1.

The procurement requirements established in the ‘Made in Zycron’ initiative, in

Directive n.12 and the March 2018 Guideline, are inconsistent with Zycron’s
obligations under Article I and Article III:4 of the GATT 1994, and Articles IV:1-2
of the GPA.

1.1. The procurement requirements established in the ‘Made in Zycron’ initiative, in

Directive n.12 and the March 2018 Guideline, are inconsistent with Zycron’s
obligations under Article I GATT 1994.

1. Avilion argues that the above measures are inconsistent with Art. I:1 of GATT for two
reasons. First, because preferential treatment is meted out to the OTA parties which is not
accorded to other members. Second, because barring Charging Queen from the
procurement competition confers a competitive opportunity on other suppliers.

2. According to directive no. 12, ‘all contracts awarded by MIET to implement the GEA
must include a requirement that any product using Solaris should be produced or
manufactured in Zycron. According to Directive n.12, to be eligible to participate in the
bidding of projects funded by MIET, the competing domestic and foreign suppliers
should use only products made of Solaris or other metals sourced in Zycron.’1 But
preferential treatment is meted out to the OTA parties which is not accorded to other
members.

3. A measure granting an advantage within the meaning of Article I:1 is a measure that
creates more favourable or competitive opportunities or affects the commercial
relationship between the products of different origins.2 It is stated “In the case of OTA
parties, each manufacturer shall furnish to the procuring authority a mandatory self-
declaration that Solaris is domestically sourced or sourced in the territory of the OTA
party according to what is prescribed in Directive n.12”3. The manufacturer from an OTA
party does not require that the solaris products necessarily be produced or manufactured
in Zycron and neither the requirement of solaris be sourced in zycron is there since it can
be sourced in the territory of the OTA parties also. This accords more favourable
competitive opportunities to the OTA parties.

4. Moreover, Pursuant to Directive n.12 and March 2018 Guideline, Charging Queen (a
major exporter of EV batteries and charging points in the world, incorporated in Avilion)
was excluded from the procurement competition for the instalment and management of

1
EMC2, para 4.9
2
EC- BANANAS III (GUATEMALA AND HONDURAS) (1997), para. 7.239
3
EMC2, para 4.11
 EV charging points in Zycron. The measure is violative of Article I:1 of GATT or MFN
treatment obligation because it accords to other suppliers an ‘advantage’ within the
meaning of Article I of GATT 1994 with ‘respect to laws, regulations and requirements
affecting internal sale, offer for sale, purchase, distribution or use’4 (matters referred in
Art. III:4 of GATT). Therefore, a competitive advantage is accorded to suppliers or
suppliers of other countries because Charging Queen is barred.

5. For a measure to be consistent with MFN treatment obligation of article I of GATT, four
requirements must be met5. The procurement requirements established in the ‘Made in
Zycron’ initiative, in Directive n.12 and the March 2018 Guideline, are inconsistent with
Zycron’s obligations under Article I GATT 1994 because they do not meet all the
requirements and therefore inconsistent with Article I:1 of GATT.

1.1.1The measure at issue is covered by Art. I:1 of GATT

6. The Directive no. 12 and March 2018 Guideline are laws, regulations and requirements
affecting internal sale, offer for sale, purchase, distribution or use’6 (matters referred in
Art. III:4 of GATT) and therefore are covered by Art. I:1 of GATT.

1.1.2The measure grants advantage to other members

7. Advantage here is accorded in the sense that

(i) the manufacturer or supplier from an OTA party does not require that the solaris products
necessarily be produced or manufactured in Zycron and neither the requirement of solaris be

sourced in zycron is there since it can be sourced in the territory of the OTA parties also and

(ii) by barring Charging Queen, a favourable competitive opportunity is accorded to suppliers

of other Member countries.

