Korean Commercial Arbitration Board (Kcab) International: Memorial For Respondent Team Gaja

Memorial for Respondent TEAM GAJA
KOREAN COMMERCIAL ARBITRATION BOARD (KCAB) INTERNATIONAL
Goliath National Bank JSC
(Claimant)
v.
The Republic of Laoc
(Respondent)
MEMORIAL FOR RESPONDENT

TABLE OF CONTENTS
TABLE OF AUTHORITIES ................................................................................................... i
TABLE OF ABBREVIATIONS .......................................................................................... xiv
STATEMENT OF FACTS ...................................................................................................... 1
EXECUTIVE SUMMARY ..................................................................................................... 2
PLEADINGS ............................................................................................................................ 3
I. MR. MASON SHOULD BE REPLACED AS AN ARBITRATOR .......................... 3
A. There are justifiable doubts as to Mr. Mason’s independence and impartiality 3
i. Mr. Mason’s external knowledge drawn from concurrent ASNEC EIT arbitrations
affects the Tribunal’s decision-making ....................................................................... 5
a. Mr. Mason is unable to build a ‘Chinese wall’ in his mind .............................. 5
b. Mr. Mason’s presence causes a manifest imbalance in the arbitral

proceedings ........................................................................................................ 8
ii. Mr. Mason’s social media post discloses a personal commitment towards Hewer
Plants .......................................................................................................................... 9
iii. Mr. Mason’s podcast interview discloses a bias against climate change ............... 10
a. The challenge was made timely ...................................................................... 10
b. Mr. Mason’s statements reveal bias against climate change ......................... 11
B. Mr. Mason’s non-disclosure of his involvement in ASNEC EIT arbitrations

raises justifiable doubts as to his independence and impartiality ...................... 12
i. Mr. Mason’s non-disclosure of his involvement in ASNEC EIT arbitrations upon

appointment was not an honest exercise of discretion............................................. 13
ii. Mr. Mason’s non-disclosure of the Hewer Plants award evinces a pattern of
serious misjudgment................................................................................................. 13
II. THE CLAIMANT HAS NO STANDING TO BRING THIS CLAIM UNDER

THE ASNEC EIT......................................................................................................... 14
A. The Claimant did not make an ‘Investment’ under Article I(1) of the ASNEC
EIT (ratione materiae) ............................................................................................. 15
i
i. The Claimant does not own or control any asset..................................................... 15
ii. The Claimant’s rights over the Financing Agreement is not ‘associated with an
Economic Activity in the Energy Sector’ .................................................................. 17
B. The Claimant is not an active Investor protected by the ASNEC EIT (ratione
personae) .................................................................................................................. 18
i. The contextual interpretation of the ASNEC EIT incorporates intuitu personae .... 18
ii. The teleological construction of the ASNEC EIT incorporates intuitu personae .... 20
C. The Claimant did not own nor control any Investment at the time of alleged
breach (ratione temporis) ........................................................................................ 23
III. THE CHALLENGED MEASURE IS NOT ATTRIBUTABLE TO THE

RESPONDENT ............................................................................................................ 25
A. The Challenged Measure is solely attributable to the Respondent under lex

specialis..................................................................................................................... 26
i. The normative control test is lex specialis applicable to ASNEC ........................... 26
ii. ASNEC exercises normative control over the Challenged Measure ....................... 28
a. The Coal Directive is legally binding upon the Respondent........................... 28
b. Only ASNEC can grant an effective remedy by reversing or modifying the

Coal Directive .................................................................................................. 30
B. Alternatively, the Challenged Measure is solely attributable to ASNEC under

general law ............................................................................................................... 32
i. The Respondent is an organ or agent of ASNEC (Article 6 of DARIO) .................. 32
ii. The Respondent acted under the effective control of ASNEC (Article 7 of DARIO)
..................................................................................................................................33
C. The Claimant cannot invoke the dual attribution of ASNEC and the
Respondent without the Respondent’s presence (Monetary Gold rule) ............. 35
IV. THE RESPONDENT DID NOT UNFAIRLY AND INEQUITABLY TREAT

MFNB IN VIOLATION OF ARTICLE II(1) OF THE ASNEC EIT ..................... 36
A. The Challenged Measure did not frustrate MFNB’s legitimate expectations ... 37
ii
i. The Respondent did not make any binding promise of regulatory stability which
induced MFNB’s investment ..................................................................................... 38
a. The Governor’s political statements had no legal effect ................................ 38
b. MFNB could not reasonably rely on the Governor’s statements as a binding

promise of regulatory stability ......................................................................... 40
ii. The Respondent’s right to regulate over its energy sector was reasonably exercised
and foreseeable ......................................................................................................... 41
a. The Challenged Measure was a rational policy to protect human health and
the environment ................................................................................................ 42
b. MFNB failed to exercise due diligence ........................................................... 45
B. The Challenged Measure was non-discriminatory .............................................. 46
i. MFNB is not in a ‘like circumstance’ with energy producers and generators........ 47
ii. Law 72/2016 does not treat foreign coal investors less favourably than domestic
renewables investors ................................................................................................ 47
iii. In any event, prioritization of renewables serves the greater public good.............. 48
PRAYER FOR RELIEF........................................................................................................ 51
iii
TABLE OF AUTHORITIES
Treaties
Abbreviation Citation
ECT Energy Charter Treaty [1994] 2080 UNTS 100
ICSID Convention Convention on the Settlement of Investment Disputes Between States
and Nationals of Other States [1965] 575 UNTS 159
New York Convention on the Recognition and Enforcement of Foreign Arbitral
Convention Awards [1959] 330 UNTS 38
TEU Consolidated Version of the Treaty on European Union [1992] OJ
C325/5
TFEU Consolidated Version of the Treaty on the Functioning of the
European Union [2012] OJ C326/47
VCLT Vienna Convention on the Law of Treaties [1980] 1155 UNTS 331
Arbitral Decisions
9REN 9REN Holding S.a.r.l v Spain, Award, ICSID Case No.ARB/15/15
(31.5.2019)
A11Y A11Y Ltd. v Czech Republic, Award, ICSID Case No.UNCT/15/1
(29.6.2018)
Abaclat Abaclat v Argentina, Decision on the Proposal to Disqualify a
Majority of the Tribunal, ICSID Case No.ARB/07/5 (4.2.2014)
AES AES Summit Generation Limited v Hungary, Award, ICSID Case
No.ARB/07/22 (23.9.2010)
Alapli Alapli v Turkey, Excerpts of Award, ICSID Case No.ARB/08/13
(16.7.2012)
Alex Genin Alex Genin, Eastern Credit Limited, Inc. v Estonia, Award, ICSID
Case No.ARB/99/2 (25.6.2001)
Alpha Alpha Projektholding GmbH v Ukraine, Decision on Respondent‟s
Projektholding Proposal to Disqualify Arbitrator Dr Yoram Turbowicz, ICSID Case
No.ARB/07/16 (19.3.2010)
Amto Limited Liability Company Amto v Ukraine, Final Award, SCC
i
Arbitration No.080/2005 (26.3.2008)

