Petren

TEAM PETREN
FOREIGN DIRECT INVESTMENT

INTERNATIONAL MOOT COMPETITION
24-26 OCTOBER 2013
________________________________________________________________________

GERMAN INSTITUTION OF ARBITRATION

CASE NO. XX
UNDER THE UNCITRAL ARBITRATION RULES ADMINISTERED BY THE DIS

BETWEEN:

CONTIFICA ASSET MANAGEMENT THE STATE OF
CORP. RURITANIA

CLAIMANT/INVESTOR RESPONDENT/PARTY

MEMORIAL FOR RESPONDENT

i
TABLE OF CONTENTS
LIST OF AUTHORITIES ............................................................................................................. III
LIST OF LEGAL SOURCES ........................................................................................................ V
LIST OF ABBREVIATIONS ...................................................................................................... XII
STATEMENT OF FACTS ............................................................................................................. 1
ARGUMENTS ................................................................................................................................ 5

PART ONE: JURISDICTION AND ADMISSIBILITY ................................................................ 5
I. THE TRIBUNAL LACKS JURISDICTION UNDER THE BIT OVER THE SUBMITTED CLAIMS, AND
THOSE CLAIMS ARE NOT ADMISSIBLE IN LIGHT OF THE FACTS SURROUNDING CLAIMANTS
ACQUISITION OF SHARES IN FBI. .................................................................................................. 5
A. The Tribunal lacks jurisdiction under the BIT over the submitted claims. ..................... 5
i. Claimants alleged shareholding in FBI is not an investment within the meaning of
the BIT. ................................................................................................................................ 5
ii. The Tribunal lacks jurisdiction because Claimant fails to satisfy the BITs nationality
requirement. ........................................................................................................................ 7
iii. The dispute arising from Respondents regulatory measures does not concern an
investment under the BIT. ................................................................................................... 9
B. Even if the Tribunal has jurisdiction over the submitted claims, those claims are
inadmissible because they constitute an abuse of process. ................................................... 10
II. THE TRIBUNAL LACKS JURISDICTION OVER SUBMITTED CLAIMS BASED ON THE ALLEGED
BREACH OF THE SHARE PURCHASE AGREEMENT BY THE STATE PROPERTY FUND OF RURITANIA.
EVEN IF IT HAD JURISDICTION, THOSE CLAIMS ARE INADMISSIBLE. ............................................ 11
A. The Tribunal lacks jurisdiction over the submitted claims based on the alleged breach
of the Agreement by the Fund. ............................................................................................. 11
i. The scope of BIT Article 6.2 does not cover an alleged breach of a commercial
contract by Respondent. .................................................................................................... 12
ii. Without prejudice to the argument in II.A.i., the Tribunal lacks jurisdiction because
the Fund is a separate legal entity with its own legal personality whose actions cannot be
attributed to Respondent. .................................................................................................. 15
B. Without prejudice to the argument in II.A., the submitted claims are inadmissible
because the Tribunal should respect the forum selection clause of the Share Purchase
Agreement. ............................................................................................................................ 18

PART TWO: MERITS ................................................................................................................. 20
III. RESPONDENT HAS ACCORDED CLAIMANTS INVESTMENTS FAIR AND EQUITABLE
TREATMENT. .............................................................................................................................. 20
A. The FET clause should be interpreted with reference to customary international law. 20

ii
B. Respondent did not violate Claimants legitimate or reasonable expectations. ............ 21
C. Respondent has acted with due process in taking every measure that has affected
Claimants investments. ........................................................................................................ 22
D. Respondent has not acted in an arbitrary or discriminatory manner. ............................ 23
IV. RESPONDENT HAS NOT VIOLATED BIT ARTICLE 3.1(C). ............................................... 24
A. Respondent did not impair Claimants investments through any arbitrary or
discriminatory measures. ...................................................................................................... 24
B. Additionally, Respondents measures under the MAB Act were not arbitrary or
discriminatory because they were taken to protect public order. .......................................... 25
V. RESPONDENT DID NOT UNLAWFULLY EXPROPRIATE CLAIMANTS INVESTMENTS. .............. 25
A. Respondent did not expropriate Claimants investments. ............................................. 25
i. Respondent did not expropriate Claimants trademarks. ........................................... 26
ii. Respondent did not expropriate Claimants purported shares in FBI. ..................... 28
B. Even if expropriation is established, Respondents measures are justifiable under BIT
Article 4.1. ............................................................................................................................ 31
VI. RESPONDENT IS NOT LIABLE FOR MORAL DAMAGES BECAUSE THE BIT AND CUSTOMARY
INTERNATIONAL LAW DO NOT PROVIDE FOR MORAL DAMAGES IN THIS CASE. ............................ 33
A. The BIT does not provide for moral damages. ............................................................. 33
B. Customary international law does not allow for moral damages here because there are
neither exceptional circumstances nor measurable damages. ............................................... 34
i. No exceptional circumstances surrounded the executives arrest. ............................. 35
ii. There were no measurable damages resulting from the executives arrest. ............. 36
VII. LOSS OF SALES BY CLAIMANT-AFFILIATED CONTIFICA COMPANIES LOCATED OUTSIDE
RURITANIA DO NOT CONSTITUTE RECOVERABLE DAMAGES. ...................................................... 37
A. Losses sustained by Contifica companies located outside Ruritania are not part of
Claimants investment in Ruritania. .................................................................................. 38
B. Even if losses sustained by Claimant-affiliated companies are recoverable, the losses at
issue were unforeseeable and not proximately caused by Respondents measures. ............. 40
C. Even if losses sustained by Claimant-affiliated companies are recoverable, Claimant
failed to meet its duty to mitigate. ........................................................................................ 41

REQUEST FOR RELIEF ............................................................................................................. 42

iii
LIST OF AUTHORITIES

BOOKS

Brower C. N. Brower, The Future of Foreign Investment-Recent Developments in
the International Law of Expropriation and Compensation, in PRIVATE
INVESTORS ABROAD PROBLEMS AND SOLUTIONS IN INTERNATIONAL
BUSINESS (V.S. Cameron eds. 1976).
Dolzer & Schreuer Rudolf Dolzer & Christoph Schreuer, Principles of International
Investment Law (2008).
Douglas Zachary Douglas, The International Law of Investment Claims (2009).
Kriebaum Ursula Kriebaum and Christoph Schreuer, The Concept of Property in
Human Rights Law and International Investment Law, in HUMAN RIGHTS,
DEMOCRACY AND THE RULE OF LAW (Stephan Breitenmoser, et al, eds.,
2007).
Schreuer Christoph Schreuer, The ICSID Convention: A Commentary (2009).

ARTICLES

Byers Michael Byers, Abuse of Rights: An Old, Principle, A New Age, 47
MCGILL L. J. 389, 392-397 (2002).
de Brabandere Eric de Brabandere, Good Faith, Abuse of Process and the Initiation of
International Treaty Claims, 3.3 J. OF INTL DISP. SETTLEMENT, 609
(2012).
Dolzer Rudolf Dolzer, Indirect Expropriations: New Developments?, 11 N.Y.U.
ENVTL. L.J. 64 (2002).
Felson Richard B. Felson, Routine Activities and Involvement in Violence as
Actor, Witness, or Target 12 VIOLENCE AND VICTIMS 209 (1997).
Gill Judith Gill, Matthew Gearing and Gemma Birt, Contractual Claims and
Bilateral Investment Treaties 21(5) J. OF INTL ARBITRATION 397 (2004).
Landes William M. Landes & Richard A. Posner, Trademark Law: An Economic
Perspective, 30 J. L. & ECON. 265 (1987).
Parish Matthew T. Parish, Annalise K. Newlson & Charles B. Rosenberg,
Awarding Moral Damages to Respondent States in Investment Arbitration,
29 BERKELEY J. OF INTL L. 225 (2011).
Perera Srilal M. Perera, State Responsibility: Ascertaining the Liability of States
in Foreign Investment Disputes, 6 J. OF WORLD INVESTMENT AND TRADE
499 (2005).

iv
Verhoosel Gaetan Verhoosel, The Use of Investor-State Arbitration Under Bilateral
Investment Treaties To Seek Relief for Breaches of WTO Law, 6 J. OF
INTL ECON. L. 493 (2003).
Wlde Thomas Wlde, The Umbrella Clause in Investment Arbitration: A
Comment on Original Intentions and Recent Cases, 6 J. OF WORLD
INVESTMENT AND TRADE 183 (2005).
Wisner Robert Wisner & Nick Gallus, Nationality Requirements in Investor-State
Arbitration, 5 J. OF WORLD INVESTMENT AND TRADE 927 (2004).

MISCELLANEOUS

Crawford Report of the Special Rapporteur, Professor James Crawford, First Report
on State Responsibility, U.N. Doc. A/CN.4/490 (1998).
Deutsches Patent- Deutsches Patent- und Markenamt, Trade Marks, available at
und Markenamt http://www.dpma.de/english/trade_marks/index.html (last visited Sept. 19,
2013).

ICAP International Center for Alcohol Policies, Module 14: Public Order and
Drinking Environments, in ICAP BLUE BOOK: PRACTICAL GUIDES FOR
ALCOHOL POLICY AND PREVENTION APPROACHES (2011).
Legum Barton Legum, Defining Investment and Investor: Who Is Entitled to
Claim?, OECD Symposium Paper, Making the Most of International
Investment Agreements: A Common Agenda (12 December 2005).
OECD OECD, International Investment Law: Understanding Concepts and
Tracking Innovations (2008).
OED Oxford English Dictionary (2d ed. 1989).
Restatement Third Restatement of the Foreign Relations Law of the United States
(1987).
The Independent Charlie Cooper, No excuse to delay plain cigarette packs after new
study, say campaigners, THE INDEPENDENT, July 22, 2013.
The New York Times Tara Parker-Pope, How Can a Big Gulp Look So Small?, THE NEW YORK
TIMES ONLINE, June 21, 2012, available at
http://well.blogs.nytimes.com/2012/06/21/how-can-a-big-gulp-look-so-
small/?src=recg&_r=0
WIPO WIPO, About Trademarks, available at
http://www.wipo.int/trademarks/en/about_trademarks.html#function (last
visited May 12, 2013).

v

LIST OF LEGAL SOURCES

ARBITRAL DECISIONS

ADC ADC Affiliate Limited and ADC & ADMC Management Limited v. The
Republic of Hungary, ICSID Case No. ARB/03/16, Award (2 October
2006).
ADM Archer Daniels Midland Company and Tate & Lyle Ingredients Americas,
Inc. v. The United Mexican States, ICSID Case No. ARB (AF)/04/5,
Award (21 November 2007).
Alpha Alpha Projecktholding GMBH v. Ukraine, ICSID Case No. ARB/07/16,
Award (20 October 2010).
Amco Amco Asia Corporation and Others v. Republic of Indonesia, ICSID Case
No. ARB/81/1, First Award (20 November 1984).
Arif Mr. Franck Charles Arif v. Republic of Moldova, ICSID Case
No. ARB/11/23, Award (8 April 2013).
Asian Ag. Products Asian Agricultural Products Ltd. v. Republic of Sri Lanka, ICSID Case
No. ARB/87/3, Award (27 June 1990).
Azurix Azurix Corp. v. The Argentine Republic, ICSID Case No. ARB/01/12,
Award (14 July 2006).
BG Group BG Group Plc. v. The Republic of Argentina, UNCITRAL, Final Award
(24 December 2007).
Biwater Gauff Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID
Case No. ARB/05/22, Award (24 July 2008).
Burlington Burlington Resources Inc. v. Republic of Ecuador, ICSID Case No.
ARB/08/5, Decision on Liability (14 December 2012).
C.S.O.B. Ceskoslovenska Obchodni Banka, A.S. v. The Slovak Republic, ICSID
Case No. ARB/97/4, Decision of the Tribunal on Objections to
Jurisdiction (24 May 1999).
Caratube Caratube International Oil Company LLP v. The Republic of Kazakhstan,
ICSID Case No. ARB/08/12, Award (5 June 2012).
Cargill Cargill, Incorporated v. United Mexican States, ICSID Case No.
ARB(AF)/05/2, Award (18 September 2009).
Cementownia Cementownia Nowa Huta S.A. v. Republic of Turkey, ICSID Case No.
ARB(AF)/06/2, Award (17 September 2009).