1.1.3The products are like products

4
Art. I:1 of GATT 1994
5
AB Report, EC – Seal Products, para. 5.86.


6
Art. I:1 of GATT 1994
8. The solaris products required for the purposes of Directive no. 12 are like products since
they compete in the same market. Moreover, likeness between products is demonstrated
when a measure at issue makes a distinction based exclusively on the origin of products. 7
The Directive no. 12 makes such distinction as it includes a mandatory requirement that
‘any product using Solaris should be produced or manufactured in Zycron. According to
Directive n.12, to be eligible to participate in the bidding of projects funded by MIET, the
competing domestic and foreign suppliers should use only products made of Solaris or
other metals sourced in Zycron.’8

1.1.4The advantage in issue is not accorded immediately and unconditionally

9. Art I:1 of GATT requires that the advantage granted to the products of any country must
immediately and unconditionally be accorded to the like products of all WTO members.
“Immediately” means that the measure must be granted without delay.9
“Unconditionally” means that the extension of advantage to other countries may not be
made subject to conditions with respect to situation or conduct of those countries.10 This
means that the advantage granted to the product of any country must be accorded to the
like products of all WTO members without discrimination as to origin.11

10. The advantages accorded to some members as argued above through Directive no.12 and
March 2018 guideline as mentioned above are not extended “immediately” and
unconditionally to other members making the measures inconsistent with Art. I:1 of
GATT.

1.2. The procurement requirements established in Made in Zycron initiative,

directive n.12 and March 2018 guideline are inconsistent with Zycron’s
obligations under article III:4 of GATT 1994 or national treatment obligation.

7
See para. 22; AB Report, Argentina – Financial Services, para. 6.36.


8
EMC2, para 4.9
9
Panel Report, US – Tuna II (Mexico), para. 7.412.

10
Panel Report, Canada – Autos, para. 10.23

11
Ibid

11. Directive n.12 specifies that all contracts awarded by M.I.E.T to implement GEA should
contain a mandatory requirement that all products using Solaris should be produced or
manufactured in Zycron. Further it says that to be eligible to participate in the bidding
projects funded by M.I.E.T, ‘the competing domestic and foreign suppliers should use
only products made of Solaris or other metals sourced in Zycron.’12

12. The broad and fundamental purpose of Article III is to avoid protectionism in the
application of internal tax and regulatory measures. More specifically the purpose of
Article III ‘is to ensure that internal measures “not to applied to imported or domestic
products so as to afford protection to domestic production”’. Toward this end the Article
III obliges members of the WTO to provide equality of competitive conditions for
imported products in relation to domestic products.13

13. For a violation of Art. III:4 to be established, three elements must be satisfied: that the
imported and domestic products at the issue are ‘like products’; that the measure at issue
is a law, regulation, or requirement affecting the internal sale, offering for sale, purchase,
transportation, distribution or use; and that the imported products are accorded ‘less
favourable’ treatment than accorded to like domestic products.14

1.2.1Measure at issue is a law, regulation, or requirement covered by Art. III:4 of

GATT and "affect" the "internal" "sale", "purchase" or "use" of solaris products.

14. First, the domestic content rules of the Directive no.12 are "requirements" in that they are
conditions with which the manufacturers or suppliers voluntarily comply in order to
obtain an advantage which is to participate in the bidding of projects funded by MIET.
Second, the domestic content rules of the Directive no. 12 "affect" the "internal" "sale",
"purchase" or "use" of solaris products in that they provide an incentive to suppliers of
solaris products to choose such solaris products manufactured in zycron.

1.2.2The imported and domestic products are ‘like products’

12
EMC2 2018, para. 4.9
13
Appellate Body Report, Japan-Alcoholic Beverages II (1996),109. In footnotes to this paragraph, the
Appellate Body refers to the following Panel reports : US- Section 377 Tarrif Act(1989), para. 5.10 ; Panel
Report, US-Superfund (1987), para.5.1.9 ;Italy-Agricultural Machinery(1958), para. 11.
14
Appellate Body Report, Korea- Various Measures on Beef (2001), para 133
15. Solaris products manufactured domestically in Zycron and imported from Avillon are
"like products" because they are in a directly competitive situation in the market and there
is no substantial difference between domestic and imported equipment in terms of their
physical properties, end-uses, consumer perceptions, and tariff classifications.

1.2.3The imported products are accorded less favourable treatment

16. Finally, the domestic content rules of the Directive no. 12 accord less favourable
treatment to imported solaris products than that accorded to like products of Zycron
origin because they modify the conditions of competition to the detriment of imported
products.