Antaris Antaris Solar GmbH v Czech Republic, PCA Case No.2014-01
(2.5.2018)
Antin Antin Infrastructure Services Luxembourg S.à.r.l. B.V. v Spain,
Award, ICSID Case No.ARB/13/31 (15.6.2018)
Azurix Azurix Corp. v Argentina, Award, ICSID Case No.ARB/01/12
(14.7.2006)
Banro Banro American Resources, Inc. v Congo, Award, ICSID Case
No.ARB/98/7 (1.9.2000)
Bayindir Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v Pakistan, Award,
ICSID Case No.ARB/03/29 (27.8.2009)
Bear Creek Bear Creek Mining Corporation v Peru, Expert Report of Alfredo
Bullard González, ICSID Case No.ARB/14/21 (26.05.2015)
Biwater Biwater Gauff (Tanzania) Ltd. v Tanzania, Award, ICSID Case
No.ARB/05/22 (24.7.2008)
Blue Bank Blue Bank International & Trust (Barbados) Ltd. v Venezuela,
Decision on the Parties‟ Proposal to Disqualify the Majority of the
Tribunal, ICSID Case No.ARB/12/20 (12.11.2013)
Burlington Burlington Resources Inc. v Ecuador, Decision on the Proposal for
Disqualification of Professor Francisco Orrego Vicuña, ICSID Case
No.ARB/08/5 (13.12.2013)
Canfor Canfor Corporation v USA, Order of the Consolidation Tribunal,
UNCITRAL (7.9.2005)
Caratube Caratube International Oil Company LLP v Kazakhstan, Decision on
the Proposal for Disqualification of Mr. Bruno Boesch, ICSID Case
No.ARB/13/13 (20.3.2014)
CC/Devas CC/Devas (Mauritius) Ltd. v India, Decision on the Respondent‟s
Challenge to Hon. Marc Lalonde as Presiding Arbitrator and
Professor Francisco Orrego Vicuña as Co-Arbitrator, PCA Case
No.2013-09 (30.9.2013)
Charanne Charanne and Construction Investments v Spain, Award, SCC Case
No. V 062/2012 (1.1.2016)
CMS CMS Gas Transmission Company v Argentina, Award, ICSID Case
ii
No.ARB/01/8 (12.5.2005)
ConocoPhillips ConocoPhillips Petrozuata B.V. v Venezuela, Decision on Jurisdiction
and the Merits, ICSID Case No.ARB/07/30 (3.9.2013)
Continental Continental Casualty Company v Argentina, Award, ICSID Case
Casualty No.ARB/03/9 (5.9.2008)
Crystallex Crystallex International Corporation v Venezuela, ICSID Case
No.ARB(AF)/11/2 (4.4.2016)
Daimler Daimler Financial Services AG v Argentina, Award, ICSID Case
No.ARB/05/1 (22.8.2012)
Duke Energy Duke Energy Electroquil Partners v Ecuador, Award, ICSID Case
No.ARB/04/19 (18.8.2018)
EDF EDF (Services) Limited v Romania, Award, ICSID Case
No.ARB/05/13 (8.10.2009)
Eiser (Annulment) Eiser Infrastructure Limited v Spain, Decision on Annulment, ICSID
Case No.ARB/13/36 (11.6.2020)
Eiser (Award) Eiser Infrastructure Limited v Spain, Final Award, ICSID Case
No.ARB/13/36 (4.5.2017)
El Paso El Paso Energy International Company v Argentina, Award, ICSID
Case No.ARB/03/15 (31.10.2011)
Electrabel (Award) Electrabel S.A. v Hungary, Award, ICSID Case No.ARB/07/19
(25.11.2015)
Electrabel Electrabel S.A. v Hungary, Decision on the Claimant‟s Proposal To
(Disqualification) Disqualify A Member of the Tribunal, ICSID Case No.ARB/07/19
(25.2.2008)
Electrabel Electrabel S.A. v Hungary, Decision on Jurisdiction, Applicable Law
(Jurisdiction) and Liability, ICSID Case No.ARB/07/19 (30.11.2012)
EnCana EnCana Corporation v Ecuador, Partial Award on Jurisdiction, LCIA
Case No.UN3481 (27.2.2004)
Energorynok State Enterprise ‘Energorynok’ (Ukraine) v Moldova, Final Award,
SCC Arbitration V (2012/175) (29.1.2015)
Enron Enron Corporation Ponderosa v Argentina, Award, ICSID Case
No.ARB/01/3 (22.5.2007)
Eureko Eureko v Slovakia, Award on Jurisdiction, Arbitrability and
iii
Suspension, PCA Case No.2008-13 (26.10.2010)

Gami Gami Inv., Inc. v Mexico, Final Award, UNCITRAL (15.11.2004)
Getma Getma International v Guinea [II], Decision on Proposal to
Disqualify Mr Bernado Cremades, Arbitrator, ICSID Case
No.ARB/11/29 (28.6.2012)
Glamis Glamis Gold, Ltd. v USA, Award, UNCITRAL (8.6.2009)
IBM IBM World Trade Corporation v Ecuador, Decision on Jurisdiction
and Competence, ICSID case No.ARB/02/10 (22.12.2003)
İçkale İçkale İnşaat Limited Şirketi v Turkmenistan, Decision on Claimant‟s
Proposal To Disqualify Professor Philippe Sands, ICSID Case
No.ARB/10/24 (11.7.2014)
Isolux Isolux Netherlands, BV v Spain, Final Award, SCC Case V2013/153
(17.7.2016)
Larsen Larsen v Hawaiian Kingdom, PCA Award, UNCITRAL (5.2.2001)
LBW Landesbank Baden-Württemberg v Spain, Decision on the “Intra-EU”
Jurisdictional Objection, ICSID Case No.ARB/15/45 (25.2.2019)
Lemire Joseph Charles Lemire v Ukraine, Decision on Jurisdiction and
Liability, ICSID Case No.ARB/06/18 (14.1.2010)
LG&E LG&E Energy Corp v Argentina, Decision on Liability, ICSID Case
No.ARB/02/1 (3.10.2006)
Mamidoil Mamidoil Jetoil Greek Petroleum Products Société S.A. v Albania,
Award, ICSID Case No.ARB/11/24 (30.5.2015)
Maffezini Emilio Agustín Maffezini v Spain, Award, ICSID Case No.ARB/97/7
(12.11.2000)
Mera Mera Investment Fund Limited v Serbia, Decision on Jurisdiction,
Micula Ioan Micula, Viorel Micula v Romania [I], Final Award, ICSID Case
No.ARB/05/20 (11.12.2013)
Micula (Abi-Saab) Ioan Micula, Viorel Micula v Romania [I], Separate Opinion of
Professor Abi-Saab, ICSID Case No. ARB/05/20 (11.12.2013)
Mihaly Mihaly International Corporation v Sri Lanka, Award, ICSID Case
No.ARB/00/2 (15.3.2002)
MTD MTD Equity Sdn. Bhd. and MTD Chile S.A. v Chile, Award, ICSID
iv
Case No.ARB/01/7 (25.5.2004)