vi
CME CME Czech Republic B.V. v. The Czech Republic, UNCITRAL, Partial
Award (13 September 2001).
CMS CMS Gas Transmission Company v The Argentine Republic, ICSID Case
No ARB/01/08, Award (12 May 2005).
Consortium Consortium RFCC v. Royaume du Maroc, ICSID Case No. ARB/00/6,
Decision on Jurisdiction (16 July 2001).
Continental Casualty Continental Casualty Company v. The Argentine Republic, ICSID Case
No. ARB/03/9, Award (5 September 2008).
Desert Line Desert Line Projects LLC v. The Republic of Yemen, ICSID Case
No. ARB/05/17, Award (6 February 2008).
Deutsche Bank Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, ICSID
Case No. ARB/09/2, Award (31 October 2012).
Duke Energy Duke Energy Electroquil Partners & Electroquil S.A. v. Republic of
Ecuador, ICSID Case No. ARB/04/19, Award (18 August 2008).
EDF EDF International S.A., SAUR International S.A. and Len
Participaciones Argentinas S.A. v. Argentine Republic, ICSID Case
No. ARB/03/23, Award (11 June 2012).
El Paso Award El Paso Energy International Company v. The Argentine Republic, ICSID
Case No. ARB/03/15, Award (31 October 2011).
El Paso, DJ El Paso Energy International Company v. The Argentine Republic, ICSID
Case No. ARB/03/15, Decision on Jurisdiction (27 April 2006).
Enron Enron Corporation and Ponderosa Assets, L.P. v. Argentine Republic,
ICSID Case No. ARB/01/3, Award (22 May 2007).
Eureko Eureko B.V. v. Republic of Poland, Ad Hoc Tribunal, Partial Award (19
August 2005).
Eureko Dissent Eureko B.V. v. Republic of Poland, Ad Hoc Tribunal, Dissenting Opinion
of Partial Award (19 August 2005).
Fabiani Antoine Fabiani Case, Fran.-Ven. M.C.C. (31 July, 1905), cited in Arif.
Feldman Marvin Roy Feldman Karpa v. United Mexican States, ICSID Case No.
ARB(AF)/99/1, Award (16 December 2002).
Impregilo Impregilo S.p.A. v. Islamic Republic of Pakistan, ICSID Case
No. ARB/03/3, Decision on Jurisdiction (22 April 2005).
Joy Mining Joy Mining Machinery Ltd v. The Arab Republic of Egypt, ICSID Case No
ARB/03/11, Award on Jurisdiction (6 August 2004).

vii
Lanco Lanco International Inc. v. The Argentine Republic, ICSID Case
No. ARB/97/6, Preliminary Decision: Jurisdiction of the Tribunal (8
December 1998).
Lauder Ronald S. Lauder v. The Czech Republic, UNCITRAL, Final Award (3
September 2001).
Lemire Joseph Charles Lemire v. Ukraine, ICSID Case No. ARB/06/18, Award
(28 March 2011).
LG&E Award LG&E Energy Corp., LG&E Capital Corp., and LG&E International, Inc.
v. Argentine Republic, ICSID Case No. ARB/02/1, Award (25 July 2007).
LG&E, DL LG&E Energy Corp., LG&E Capital Corp., and LG&E International, Inc.
v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability
(3 October 2006).
Link-Trading Link-Trading Joint Stock Company v. Department for Customs Control of
the Republic of Moldova, UNCITRAL, Final Award (18 April 2002).
Lusitania Opinions in the Lusitania Cases, 7 R.I.A.A 32 (1 November 1923).
M.E. Cement Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of
Egypt, ICSID Case No. ARB/99/6, Award (12 April 2002).
Metalclad Metalclad Corporation v. The United Mexican States, ICSID Case
No. ARB(AF)/97/1, Award (30 August 2000).
Methanex Methanex Corp. v. United States of America, UNCITRAL, First Partial
Award (7 August 2002).
Mobil Mobil Corporation, Venezuela Holdings BV, Mobil Cerro Negro Holding,
Ltd, Mobil Venezolana de Petroleos Holdings, Inc, Mobil Cerro Negro,
Ltd, and Mobil Venezolana de Petroleos, Inc v Bolivarian Republic of
Venezuela, ICSID Case No ARB/07/27, Decision on Jurisdiction (10 June
2010).
Noble Ventures Noble Ventures, Inc. v. Romania, ICSID Case No. ARB/01/11, Award (12
October 2005).
Occidental Occidental Exploration and Production Company v. The Republic of
Ecuador, LCIA Case No. UN3467, Final Award (1 July 2004).
Pan American Pan American Energy LLC and BP Argentina Exploration Company v.
The Argentine Republic, ICSID Case No. ARB/03/13, Decision on
Preliminary Objections (27 July 2006).
Phoenix Phoenix Action Ltd v. Czech Republic, ICSID Case No. ARB/06/5, Award
(15 April 2009).

viii
Pope & Talbot Pope & Talbot Inc. v. Government of Canada, UNCITRAL, Interim
Award (26 June 2000).
PSEG Award PSEG Global, Inc., The North American Coal Corporation, and Konya
Ingin Electrik retim ve Ticaret Limited Sirketi v. Republic of Turkey,
ICSID Case No. ARB/02/5, Award (19 January 2007).
Railroad Dev. Railroad Development Corporation v. Republic of Guatemala, ICSID
Case No. ARB/07/23, Award (29 June 2012).
Roussalis Spyridon Roussalis v. Romania, ICSID Case No. ARB/06/1, Award (7
December 2011).
Rumeli Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon
HizmetleriA.S. v. Republic of Kazakhstan, ICSID Case No. ARB/05/16,
S.D. Myers S.D. Myers, Inc. v. Government of Canada, UNCITRAL, Partial Award
(13 November 2000).
S.D. Myers, 2d S.D. Myers, Inc. v. Government of Canada, UNCITRAL, Second Partial
Award (21 October 2002).
Salini v. Morocco Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco,
ICSID Case No. ARB/00/4, Decision on Jurisdiction (31 July 2001).
Saluka Saluka Investments BV (The Netherlands) v. The Czech Republic,
UNCITRAL/PCA, Partial Award (17 March 2006).
Schering Schering Corporation v. The Islamic Republic of Iran, Award No. 122-38-
3, Iran-U.S.C.T.R. 361 (1984).
SEDCO SEDCO, Inc. v. National Iranian Oil Company, 15 Iran-U.S. C.T.R. 23
(1987).
Sempra Award Sempra Energy International v. Argentine Republic, ICSID Case No.
ARB/02/16, Award (28 September 2007).
SGS v. Pakistan SGS Socit Gnrale de Surveillance S.A. v. Islamic Republic of
Pakistan, ICSID Case No. ARB/01/13, Decision of the Tribunal on
Objections to Jurisdiction (6 August 2003).
SGS v. Philippines SGS Socit Gnrale de Surveillance S.A. v. Republic of the Philippines,
ICSID Case No. ARB/02/6, Decision of the Tribunal on Objections to
Jurisdiction (29 January 2004).
Shufeldt Shufeldt Claim (U.S. v. Guatemala), Award, (24 July 1930).
Siag Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of
Egypt, ICSID Case No. ARB/05/15, Award (1 June 2009).

ix
Siemens Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8,
Award (17 January 2007).
SOABI Socit Ouest Africaine des Btons Industriels v. Senegal, ICSID Case No.
ARB/82/1, Award (25 February 1988).
Socit Gnrale Socit Gnrale In respect of DR Energy Holdings Limited and Empresa
Distribuidora de Electricidad del Este, S.A. v. Dominican Republic,
UNCITRAL, Award on Preliminary Objections to Jurisdiction (19
September 2008).
Tecmed Tcnicas Medioambientales Tecmed, S.A. v. The United Mexican
States, ICSID Case No. ARB (AF)/00/2, Award (29 May 2003).
Telenor Telenor Mobile Communications A.S. v. The Republic of Hungary,
ICSID Case No. ARB/04/15, Award (13 September 2006).
Tza Yap Shum Seor Tza Yap Shum v. The Republic of Peru, ICSID Case No. ARB/07/6,
Ulysseas Ulysseas, Inc. v. The Republic of Ecuador, UNCITRAL, Final Award (12
June 2012).
Unglaube Marion Unglaube and Reinhard Unglaube v. Republic of Costa
Rica, ICSID Case Nos. ARB/08/1 and ARB/09/20, Award (16 May
2012).
Vivendi Annulment Compai de Aguas del Aconquija S.A. and Vivendi Universal S.A. v.
Argentine Republic, ICSID Case No. ARB/97/3, Decision on Annulment
(10 August 2010).
Waste Mgmt. II Waste Management, Inc. v. United Mexican States (Number 2), ICSID
Case No. ARB(AF)/00/3, Award (30 April 2004).

INTERNATIONAL COURT CASES

Barcelona Traction Barcelona Traction, Light and Power Company, Limited (Belgium v.
Spain); 1970 I.C.J. 3 (5 February).
ELSI Elettronica Sicula Spa (ELSI) (U.S. v. It.), 1989, I.C.J. 15 (20 July).
Gabcikovo Gabcikovo-Nagymaros Project (Hungary v. Slovakia), 1997 I.C.J. Reports
7 (25 September).
Nicaragua Military and Paramilitary Activities in and Against Nicaragua (Nicar. v.
U.S.), 1986 I.C.J. 14 (27 June).

x
TREATIES

H.K.-France BIT Agreement for the Reciprocal Promotion and Protection of Investments,
Hong Kong-France, 30 November 1995.
ICSID Convention ICSID Convention, opened for signature 18 March 1965 (entered into
force on 14 October 1966), 575 U.N.T.S. 159.
Lebanon-Swiss BIT Agreement on the Promotion and Reciprocal Protection of Investments,
Lebanon-Swiss, March 2000.
NAFTA North American Free Trade Agreement, U.S.-Can.-Mex., Dec. 17, 1992,
32 I.L.M. 289 (1993).
Neth.-Venezuela BIT Agreement on Encouragement and Reciprocal Protection of Investments,
Netherlands-Venezuela, 22 October 1991.
Paris Convention Paris Convention for the Protection of Industrial Property, 1883, as
amended on September 28 1979.
Turkey-U.S. BIT Treaty Concerning the Reciprocal Encouragement and Protection of
Investments, Turkey-U.S., 3 December 1985.
U.S.-Ecuador BIT Treaty Concerning the Reciprocal Encouragement and Protection of
Investments, U.S.-Ecuador, 27 August 1993.
VCLT Vienna Convention on the Law of Treaties, opened for signature 23 May
1969 (entered into force 27 January 1980).

MISCELLANEOUS

Australia Act Trade Marks Amendment (Tobacco Plain Packaging) Act, 2011,
Commonwealth of Australia.
Colo. Model BIT Colombian 2007 Model Bilateral Investment Treaty.
German Model BIT German 2008 Model Bilateral Investment Treaty.
ILC Articles International Law Commission, Draft articles on Responsibility of States
for Internationally Wrongful Acts, with commentaries (2001).
Model Arb. Law UNCITRAL 1986 Model Law on International Commercial Arbitration,
as amended in 2006.
S.C. Res. 687 United Nations Security Council Resolution 687 (3 April, 1991).
U.K. Pub. Ord. Act Public Order Act, 1986, c. 64 (U.K.).
U.S. 2012 Model BIT United States 2012 Model Bilateral Investment Treaty.

xi
UNCITRAL Rules UNCITRAL Arbitration Rules (as revised in 2010). G.A. Res. 65/22.

xii
LIST OF ABBREVIATIONS

/ Paragraph(s)
Art(s). Article(s)
BIT Bilateral Investment Treaty
CAM Contifica Asset Management Corp.
CQ Clarifying Question
FBI Freecity Breweries Inc.
FET Fair and Equitable Treatment
HRI Human Health Research Institute
ICJ International Court of Justice
ICSID International Centre for Settlement of Investment Disputes
MAB Act Marketing of Alcoholic Beverages Act
p. / pp. Page / Pages
PCIJ Permanent Court of International Justice
PO Procedural Order
R Record
SC Statement of Claim
SD Statement of Defense

1
STATEMENT OF FACTS

1. Claimant, Contifica Asset Management Corp. (CAM or Claimant), is a company
incorporated under the laws of the State of Cronos.
1
Claimant is a member of Contifica group, a
major international conglomerate.
2
Contifica groups parent company, Contifica Enterprises plc,
is incorporated in Prosperia.
3

2. Respondent is the Republic of Ruritania (Ruritania or Respondent).
4
The State
Property Fund of Ruritania (the Fund), an independent legal entity incorporated under the laws
of Ruritania, owned Freecity Breweries Inc. (FBI), Ruritanias oldest and largest brewery, until
2008.
5
FREEBREW is an FBI brand beerits distinct flavor comes from Reyhan, a local
plant.
6
FREEBREW is sold in 0.8l bottles.
7
Other FBI brand beers, RURILITE and
HILLMAGORE STOUT, are sold in 0.5l bottles and are Reyhan-free.
8

3. Following the financial crisis, the Fund decided to sell FBI in 2008 by issuing a tender.
9

On 30 June 2008, Contifica Spirits S.p.A. (Contifica Spirits), a wholly-owned subsidiary of
Contifica Enterprises plc, won the tender.
10
That same day, Contifica Spirits and the Fund
entered into a share purchase agreement (the Agreement) providing for the acquisition of all
shares in FBI for US$300,000,000.
11
The Agreement provides that any disputes arising out of it
will be decided under the Rules of Arbitration of the International Chamber of Commerce.
12

4. On 17 March 2010, two months after the New Way party, known for its public stance
against irresponsible drinking, won a majority of seats in Ruritanian parliament, Contifica Spirits
transferred its shares in FBI to Claimant.
13
That same day, Claimant acquired rights to the

1
SC, 1.
2
SC, 4.
3
SC, 4.
4
SC, 1.
5
SC, 3, 5.
6
SC, 5.
7
SC, 5.
8
SC, 5, 9.
9
SC, 6.
10
SC, 7.
11
SC, 7.
12
SD, 12.
13
SC, 9; SD, 6.