17. The procurement requirements set out by Zycron qualify as ‘laws’, ‘regulations’ and
‘requirements’ within the meaning of Article III:4 which accord ‘less favourable’
treatment to imported products than the like products of Zycron origin and therefore
violate Article III:4 of GATT 1994.

1.3. The procurement requirements established in the ‘Made in Zycron’ initiative, in

Directive n.12 and the March 2018 Guideline, are inconsistent with Zycron’s
obligations under Articles IV:1-2 of the GPA.

18. Zycron is signatory to GPA and therefore is bound by its obligation of non-discrimination
under Article IV :1-2 of the GPA. Also, MIET is included in the government bodies listed

in Zycron’s GPA Schedules of Commitments, Annex 1.

19. Therefore, Zycron for the purposes of government procurement ‘shall accord
immediately and unconditionally to the goods and services of any other Party and to the
suppliers of any other Party offering the goods or services of any Party, treatment no less
favourable than the treatment the Party, including its procuring entities, accords to:
domestic goods, services and suppliers; and goods, services and suppliers of any other
Party.’15
20. The procurement requirements established in Made in Zycron initiative discriminate

15
Article IV:1 of revised GPA
 solely on the basis of origin of the products containing Solaris. According to Directive
n.12, to be eligible to participate in the bidding of projects funded by MIET, ‘the
competing domestic and foreign suppliers should use only products made of Solaris or
other metals sourced in Zycron.’16
21. The measures diminish competing opportunities of suppliers who do not use domestically
sourced Solaris or their products using solaris are not produced or manufactured in
Zycron. The Directive no. 12 simply bars all those suppliers who do not use solaris
products produced or manufactured in Zycron from the bidding of projects funded by the
MIET.
22. Avillon argues that these measures clearly treat a locally established supplier less
favourably simply on the basis of foreign affiliation and violate Art. IV:2(a) because the
suppliers would be simply barred to participate in the bidding of projects funded by MIET
if they don’t use solaris products produced or manufactured in Zycron but rather use
imported solaris products.
23. The March 2018 Guideline that bars Charging Queen from the procurement competition
blatantly violates Art. IV:1-2 of GPA as it treats the supplier less favourably than it does
to domestic suppliers and also discriminates on the basis of foreign affiliation. Here
barring amounts to less favourable treatment and the domestic content requirements in
Directive no.12 would amount to discrimination based on foreign affiliation.
24. The effect of these discriminatory regulations is such that ‘the volume of exports of EV
batteries and charging points by Charging Queen to Zycron drastically dropped to 20% of

its exports before the Initiative was implemented.’17

2. The implementation of the 'official unitary fee’ (OUF) established by Zycron in the
GEA, as well of the accumulation of origin rule in the OTA, are subsidies within the
meaning of Article 1.1 of the SCM Agreement, and are in violation of Article 3.1(b)
of the SCM Agreement.
2.1. The implementation of the 'official unitary fee’ (OUF) established by Zycron in
the GEA is a subsidy within the meaning of Article 1.1 of the SCM Agreement,
and is in violation of Article 3.1(b) of the SCM Agreement.

25. The implementation of official unitary fee in the GEA that stipulates ‘charging stations
will remain state-owned and that private operators will obtain an ‘official unitary fee’

16
EMC2 2018, para. 4.9
17
EMC2, para.4.14
 (OUF), which would be payed to cover the cost of operation and reasonable profit.18
Further it is stated that the successful bidder will be awarded the contract for a 10 year
period. Moreover the government guarantees a minimum weekly fee , even if no cars
have used the charging stations in a week.19 This implies that the OUF will be obtained
by the charging operators for a 10 year period regardless of whether or not the charging
stations have been used by vehicles.

26. Avilion states that a measure may be characterized in multiple ways under
Article1.1(a)(1) of the SCM Agreement. This conclusion follows from the Appellate
Body's findings in US – Large Civil Aircraft (2nd complaint) that Article 1.1(a)(1) "does
not explicitly spell out the intended relationship between the constituent subparagraphs"
and that its structure "does not expressly preclude that a transaction could be covered by
more than one subparagraph".20 This reasoning was also approved by the appellate body
in Canada Renewable Energy in para 5.119

27. Avilion argues that the challenged measures each amount to a "financial contribution" in
the form of a "direct transfer of funds" or a "potential direct transfer of funds" under
Article 1.1(a)(1)(i) of the SCM Agreement, or alternatively, a form of "income or price
320
support" within the meaning of Article 1.1(a)(2) of the SCM Agreement . Avilion also
argues the OUF can also be construed as government purchase of goods under
Art.1.1(a)(1)(iii).