National Grid National Grid Plc v Argentina, Award, UNCITRAL (3.11.2008)
Pac Rim Cayman Pac Rim Cayman LLC v El Salvador, Decision on the Respondent‟s
Jurisdictional Objections, ICSID Case No.ARB/09/12 (1.6.2012)
Pac Rim Cayman Pac Rim Cayman LLC v El Salvador, Opinion of Professor Don
(Wallace) Wallace, Jr., ICSID Case No.ARB/09/12 (12.5.2010)
Plama Plama Consortium Limited v Bulgaria, Decision on
Jurisdiction, ICSID Case No.ARB/03/24 (8.2.2005)
Parkerings Parkerings–Compagniet AS v Lithuania, Award, ICSID Case
No.ARB/05/8 (11.9.2007)
Perenco Perenco Ecuador Ltd. v Ecuador & Petroecuador, Decision on
Challenge to Arbitrator, PCA Case No.IR-2009/1 (8.12.2009)
Petrobart Petrobart Limited v Kyrgyzstan, Award, SCC Arbitration
No.126/2003 (29.3.2005)
Phoenix Action Phoenix Action Ltd. v Czech Republic, Award, ICSID Case
No.ARB/06/5 (15.4.2009)
PIP-Sàrl Participaciones Inversiones Portuarias Sàrl v Gabon, Decision on
Proposal to Disqualify an Arbitrator, ICSID Case No.ARB/08/17
(12.11.2009)
PV Investors The PV Investors v Spain, Final Award, PCA Case No.2012-14
(28.2.2020)
Rainbow Warrior Case Concerning Rainbow Warrior Affair (France-New Zealand)
[1990] 20 UNRIAA 215
RREEF RREEF Infrastructure (G.P.) Limited v Spain, Decision on
Jurisdiction, ICSID Case No.ARB/13/30 (6.6.2016) 
Ruby Roz Ruby Roz Agricol LLP v Kazakhstan, Award on Jurisdiction,
UNCITRAL (1.8.2013)
RWE Innogy RWE Innogy GmbH v Spain, Decision on Jurisdiction, Liability and
Certain Issues of Quantum, ICSID Case No.ARB/14/34 (30.12.2019)
Saint-Gobain Saint-Gobain Performance Plastics v Venezuela, Decision on
Claimant‟s Proposal to Disqualify Mr. Gabriel Bottini from the
Tribunal under Article 57 of the ICSID Convention, ICSID Case
No.ARB/12/13 (27.2.2013)
v
Salini Salini Costruttori S.p.A. v Morocco [I], Decision on Jurisdiction,

Saluka Saluka Investments BV (The Netherlands) v Czech Republic, Partial
Award, PCA Case No.2001-04 (17.3.2006)
SCB Standard Chartered Bank v Tanzania, Award, ICSID Case
No.ARB/10/12 (2.11.2016)
Société Générale Société Générale in respect of DR Energy Holdings Limited v The
Dominican Republic, Award on Preliminary Objections to
Jurisdiction, LCIA Case No.UN 7927 (19.9.2008)
Southern Bluefin Southern Bluefin Tuna (New Zealand-Japan, Australia-Japan),
Tuna Award on Jurisdiction and Admissibility [2000] 23 UNRIAA 1
Suez Suez v Argentina, Decision on a Second Proposal for the
Disqualification of a Member of the Arbitral Tribunal, ICSID Case
No.ARB/03/19 (12.5.2008)
Tecmed Tecnicas Medioambientales Tecmed S. A. v Mexico, Award, ICSID
Case No.ARB (AF)/00/2 (29.5.2003)
Telefónica Telefónica S.A. v Argentina, Decision of the Tribunal on Objections
to Jurisdiction, Case No.ARB/03/20 (25.5.2006)
Telekom Ghana v Telekom Malaysia Berhad, Decision (District Court of The
(Challenge-I) Hague), PCA Case No.2003-03 (18.10.2004)
Telekom Ghana v Telekom Malaysia Berhad, Decision (District Court of The
(Challenge-II) Hague), PCA Case No.2003-03 (5.11.2004)
Thunderbird International Thunderbird Gaming Corporation v Mexico, Arbitral
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Tidewater Tidewater Inc., Tidewater Investment SRL v Venezuela, Decision on
(Disqualification) Claimant‟s Proposal to Disqualify Arbitrator Professor Brigitte Stern,
Tidewater Tidewater Inc., Tidewater Investment SRL v Venezuela, Decision on
(Jurisdiction) Jurisdiction, ICSID Case No.ARB/10/5 (8.2.2013)
Tokios Tokios Tokelės v Ukraine, Decision on Jurisdiction, ICSID Case
No.ARB/02/18 (29.4.2004)
Total Total S.A. v Argentina, Decisions on Liability, ICSID Case
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vi
Universal Universal Compression International Holdings v Venezuela, Decision