2
principal intellectual property used by FBIincluding the 0.8l FREEBREW bottleby way of
assignment of the respective registrations.
14
Claimant received these assets, worth
US$300,000,000, for a mere US$5,000.
15

5. On 20 November 2010, Ruritanias parliament adopted the Regulation of Sale and
Marketing of Alcoholic Beverages Act (MAB Act).
16
The act restricts certain alcohol
marketing and sale practices,
17
requires that all text on alcohol labels share the same color and
font,
18
and prohibits selling alcohol in containers over 0.5l.
19
The act applies to all alcohol
brands.
20

6. On 15 June 2011, Ruritanias Human Health Research Institute (HRI) released the
results of a ten-year study indicating that consumers of products containing
Methyldioxidebenzovat, an active chemical ingredient found in Reyhan concentrate, have a
higher risk of cardiac complications.
21

7. On 30 June, 2011, the Ministry of Health and Social Security (Ministry) adopted an
ordinance requiring products containing Reyhan to be labeled with a warning that consumption
of such products may lead to higher risk of cardiac complications.
22
The requirement was
equally applicable to all Reyhan-containing products, including bread, meat products, and soft
drinks.
23

8. On 20 August 2011, FBI wrote to the Ministry arguing that HRIs study had a number
of flaws.
24
A statement by a scientist selected and paid by Claimant accompanied the letter.
25

14
SC, 9.
15
SC, 7.
16
SC, 10.
17
SC, 11.
18
SC, 11.
19
SC, 12.
20
SD, 16.
21
SC, 14.
22
SC, 15
23
SD, 15.
24
SC, 17.
25
SD, 15.

3
The statement criticized the technical details of HRIs study, but did not offer any evidence that
Reyhan does not pose cardiac health risks.
26

9. On 1 December 2011, the Prosecutors Office of Ruritania began investigating Messrs.
Goodfellow and Straw, FBI and Contifica Group executives, on information that they had helped
Contifica Spirits acquire its shares in FBI through bribery.
27
On 19 December 2011, the
executives were notified of the proceedings against them and the possibility of future
interrogations.
28

10. On 23 December 2011, Messrs. Goodfellow and Straw were detained at the airport
when they were trying to leave Ruritania for Prosperia.
29
Free TV broadcasted a video of the
detention.
30
The reason for the detention, expressed by a spokesman for the Prosecutors Office,
was that Ruritanias law enforcement agencies did not want to let people responsible for
corruption escape investigation.
31

11. The executives were released on 3 January 2012.
32
They were not physically abused or
harmed during their arrest and detention.
33
In June 2012, the investigation was terminated due to
insufficient evidence.
34

12. In December 2011, Claimant informed Respondent that its measures allegedly violated
certain provisions of the Treaty of Mutual Promotion and Protection of Foreign Investment
between The Republic of Ruritania and the State of Cronos (the BIT).
35

26
SD, 15.
27
SC, 22.
28
SC, 22.
29
SC, 23.
30
SC, 24.
31
SC, 24.
32
SC, 25.
33
PO 2, CQ 22.
34
SC, 25.
35
SC, 27.

4
13. BIT Article 8 provides that disputes arising under the BIT will be resolved by
arbitration under the UNCITRAL Rules administered by the German Institution for Arbitration.
36

14. Claimant seeks damages totaling US$380,000,000the figure includes the loss of
sales of various other Contifica Group companies.
37
Additionally, Claimant seeks
US$1,000,000 under BIT Article 2 for the moral damages caused to Messrs. Goodfellow and
Straw.
38

36
SC, 26.
37
SC, 30.
38
SC, 32.

5
ARGUMENTS

PART ONE: JURISDICTION AND ADMISSIBILITY

I. THE TRIBUNAL LACKS JURISDICTION UNDER THE BIT OVER THE SUBMITTED CLAIMS,
AND THOSE CLAIMS ARE NOT ADMISSIBLE IN LIGHT OF THE FACTS SURROUNDING
CLAIMANTS ACQUISITION OF SHARES IN FBI.

15. Claimant submits that (A) the Tribunal lacks jurisdiction under the BIT over the
submitted claims. Furthermore, (B) the claims are inadmissible.

A. The Tribunal lacks jurisdiction under the BIT over the submitted claims.

16. Under the BIT, the Tribunal has jurisdiction to hear only disputes concerning
Investments between a Contracting State and an Investor of the other Contracting State.
39
Here,
(i) Claimant has not made an Investment, (ii) Claimant is not an Investor of the other Contracting
State, and (iii) the dispute does not concern an Investment under the BIT. Therefore, the
Tribunal lacks jurisdiction under the BIT.

i. Claimants alleged shareholding in FBI is not an investment within the
meaning of the BIT.

17. Under BIT Article 8.1, only disputes concerning an Investment may be submitted to
arbitration.
40
BIT Article 1.1, defines the term Investment as an asset that is directly or
indirectly invested in accordance with the laws and regulations of the host state by Investors of
the other Contracting State. Claimant has neither invested nor invested in accordance with the
laws and regulations of Ruritania.
18. First, Claimant has not made an actual investment in FBI. The BIT does not define the
word invested. It should therefore be interpreted in accordance with its ordinary meaning,
the context of the BIT, and in light of the BITs object and purpose, pursuant to VCLT Article
31.
41
The ordinary meaning of invest is to put (money) into financial schemes, shares,
property, or a commercial venture with the expectation of achieving a profit.
42
Here, Claimant

39
BIT, Art. 8.1.
40
BIT, Art. 8.1.
41
VCLT, Art. 31.1.
42
OED.

6
has not put money or any other consideration in FBI that would entitle it to reap the full return on
the investment at a future date. Instead, Contifica Spirits, which invested US$300,000,000 in
FBIs shares, appears to be the proper beneficiary of the expected profit arising from the
investment. The BIT Preamble provides that an objective of signing the BIT was to intensify
economic co-operation . . . with a view to stimulate private enterprise. Here, Claimants
purported acquisition of FBIs shares did not stimulate private enterprise: the true economic
substance of Contifica Groups corporate arrangement remained the same even after the
purported transfer of the shares; only a nominal amount of US$5,000 changed hands. The
tribunal in Caratube found that the payment of a nominal price by a purported investor suggests
that an investment was not an economic arrangement, is not covered by the term investment as
used in the BIT, and thus is an arrangement not protected by the BIT.
43
Because Claimant never
invested in FBIs shares, it has not made an actual investment.
19. Second, because Claimants alleged investment in the FBI shares was not made in good
faith, it failed to be in accordance with laws and regulations of the host state as required by
BIT Article 1.1.
44
In light of VCLT Article 31, the reference to the host states domestic law in
the BITs definition of an investment should be read to require investments to be legal under
domestic law.
45
Kriebaum and Schreuer specifically note that if the investment subject to such
provision consists of the acquisition of shares in a company, as is the case here, the investment
will only exist if the purchase of the shares is valid under applicable domestic law.
46
Therefore,
Ruritanian law governs the validity of the purchase.
20. The principle of good faith is part of every domestic civil law and common law
system.
47
It has been equally ubiquitous in the international arena, often referred to by the PCIJ,
the ICJ, and arbitral tribunals, and has therefore been recognized as a general principle of
international law or as a rule of customary international law.
48
VCLT Article 26 mandates that
treaty parties perform treaties in good faith.

43
Caratube, 435.
44
BIT, Art. 1.1.
45
Kriebaum, p.4.
46
Kriebaum, p.4.
47
See Byers, pp.392-97.
48
See de Brabandere, p.619.

7
21. Claimant failed to meet the requirement that an investment be in accordance with laws
and regulations of the host state because it purchased FBIs shares in bad faith. In June 2008,
eighteen months before the New Way Party assumed power, Contifica Spirits, which is not
registered in Cronos, acquired FBIs shares. Two months after the New Way Partywell-known
for its much-publicized stance against irresponsible drinkingassumed power, Contifica Spirits
transferred its shares to the Cronos-registered Claimant, to take advantage of the BIT. While
treaty shopping is not outlawed per se, tribunals have set clear limits to the practice, granting
jurisdiction to cases involving prospective nationality planning while denying jurisdiction to
claims seeking remedies for past grievances.
49
It is not prospective if corporate arrangements
are made after the facts leading to the dispute have occurred,
50
as is the case here. Therefore, the
facts that led to the present dispute had already occurred at the time of the FBI share transfer,
even though the MAB Act and Reyhan ordinance were not implemented until later.
22. Further, the FBI share transfer lacked any legitimate economic or strategic reason other
than the sole purpose of gaining access to the BIT for an already existing dispute. Claimant
alleges tax motives for the FBI transfer, but a close reading of Claimants Memorandum shows
that the Contifica Group managements decision to transfer FBIs shares to Claimant depended
solely on the BIT.
51
Transferring the shares would enable Claimant to instigate this suit in an
expedient manner.
52
By contrast, other jurisdictions were ruled out either because they lacked
investment treaties with Respondent or because no Contifica Group member was incorporated
there. Tax consequences had no influence on Claimants acquisition of FBIs shares. Thus,
Contifica Spirits transfer of FBI shares to Claimant is an abuse of a treaty shopping opportunity
that aims to create jurisdiction where it should not exist.
ii. The Tribunal lacks jurisdiction because Claimant fails to satisfy the BITs
nationality requirement.

23. BIT Article 8.1 imposes a nationality requirement: a dispute arbitrated under the BIT
must be between a Contracting State and an Investor of the other Contracting State.
53
BIT Article
1.3 defines the term "Investor" as any entity established in accordance with, and recognised as a

49
See Mobil, 189-190, 204-06; Phoenix, 94-95, and Cementownia, 154-57; Dolzer & Schreuer, p.55.
50
See Mobil, 189-190, 204-06; Phoenix, 94-95, and Cementownia, 154-57; Dolzer & Schreuer, p.55.
51
See Exhibit RX1, R.24; PO 3, R.34.
52
Exhibit RX1, R.24; PO 3, R.34.
53
Exhibit RX1, R.24; PO 3, R.34.

8
legal person by the law of the home state that is the owner, possessor or shareholder of an
Investment in the host state.
54
Claimant is not an Investor within the meaning of the BIT
because it is not a real shareholder of FBI. Rather, Prosperia-based Contifica Enterprises is FBIs
true owner.
24. Respondent requests that the Tribunal look to the nationality of Contifica Enterprises,
which controls Claimant, and not the nationality of Claimant, which is a mere asset management
subsidiary. Recent decisions have prescribed looking through holding companies to find the
beneficial owner or true controller of an investment, for the purposes of determining nationality
to establish jurisdiction. For example, in Waste Management II, the NAFTA tribunal held that
the nationality of the beneficial ownership of the company that suffered damages, rather than
the companys nationality, was relevant in determining whether the claimant met the nationality
requirement.
55
Tribunals have also looked through a second layer of shareholders to determine if
the true controller of a company meets the nationality requirement. The SOABI tribunal looked at
the nationality of the majority shareholders of the claimants company, rather than the
companys own nationality, to determine whether it had jurisdiction.
56

25. In contrast, the Amco decision has been interpreted as suggesting that tribunals should
only look to the first layer of ownership to determine control.
57
Amco, however, involved an
American company that had substantial operations in its country of incorporation, whereas the
companies in Waste Management II and SOABI were mere holding companies.
58
Commentators
have noted that these facts suggest that investorstate tribunals will look through holding
companies to determine control, but will not look through companies actively pursuing business
in the jurisdiction in which they are incorporated.
59
In 2003, Contifica Enterprises acquired a
100% stake in Claimant, formerly called Business Holding XVII Corp., and changed its name to
CAM.
60
The Tribunal should look beyond Claimant, a holding company with no substance, to

54
Exhibit RX1, R.24; PO 3, R.34.; R.9, Art. 1.1.
55
Waste Mgmt. II, 80.
56
Wisner, p. 934(discussing SOABI, p.190).
57
Wisner p. 935 (discussing SOABI, p.190, Dissent, 77).
58
Wisner, pp.938-39.
59
Wisner, pp.938-39.
60
PO 3, CQ 24, 20.

