
host state] is an obligation of vigilance, in the sense that [the host state] shall take all
measures necessary to ensure the full enjoyment of protection and security of its [sic]
investments and should not be permitted to invoke its own legislation to detract from any
such obligation."[21] Of course, as still another ICSID panel has observed, a host state's
promise to accord foreign investment such protection is not an "absolute obligation which
guarantees that no damages will be suffered, in the sense that any violation thereof creates
automatically a 'strict liability' on behalf of the host State."[22] A host state "is not an insurer
or guarantor….[i]t does not, and could hardly be asked to, accept an absolute responsibility
for all injuries to foreigners.[23]24
Therefore, the obligation to accord full security and protection does not create strict liability but
an obligation of due diligence, i.e. it exists to the extent of the reasonable use of the host State's
capabilities.

E. IN ANY EVENT, APPLICANT CONTRIBUTED TO THE DAMAGE SUFFERED

BY ITS INVESTMENT

In the case between Yukos vs Russia, the tribunal evaluated the principle of contributory fault on
the basis of whether any willful or negligent act or omission of the Claimant that had a material
and significant contribution to the damage it suffered. The contributory effect of the investor
may lead to loss the whole legitimate compensation based on the contributory extent. With
regard to this, in the case between MTD v. Chile the tribunal found that the Claimants were 50
per cent responsible for the damage they suffered. Additionally, in the Occidental v. Ecuador the
tribunal determined that the claimants’ contributory fault led to a 25 per cent reduction in the
damages. In the same manner the Yukos tribunal, “having considered and weighed all the
arguments” presented by the parties and “in the exercise of its wide discretion,” agreed to a 25
per cent reduction, which it saw as a “fair and reasonable” apportionment of responsibility
between the claimants and Russia.

21
[Referring to AMT v. Zaïre, Award, 21 February 1997, para. 6.05].
22
[Referring to AAPL v. Sri Lanka, Award, 21 June 1990, para. 48].
23
[Referring to AAPL v. Sri Lanka, supra note 9, para. 49].
24
Wena v. Egypt, Award, 8 December 2000, para. 84.

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MEMORIAL FOR RESPONDENT 014R

In the case at hand, Applicant contributed to the damaged allegedly suffered by its investment.
First, according to Respondent’s National Investment Commission, Applicant did not even talk
with the local people and this was the source of dissatisfaction for residents.25 This is a clear
violation of Angotia’s Constitution which provides that “Nationals have the right to participate in
national development and, in particular, to be consulted with respect to policies and projects
affecting their community.”26 Applicant trespassed the repetitive notification by Ardorland’s
Regional Investment Bureau to discuss and solve its problems with the society as per the Laws of
Angotia.27 Second, Applicant failed to employ the displaced people to enable them to earn
income for their livelihood, build some social institutes like a hospital and a primary school so as
to enable the residents to benefit from the investment or allow having shares in the Company.
According to Angotia’s Constitution, the basic aim of development activities shall be to enhance
the capacity of citizens for development and to meet their basic needs.28 Similarly, the
investment objective as stipulated under Angotia’s Investment Proclamation is to improve the
living standards of the peoples of Angotia through the realization of sustainable economic and
social development particularly through creating ample employment opportunities for
nationals.29 This includes the right of nationals to benefit from all economic and developmental
activities including foreign investments. Third, in spite of the reminders, Applicant denied to
replace the management of the Company, which is foreign-controlled, by Angotian ones.30 In
this regard, Applicant violated the investment objective of Angotia which require all investments
to advance the transfer of technology required for the development of the country.31 Fourth,
Applicant caused serious environmental pollution which threatened the life, health and safety of
the nearby communities and their cattle. Studies have identified that the intensive use of
fertilizers and pesticides as well as the emission of toxic liquid from the Company has been
polluting the ground and river waters that the residents have been using for both domestic use

25
Moot Case, Para. 13.
26
The Constitution of the Federal Democratic Republic of Angotia, FDRA Constitution, Proclamation No 1/1995,
Fed. Negarit Gazette, 1st Year No.1, 1995, Art. 43(2).
27
Moot case, para. 13.
28
Id. Art. 43(4).
29
A Proclamation on Investment, Proc. No. 769/2012, Fed. Negarit Gazeta, 18th Year No. 63, Addis Ababa, 17
September 2012, Art. 5(8).
30
Moot case, para. 13.
31
Investment Proclamation, supra note 29, Art. 5(8), last phrase.