28. Avilion contends that the commitment by Zycron to pay the agreed price as OUF for the
electricity generated by charging stations would be better characterised as a "direct
transfer of funds" in the sense of Article1.1(a)(1)(i) of the SCM Agreement because
future payments are made unconditionally by way of a minimum weekly fee guaranteed
to the operators of charging stations. Alternatively, Avilion considers that the OUF
provides a form of income or price support to charging stations through guaranteed prices
in the sense of Article 1.1(a)(2) because even if no cars have used the charging stations in
a week, the government guarantees a minimum weekly fee.

29. Avillon also argues the OUF can also be construed as government purchase of goods
under Art.1.1(a)(1)(iii). This is because government of Zycron purchases the product of
charging points i.e electricity from the enterprise that was responsible for the installation
and management of EVs since Zycronian EV owners incur no expense. Art.1.1(a)(1)(iii)
covers financial contributions where ‘a government provides goods or services other than
general infrastructure, or purchases goods’. In US – Large Civil Aircraft (Second
Complaint), the Appellate Body observed that a purchase of goods "is usually understood

18
EMC2, PARA 3.4
19
EMC2, para 4.6
20
Appellate Body Report, US – Large Civil Aircraft (2nd complaint), para. 613 and fn 1287 thereto,
respectively).
 to mean that the person or entity providing the goods will receive some consideration in
470
return" OUF here is the consideration of purchased electricity.

2.1.1Benefit analysis within the meaning of Art. 1.1(b)

30. First, according to Avilion, the challenged measures confer a benefit because they
guarantee that the operators of charging stations will receive a price for the electricity.

31. Secondly, Avilion argues that the inherent nature of the OUF demonstrates the existence
of benefit because it reveals that the OUF is intended to facilitate private investment in
new electric transport infrastructure specially charging stations which the wholesale
market in Zycron is incapable of attracting. In this regard Avilion points to two main
features (i) the duration of contract which is 10 years and renewable for an additional
period of 10 years and (ii) the guaranteed weekly fee granted by the government of
Zycron even if no cars use the charging stations. According to Avilion, either of these
features would not be available to the same charging point operators if they had to operate
on the wholesale electricity charging point market in Zycron.

32. Third, the guarantee of minimum weekly fee even if no cars have used the charging
stations in a week is a benefit.

33. Fourth, the GEA stipulates that the private operators of charging stations will obtain OUF
in order to cover the costs of operation of the stations and reasonable profit.21 Reasonable
profit here shall be considered as to confer benefit within the meaning of Art. 1 of SCM
Agreement

34. Fifth, The OUF allows Zycron companies to produce charging points cheaper.22. This is
because of the economies of scale of manufacturing charging points for a whole country for
at least a 10-year period, together with the guaranteed fixed income provided by the OUF,
because of the management of the charging stations.23
 The reduction in cost of
production confers a ‘benefit’ within the meaning of Art. 1.1(b) SCM

35. Sixth, according to the Appellate Body in US-Softwood Lumber IV(2004) sub- paragraph
(iii) contemplates a transaction where the government purchases goods from an
enterprise. Such type of transaction has the potential to artificially increase revenues
gained from selling the product.24 Thus conferring a benefit upon the Zycronian
companies within the meaning of Art. 1.1(b).

36. Finally, Avilion submits that regardless of any appropriate benchmark the panel deems fit

21
EMC2, para 3.4
22
EMC2, para. 4.6
23
EMC2 Corrections and Clarifications, para 37
24
Appellate Body Report, US-Softwood Lumber IV (2004), para 53
 for the its benefit analysis, the OUF would confer a benefit because it offers standardized
prices to all charging stations regardless of their actual costs of production.