9
the nationality of the true shareholderProsperia-based Contifica Enterprisesto determine that
Claimant may not rely on the BIT.
26. Finally, the object and purpose of the BIT was to encourage investment.
61
Where it is
clear that a transaction at issue had no relevance to the investment decision, the BIT should not
be used as a free insurance policy to provide protection against risk. Treaties are negotiated and
designed to reflect and impact real economic relationships between states, not to provide blanket
protections to any firm irrespective of its true nationality.
iii. The dispute arising from Respondents regulatory measures does not
concern an investment under the BIT.

27. BIT Article 8.1 allows [d]isputes concerning Investments to be submitted to
international arbitration.
62
The ordinary meaning of concern is to relate to.
63
Tribunals have
construed the phrase concerning investments narrowly, especially when it involves disputes
concerning changes in host state regulations. In Methanex, the tribunal held that the phrase
relating to in Article 1101 of NAFTA must be interpreted as requiring a legally significant
connection between the measure and the investor or the investment, because [t]he possible
consequences of human conduct are infinite, especially when comprising acts of governmental
agencies.
64
Merely affecting the investor or investment is insufficient; the tribunal required a
demonstrated intent to harm the investment or the investor, holding that decrees and regulations
may be the product of compromises and the balancing of competing interests by a variety of
political actors.
65

28. Respondents MAB Act and the Reyhan ordinance were not concerned with Claimants
investments, and did not intend to harm these investments. The MAB Act is a product of
compromises and the balancing of competing interests of Ruritanias parliamentarians, over half
of whom voted for the Act.
66
The Act imposed numerous restrictions aimed at curbing
alcoholism and youth exposure to alcohol, while still allowing for responsible drinking.

61
BIT, Preamble.
62
BIT, Art. 8.1.
63
OED.
64
Methanex, 137-39.
65
Methanex, 8, Verhoosel, p.502.
66
PO2, at p.34.

10
Meanwhile, the Reyhan ordinance was an effective response to a study that found that Reyhan
may pose certain health risksthe ordinance, which applied to all products containing Reyhan,
balanced the need to inform consumers of risks with giving them the autonomy to consume
Reyhan. Respondents measures may have affected Claimant, but did not concern or relate to
Claimants investment.
67
Given the lack of a legally significant connection between these
regulatory measures and Claimants investment, this case does not concern an investment under
the BIT and the Tribunal lacks jurisdiction.
B. Even if the Tribunal has jurisdiction over the submitted claims, those claims are
inadmissible because they constitute an abuse of process.

29. Article 19 of the UNCITRAL Rules states that unless the parties agree on the procedure
to be followed by the arbitral tribunal in conducting the proceedings,
the arbitral tribunal may, . . . conduct the arbitration in such
manner as it considers appropriate. The power conferred upon the
arbitral tribunal includes the power to determine the admissibility,
relevance, materiality and weight of any evidence.
68

Thus, the UNCITRAL Rules empower tribunals to use discretion in designing procedure. The
Explanatory Note accompanying these Rules emphasizes that the discretion of arbitral tribunals
is important in that it enables tribunals to tailor the conduct of the proceedings to the specific
features of the case without being hindered by any restraint . . . from traditional local law.
69
At
least one other tribunal has acknowledged that both jurisdiction and admissibility objections may
be dealt with during the preliminary phase of arbitration proceedings.
70
In that case, the tribunal
stated that it could dismiss a claim at the outset as a question of admissibility if it were
abundantly clear that the claimant could not prove the merits of such claim.
71

30. As submitted in Section I.A(i) above, because Claimants acquisition of FBI shares
constitutes an abuse of process, Respondent requests that the Tribunal address the question of
admissibility during the preliminary stage of the proceedings and find that the claims are
inadmissible.

67
See Methanex, 8, Apotex, 272-73.
68
UNCITRAL Rules, Art. 19.
69
Explanatory Note by the UNCITRAL secretariat, Model Arb. Law, 35.
70
See, e.g., Socit Gnrale, 60.
71
Socit Gnrale, 60.

11
II. THE TRIBUNAL LACKS JURISDICTION OVER SUBMITTED CLAIMS BASED ON THE
ALLEGED BREACH OF THE SHARE PURCHASE AGREEMENT BY THE STATE PROPERTY
FUND OF RURITANIA. EVEN IF IT HAD JURISDICTION, THOSE CLAIMS ARE
INADMISSIBLE.

31. On 30 June 2008, the Fund, a legal entity separate from the State of Ruritania, entered
into the Agreement with Contifica Spirits.
72
Claimant now asks this Tribunal to find that
Respondent breached this Agreement. Such a claim, however, is beyond the scope of the BITs
dispute resolution clause.
73
The Agreement represents a commercial transaction between two
partiesneither of which was Respondent. As such, Respondent submits that (A) the Tribunal
does not have jurisdiction over any claims alleging a breach of the Agreement. Without prejudice
to that argument, even if the Tribunal finds it has jurisdiction, (B) such claims are inadmissible
due to the mandatory dispute resolution clause of the Agreement.

A. The Tribunal lacks jurisdiction over the submitted claims based on the alleged
breach of the Agreement by the Fund.

32. BIT Article 8.1 limits the Tribunals jurisdiction to Disputes concerning Investments
between a Contracting State and an Investor of the other Contracting State under this Treaty.
74

Claimant suggests that BIT Article 6.2 satisfies the requirement that the dispute arise under the
Treaty. However, (i) Article 6.2 should not be read as an expansive umbrella clause that elevates
any breach of contract claim into a breach of treaty claim. Without prejudice to that argument,
even if the Tribunal read Article 6.2 so expansively, (ii) the actions of the Fund cannot be
attributed to Respondent. Therefore, no dispute over the Agreement exists between Claimant, an
Investor, and Respondent, a Contracting State, for the Tribunal to consider.

72
SC, 2, 6-7.
73
BIT, Art. 8.1.
74
BIT, Art. 8.1.

12
i. The scope of BIT Article 6.2 does not cover an alleged breach of a
commercial contract by Respondent.

33. BIT Article 6.2 states:

Each Contracting State shall fulfill any other obligations it may
have entered into with an Investor or an Investment of an Investor
of the other Contracting State.
75

Respondent invites the Tribunal, in interpreting the clause, to consider VCLT Article 31both
in accordance with the ordinary meaning to be given to the terms of the treaty in their context
and in the light of its object and purpose.
76

34. A plain reading of the text suggests that this clause concerns direct agreements between
a Contracting State and Investors regarding their Investments. Notably, the use of the term
Contracting State suggests a reference to Respondent acting in its sovereign capacity. A state
clearly makes treaty commitments through its capacity as a state, disconnected from any
commercial obligations it may have. Because this clause is situated within a BIT, it implies that
obligations refers to a Contracting States specific guarantees to an investor in order to secure
its investment, such as promising to build necessary infrastructure providing a specific tax
incentive.

35. Reading Article 6.2 in light of the BITs object and purpose also supports narrowing it
to obligations entered into by the Government of Ruritania acting in its sovereign capacity to
promote investment. While the BIT Preamble indicates its intention to create favourable
conditions for Investments by Investors, this statement should not be construed to ensure that
contract disputes between state-owned entities and foreign investors are always settled in favor
of the investor.
77
Holding as such could discourage privatization, which would work against
another purpose of the BITto stimulate private enterprise.
78

75
BIT, Art. 2.2.
76
VCLT, Art. 31; Noble Ventures, 50.
77
BIT, Preamble; El Paso, DJ, 70.
78
Eureko Dissent, 11; BIT, Preamble.

13
36. The history of umbrella clauses also supports interpreting them as only extending to the
obligations entered into by states qua sovereigns. Thomas Wlde explains that the drafters of the
original umbrella clauses assumed [it] as evident that the State conduct targeted by the clause
had to be qualified as governmental.
79
They did not address its application to contracts
completed by states in a commercial context because it did not occur to them that anyone would
argue for this application.
80
Nothing suggests that they intended to create a treaty-based forum
for adjudicating all contractual disputes between State entities and foreigners.
81

37. At issue for these original framers were large, long-term, investment-backed, semi-
public concession contracts, where the state had the power to change the contractual
relationship through an exercise of its sovereign authority.
82
Clauses like Article 6.2 were
designed to protect investors from actions by contracting states that an ordinary party could not
take. The Impregilo tribunal recognized this interpretation, and Respondent requests that the
Tribunal follow suit.
83
It then follows that Article 6.2 does not apply because the breach in
questionfailure to disclose information in violation of a contractual warrantyis an action that
any commercial entity could take.

38. Moreover, it is unclear that the Contracting States intended the BIT to have the effect of
elevating all contract claims into treaty claims. International law firmly recognizes that per se a
breach of a contract by the State does not give rise to direct international responsibility on the
part of the State.
84
While states are able to contradict this principle through treaties, they must
indicate a clear intention to do so.
85
At minimum, the language of Article 6.2 supports an
interpretation of the clause as intending to cover only obligations entered into by the State acting
in its sovereign capacity. The clauses ambiguity should therefore negate any assertion that the
Contracting States clearly intended to rebut this well-established principle of international law.
Tribunals in Impregilo and SGS v. Pakistan reached a similar conclusion.
86

79
Wlde, p.205.
80
Wlde, p.205.
81
Wlde, p.205.
82
Wlde, p.205; Brower (cited in OECD 2008, p.105).
83
Impregilo, 260, 266, 278.
84
SGS v. Pakistan, 167. See also Noble Ventures, 53, 55; Restatement, 712.
85
Noble Ventures, 53; ELSI, p.42.
86
SGS v. Pakistan; Impregilo, 189.

14

39. Even tribunals finding jurisdiction over contractual claims on the basis of umbrella
clauses recognize that their interpretation must have some limit despite their apparent
breadth.
87
For example, the tribunal in El Paso held that the umbrella clause of the Argentina-
U.S. BIT only covered obligations entered into by the State as sovereign, not those entered into
by the State as merchant.
88
It based this approach on similar assertions by other tribunals, such
as Joy Mining Machinery and the annulment committees decision in Vivendi, which made a
well-known distinction between contractual claims and treaty claims.
89
The El Paso tribunal also
found support in the 2012 U.S. Model BIT, which explicitly limited claims that could be
arbitrated before an international tribunal to those arising from a breach of an investment
agreement.
90

40. Tribunals have grounded narrow interpretations of umbrella clauses in considerations
of contracting parties intent, amplified by general uneasiness with the negative implications of
giving these clauses a broad interpretation.
91
In SGS v. Pakistan, the tribunal expressed serious
concerns about elevating alleged breaches of an unlimited number of State contracts into
alleged breaches of a treaty to be heard before an international tribunal.
92
It also pointed out that
it would render dispute resolution clauses in State contracts binding on the State only, while
giving the investor the option to pursue claims before an international tribunal if so desired.
93

Most importantly, because the texts of these clauses do not limit themselves to contractual
obligations, tribunals have warned that this would mean all municipal law commitments must
necessarily be . . . internationalized, and that the division between the national legal order
and the international legal order [would be] completely blurred.
94
As a result, Respondent urges
the Tribunal to follow the lead of these tribunals and place some limiting principle on the
interpretation of an umbrella clause.

87
Noble Ventures, 61.
88
El Paso, DJ, 79-81. See Consortium, 69; Joy Mining, 78.
89
El Paso, DJ, 79; Joy Mining, 72; Vivendi Annulment, 96.
90
El Paso, DJ, 80; 2012 U.S. Model BIT, Art. 24.1(a).
91
SGS v. Pakistan, 167-74; El Paso, DJ, 72-74; Pan American, 101-03, 110; CMS, 299.
92
SGS v. Pakistan, 168.
93
SGS v. Pakistan, 168.
94
El Paso, DJ, 77.

15
41. In sum, Respondent submits that the Tribunal should limit Article 6.2 to cover only
additional investment protections contractually agreed on by the State as sovereign . . . inserted
in an investment agreement.
95
To expand the clause to cover all commercial contracts entered
into by the State or a State-owned entity would extend it well beyond the contours of what
Respondent and Cronos agreed to resolve by arbitration.

ii. Without prejudice to the argument in II.A.i., the Tribunal lacks jurisdiction
because the Fund is a separate legal entity with its own legal personality
whose actions cannot be attributed to Respondent.