Compression on the Proposal to Disqualify Prof. Brigitte Stern and Prof. Guido
Santiago Tawil, Arbitrators, ICSID Case No.ARB/10/9 (20.5.2011)
Urbaser Urbaser S.A. v Argentina, Decision on Claimants' Proposal to
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No.ARB/07/26 (12.8 2010)
Vannessa Vannessa Ventures Ltd v Venezuela, Award, ICSID Case
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Vale Vale S.A. v BSG Resources Limited, Decision on Challenge to Full
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Vattenfall Vattenfall v Germany, Recommendation Pursuant to the Request by
(Disqualification) ICSID dated 8.5.2020 on the Respondent‟s Proposal to Disqualify All
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Vattenfall Vattenfall v Germany, Decision on Achmea Issue, ICSID Case
No.ARB/12/12 (31.8.2018)
WA Investments WA Investments Europa Nova Ltd. v Czech Republic, Award, PCA
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Waste Management Waste Management, Inc. v Mexico ("Number 2"), Award, ICSID Case
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Wirtgen Jürgen Wirtgen, Stefan Wirtgen, Gisela Wirtgen v Czech Republic,
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Yukos Yukos Universal Limited (Isle of Man) v Russia, Interim Award on
Jurisdiction and Admissibility, PCA Case No.2005-04/AA227
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Sornarajah M.Sornarajah, The International Law on Foreign Investment (4th edn, CUP
2017)
UN/EU Documents
Accession to ECHR Opinion 2/13 of the Court, Opinion pursuant to Article 218(11)
TFEU ECLI:EU:C:2014:2454
ARSIWA ILC, Articles on the Responsibility of States for Internationally
Wrongful Acts, A/CN.4/SER.A/2001/Add.1(Part 2), 2001
DARIO ILC, Draft Articles on the Responsibility of International
Organizations, A/CN.4/L.778, 2011
DARIO ILC, Draft Articles on the Responsibility of International
Commentaries Organizations, with Commentaries, A/66/10, 2011
Directive 93/75 Council Directive 93/75/EEC of 13 September 1993 concerning
minimum requirements for vessels bound for or leaving Community
ports and carrying dangerous or polluting goods [1993] OJ L247
Gaja (2004) G.Gaja, Second Report on Responsibility of International
xii
Organisations, A/CN.4/541, 2004

Observations 2011 Comments and Observations Received from International
Organizations, A/CN.4/637 and Add.1, 2011
UN News 2019 UN News, „Is the world ready to end the coal era and embrace clean
energy?‟ <https://www.un.org/sg/en/content/sg/statement/2019-09-
23/secretary-generals-remarks-closing-of-climate-action-summit-
delivered> accessed 23.9.2020
UN Secretary-General United Nations Secretary-General‟s remarks at closing of Climate
Statement Action Summit, 2019
UNCTAD Series on United Nations Conference on Trade and Development, Fair and
FET Equitable Treatment, UNCTAD Series on Issues in International
Investment Agreements II, UNCTAD/DIAE/IA/2011/5, 2012
UNSC Report 1994 United Nations Security Council, Report of the Commission of
Inquiry Established pursuant to Investigate Armed Attacks on
UNOSOM II Personnel, S/1994/653, 1994.
Miscalleneous
Denchak M.Denchak, „Fossil Fuels: The Dirty Facts‟ (2018) NRDC,

<https://www.nrdc.org/stories/fossil-fuels-dirty-
facts#:~:text=Regardless%20of%20variety%2C%20however%2C%20all,fos
sil%20fuel%20we%20can%20burn.&text=Coal%20and%20the%20power%
20plants,more%20than%20half%20in%202008> accessed 23.9.2020
Report of International Council For Commercial Arbitration, „Report of The ASIL-
ASIL-ICCA ICCA Joint Task Force on Issue Conflicts in Investor-State Arbitration‟
(2016) <https://www.asil.org/sites/default/files/ASIL_ICCA.pdf> accessed
20.9.2020
WCA World Coal Association, Coal <https://www.worldcoal.org/coal/what-coal>
accessed 23.9.2020
xiii
TABLE OF ABBREVIATIONS
Abbreviation Term
ASNEC Association of Sovereign Nations for Economic Cooperation
ASNEC Charter Founding Charter of ASNEC
ASNEC EIT Treaty concerning the Encouragement and Reciprocal Protection of
Investments in the ASNEC Region
C-Energy C-Energy v Wellfalcon
Challenged Measure Law 66/2016 and Law 72/2016
CJEU Court of Justice of European Union
Coal Directive Directive (ASNEC) 2016/87 of the Council of 17.2.2016 on the
renewable sources of energy
ECtHR European Court of Human Rights
ECT Energy Charter Treaty
EU European Union
FET Fair and Equitable Treatment
GNB Goliath National Bank JSC
Governor Ji-Yeong, Huan (Governor of Ticadia)
Hewer Plants Hewer Plants JSC v Wellfalcon
Statement of I&I Statement of Independence and Impartiality
IAN International Arbitration News
ICCA International Council For Commercial Arbitration
ICJ International Court of Justice
ICSID International Centre for Settlement of Investment Dispute
KFOR Kosovo Force
Laoc Republic of Laoc
LEU Laocan Environmental Union
LRC Laocan Renewables Company
Mercuria Republic of Mercuria
MFN Most Favourite Nation
MFNB Mercurian First National Bank
Mountaintop Mountaintop Investment LLC
NDC Nationally Determined Contribution
xiv
REIO Regional Economic Integration Organisation

T-1 Ticadia-1 Power Plant
T-1 LLC Ticadia-1 LLC
UN United Nations
UNAMIR United Nations Assistance Mission for Rwanda
UNFCCC United Nations Framework Convention on Climate Change
UNMIK United Nations Interim Administration Mission in Kosovo
UNOSOM II United Nations Operation in Somalia II
UNSC United Nations Security Council
WTO World Trade Organization
xv
STATEMENT OF FACTS
Pre-Investment
[1] 1980s: Many coal-fired power plants were constructed to generate electricity in Laoc
for domestic consumption.
[2] 1990s: In 1997, Laoc ratified the UNFCCC.
[3] 2000s: Laoc‟s economy grew due to its industrial and agricultural sectors. Laocan
officials actively source for foreign investments to construct new coal-fired power
plants. Floods intensified throughout ASNEC, striking Laoc hardest (6 major floods,
85,000 deaths, and 50,000 houses destroyed in 2000-2015). Pro-environmental
political parties won numerous elections in almost all ASNEC States (except Laoc).
[4] 2009: In August, after meeting the Governor, Mountaintop commenced negotiations
with Laocan authorities to build a coal-fired power plant in Ticadia. Approval was
granted. Mountaintop established T-1 LLC, a Laocan subsidiary, to operate the plant.
Investment
[5] 2010: Representatives of MFNB and Mountaintop had regular meetings with Laocan
officials. At a November meeting, the Governor committed towards ensuring that the
project will be „economically beneficial‟ to all parties. MFNB agreed to furnish a loan
of USD600 million to fund 60% of T1‟s construction cost. In December, MFNB, T-1
LLC and Mountaintop executed a Financing Agreement. Construction of T-1 began.
Post-Investment
[6] 2012: In February, 13 States including Laoc and Mercuria founded ASNEC (with
competence over environmental and energy polices). In June, ASNEC and Member
States signed the ASNEC EIT to promote intra-ASNEC investment flows.
[7] 2014: T-1 commenced commercial operations.
[8] 2015: Pro-environmental LEU gained control of Laoc‟s Parliament. In December,