2.1.2 The implementation of OUF violates Art. 3.1(b) of SCM Agreement

37. The OUF intends to cover operation costs of the charging stations operated by the
winning bidders of the open competitive call for a long-term framework purchasing
agreement for the installation and the management of public EV charging points, using
Solaris, across Zycron’s territory, published on 1 April 2018 in the Zycron Register. But
according to Directive no. 12 ‘to be eligible to participate in the bidding of projects
funded by MIET, the competing domestic and foreign suppliers should use only products
made of Solaris or other metals sourced in Zycron.’25A winning bidder who would
eventually obtain OUF must comply with Directive no. 12 that establishes that the
competing domestic and foreign suppliers should use only products made of Solaris or
other metals sourced in Zycron. To eventually receive OUF the bidder must comply with
Directive no. 12 that prescribes ‘that any product using solaris should be produced or
manufactured in Zycron’26 and therefore making OUF contingent on the use of domestic
over imported goods. Assuming OUF to be a subsidy as argued above, OUF itself is
contingent on the use of domestic over imported goods clearly making it a prohibited
subsidy within the meaning of Art. 3.1(b) of the SCM Agreement.

2.2. The accumulation of origin rule in the OTA is a subsidy within the meaning of Art.
1.1 of SCM and is in violation Art. 3.1(b) of the SCM Agreement.

38. Pursuant to Article 3.1 of the OTA (that establishes accumulation of origin rules for OTA
Parties), raw Solaris metal and processed products containing Solaris metal originating
from an OTA party shall be treated as a domestic product in the importing OTA party and
thus be subject to zero tariffs.27
39. Therefore, to avail zero tariffs, a supplier’s solaris or any solaris product must qualify as
‘originating’ in Art. 3.1 of the OTA. Treating Solaris originating in the territory of an
OTA party as tariff free confers a cost reduction on the supplier which qualifies as a
benefit within the meaning of Art 1.1(b) SCM. The governments were entitled to collect
tariffs but did not. This qualifies as a financial contribution under Art. 1.1(a)(1)(ii) where
the word ‘foregone’ suggests that the government has given up an entitlement to raise
revenue that is ‘otherwise’ due.

25
EMC2, para 4.9
26
EMC2, para 4.9
27
EMC2, para. 2.4
40. For a supplier to avail this subsidy, he must use solaris or solaris products originating
within the OTA party therefore the subsidy is contingent upon the use of domestic over
imported goods within the meaning of Art 3.1(b) of SCM and is prohibited under Art. 3.2
of SCM.

3. The implementation of the accumulation of origin rule in the OTA and the Zycron
Customs Regulation No. 50, is inconsistent with Zycron’s obligations under Article
I:1 of the GATT 1994 and Article XI:1 of GATT 1994 and Article 2(b) and (c) of the
Agreement on Rules of Origin.
3.1 The implementation of the accumulation of origin rule in the OTA and the
Zycron Customs Regulation No. 50, is inconsistent with Zycron’s obligations
under Art I:1

41. For a measure to be consistent with the MFN treatment obligation of Article I:1 of GATT
four requirements must be met.28 The accumulation of origin rule in the OTA and the
Zycron customs regulation No.50 do not meet all requirements and are therefore
inconsistent with Art I:1 GATT

A. The measure at issue is covered by Article I:1 GATT

42. Article 3.1 and 3.2 in the accumulation of origin stipulate that raw Solaris metal and
processed products containing metal from an OTA party shall be treated as a domestic
product in the importing OTA party and thus be subject to zero tariff.29 Moreover the
requirement for getting end user cert by an non OTA party are the biased exemption that
falls within the ambit of charges listed in Article I:1.

B. The import duty exemption grants an advantage to products from OTA

parties
43. A measure that creates more favourable competitive opportunities for products of a
certain origin is a measure granting an advantage within the meaning of Art I:1 GATT.30
By exempting tariffs of OTA parties and the requirement of official certification for an
non-OTA party. THE OTA parties receive more favourable competitive opportunities
than other Countries. The measure is therefore an advantage in the meaning of Art I:1.