42. Even if the Tribunal takes an expansive view of Article 6.2, the clause is irrelevant to
this proceeding because the Fund is a separate legal entity whose actions cannot be attributed to
Ruritania. The BITs dispute resolution clause explicitly refers to disputes between a
Contracting State and an Investor.
96
However, the claim regarding the Agreement is a dispute
between Claimant and the Fund, which has a distinct legal personality from Respondent. The
BIT does not address attribution and does not clarify whether its use of the term State
encompasses state entities. As a result, Claimant invites the Tribunal to first interpret the treaty
in line with VCLT Article 31 and then supplement that interpretation with a consideration of
international law principles of attribution.

43. The ordinary meaning of the term Contracting State, within the BITs context,
suggests that it only refers to the national government and its executive bodies. Although the BIT
does not define this term, it introduces it in the preamble, which mentions The Government of
the Republic of Ruritania. Furthermore, BIT Article 1.3 treats a state entity as an Investor so
long as it is established in accordance with and recognized as a legal person by the law of that
Contracting State.
97
If the contracting parties intended for state entities to be considered in the
definition of Contracting State, they could have made it apparent.

95
El Paso, DJ, 81.
96
BIT, Art. 8.1.
97
BIT, Art. 1.3(b).

16
44. Customary international law on the rules of attribution and the ILC Draft Articles on
State Responsibility (ILC Articles) support such an interpretation. Tribunals commonly
consider these sources of law, as, for example, in Noble Ventures.
98

45. In principle, actions of state entities are not attributed to the state.
99
Thus Respondent
submits that this issue could be resolved with the finding that the Fund is a separate legal entity.
International law recognizes the general separateness of corporate entities at the national level
and is only inclined to pierce the corporate veil if it is a mere device or a vehicle for fraud or
evasion.
100
Claimant must rebut the presumption that a state is not ordinarily responsible for the
actions of a state entity with strong evidence to the contraryevidence that simply does not exist
in this case.
101
The Impregilo tribunal easily found that a contract concluded with the Pakistan
Water and Power Development Authority was not a contract with Pakistan because it was a
separate entity with a separate legal personality.
102
It did not even entertain whether its actions
could be attributed to Pakistan by inquiring if it exercised governmental authority or was under
government control. The Fund is a fully autonomous entity established to carry out commercial
activities based on its own financial standingRespondent has no liability for its debts.
103

Therefore, Respondent is not liable for any alleged breach of contract by the Fund.

46. Additionally, the Funds actions are not attributable to Ruritania under an analysis
based on the ILC Articles. As established above, the Fund is not an organ of the state, so its
actions are not attributable under ILC Article 4.
104
Although commentators suggest that state
entities should only be covered under ILC Article 8, and not ILC Article 5,
105
the Fund was not
empowered by the law of [Ruritania] to exercise elements of the governmental authority, so its
actions are not attributable under ILC Article 5.
106
The Commentary on ILC Article 5 states that
state entities conduct should concern governmental activity and not other private or

98
Noble Ventures, 69; Dolzer & Schreuer, p.199.
99
Dolzer & Schreuer, p.198.
100
ILC Articles, p. 48, 6; Barcelona Traction, 56-58; Schering, 370, 379-80.
101
Perera, p.525.
102
Impregilo, 223.
103
SD, 11.
104
ILC Articles, Art. 4.
105
Crawford, 213, pp.21-22.
106

17
commercial activity in which the entity may engage.
107
Tribunals have thus found it important
to consider the function of state-affiliated entities.
108
Only if that function is one traditionally
reserved for governmental authorities can an entitys actions be attributed to the state.
109

47. The Fund was not exercising elements of governmental authority. It owned FBI and
managed it as a successful and profit-generating asset.
110
Its operation of FBI was thus a
commercial activity, not properly attributable to the state under ILC Article 5. Owning and
managing a brewery are not functions traditionally reserved for government. Breweries around
the world are run as commercial entities. Additionally, the alleged action at hand, breach of a
contractual warranty in a contract, is purely of a commercial nature.

48. Finally, the Funds actions are not attributable to Ruritania under ILC Article 8 because
it was not acting on the instructions of, or under the direction or control of [Ruritania].
111
In
interpreting this Article in the Nicaragua case, the ICJ held that planning, direction, and support
were not sufficient to attribute the actions of the contras to the United States.
112
Thus, a high
threshold was set for establishing control under Article 8. Moreover, the ILC Commentary
suggests that Article 8 is not appropriate to apply to corporate entities even if they are owned by
and in that sense subject to the control of the State.
113
Their actions are only considered
attributable when they are exercising elements of governmental authority within the meaning of
[Article 5].
114
The Iran-U.S. Claims Tribunal supported this approach in SEDCO.
115

49. In conclusion, the Fund does not have the status, function, or control required for its
actions to be attributed to Respondent.
116
The fact that HRI, a government-funded institution,
investigated the harmful effects of FBIs products when they were still Fund-owned indicates

107
ILC Articles, p.43, 5.
108
Salini v. Morocco; C.S.O.B., 24-27.
109
Salini v. Morocco; C.S.O.B., 24-27.
110
SC, 5-6.
111
112
Nicaragua, 86; ILC Articles, p.47, 4.
113
114
115
SEDCO, p.23.
116
Dolzer & Schreuer, p.204.

18
that the Fund was not part of one monolithic entity that can be called the State.
117
The Tribunal
therefore does not have jurisdiction over claims based on the Agreement.

B. Without prejudice to the argument in II.A., the submitted claims are
inadmissible because the Tribunal should respect the forum selection clause of
the Share Purchase Agreement.

50. As submitted in I.B., this Tribunal has the authority to make determinations of
admissibility. Respondent submits that Claimants allegations of breach of the Agreement are not
admissible, since the Agreement explicitly states how such a dispute should be resolved. Article
14.2 of the Agreement provides that:
All disputes arising out of or in connection with the present
Agreement shall be finally settled under the Rules of Arbitration of
the International Chamber of Commerce by three arbitrators
appointed in accordance with the said Rules seated in Geneva.
118

The use of shall demonstrates that this forum is the exclusive one for settling disputes arising
out of the Agreement. The tribunal in SGS v. Philippines, while holding that the umbrella clause
expanded the tribunals jurisdiction to cover a contractual claim, asserted that an exclusive forum
selection clause rendered the contractual claim inadmissible.
119
It reasoned that a tribunal should
not, unless clearly expressed to do so, override specific and exclusive dispute settlement
arrangements made in the investment contract itself, as holding otherwise would prevent
investors from ever being bound by an exclusive forum selection clause.
120
Respondent
emphasizes that this tribunal, widely cited for its expansive interpretation of umbrella clauses,
ultimately deferred to the forum selection clause of the contract at issue.

51. Although several ICSID tribunals have held that an exclusive jurisdiction clause in a
contract did not prevent them from hearing a claim, their arguments at least partially rely on
Article 26 of the ICSID Convention,
121
which requires that consent to arbitrate under the
Convention be to the exclusion of any other remedy.
122
Since the Convention is not implicated

117
SC, 14.
118
Exhibit 2, R.18, Art. 14.2.
119
SGS v. Philippines, 134.
120
121
Lanco, 39-40; Gill, p.401.
122
ICSID Convention, Art. 26.

19
here, ICSID tribunal decisions are not relevant to this Tribunals assessment. Additionally, the
oft-cited Vivendi annulment decision, which criticized the ruling tribunal for adhering to a
concession contracts forum selection clause, dealt with a claim that went well beyond the
contract at issue.
123
The claimant in Vivendi was not basing jurisdiction over a purely contractual
claim on an umbrella clause, but rather the fair and equitable treatment provision of the France-
Argentina BIT.
124

52. Respondent requests that the Tribunal apply the reasoning of SGS v. Philippines, as the
two considerations given by that tribunal for respecting the exclusive forum selection clause
apply here as well.
125
First, BIT Article 6.2 is a general provision and was not concluded with
any specific investment or contract in view.
126
Thus the Tribunal should not give precedence to
a general provision where it would override specific provisions of particular contracts, freely
negotiated between the parties.
127

53. Second, the Tribunal should bear in mind that the BIT is a framework, intended by the
States Parties to support and supplement, not to override or replace, [their] actually negotiated
investment arrangements.
128

54. Finally, the Tribunal must recall that Contifica Spirits freely negotiated the Agreement
and agreed to its dispute resolution clause after the BIT came into force. Had Contifica Spirits
wanted to bring disputes under the Agreement before this Tribunal, it would not have signed
onto the clause stating that all disputes arising in connection with the Agreement shall be finally
settled under the Agreements own procedures.

55. Thus, Respondent requests that the Tribunal dismiss the submitted claims as
inadmissible on the grounds that the Agreements forum selection clause is exclusive and
binding and any dispute arising under the Agreement must be settled through that mechanism.

123
Vivendi Annulment, 101; Gill, p.402.
124
Vivendi Annulment, 101; Gill, p.402.
125
126
127
SGS v. Philippines, 141; Schreuer, p.362.
128

20
PART TWO: MERITS

III. RESPONDENT HAS ACCORDED CLAIMANTS INVESTMENTS FAIR AND EQUITABLE
TREATMENT.

56. BIT Article 2.1(b) states that each Contracting State shall in every case accord
Investments by Investors of the other Contracting State fair and equitable treatment, or FET.
According to one tribunal, the threshold for finding a violation of the FET standard is a high
one.
129

57. Without prejudice to arguments above, Respondent submits that it did not violate the
FET standard, asserting that (A) the standard should be interpreted with reference to customary
international law; and that Respondent (B) did not violate Claimants legitimate and reasonable
expectations, (C) followed due process of law, and (D) did not act in an arbitrary or
discriminatory manner.

A. The FET clause should be interpreted with reference to customary international
law.

58. While Article 2.1(b) does not explicitly refer to international law, multiple tribunals
have found that the autonomous FET standard is not materially different from the minimum
standard of treatment in customary international law.
130
In Deutsche Bank AG and Biwater Gauff,
faced with a nearly identical clause as here, the tribunals adopted the standard of Waste Mgmt.
II,
131
which prohibits conduct that is:
arbitrary, grossly unfair, unjust or idiosyncratic, is discriminatory
and exposes the claimant to . . . prejudice, or involves a lack of due
process leading to an outcome which offends judicial propriety
as might be the case with a manifest failure of natural justice in
judicial proceedings or a complete lack of transparency and candor
in an administrative process.
132

129
Biwater Gauff, 597.
130
Deutsche Bank, 419; CMS, 284; Saluka, 291; Azurix, 361; Occidental, 190; Biwater Gauff, 592; El Paso,
336; Rumeli, 611.
131
Deutsche Bank, 420; Biwater Gauff, 599.
132
Waste Mgmt. II, 98.

21
The Tribunal should interpret the FET clause to protect only gross and offensive conduct, as
required by customary international law. Whatever the Tribunals interpretation of the FET
standard, however, Respondent accorded Claimants investment fair and equitable treatment.

B. Respondent did not violate Claimants legitimate or reasonable expectations.

59. Tribunals have concluded that the FET standard protects only legitimate or reasonable
expectations, which an investor relied upon in making an investment.
133
In assessing this, the
Tribunal must take into account all circumstances: the facts surrounding the investment and the
host states political, socioeconomic, cultural, and historical conditions.
134
Due regard should be
paid to the states power to regulate its economic life in the public interest,
135
which
Respondent exercised here.

60. Any expectations Claimant had based solely on Respondents regulatory framework
prior to its investment are neither legitimate nor reasonable. An investor may only rely on
specific promises or representations made by the state, and not on the BIT as an insurance
policy against the risk of any changes in the states regulatory framework.
136
Because
Respondent made no specific promises or representations about the regulation of alcohol,
Claimant could not have legitimately or reasonably expected an immutable regulatory
framework.

61. Furthermore, alcohol is a heavily-regulated product throughout the world that poses
commonly known risks. At the time Claimant invested in FBI, Claimant must have anticipated
the potential for change in Respondents regulatory scheme as information about alcohol abuse
and social values change. Expectations to the contrary fail to acknowledge the reality of alcohol
regulation. Claimant could have legitimately expected to be able to produce and sell beer, as it
still does, but could not have legitimately expected to do so unregulated.

133
Deutsche Bank, 420; Saluka, 302; Biwater Gauff, 602.
134
Duke Energy, 340.
135
EDF, 219.
136
EDF, 217, relied upon in Ulysseas, 249; see also PSEG, 241; Continental Casualty, 260-61.