ASNEC and Member States signed the Seoul Agreement, which aims to reduce
greenhouse gas emissions.
1
[9] 2016: In February, ASNEC communicated NDCs for the region. Weeks later,
ASNEC adopted the Coal Directive by majority vote (Laoc against) which mandated
the increase of renewables, and phase-out of coal-fired power plants by end of 2028.
Challenged Measure
[10] 2016: In July, Laoc‟s Parliament enacted Law 66/2016 to implement the coal phase-
out. In December, the Parliament enacted Law 72/2016 to grant priority of access and
premium pricing to electricity generators supplied by renewables.
[11] 2017: T-1‟s market value dipped by 40%. Mountaintop rejected MFNB‟s request for
additional security. MFNB commenced arbitration against Mountaintop as guarantor
(lost in 2018). Due to low liquidity, MFNB assigned its rights under the Financing
Agreement to the Claimant for USD150 million.
Arbitration
[12] 2019: In January, the Claimant filed this arbitration. In June, the INA article
disclosed Mr. Mason‟s involvement as arbitrator in Hewer Plants. Within 2 weeks,
the Respondent filed a challenge against Mr. Mason.
2
EXECUTIVE SUMMARY
[1] Disqualification: There are justifiable doubts as to Mr. Mason‟s independence and
impartiality. His undisclosed involvement in two ASNEC EIT arbitrations (i.e. Hewer
Plants and C-Energy) constitutes an „issue conflict‟ due to significant concurrency of
legal issues (i.e. Attribution and FET Standard) and his inability to build a „Chinese
wall‟ within his mind.
[2] Jus Standi: The Claimant is a mere debt collector who has never stepped foot nor
contributed a single cent to Laoc‟s economy. The assignment of MFNB‟s financing
rights after the Challenged Measure‟s adoption is not an „investment‟ protected under
the ASNEC EIT, violates the doctrine of intuitu personae, and constitutes an abuse of
rights.
[3] Attribution: The Challenged Measure was a direct implementation of ASNEC‟s

binding Coal Directive. Concomitantly, such conduct is attributable to ASNEC,
whether under Articles 6-7 of DARIO or EU‟s lex specialis rule on normative control.
[4] FET Standard: The Respondent made no binding promise of regulatory stability. The
coal phase-out and incentives to renewables are rational policies aimed at reducing
greenhouse gas emissions in line with ASNEC‟s commitment towards combatting
climate change.
[5] In conclusion, this dispute is a non-starter as the proper parties are not even before
this Tribunal (i.e. MFNB and ASNEC). In any event, there is nothing unfair or
inequitable in the elimination of dirty pollutants that endanger the environment and
human lives.
2
PLEADINGS
I. MR. MASON SHOULD BE REPLACED AS AN ARBITRATOR
[1] On 2.6.2019, via IAN‟s article, 1 the Respondent discovered Mr. Mason sat as an
arbitrator in Hewer Plants since 2016.2 Such discovery, coupled with his subsequent
tweet 3 and pod-cast interview in 2018, 4 raises justifiable doubts over Mr. Mason‟s
independence and impartiality.5
[2] The thrust of the Respondent‟s challenge is two-fold: [A] issue conflict; and [B] non-
disclosure.
A. There are justifiable doubts as to Mr. Mason’s independence and impartiality
[3] In accordance to Article X(2) of the ASNEC EIT, 6 this Tribunal should apply the
standard of disqualification under Article 12(1) of the UNCITRAL Rules i.e. „if
circumstances exist that give rise to justifiable doubts as to the arbitrator’s
impartiality or independence‟.7
[4] As affirmed by scholars8 and arbitral tribunals,9 such standard is less stringent than
the standard of „manifest lack‟ under the ICSID Convention.10 Further, the standard is
objective from the „point of view of a reasonable and informed third person‟.11
[5] An arbitrator ceases to be independent and impartial when he is „influenced by factors

other than those related to the merits of the case‟. 12 The Respondent is chiefly
1
Record, p.50.
2
ibid p.45.
3
ibid p.51.
4
ibid pp.48-49.
5
ibid pp.44-46.
6
ibid p.65.
7
UNCITRAL Rules, art.12(1).
8
Hwang & Lim, ¶35; Loretta, ¶8.19; Caron, p.598.
9
Tidewater (Disqualification), ¶¶39-40, ¶43; Suez, ¶29; Alpha Projektholding, ¶¶60-64.
10
ICSID Convention, art.57.
11
Burlington, ¶66; Blue Bank, ¶59; Abaclat, ¶75; Caron, p.210.
12
ConocoPhillips, ¶55; Universal Compression, ¶70; Urbaser, ¶43; Suez, ¶29; Getma, ¶59; Blue Bank, ¶59;
Burlington, ¶66.
3
concerned that Mr. Mason‟s mind is clouded by conscious (or unconscious) bias, and
immune from persuasion due to strongly-held beliefs.13
[6] In arbitral circles, the colloquial term is „issue conflict‟. 14 This arises when an
„arbitrator is inappropriately predisposed to favor a particular outcome with respect
to the issues‟15 stemming from the „desire to conform to his or her own previously
expressed view‟.16
[7] In CC/Devas, Judge Tomka opined:
„I must find, on the basis of the prior view and any other relevant
circumstances, that there is an appearance of pre-judgment of an issue
likely to be relevant to the dispute on which the parties have a
reasonable expectation of an open mind.‟17
Such test was affirmed in İçkale18 and Vattenfall.19
[8] The general principles revolving challenges against „repeat arbitrators‟ include:
(a) Arbitrators are presumed to be „neutral‟ and exercising „independent arbitral

function‟ in every case20 (even if re-appointed by the same party21 or hear a
parallel arbitration concerning the same government, same treaty, and same
measure22).
(b) Conflict arises where there is „material risk that the arbitrator may be
influenced by factors outside the record‟,23 particularly from „prior knowledge
of facts relevant to the outcome of the dispute‟.24
13
CC/Devas, ¶64.
14
Hwang & Lim, ¶39; Report of ASIL-ICCA, ¶14.
15
Vattenfall (Disqualification), ¶12.
16
CC/Devas, ¶58.
17
ibid ¶58.
18
İçkale, ¶120.
19
Vattenfall (Disqualification), ¶112.
20
Tidewater (Disqualification), ¶60.
21
Universal Compression, ¶¶80-83.
22
Electrabel (Disqualification), ¶40.
23
ibid ¶62.
24
Caratube, ¶65.
4
(c) „Knowledge of the law or views expressed about the law are not per se sources
of conflict‟ that justify disqualification.25
[9] The Respondent does not dispute such collective wisdom. Since „issue conflict‟ is an
ever-evolving concept, 26 the Respondent further draws guidance from the 2016
ICCA‟s cross-jurisdictional survey on arbitral jurisprudence constante. Such report
posits two critical factors that increases the likelihood of bias:
(a) Concurrence – Where an arbitrator encounters difficulty to „build a Chinese