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MEMORIAL FOR RESPONDENT 014R

and to water their cattle.32 The leading national newspapers and big media outlets also revealed
that 200 cows of the local people found below the Horticulture Farm died of drinking the
polluted river water.33

Thus, based on its full contributory fault of which it was fully aware, Applicant should not be
entitled to a compensation of any kind.

PRAYER FOR RELIEF

In light of the facts of the case and the arguments presented, the Respondent requests this
Tribunal find that:

1) the Arbitral Tribunal has no jurisdiction over the case at hand

2) even if the Arbitral Tribunal finds that it has jurisdiction over the case, the Applicant is
not entitled to any form of compensation because the loss incurred by its investments is
not attributable to Respondent
3) the Respondent took all possible reform measures to ensure the security and full
protection of Applicant’s investment
4) the Applicant fully contributed to the damage suffered by its investment.

Respectfully Submitted on 14th February, 2020

By Team 014R

On behalf of Respondent,

The Federal Democratic Republic of Angotia

32
Moot case, para. 14.
33
Moot case, para. 14.

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REFERENCES

A Proclamation on Investment, Proc. No. 769/2012, Fed. Negarit Gazeta, 18th Year No. 63,
Addis Ababa, 17 September 2012

AAPL v. Sri Lanka, Award, 21 June 1990, 4 ICSID Reports 246

Agreement on Encouragement and Reciprocal Protection of Investment between the Federal

Democratic Republic of Angotia and the Kingdom of the Reallands, done at Greenwich,
January 12, 2003

AMT v. Zaïre, Award, 21 February 1997

Biwater Gauff v. Tanzania, Award, 24 July 2008

Elettronica Sicula SpA (ELSI) (United States of America v. Italy), ICJ Reports 1989

Enron v. Argentina, Award, 22 May 2007

ICJ, Interhandel Case, (Switzerland v. United States of America), I.C.J Reports 1959, 6 27.

Land Lease Agreement concluded between Pointer Horticulture Company and the Ministry of
Agriculture of the Federal Democratic Republic of Angotia, February 25, 2006

LG&E v. Argentina, Decision on Liability, 3 October 2006

MCI v. Ecuador, Award, 31 July 2007

Noble Ventures Inc. v. Romania, Award, 12 October 2005

Plama v. Bulgaria, Award, 27 August 2008

Rumeli v. Kazakhstan, Award, 29 July 2008

Salini Costruttori S.P.A. and Italstrade S.P.A. V. Kingdom of Morocco, ICSID, Case No.
ARB/OO/4, Decision on Jurisdiction 42, ILM 609 (2003)

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MEMORIAL FOR RESPONDENT 014R

Saluka Investments BV (The Netherlands) v. The Czech Republic, Partial Award, 17 March 2006

Schering Corp. v. Islamic Republic of Iran, 5 Iran-U.S. Cl. Trib. Rep. 361, 362-63 (1984)

Sea Land Serv. Inc. v. Islamic Republic of Iran, 6 Iran-U.S. CI. Trib. Rep. 149, 166 (1984)

Siag v. Egypt, Award, 1 June 2009

Tecnicas Medioambientales Tecmed S. A. v. The United Mexican States, Award, 29 May 2003,
43 ILM 133 (2004)

The Ambatielos Claim, 12 UNRIAA 83 (1956)

The Constitution of the Federal Democratic Republic of Angotia, FDRA Constitution,

Proclamation No 1/1995, Fed. Negarit Gazette, 1st Year No.1, 1995

The Finnish Ships Arbitration, 3 UNRIAA 1479 (1934)

Wena Hotels Ltd. v. Arab Republic of Egypt, Award, 8 December 2000, 6 ICSID Reports 68

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