22
62. The BIT does not protect any expectations Claimant had about Reyhan, because in
warranting that FREEBREW did not pose greater risks than other beers the Fund did not act
differently from a normal contracting party.
137
The BIT does not protect mere contractual
expectations, but only expectations created by Respondent qua sovereign.
138
Furthermore, the
warranty in the Agreement is not a valid basis for expectations about regulation, as the Fund only
warranted that to the best of its knowledge at the time of contracting, FBIs products did not
pose any abnormal risks.
139
It did not guarantee ad infinitum that no new information regarding
FBIs products would emerge.

C. Respondent has acted with due process in taking every measure that has affected
Claimants investments.

63. Respondent has not acted in any way that offends judicial propriety.
140
Ruritanias
parliament enacted the MAB Act and the record suggests no impropriety in this enactment. In
adopting the Reyhan ordinance, the Ministry of Health and Social Security did not act with a
complete lack of transparency and candor.
141
The Ministry fully disclosed the grounds for its
decision to Claimant shortly after adopting the rule.
142
Given the short time frame within which
the Ministry acted to protect the public from risks associated with Reyhan, Claimant received the
report on which the ordinance was based within a reasonable amount of timeless than a
month.
143
Claimant highlights that the Ministry denied Claimants request to lift the labeling
requirement pending further investigation.
144
An unsatisfactory result for Claimant, however, is
no basis on which to find a lack of due process. Claimant provides no evidence that the Ministry
did not duly consider the information Claimant provided in denying its request.

137
Duke Energy, 358.
138
Duke Energy, 35860.
139
Agreement, R.18.
140
Waste Mgmt. II, 98.
141
Waste Mgmt. II, 98.
142
SC, 16.
143
SC, 14, 16.
144
SC, 17.

23
D. Respondent has not acted in an arbitrary or discriminatory manner.

64. In the ELSI case, the ICJ defined arbitrariness as a wilful [sic] disregard of due process
of law, an act which shocks, or at least surprises, a sense of juridical propriety.
145
The tribunal
in LG&E described arbitrary measures as those taken without engaging in a rational decision-
making process.
146
Tribunals have cited Blacks Law Dictionary, which defines arbitrary as
depending on individual discretion; founded on prejudice or preference rather than on reason
or fact.
147

65. When governments act to correct societal problems, tribunals should defer to the
governments judgment regarding the best course of action to protect its people and handle its
crises. The Enron tribunal determined that the measures taken there:
might have been good or bad, a matter which is not for the
Tribunal to judge, . . . but they were not arbitrary in that they were
what the Government believed and understood was the best
response to the unfolding crisis.
148

The Unglaube tribunal similarly found that because governments receive a substantial amount of
deference regarding domestic regulation, tribunals only find violations in measures that shock
the conscience, are clearly improper or discreditable or which otherwise blatantly defy logic or
elemental fairness.
149

66. Regardless of the Tribunals definition of arbitrary, neither the MAB Act nor the
Reyhan ordinance was arbitrary. Both were proportional responses to societal concerns based on
reasoned decision-making. Respondent enacted the MAB Act to limit the effects of alcohol
abuse and addiction on public order and health.
150
For example, the bottle-size restriction aims to
prevent individuals from consuming large amounts of alcohol with ease. Similarly, the Ministry
of Health and Social Security adopted the Reyhan ordinance after a ten-year study revealed that

145
ELSI, 128.
146
LG&E, DL, 158.
147
CMS, 291; Lauder, 221; Occidental, 162.
148
Enron, 281.
149
Unglaube, 258.
150
SC, 10.

24
Reyhan posed risks from which Respondent needed to protect its citizens.
151
Though Claimant
suggests that this study was flawed, such a finding on its own would not make the ordinance an
arbitrary measure: arbitrariness is the lack of any reasons, not the lack of the best reasons.

67. To show discrimination, Respondent must show capricious, irrational or absurd
differentiation in the treatment accorded to the Claimant as compared to other entities or
sectors.
152
Here, neither the MAB Acts restrictions nor the Reyhan ordinance discriminated
against Claimants investments. For example, Respondent chose to restrict alcohol containers to
0.5 l to curb high alcohol consumption, in an effort to address addiction. Such a measure is by no
means absurd.

68. Similarly, the Reyhan ordinance aims to warn consumers of the potential risks posed by
Reyhan concentrate. It therefore distinguishes between all products that contain Reyhan and
those that do not.
153
With Respondents goal of limiting Reyhan consumption, any differentiation
not on the basis of Reyhan would be capricious, irrational, or absurd. Since Respondent
regulated all Reyhan-containing products, it did not discriminate against Claimants investment.

IV. RESPONDENT HAS NOT VIOLATED BIT ARTICLE 3.1(C).

69. Article 3.1(c) obliges contracting states not to impair by arbitrary or discriminatory
measures the management, maintenance, use, enjoyment or disposal of Investments.
Respondent submits that (A) it did not impair Claimants investments through arbitrary,
discriminatory measures, and (B) that the MAB Act was enacted to protect public order.

A. Respondent did not impair Claimants investments through any arbitrary or
discriminatory measures.

70. As discussed above, none of Respondents measures were arbitrary or discriminatory.
Therefore, Respondent did not violate BIT Article 3.1(c).

151
SC, 14.
152
Sempra, 319; Enron, 282.
153
SD, 15.

25
B. Additionally, Respondents measures under the MAB Act were not arbitrary or
discriminatory because they were taken to protect public order.

71. Article 3.2 states that any measures a government must take for reasons of public
security and order shall not be deemed arbitrary or discriminatory under Article 3. In enacting
the MAB Act, Respondent wished to address the interrelated problems of alcohol abuse and
public disorder. The link between these problems is well documented.
154
The MAB Acts
restrictions were tailored to this purpose. The bottle-size restriction, for example, aims to limit
alcohol consumption, thereby lowering drunkenness and any resultant public disorder, while the
provision prohibiting sales at sports establishments directly targets public disorder by restricting
alcohol in situations that pose a heightened risk of public disorder.
155
Because Respondent
enacted the act to protect public order, it was neither arbitrary nor discriminatory.

V. RESPONDENT DID NOT UNLAWFULLY EXPROPRIATE CLAIMANTS INVESTMENTS.

72. Without prejudice to any argument submitted above, Respondent submits that it did not
violate BIT Article 4.1, as its regulatory measures (A) did not expropriate Claimants
investments. Should the Tribunal find expropriation, Respondent alternatively submits that (B)
its measures are permitted under Article 4.1.

A. Respondent did not expropriate Claimants investments.

73. BIT Article 4.1 prohibits Contracting States from directly or indirectly expropriating
Investments, and from instituting measures the effects of which would be equivalent to
expropriation, subject to exceptions. Claimant, whose Ruritania-registered trademarks and
purported shares in FBI are distinct investments under BIT Article 1, alleges that the cumulative
effect of measures adopted by Ruritania has resulted in expropriation of its investments
associated with FBI.
156
In response, and without prejudice to any argument above, Respondent
submits that it (i) did not expropriate Claimants trademarks and (ii) the effect of its various
regulatory measures, even when taken together, are not equivalent to the expropriation of
Claimants purported shares in FBI.

154
ICAP; see also the many references to alcohol in the UK Pub. Ord. Act.
155
ICAP, p.2; Felson, p.209.
156
SC, 28.

26

i. Respondent did not expropriate Claimants trademarks.

74. Respondent submits that it has not expropriated Claimants trademarks. Claimant
unmistakably fails to demonstrate that the MAB Act directly or indirectly expropriated
Claimants trademarks. Claimant further fails to demonstrate that the effects of the MAB Act
are equivalent to expropriation.

75. Respondent invites this Tribunal to consider the ordinary meaning of the term
equivalent, in accordance with the guidance of VCLT Article 31. Equivalent ordinarily
means equal to.
157
The words presence in BIT Article 4.1 demonstrates that it is not sufficient
for state measures to have a negative impact on an investment in order to implicate Article 4.1
the negative impact must be equal to expropriation. Tribunals and commentators agree that
expropriation is the deprivation of an investment;
158
state measures must deprive investors of
their investment in order to have effects equivalent to expropriation.

76. At the outset, Respondent submits that Claimant retains title to its Ruritania-registered
trademarks. The MAB Act therefore did not directly expropriate Claimants intellectual property.

77. Previous tribunals pronouncements, where they have interpreted similar expropriation
clauses, help highlight the characteristics of indirect expropriation.
159
Tribunals, alongside
notable commentators, agree that indirect expropriation occurs when a host state measure (a)
permanently affects an investor; (b) substantially deprives the investor of its control of its
investment; and (c) interferes with the investors legitimate, investment-backed expectations,
even as the investor retains legal title over its investment.
160
None of these three effects of
expropriation are met here.

78. First, the MAB Acts restrictions are not permanent in character, nor do they have
permanent effects on Claimant. The MAB Act may be subject to review and amendment, in line
with insights offered by new research. This shows that the Acts current restrictions are

157
OED.
158
CME, 150; McLachlan, pp.290-98.
159
See Corn Products, 77; Metalclad, 108.
160
LG&E, 190; Metalclad, 103; Dolzer, pp.65-93.

27
temporary in nature. Even if the Act remains as is, Claimant can continue to use its bottle-related
trademark by selling non-alcoholic drinks in 0.8l bottles.

79. Second, the MAB Act does not substantially deprive Claimant of control of its
trademarks. Pope & Talbot first identified the substantial deprivation standard, and is therefore
instructive in that regard.
161
The tribunal there held that an investor cannot establish indirect
expropriation when it remains in control of its investment, despite host state measures.
162
In
reaching its holding, the tribunal interpreted the expropriation clause in NAFTA Article 1110,
which is similar to BIT Article 4.1 in that it prohibits measures tantamount to expropriation.
163

(The ordinary meaning of tantamount is equivalent.
164
)

80. Subsequent tribunals have adopted Pope & Talbots control test. PSEG, for example,
required host state measures to interfere with an investors control of, or management of, its
investment in order to establish substantial deprivation.
165
The tribunal there applied the Turkey-
United States BITs expropriation clause, which is again similar to Article 4.1 in that it prohibits
measures tantamount to expropriation.
166

81. Here, Claimant retains control over the primary right that a trademark owner has over
its intellectual property: the right to exclude third parties from using ones property.
167
Globally,
trademark laws offer intellectual property owners no greater right regarding their property, as is
evident from the provisions of the Paris Convention,
168
to which Respondent is a signatory.
169

Since Claimant may still prevent third parties from employing its trademarks, it has not been
substantially deprived of its marks.

161
Pope & Talbot, 102.
162
Pope & Talbot, 100.
163
NAFTA Art. 1110.
164
OED.
165
PSEG, 278.
166
Turkey-United States BIT, Art. III.
167
Landes & Posner, p.266. See also Deutsches Patent- und Markenamt.
168
See Paris Convention. See also WIPO.
169
PO 2, CQ 2.

28
82. An investor may also be substantially deprived of its investment if the investment has
suffered substantial erosion in value.
170
In such case, a tribunal must be able to ascertain the
monetary value of an investment before and after state intervention.
171
Claimant has been unable
to place a monetary value on its intellectual property prior to and after the MAB Acts
enactment.

83. Third, Respondent submits that the MAB Act does not interfere with Claimants
legitimate, investment-backed expectations. As noted above, a trademark owners only
legitimate expectation ought to be that it can prevent third parties from using its marks.
172
The
MAB Act leaves this expectation intact. International trademark lawembodied in the Paris
Conventiondoes not offer owners the unbridled right to display their trademarks however they
please.
173
The MAB Acts various restrictions therefore comply with a trademark owners
legitimate expectations.

84. For these reasons, Respondent submits that it did not expropriate Claimants
trademarks.
ii. Respondent did not expropriate Claimants purported shares in FBI.

85. Respondent submits that it has taken various measures that have affected Claimant,
from the MAB Act to the Reyhan ordinance. Even taken together, however, these measures do
not have effects that are equivalent to expropriation. They are therefore in compliance with
BIT Article 4.1.

86. As submitted in V(i) above, Respondent invites this Tribunal to consider the ordinary
meaning of equivalent, which is equal to.
174
This would accord with the guidance offered in
VCLT Article 31.
175
The use of the term equivalent in Article 4.1 demonstrates that state

170
ADM, 242; Alpha, 408; S.D. Myers, 282-83; Tza Yap Shum, 144; Telenor, 65-66.
171
ADM, 246; Telenor, 76.
172
See Landes & Posner, p.266. See also Deutsches Patent- und Markenamt.
173
See Paris Convention.
174
OED.
175
VCLT, Art. 31.