wall‟ in his mind to shut out reference to extraneous materials from previous
or parallel cases (EnCana,27 Caratube,28 and İçkale29)
(b) Commitment – Where an arbitrator is deeply invested on promoting or

defending a legal opinion critical to the dispute (Perenco30, CC/Devas31 and
Urbaser32)
[10] Here, justifiable doubts overshadow Mr. Mason‟s independence and impartiality due
to the [i] ASNEC EIT arbitrations; [ii] social media post; and [iii] pod-cast interview.
Each ground in itself is serious enough to warrant disqualification.
i. Mr. Mason’s external knowledge drawn from concurrent ASNEC EIT

arbitrations affects the Tribunal’s decision-making
[11] Mr. Mason‟s involvement in Hewer Plants and C-Energy entails two types of
prejudice [a] personal bias; and [b] manifest imbalance.
a. Mr. Mason is unable to build a ‘Chinese wall’ in his mind
[12] In Caratube, the unchallenged arbitrators disqualified Mr. Boesch because there was
„significant overlap in the underlying facts‟ with the Ruby Roz arbitration in relation
25
CC/Devas, ¶58.
26
Caratube, ¶108.
27
EnCana, ¶45.
28
Caratube, ¶89.
29
İçkale, ¶121.
30
Perenco, ¶48-58.
31
CC/Devas, ¶62.
32
Urbaser, ¶47.
5
to the modus operandi of the Hourani and Omar families.33 This is despite both cases
concerning „completely unrelated industries‟ (i.e. termination of oil concession and
expropriation of a chicken farm), 34 and Ruby Roz not proceeding to trial due to
dismissal at jurisdiction.35
[13] The unchallenged arbitrators emphasised that the concern was not of Mr. Boesch‟s
„ethical or moral strength‟,36 but the difficulty to shut out his unconscious bias:
„[I]t remains that Mr. Boesch is privy to information that would possibly
permit a judgment based on elements not in the record in the present
arbitration and hence there is an evident or obvious appearance of lack
of impartiality…‟37
[14] Bias is not limited to similarity in factual matrix. In CC/Devas, Professor Vicuña was
removed due to his stubborn scholarly defence on a singular point of law – the
interpretation of „essential security interest‟ 38 (a generic exception clause found in
many trade agreements subject to constant review before the ICJ39 and WTO40).
[15] In short, all it takes is a singular concurrency of factual or legal issue for „issue
conflict‟ to arise. The inquiry is qualitative, not quantitative – or as aptly put in
Tidewater: „a matter of substance, not of mere mathematical calculation‟.41
[16] Hence, this Tribunal need not draw a comparative table to calculate the similarities
and differences between the situations in Laoc and Wellfacon. It is immaterial that the
Hewer Plants award is unpublished,42 and that the Wellfalcon arbitrations involved
lignite43 (a dirty pollutant closely identical to coal44).
33
Caratube, ¶90; Ruby Roz, ¶¶31-32.
34
Caratube, ¶85.
35
ibid ¶¶73,86.
36
ibid ¶64.
37
ibid ¶89.
38
CC/Devas, ¶62.
39
Oil Platforms, ¶32-33; Nicaragua, ¶222.
40
Russia–Traffic, ¶130.
41
42
Record, p.71.
43
ibid p.50.
44
WCA.
6
[17] Here, there is an overlapping of two critical issues in the ASNEC EIT arbitrations –
interpretation of the FET standard, and attribution of domestic measures to ASNEC.45
[18] Another dimension of concurrency is timing. In Urbaser, the tribunal did not find a
text book chapter written by Professor McLachlan 3 years prior warranted
disqualification as „[o]ne of main qualities of an academic is the ability to change
his/her opinion as required in light of the current state of academic knowledge‟.46 In
Saint-Gobain, Mr. Bottini‟s previous stance as a counsel was not held against him.47
In contrast, Professor Gaillard was compelled to resign in Telekom due to concurrent
involvement in an ICSID annulment proceedings and another arbitration relating to
that same award.48
[19] It is deeply troubling that Mr. Mason was involved in three ASNEC EIT arbitrations
around the same period, as depicted below:
Case Nomination of Mr. Mason Award
GNB v Laoc (this dispute) 31.1.201949 Pending
C-Energy v Wellfalcon 16.3.201850 Pending
Hewer Plants v Wellfalcon 11.8.201651 1.5.201952
GNB v Laoc
Disclosure
Since 2018 C-Energy v Wellfalcon
Since 2016 Hewer Plants v Wellfalcon
February March April May June
Concurrence of ASNEC EIT arbitration in 2019
45
Record, p.50.
46
Urbaser, ¶51.
47
Saint-Gobain, ¶¶80-81.
48
Telekom (Challenge-I), p.7.
49
ibid pp.7,60.
50
ibid p.75, ¶7.
51
Record, p.70, ¶15.
52
ibid p.50.
7
[20] The difficulty lies in building a „Chinese wall‟ to compartmentalize the sheer volume
of information. The likelihood of spillover is exacerbated by significant similarities.
[21] Hence, an informed third party would hold that Mr. Mason is likely to determine this
dispute based on external knowledge beyond the four corners of the record.53
b. Mr. Mason’s presence causes a manifest imbalance in the arbitral

proceedings
[22] A fundamental tenet of arbitration is the equality of arms. 54 Under the UNICTRAL
Rules, the arbitral tribunal in conducting proceedings must ensure that „parties are
treated with equality and […] each party is given a reasonable opportunity of
presenting its case‟.55
[23] In EnCana, the tribunal cautioned that equality is compromised when an arbitrator is
affected by external information drawn from other arbitrations.56 To mitigate bias, he
must share relevant information with his co-arbitrators. 57 However, as noted in
Caratube, this solution is unworkable where the arbitrator is constrained by the duty
of confidentiality.58
[24] Here, Mr. Mason cannot divulge any information gained from Hewer Plants and C-
Energy. This puts him in an awkward position where he has to think twice before
speaking up during deliberations. His lack of candour will invariably affect his co-
arbitrators‟ perception and confidence on his views.59
[25] Hence, this gives rise to a „manifest imbalance‟ within the Tribunal to the
disadvantage of all parties.60
53
Caratube, ¶89.
54
Model Law, art.18; Redfern, ¶3.05.
55
UNCITRAL Rules, art.17(1).
56
EnCana, ¶45.
57
ibid.
58
Caratube, ¶94.
59
Eiser (Annulment), ¶¶249-250.
60
Caratube, ¶93.
8
ii. Mr. Mason’s social media post discloses a personal commitment towards
Hewer Plants
[26] It is entirely possible for arbitrators to be disqualified for a single off-hand statement.
Context matters – general views are permissible, specific views are suspect.61
[27] In Saint-Gobain 62 and Telekom, 63 benefit of doubt was accorded to past views
advocated in an arbitrator‟s previous life as counsel. This is because such advocacy
reflects their client‟s position, and not necessarily their own.64
[28] In Canfor,65 a NAFTA arbitrator appointed by a Canadian investor was compelled to