28
AB Report, EC- Seal Products, para. 5.86
29
EMC2 case para 2.4
30
Panel Report, EC – Bananas III (Guatemala and Honduras), para. 7.239-7.240; AB Report, EC – Bananas
III, paras. 206-207.
 C. The products are like products
44. Likeness between products is presumed when it is demonstrated that the measure at issue
makes a distinction based exclusively on the origin of the product.31 The OTA agreement
reduces the tariff to zero exclusively based on the origin of Solaris. Therefore, likeness
between OTA parties solaris and solaris originating in other countries is presumed.

D. The advantage at issue is not accorded immediately and unconditionally

45. The OTA provision must grant the advantage immediately and unconditionally to all like
products irrespective of their origin or destination.32 The tariff exemption is only granted
to the OTA and like products from other countries are excluded from this advantage and
only the OTA parties can give electronic self-declaration whereas the non-OTA parties
are required to get end user certificate which takes 3-4 months. Given that the advantage
is not extended to other Countries, it is also not extended “immediately” and
“unconditionally”

3.2.The implementation of the accumulation of origin rule in the OTA and the
Zycron Customs Regulation No. 50, is inconsistent with Zycron’s obligations
under Art XI:1
46. Art. XI GATT establishes a general ban on all import restriction by prohibiting the
institution and maintenance of non-tariff measures that prohibit or restrict the importation
of any product from the territory of another WTO Member.33 A measure is inconsistent
with Art. XI GATT when it meets four requirements. Firstly, the measure at issue must be
prohibition or restriction other than a duty, tax or other charge.34 Secondly, this
prohibition or restriction must be made effective through quotas, import or export license
or other measures that quantitatively restrict.35 Thirdly, the measure must be instituted or
maintained by a WTO member.36 Fourthly, the measure does not qualify as one of the
exemptions provided by Art. XI:2 GATT.

31
See para. 22 AB report, Argentina- Financial Services, para 6.36
32
Art. I:1 GATT; AB Report, EC- Seal Products, para 5.88
33
Panel Report, India – Quantitative Restrictions, para. 5.128; GATT Panel Report, Japan – Trade in
semiconductors,
L/6309, adopted 4 May 1988, BISD 35S/116, para. 104.
34
Art XI GATT
35
Ibid
36
Ibid
47. Zycron, a WTO member, implemented the origin rule in the OTA and custom regulation
No.50, which provide exemption of tariff based on the origin of the product and the
requirement of getting end user certificate to be given by a non-OTA which result in
creating a limiting effect on importation and exportation of like product. Thereby creating
a trade restriction for other WTO members producing like products.
48. The limiting effect is created by the delay caused in granting end user certificate. This is
demonstrated by the paragraph no.45 of Corrections and Clarifications where it is stated
that it takes an average of 3-4 months for the Avillon end users to get certifications.
49. The panel in Colombia – Ports of Entry (2009) found that the Colombian customs
regulation on the importation of textiles, apparel and footwear required importers of
goods arriving from Panama to submit import declarations in advance, and, accordingly,
to pay customs duties and taxes in advance, while importers of goods from other
countries were not required to file import declarations in advance. On this basis the Panel
concluded that the Colombia customs regulation granted an advantage within the meaning
of Art. I:1 of GATT to the goods from countries other than Panama.37 On a very similar
note, Zycron grants an advantage to OTA parties for they are not required to obtain
official certification which causes a lot of delay but instead can give self declarations. The
only difference from Colombia -Ports of Entry is in the sense that here official
certification and self declarations are for export of solaris.

3.3.The implementation of the accumulation of origin rule in the OTA and the
Zycron Customs Regulation No. 50, is inconsistent with Zycron’s obligations
under Article 2(b) and (c) of the Agreement on Rules of Origin.

50. Art 2(b) of agreement on rules of origin states notwithstanding the measure or instrument
of commercial policy to which they are linked, their rules of origin are not used as
instruments to pursue trade objectives directly or indirectly.38 The OTA is not about
preventing conflict over Solaris between neighbouring countries, but rather Zycron's
ensuring its ability to plunder Tlön natural resources after decades of war.39 Since most of
the mines extracting solaris in Tlon is controlled by Zycronian Nationals the OTA helps
Zycron to extract zero tariff Solaris from Tlon.