29
measures that merely have a negative impact on an investment are not sufficient to implicate the
Articlethe negative impact must be equal to the expropriation of the investment.

87. As submitted in V(i) above, indirect expropriation occurs when a host state measure (a)
permanently affects an investor, (b) substantially deprives the investor of control over its
investment, and (c) interferes with the investors legitimate, investment-backed expectations,
even as the investor retains legal title over its investment.
176
Even when the impact of
Respondents individual measures are taken together, none of these three effects of
expropriation are met here.

88. First, Respondents measures do not permanently affect Claimant. As submitted above,
the MAB Act is subject to amendment, and even if it remains as is, Claimant can continue to use
its bottle-related trademark if it uses its 0.8l bottle for non-alcoholic drinks. Also, the Reyhan
ordinance is subject to change or withdrawal, based on new scientific evidence. Even if new
evidence confirms the harmful effects of Reyhan concentrate, the labeling requirement will cease
to have any impact on Claimant if it simply stops using Reyhan in FREEBREW.

89. Second, even considered together, the MAB Act and Reyhan ordinance did not
substantially deprive Claimant of its investment in FBI. Claimant remains in control of FBI,
including its management. Therefore, there is no substantial deprivation under the Pope &
Talbot understanding of the standard.
177

90. Further, Respondents regulatory measures have not substantially deprived Claimant of
the economic value of its investment in FBI. The tribunal in Metalclad, a NAFTA case, noted
that substantial deprivation occurs when host state measures have the effect of depriving an
investor of its reasonably-to-be-expected economic benefit, in whole or significant part.
178

91. Claimant asserts that the MAB Act and Reyhan ordinance led to a decline in FBIs
revenue, but this is speculation, as correlation does not imply causation. With regard to the

176
LG&E, 190; Metalclad, 103; Dolzer, pp.65-93.
177
Pope & Talbot, 102.
178
Metalclad, 103.

30
Reyhan ordinance, it is not the requirement that led to a decrease in FBIs revenue but rather
Claimants insistence on using Reyhan in its products, despite evidence about the health risks
posed by the ingredient.

92. Moreover, decline in revenue alone is not sufficient to meet the Metalclad substantial
deprivation standard, since Claimant cannot reasonably expect that FBI will always generate
revenue comparable to 2009 levels. Instead, as the Burlington Resources tribunal recently
asserted, what matters when assessing substantial deprivation is whether a state measure has
deprived an investments capacity to earn a commercial return.
179
In making this
pronouncement, the tribunal interpreted the expropriation clause of the United States-Ecuador
BIT, which is similar to Article 4.1 in that it prohibits measures tantamount to expropriation.
180

93. While FBIs decline in revenue has led Claimant to pledge its investment in the
company to third-party lenders, the purported resultant deprivation is a product not of
Respondents measures, but of the nature of Claimants agreement with its lenders. Thus,
Respondents measures are not responsible for depriving FBI of its capacity to earn a
commercial return.

94. Third, Respondents measures do not interfere with Claimants legitimate, investment-
backed expectations. As submitted above, international trademark lawas enshrined in the Paris
Convention
181
does not foster any expectation that Claimant may employ its trademarks as it
pleases.
182
Also, Claimant cannot legitimately expect to sell products that may pose certain
health risks without having to warn consumers about these potential risks. The Reyhan ordinance
does nothing more than inform consumers of Reyhan-containing products that Reyhan may lead
to higher risk of cardiac complications.
183

95. Respondents measures do not permanently affect Claimant. As submitted above, the
MAB Act is subject to amendmenteven if it remains as is, Claimant can continue to employ its

179
Burlington, 397.
180
United States-Ecuador BIT, Art. III.
181
PO2, CQ 2.
182
See Paris Convention. See also Landes & Posner, p.266; Deutsches Patent- und Markenamt.
183
SC, 15 (emphasis added).

31
bottle-related trademark if it uses its 0.8l bottle for non-alcoholic drinks. Also, the Reyhan
ordinance is subject to amendment or withdrawal, based on new scientific evidence. Even if new
evidence confirms Reyhans harmful effects, the labeling requirement will cease to have any
impact on Claimant if it simply stops using Reyhan in its products.

96. For the reasons above, Respondent submits that its regulatory measures did not have
effects equivalent to the expropriation of Claimants shares in FBI.
B. Even if expropriation is established, Respondents measures are justifiable
under BIT Article 4.1.

97. Without prejudice to the argument in V(A), Respondent submits that even if the
Tribunal finds expropriation, its regulatory measures are justifiable under BIT Article 4.1.

98. Article 4.1 prohibits expropriation except where such Expropriation is (a) for the
public benefit; (b) not discriminatory; (c) carried out under due process of law; and (d) against
compensation.
184
Article 4.1 does not ask this Tribunal to weigh these factors when determining
expropriation. Instead, the phrase except where such Expropriation is carves out an exception
whereby Contracting States may expropriate investments without breaching their obligations
under the BIT. Respondents measures meet all four conditions required by this exception.

99. Respondent enacted both the MAB Act and the Reyhan ordinance for the public benefit.
The MAB Act was meant to curb alcoholism and underage drinking, while the Reyhan label was
meant to warn consumers about Reyhans potential health risks. It is immaterial if, in Claimants
view, Respondents measures were not the most appropriate response to these health issues.
Article 4.1 simply requires that Respondents measures be for the public benefit.

100. Tribunals have inquired into whether public issues addressed by expropriatory measures
are in the genuine interest of the public,
185
or are proportional to the public interest
protected.
186
Alcoholism, underage drinking, and Reyhans potential health risks are of genuine

184
BIT, Art. 4.1.
185
ADC, 432.
186
Tecmed, 122.

32
interest to Ruritanians. This is demonstrated both by how Ruritanians elected the New Way
Party, known for its stance against irresponsible drinking, and by the fall in FREEBREW
consumption once the public weighed the potential health risks of Reyhan. Respondents
measures were also proportional to the public interest protected. The MAB Acts trademark
restriction is supported by recent studies showing that using plain packaging discourages
consumption.
187
(Similar studies encouraged the Australian government to enact plain packaging
laws for cigarettes.)
188
The MAB Acts bottle-size restriction keeps Ruritanians from over-
consuming alcoholstudies demonstrate that consumers have trouble effectively gauging the
amount of liquids held in bottles, leading to over-consumption of drinks.
189
Finally, the Reyhan
label only informs consumers that Reyhan concentrate may pose certain health risks, letting
consumers weigh those risks for themselves. This is a proportional response to the HRI study, in
contrast to, say, an outright ban on Reyhan.

101. Respondents measures are non-discriminatory, as the MAB Act and the Reyhan
ordinance apply to all alcoholic beverage manufacturers and all Reyhan products, respectively.

102. Respondents measures followed all legal provisions and procedures. Past tribunals
have called for host states to provide investors with reasonable advance notice, a fair hearing,
and an impartial adjudicator.
190
The NAFTA tribunal in Metalclad asked that states provide a
transparent and predictable framework for investment, to meet the due process requirement.
191

The MAB Act was duly enacted by Ruritanian Parliament, while the Reyhan ordinance was
issued by the countrys Executive. Both measures were authorized under Ruritanian law.
Claimant did not challenge these laws in any Ruritanian court and makes no claim that if it had
done so it would be denied a fair hearing or impartial adjudicator. Claimants sole response to
the Reyhan ordinance was to present a report by an expert it chose and paid,
192
where Claimant
provided no evidence that Reyhan posed no cardiac health risks.
193

187
The Independent.
188
Australia Act.
189
The New York Times.
190
ADC, 435; see also Tza Yap Shum, 223.
191
Metalclad, 99.
192
SD, 15.
193
SD, 15.

33
103. While Article 4.1 requires that investors be compensated for expropriation, Respondent
submits that given the instant circumstances, it is not liable to compensate Claimant. Faced with
a similar expropriation clause, the Saluka tribunal held that it is established in international law
that a state that implements a bona fide, non-discriminatory regulation for the public benefit
should not be liable to compensate adversely affected foreign investors.
194
Respondent submits,
given the assertions above, that both the MAB Act and the Reyhan ordinance were bona fide,
non-discriminatory regulations, designed to benefit the Ruritanian public.

104. Further, it is unreasonable to compensate Claimant for every loss it suffers as a result of
Respondents regulatory measures. This is particularly true when there is a tenuous connection
between Respondents measures and Claimants loss and when Respondents regulatory
measures address important public health issues.

105. For the reasons above, Respondent submits that even if the Tribunal finds expropriation,
Respondents regulatory measures are permitted under Article 4.1.

VI. RESPONDENT IS NOT LIABLE FOR MORAL DAMAGES BECAUSE THE BIT AND CUSTOMARY
INTERNATIONAL LAW DO NOT PROVIDE FOR MORAL DAMAGES IN THIS CASE.

106. Claimant has requested US$1,000,000 for moral damages under BIT Article 2, for the
arrest of Contifica executives Messrs. Goodfellow and Straw. Respondent submits that (A) the
BIT and (B) customary international law do not provide for moral damages in this case.

A. The BIT does not provide for moral damages.

107. Moral damages can be defined as injuries resulting in mental suffering, injury to
[ones] feelings, humiliation, shame, degradation, loss of social position or injury to [ones]
credit orreputation.
195
Neither Article 2 nor any other provision allows for such damages.

194
Saluka, 255.
195
Lusitania, p.40.

34
Article 2 simply guarantees [i]nvestments . . . fair and equitable treatment as well as full
protection and security.
196

108. Tribunals have interpreted the full protection and security clause to only protect
investments, not investors.
197
In Roussalis, for example, the tribunal noted that the claimant
could not request moral damages in his individual capacity because the tribunal could only
award damages for harm to the investment.
198
Because the underlying treaty did not address
moral damages, the claimant had to clearly demonstrate assessable damages to receive
compensation.
199
Similarly, the Siag Case tribunal, as noted in Lemire, found that there was no
right to punitive damages where there was no provision for such an award in the BIT.
200
The
tribunal added that punitive damages are only available in extreme cases of egregious
behavior, because they are not compensatory by nature.
201

109. This Tribunal should similarly interpret the BIT to exclude any right for the executives
to recover moral damages in their individual capacity.

B. Customary international law does not allow for moral damages here because
there are neither exceptional circumstances nor measurable damages.

110. The BIT does not provide for moral damages. However, should the Tribunal elect to
consider customary international law it should similarly find that Claimant does not deserve
moral damages.

111. ILC Article 31 provides that a responsible state should make full reparation for the
injury caused by the internationally wrongful act.
202
The article defines injury as any damage,
whether material or moral, caused by the internationally wrongful act of a State.
203
ILC Article
36 specifies that compensation can be recovered only for financially assessable damage and

196
BIT, Art. 2(b).
197
See Douglas, 276.
198
Roussalis, 294.
199
Roussalis, 588.
200
Lemire, 544.
201
Lemire, 544.
202
ILC Articles, Art. 31(a).
203
ILC Articles, Art. 31(b).

35
insofar as established.
204
As a result, few moral award damages have been made and only
when there were (i) exceptional circumstances and (ii) substantial measurable damages.

i. No exceptional circumstances surrounded the executives arrest.

112. Moral damages can be awarded only in exceptional circumstances where the damages
are grave or substantial and the States behavior is egregious.
205

113. In all moral damages awards, the underlying circumstances have been exceptional. In
the Lusitania Cases, a German submarine torpedoed the ocean liner Lusitania, resulting in
numerous deaths.
206
The umpire granted claimants request for moral damages because of the
mental suffering and shock associated with the death of family members.
207

114. In recent years there have been only two awards of moral damages.
208
In the Fabiani
Case, as discussed by the Arif tribunal, the state expropriated all of claimants property in
Venezuela, driving the claimant into bankruptcy.
209
The claimant was repeatedly denied
justice.
210
He was awarded moral damages for pain and suffering, lost business opportunity, and
damaged reputation.
211
In Desert Line, the Yemeni Army invaded the claimants workplace and
arrested three employees.
212
Armed military officers occupied claimants business, fired
automatic weapons, and detained the chairmans son.
213
Several executives suffered stress and
anxiety due to the siege with heavy artillery an act of terror in its worst image.
214
The
tribunal reasoned that it may, in exceptional circumstances award moral damages.
215
The
tribunal additionally found that Yemens armed assault was malicious and subjected the state to
fault-based liability.
216

204
ILC Articles, Art. 36(2).
205
See Desert Line, 289; Lemire, 328.
206
See Parish, p.228.
207
See Parish, p.228.
208
Parish, p.231.
209
Arif, 613.
210
Arif, 586.
211
Arif, 586.
212
Desert Line, 33, 185.
213
214
215
Desert Line, 289.
216
Desert Line, 290.