resign for criticizing the US‟s repeated challenges on softwood lumber „because they
know harassment is just as bad as the process‟.66
[29] Here, Mr. Mason retweeted the IAN article a day after its publication with the caption:
„Proud to have served as arbitrator in this ground-breaking case on
#ClimateChange!‟67
[30] The timing is a cause of concern. First, he is still under a duty of confidentiality until
the award is published.68 Second, both this dispute and C-Energy are on-going. Third,
69
construed contextually, the term „ground-breaking‟ strongly suggest that
environmental aspects feature heavily in the merits of the award.
[31] His rush to celebrate the Hewer Plants award is unsettling. At best, he has strong
emotional connection to the case. At worst, he is an opportunist indirectly marketing
himself to solicit future legal work. Either way, any overt affinity towards a single
61
Urbaser, ¶52; Report of ASIL-ICCA, ¶161.
62
Saint-Gobain, ¶84.
63
Telekom (Challenge-II), ¶11.
64
Report of ASIL-ICCA, ¶161.
65
Canfor, ¶20.
66
Report of ASIL-ICCA, ¶123.
67
Record, p.51.
68
Vale, ¶321.
69
ibid ¶313.
9
case is rather unnatural of an experienced investment arbitrator of over 30

appointments.70
[32] The prejudice is self-evident. An arbitrator lending support in a unanimous „ground-

breaking‟ decision71 will be loath to reach a different conclusion on the same issue in
a subsequent case. This is especially true for media-friendly Mr. Mason.72 Being in
the public spotlight heightens the pressure of conformity.
[33] Hence, the deep connection that Mr. Mason has forged with Hewer Plants raises
justifiable doubts as to his ability to adjudge similar ASNEC EIT arbitrations with an
open mind.73
iii. Mr. Mason’s podcast interview discloses a bias against climate change
[34] On the podcast interview, the Claimant objected on the basis of [a] delay, and [b]
insignificance74 The Respondent will address both points in turn.
a. The challenge was made timely
[35] Pursuant to Article 13 of the UNCITRAL Rules, a challenging party must notify all
parties and arbitrators within 15 days after the circumstances giving rise to justifiable
doubts „became known‟ to the challenging party.75
[36] The term „became known‟ is equivalent to „actual knowledge‟.76 The lower threshold
of „constructive knowledge‟ can only be implied with terms such as „ought
reasonably to have known‟ or „with reasonable diligence have discovered‟.77
[37] The Respondent only learnt about the interview via the IAN article on 2.6.2019.78 It is
immaterial whether the Respondent could have known earlier with due diligence. As
70
Record, p.53.
71
ibid p.75.
72
ibid p.50.
73
Caratube, ¶90.
74
Record, p.53.
75
UNCITRAL Rules, art.13(1)-(2).
76
CC/Devas, ¶47.
77
Vale, ¶222; UK Arbitration Act, art.73(1).
78
Record, p.45.
10
the challenge against Mr. Mason was filed on 16.6.2019, 79 this ground was raised
within a timely fashion within 15 days.
b. Mr. Mason’s statements reveal bias against climate change
[38] There is no short of cautionary tales for outspoken arbitrators. In Perenco, Judge
Bower openly criticised the respondent Ecuador as being a „recalcitrant‟ host State
akin to Libya during an interview. 80 This was in a response to a rather generic
question: „what do you see as the most pressing issues in international arbitration?‟81
Despite Judge Bower explaining his subjective intent, the appointing authority upheld
his disqualification based on an objective interpretation from a reasonable third
party.82
[39] Concomitantly, it is immaterial as to what was the focus of the podcast interview
(career advice),83 and the interview question that elicited his controversial comment
(prospective area of law).84 Similarly, his subsequent explanation of what his words
actually meant is irrelevant.85
[40] It is noteworthy that the interview went live on 9.5.2018 after his appointment in
Hewer Plants and C-Energy. By then, he would have developed views on the merits.
[41] From his comments, we can infer where Mr. Mason stands on climate change:
Comment Inference
(a) „I do not see how climate change adds He does not believe that climate
anything new to the debate in change offers a legitimate basis for
investment law‟86 host States to exercise their right to
regulate
79
ibid p.44.
80
Perenco, ¶¶48-50.
81
ibid ¶¶50-52.
82
ibid ¶53.
83
Record, p.48.
84
ibid p.50.
85
ibid p.52.
86
ibid p.49.
11
(b) „whether climate change treaties, if He does not consider the Seoul
they can be considered treaties at Agreement (which entered into force
all‟87 in 201688) as valid and binding.
(c) „Understanding a project from the He believes that economics trumps

financial side is what helps to find a over environment.
right solution for a case‟89
[42] In totality, Mr. Mason appears deeply skeptical of climate change as a matter of
public interest. Hence, he should be disqualified for having pre-judged the
Respondent‟s defence revolving around the Coal Directive.
B. Mr. Mason’s non-disclosure of his involvement in ASNEC EIT arbitrations

raises justifiable doubts as to his independence and impartiality
[43] Article 11 of the UNCITRAL Arbitration Rules requires arbitrators to „disclose any
circumstances likely to give rise to justifiable doubts‟ as to their impartiality before
and throughout proceedings. 90 Since the standard of disclosure is lower than the
standard of disqualification in Article 12, 91 not every non-disclosure justifies
disqualification.92
[44] The Suez tribunal listed several factors to evaluate whether non-disclosure affects an
arbitrator‟s impartiality: whether it was inadvertent or intentional, whether it was the
result of an honest exercise of discretion, and whether it was part of a pattern of
circumstances raising doubts as to impartiality.93
[45] Mr. Mason‟s conduct fell short of the standard of non-disclosure [i] at the point of
appointment; and [ii] throughout proceedings.
87
ibid.
88
ibid p.71.
89
ibid p.49.
90
UNCITRAL Rules, art.11.
91
Alpha Projektholding, ¶64; Tidewater (Disqualification), ¶40.
92
Caron, p.226; ConocoPhillips, ¶60.
93
Suez, ¶44; Tidewater (Disqualification), ¶47; Baker, p.50.
12
i. Mr. Mason’s non-disclosure of his involvement in ASNEC EIT