37
See Panel Report, Colombia- Ports of Entry (2009), para 7.352
38
Art.2(b) agreement on rules of origin
39
EMC2 para 5.2
51. The article 2(c) of the agreement of rules of origin states that rules of origin shall not
themselves create restrictive, distorting, or disruptive effects on international trade. They
shall not pose unduly strict requirements or require the fulfilment of a certain condition
not related to manufacturing or processing, as a prerequisite for the determination of the
country of origin. However, costs not directly related to manufacturing or processing
may be included for the purposes of the application of an ad valorem percentage criterion
consistent with subparagraph (a);40
52. The requirement for getting end user certificate for an OTA party is a long and tedious
process which takes around 3 to 4 months to be completed whereas a non-OTA party
simply has to give an electronic self-declaration. This requirement in custom regulation
no. 50 creates a restricting effect in trading Solaris for the non-OTA parties and is
violative of article 2(c) of the agreement of rules of origin.

4. Avilion also alleged that the derogations under Article III:8(a) of the GATT 1994, as
well as the exceptions under Articles XX, and Article III.2 of the GPA, are not
applicable to the measures at issue.
4.1.Derogation under Article III:8(a) of the GATT is not applicable to the
measure at issue.

53. First, Avillon submits that Art. III:8(a) of GATT shall not be applicable to the measures
at the issue because of the maxim lex specialis derogat genrali, the idea that specific law
overrides general has a long pedigree in international jurisprudence. Its rationale is well
expressed already by Grotius: "What rules ought to be observed in such cases [i.e. where
parts of a document are in conflict]. Among agreements which are equal...that should be
given preference which is most specific and approaches most nearly to the subject in
hand, for special provisions are ordinarily more effective than general”41

54. Art. III:8(a) of GATT which provides for governmental procurement as a derogation to
Art. III:4 OF GATT is the general rule under GATT but since both parties are signatory
to revised GPA which is a specific agreement for the purposes of government

40
Art 2(c) Rules of origin

41
Hugo Grotius, De Jure belli ac pacis. Libri Tres, Book II Sect. XXIX.
 procurement, Zycron cannot plead derogation under Art. III:8(a) which is a general rule
since specific rule takes precedence over the general rule according to lex specialis non
derogat.

55. Second, Avilion argues that Article III:8(a) of the GATT 1994 is not applicable because
even assuming that the measures involve a "purchase" or "procurement" of solar charging
points, such conduct is not undertaken "for governmental purposes". For Aviilon, the key
question in this respect is whether the electricity (the final product of charging stations)
purchased by the government is acquired with a view to covering the needs of the
Government of Zycron. According to the Avilion, the fact that the government purchases
contracts for the installation and management of charging stations to secure a reliable
supply of electricity from clean sources, in pursuit of a public policy, is irrelevant since
the electricity is neither used by nor covers the needs of the the Government of Zycron to
perform any of its public service functions.

56. Third, Avillon argues that the contracts for installation and management of charging
points are not entered into "for governmental purposes". Avilion is of the view that the
expression "for governmental purposes" means for governmental use, consumption or
benefit. Avilion contends that the Government of Zycron does not use, consume or
benefit from the electricity delivered pursuant to contracts awarded for installation and
management of charging stations.

57. Finally, the Avilion argues that Article III:8(a) of the GATT 1994 is not applicable
because any purchase of electricity(final product) through the contracts for installation
and management of charging stations is "with a view to commercial resale and/or with a
view to be used in the production of goods for commercial sale”. In this respect, the
Avilion submits that a "commercial resale" in the sense of ArticleIII:8(a) does not
necessarily require that the product in question be resold for a profit. Rather, the Avilion
submits that Article III:8(a) merely requires that the purchased product is sold, traded or
introduced into the market for that particular product. Avilion asserts that the electricity
produced by the charging stations is introduced into the relevant market.
 4.2.Exceptions under Art.XX of GATT `of GPA are not applicable to
measures at the issue. The burden of proof for proving these exceptions
lies with Zycron.
4.2.1Burden of proof
58. It is well established that the kinds of measures listed in Article XX are ‘exceptions’ to
the general GATT rules and the burden of proof is on the party invoking a specific Article
XX sub-paragraph to show that the measure is justified under the provision.42
59. Zycron has not provided any proof whatsoever to justify these measures ‘necessary’ or
‘relating to’ the objectives enlisted in Art. XX of GATT.