36

115. Other tribunals have consistently refused to award moral damages because of the high
bar for exceptional circumstances. The Roussalis tribunal, for example, concluded that severe
physical abuse and extreme infliction of emotional distress were prerequisites for an award of
moral damages.
217
The claimant there was prohibited from leaving Romania for nearly two years
while under criminal investigation.
218
This two-year interdiction was not found to have met the
tribunals prerequisites.
219

116. The circumstances surrounding the executives arrest are far from exceptional. There
was no physical abuse or threats with dangerous weapons during or following the arrest. It is
within a states police power to ensure that people suspected of fleeing justice be detained or
questioned. Temporary detention cannot amount to the extraordinary circumstances tribunals
have considered appropriate for awarding moral damages.

ii. There were no measurable damages resulting from the executives arrest.

117. Tribunals have required that damages be actual and measurable. Claimant has provided
no evidence that the executives arrest had any actual, measurable impact on the executives or on
Claimants investment.

118. In the Lusitania Cases, the umpire clarified that moral damages have to be awarded for
a loss suffered and that the award should be commensurate with the loss.
220
The tribunal found
that only compensatory damages could be considered in determining moral damages when there
are no measurable damages.
221
The Lemire tribunal similarly noted that moral damages require
some discernible effect on the claimant.
222
Arif explicitly endorsed the Lemire reasoning, and
further clarified that speculated loss of reputation or anxiety would not amount to the type of
impact or actual damage required for moral damages.
223

217
Roussalis, 590.
218
Roussalis, 544
219
Roussalis, 544
220
Roussalis, 302.
221
Roussalis, 301.
222
Lemire, 333
223
Arif, 590-91.

37

119. Tribunals have refused to award moral damages that could not be measured even in
exceptional circumstances. In the Siag Case, as described in Lemire, the respondent expropriated
claimants property through seizures despite their prohibition by a court.
224
During the seizure, a
claimant was arrested and his employee beaten.
225
While the claimants did not request moral or
punitive damages, they asked for enhanced damages in order to ensure full compensation.
226

However, because their request was based on speculative impact claims, the tribunal refused to
award enhanced damages.
227

120. Claimant has provided no evidence that the executives arrest led to measurable
damages. Even if the executives claim reputational harm due to the broadcast of their arrest, they
have not demonstrated any effect on Claimants current investment or the executives future
professional lives. As confirmed in Caratube, there can be no award of moral damages on the
basis of speculative claims. There must be evidence that state measures have affected claimants
reputation in ways that have subsequently led to a loss of business opportunities.
228
Claimant
provides no evidence of assessable damage suffered to its reputation or business due to the
executives arrest. Therefore, moral damages should not be awarded.

VII. LOSS OF SALES BY CLAIMANT-AFFILIATED CONTIFICA COMPANIES LOCATED OUTSIDE
RURITANIA DO NOT CONSTITUTE RECOVERABLE DAMAGES.

121. Respondent submits that sales lost by Claimant-affiliated Contifica companies located
outside Ruritania are not recoverable. Even if Respondents regulations constituted wrongful acts
under general principles of international law, or violated the BIT, (A) Claimant cannot recover
for losses suffered by these companies, since their sales are not part of Claimants investment in
Ruritania. Further, even if the sales were a component of Claimants investment, (B) the lost
sales were remote, unforeseeable, speculative and tenuously linked to Ruritanias measures.
Assuming arguendo that the damages sustained by these companies are recoverable, (C)

224
Lemire, 331.
225
Lemire, 331.
226
Lemire, 332.
227
Lemire, 546.
228
Caratube, 457.

38
Claimants exaggerated US$380,000,000 estimate should be reduced to reflect Claimants failure
to meet its duty to mitigate losses.
229

A. Losses sustained by Contifica companies located outside Ruritania are not part
of Claimants investment in Ruritania.

122. Respondent submits that in the present proceedings Claimant cannot recover sales lost
by Claimant-affiliated Contifica companies located outside Ruritania, since they are not part of
Claimants investment in Ruritania. BIT Article 1, which defines investment, does not refer to
sales lost by affiliated companies that are located outside of Respondents territory.
230
There are
certain ways in which BITs typically make treaty protection available when multinational
companies use corporate entities, such as subsidiaries that may be organized under the laws of a
third State, for their investments. For instance, some BITs define investor broadly to include
companies controlled by their citizens or by companies organized under their laws.
231
Other
model BITs, such as the U.S. 2012 Model BIT, instead define investment broadly as every
asset that an investor owns or controls, directly or indirectly.
232

123. Here, the BITs investment definition refers to every asset which is directly or
indirectly invested in accordance with laws and regulations, but it does not refer to assets that
are directly or indirectly controlled.
233
The term control in expansive investment definitions
suggests that assets not located in a respondents territory are within a tribunals purview. The
conspicuous absence of the term in the BIT should be viewed as Respondents deliberate choice
to limit the scope of claims it is willing to address in arbitration. Thus, the BITs investment
definition should not be interpreted to include sales from affiliated companies, located in third
states that are not parties to the BIT. Additionally, the BITs definition of investor includes any
entity which is established in accordance with, and recognized as a legal person by the law of
that Contracting State . . . but does not refer to legal entities controlled by the Contracting
States citizens. Accordingly, neither the investment nor investor definition is sufficiently broad
to extend BIT protection to sales lost by third-state companies.

229
SC, 31.
230
BIT, Art. 1.
231
Legum, p.3; see, e.g., Colo. Model BIT. See also Neth.-Venezuela BIT; Lebanon-Swiss BIT; H.K.-France BIT.
232
U.S. 2012 Model BIT; see also German Model BIT.
233
BIT, Art. 1.

39

124. At least two cases have dealt with the present issueboth involved the sale of high-
fructose corn syrup (HFCS) in Mexico. In ADM, the American claimant attempted to recover
damages not only for sales lost in Mexico, but also for sales lost on US-produced HFCS intended
for Mexico, as a result of changes in Mexicos tax policy.
234
The tribunal held that it did not have
jurisdiction to award damages for HFCS produced outside of the respondents territory, and
rejected damages for the US-produced HFCS.
235
As in ADM, Claimant seeks recovery for
alleged damages not sustained in the host state. The Tribunal should limit its review of damages
to the potential sales lost within Ruritania and should not consider alleged sales lost by Claimant-
affiliated companies outside Ruritania, which are beyond this Tribunals purview.

125. The instant case is distinguishable from the second case dealing with this issue.
236
In
Cargill, the tribunal held that the claimant could recover damages for sales lost from a parent
company located outside Mexico to its subsidiary located within the Mexico.
237
The tribunal
overcame the jurisdictional issue by taking a holistic approach to the investment and holding that
the sale of HFCS from the parent to the subsidiary was just the other side of the coin of the
subsidiarys inability to resell HFCS in Mexico.
238
Claimants case is unlike Cargill, however,
because Claimants affiliated companies were not simply selling FBI beer for FBI to resell in
Ruritania. Instead, the companies were supplying FBI with components, such as barley and
bottles, for making beer for Ruritania.
239
Thus, while the sale of HFCS through a Mexican
subsidiary in Cargill was essentially splitting one transaction into two sub-parts, the sale of
components here are distinct and independent transactions from FBIs sale of beer in Ruritania.

126. Thus, the alleged sales lost by Claimant-affiliated companies located outside Ruritania
are not recoverable, regardless of whether the companies are located in third States or in Cronos,
because they are not part of Claimants investment in Ruritania.

234
ADM, 255.
235
ADM, 270, 274.
236
Cargill.
237
Cargill, 526.
238
Cargill, 525.
239
SC, 8.

40
B. Even if losses sustained by Claimant-affiliated companies are recoverable, the
losses at issue were unforeseeable and not proximately caused by Respondents
measures.

127. Respondent submits that Claimant has failed to establish that Respondents regulations
have proximately caused the financial losses suffered by its affiliated companies. Assuming
arguendo that Respondent committed a wrongful act under international law by violating the
BIT, ILC Article 31 would allow Claimant to demand and receive full reparations for damages
sustained, while ILC Article 36 would ensure that Claimant receive fair compensation for
financially assessable damages, including lost profits.
240
However, not all damages or lost profits
are recoverable. Tribunals have generally limited damages if they were considered remote or not
the proximate result of the respondent states policies.
241
For instance, the Shufeldt tribunal
noted that lost profits had to be the direct fruit of the contract to be recoverable.
242
In that same
vein, the ILC Commentary suggests that lost profits should only be awarded, if they are,
considered a legally protected interest of sufficient certainty to be
compensable. This has normally been achieved by virtue of
contractual arrangements or, in some cases, a well-established
history of dealings.
243

128. There are no contractual arrangements that protect sales from Contifica companies
located outside Ruritania to FBI. While there is some history of dealings between these
companies, they are not well established. FBI was incorporated into Contificas procurement
network in June 2008; the MAB Act was enacted in November 2010.
244
Thus, there were only
about twenty-nine months of dealings between Contificas companies and FBI. This is not a
well-established history from which the Tribunal can reliably determine the Contifica
companies lost salesthe relevant figures would reflect wild fluctuations from when FBI was
first purchased, to when it increased its output by 30% in 2010, to when its sales dropped 60% by
mid-2011 and another 20% by the end of 2011.
245
Given the inconsistency in these figures, they
cannot establish any pattern of dealings between the companies and FBI; at best the data could
be used to create a projection reflecting lost sales. Previous tribunals, such as those in LG&E and

240
ILC Articles, Arts. 31, 36,
241
S.D. Myers, 2d, 152, 159. See, e.g., Metalclad, 115; LG&E, 89; Biwater Gauff, 785; BG Group, 427-28.
242
Shufeldt, p.1099.
243
244
SC, 7-8, 10.
245
SC, 8, 13.

41
Railroad Development, have found the inherently speculative nature of such projections to be
sufficient reason to reject claimants request for recovery.
246
Without the requisite certainty, the
alleged lost sales must be deemed too remote.

C. Even if losses sustained by Claimant-affiliated companies are recoverable,
Claimant failed to meet its duty to mitigate.

129. Finally, Respondent submits that Claimant did not meet its duty under international law
to mitigate the losses suffered by affiliated companies, and therefore may not recover damages.
The duty to mitigate damages sustained is a principle of customary international law, articulated
inter alia by the ILC,
247
UN Security Council,
248
ICJ,
249
and other tribunals.
250
Failure to meet
ones duty to mitigate losses can limit or eliminate recovery.

130. Claimant failed to meet its duty to mitigate losses: it chose to continue selling
FREEBREW despite the fact that it was the FBI beer most impacted by Respondents measures.
Following the MAB Act, Claimant reconfigured its operations to bottle FREEBREW in 0.5l
bottles, instead of the traditional 0.8l bottle.
251
As a result, the bottling of RURILITE and
HILLMAGORE STOUT were suspended.
252
Additionally, once the Reyhan ordinance was
implemented, Claimant continued selling FREEBREW, which contains Reyhan, rather than
resume bottling of RURILITE and HILLMAGORE STOUT, which do not contain Reyhan and
are thus exempt from Respondents labeling regulation.
253
To mitigate potential losses, Claimant
should have focused its efforts on promoting RURILITE and HILLMAGORE STOUT, Reyhan-
free beers sold in 0.5l bottles, rather than reconfiguring FBIs operations to push FREEBREW
sales. It could also have removed Reyhan from FREEBREW. But for FREEBREWs reduced
output and sales, Claimants affiliated companies would not have sustained their alleged losses.

246
LG&E, 88-89; Railroad Dev., 269; see also Asian Ag. Products, 104.
247
248
S.C. Res. 687, 16.
249
Gabckovo, 54.
250
EDF, 1301-03; M.E. Cement, 167; AIG, 10.6.4.
251
SC, 5, 12.
252
SC, 12.
253
SC, 5, 15.

42
REQUEST FOR RELIEF

131. Respondent respectfully asks the Tribunal to find that:
(1) The Tribunal lacks jurisdiction over the submitted claims, including claims
arising under the Share Purchase Agreement; and
(2) The submitted claims are inadmissible.

132. Alternatively, should the Tribunal assert jurisdiction over the claims, and find them
admissible, Respondent asks the Tribunal to find that:
(1) Respondents measures do not amount to violations of FPS, FET, BIT Article
3.1(c), or unlawful expropriation of Claimants investments;
(2) Respondent is not liable for any moral damages; and
(3) Losses borne by Claimant-affiliated companies outside Ruritania do not constitute
recoverable damages.

Respectfully submitted on 22 September 2013 by
PETREN
On behalf of Respondent
GOVERNMENT OF THE REPUBLIC OF RURITANIA

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