4.2.2Requirements of the ‘chapeau’ of Art. XX not fulfilled

60. for a GATT-inconsistent measure to be justified under Article XX, it must meet: (1) the
requirements of one of the exceptions listed in paragraphs(a) to (j) of Article XX; and (2)
the requirements of the introductory clauses, commonly referred to as the ‘chapeau’, of
Article XX. The Appellate Body further clarified, in US – Shrimp (1998), that, to
determine whether measure can be justified under Article XX, one must always examine,
first, whether this measure can be provisionally justified under one of the specific
exceptions listed in paragraphs (a) to (j) of Article XX; and, if so, whether the application
of this measure meets the requirements of the chapeau of Article XX.43
61. The chapeau of Art. XX limits the ability to pursue policies listed in Art. XX by stating
‘subject to the requirement that such measures are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between where same
conditions prevail, or a disguised restriction on international trade’.
62. Generally speaking the chapeau is designed to ensure the members do not abuse the
exceptions by using them as disguised means of discrimination against or among other
Members’ goods or a trade restriction of some other kind.44
63. Avilion argues that Zycron disguises these measures behind the façade of Art. XX and
that the real motive behind them is to hinder or obstruct trade so as to emerge as a leader
in global EV charging points market.

42
Appellate Body Report, EC- Tariff Preferences, para 95; Appellate Body Report, US- Shrimp, para 157
43
Appellate Body Report, US – Shrimp (1998)
44
Appellate Body Report, US- Gasoline, at 22; Appellate Body Report, US- Shrimp, para 158
64. Avilion also believes that the Directive no. 12 and March 2018 Guideline impose
arbitrary and unjustifiable discriminatory measures on Members as argued above.
65. Avilion also argues that whatever policy Zycron claims to pursue through these measures,
there are other means ‘reasonably available’ and that these measures are neither
‘necessary’ nor relate to any of the sub- paragraph in Art. XX but are only a means to
hinder trade.
66. The burden of proof lies on Zycron and it has not yet provided any proof to justify its
measures under Art. XX. Moreover, these measures are restricted by the chapeau or the
introductory clause of Art. XX causing them to be inapplicable.

4.3 Article III.2 of the GPA is not applicable to the measures at issue.
67. Article III.2 of GPA states: Subject to the requirement that such measures are not applied
in a manner that would constitute a means of arbitrary or unjustifiable discrimination
between Parties where the same conditions prevail or a disguised restriction on
international trade, nothing in this Agreement shall be construed to prevent any Party
from imposing or enforcing measures:
1. necessary to protect public morals, order or safety;
2. necessary to protect human, animal or plant life or health;
3. necessary to protect intellectual property; or
4. relating to goods or services of persons with disabilities, philanthropic institutions or
prison labour.
4.3.1Burden of proof
68. The Appellate Body has recognized that the concept of a burden of proof is implicit in the
WTO dispute settlement system. The mere assertion of a claim does not amount to proof.
In line with the practice of various international tribunals, the Appellate Body has
endorsed the rule that the party who asserts a fact, whether the complainant or the
respondent, is responsible for providing proof thereof. The burden of proof rests upon the
party, whether complaining or defending, who asserts the affirmative of a particular claim
or defence.45

45
Appellate Body Report, US —- Wool Shirts and Blouses DSR 1997:I.
69. The party invoking in defence a provision that is an exception to the allegedly violated
obligation (i.e. the respondent) bears the burden of proof that the conditions set out in the
exception are met.46
70. Zycron has publicly stated that its procurement practices are not inconsistent with Article
III:4 of the GATT 1994 as covered by the derogation under Article III:8(a) of GATT
1994, and that its laws, regulations and policies are covered and in complete compliance
with the GPA.47 Hence Zycron is obligated to prove that their procurement practices are
consistent with Art. XX GATT and Art. III.2 GPA.

71. Avilion further argues that the measures constitute a means of arbitrary and unjustifiable
discrimination and the measures are disguised under the garb of Art. III:2 to obstruct
trade and with the ulterior motive to establish itself as a leader in global EV charging
points market.

46
ibid
47
EMC2, case para 5.2