arbitrations upon appointment was not an honest exercise of discretion
[46] As adumbrated above, there is a „significant overlap‟ between the Wellfalcon

arbitrations and this dispute. 94 Mr. Mason ought to have disclosed his previous
appointments in his Statement of I&I.95
[47] Such disclosure is vital as a matter of prudence,96 and to put this Tribunal on notice to
take any appropriate measures to prevent disadvantage to parties97 (particularly, to
identify the relevant external knowledge that Mr. Mason possesses98).
[48] It is patently obvious to a reasonable person that such concurrent appointments are
likely give rise to an „issue conflict‟. Silence reflects poorly of his judgment.
ii. Mr. Mason’s non-disclosure of the Hewer Plants award evinces a pattern
of serious misjudgment
[49] The duty of disclosure subsists throughout proceedings. 99 Even if Mr. Mason
experienced a lapse of judgment at the beginning, he still could – and should – rectify
his mistake.
[50] Although non-binding, IBA Guidelines are strongly persuasive 100 in addressing the
growing problem of conflicts of interest in international arbitration.101
[51] The IBA Guidelines classifies information into three Lists.102 Disclosure is mandatory
for information on direct conflict under the Red List103 and Orange List.104 The non-
94
See [11]–[25] of Memorial.
95
Record, p.47.
96
Halliburton, ¶¶88-89.
97
ibid ¶87.
98
İçkale, ¶119.
99
UNCITRAL Rules, art.11; Suez ¶42.
100
Alpha Projektholding, ¶56; PIP-Sàrl, ¶24; Hrvatska, ¶29; Burlington ¶38.
101
IBA Guidelines, ¶¶1–3.
102
ibid Part II, ¶1.
103
ibid Part II, ¶2.
104
ibid Part II, ¶3.
13
mandatory Green List disclosure includes „previously expressed legal opinions‟.105

However, this merely refers to opinions of a general nature, and not specific.106
[52] The Hewer Plants award is a specific legal opinion. Any confidentiality concerns
would have dissipated as soon as the award made the press on 2.6.2019. 107 To be
clear, the Respondent does not expect Mr. Mason to reveal its contents, but merely the
fact that he was involved in its making.
[53] However, instead of seizing the opportunity to disclose such fact to this Tribunal, his
immediate instinct was to celebrate on social media. Such conduct betrays a warped
sense of priorities, and pattern of neglect towards his duties as a contentious
arbitrator.108
[54] In sum, Mr. Mason‟s repeated lapse of disclosure „are of such gravity […] as to call
into question‟ his ability to exercise independent and impartial judgment in this
arbitration.109
II. THE CLAIMANT HAS NO STANDING TO BRING THIS CLAIM UNDER

THE ASNEC EIT
[55] As a preliminary matter of jus standi, the Respondent contends that the proper
claimant to bring this claim under the ASNEC EIT is MFNB, not the Claimant.110
[56] Concomitantly, this Tribunal lacks jurisdiction over this dispute on three alternative
bases: [A] rationae materiae; [B] ratione personae; and [C] ratione temporis. 111
Failure to overcome any one of these jurisdictional hurdles is sufficient to dismiss the
claim in limine.
105
ibid Green List No. 4.1
106
ibid Green List No. 4.1.1; Urbaser, ¶52.
107
Record, p.50.
108
Suez, ¶44.
109
110
Record, pp.26-27, ¶¶4-8.
111
Micula, ¶53.
14
A. The Claimant did not make an ‘Investment’ under Article I(1) of the ASNEC
EIT (ratione materiae)
[57] The Respondent‟s first objection is that the Claimant „does not own nor, in fact, has it
ever made any investment‟ under the ASNEC EIT.112
[58] It is trite law that the scope of „investment‟ of BITs must be interpreted autonomously
in accordance to the rules of interpretation under Articles 31-32 of the VCLT:113
[59] The ASNEC EIT is a regional treaty exclusively governing the energy sector – closely
mirroring the ECT ratified by over 50 States in Europe and Central Asia.114 Similar to
Article 1(6) of the ECT, 115 the definition of „investment‟ in Article I(1) has three
operative limbs: wide definition, enumeration of types, and restrictive proviso.116
[60] The Claimant fails to fulfill the first and third definitional limbs: [i] ownership or
control; and [ii] association with economic activity in the energy sector.
i. The Claimant does not own or control any asset
[61] The opening text of Article 1(I) defines „Investment‟ as „every kind of asset owned or
controlled by Investors of a Contracting Party, either directly or indirectly‟.117
[62] Arbitral tribunals have construed such term rather broadly. 118 There is no room to
incorporate new additional requirements,119 including the Salini test on Article 25 of
the ICSID Convention (i.e. active contribution, certain duration, element of risk, and
contribution to host State‟s economy).120 The Respondent does not contend otherwise.
112
Record, p.26, ¶5.
113
Tokios, ¶77; Fedax, ¶25; SCB, ¶¶206-207; Daimler, ¶46; Phoenix Action, ¶¶75-76; Saluka, ¶¶296-300; A11Y,
¶¶136-138.
114
SCB, ¶121.
115
Amto, ¶36.
116
Record, p.62.
117
ibid.
118
Saluka, ¶204; Amto, ¶42; Plama, ¶128.
119
Yukos, ¶415; Mera, ¶150.
120
Salini, ¶52.
15
[63] Instead, the Respondent‟s contention is simple – that the Claimant being a mere debt
collector does not own or control any asset in Laoc, directly or indirectly.
[64] A similar „claim to money‟ was considered by the ECT tribunal in Energorynok
concerning an electricity supply agreement between Ukraine and Moldova (APO).121
Due to an electrical overflow from Ukraine to Moldova, the Moldovan state enterprise
was obliged to pay compensation.122 The Ukrainian counterparty transferred the debt
to another state enterprise (claimant) who became its „legal successor‟ over its APO
rights.123 The claimant sued in the Moldovan court and obtained judgment.124 Due to
repeated failure of enforcement, the claimant commenced arbitration against Moldova
under the ECT.125
[65] The ECT tribunal had little hesitation finding that the APO itself constituted a
protected investment. 126 The critical issue, however, was whether the claimant‟s
assigned „claim for money‟ was similarly protected.127
[66] First, the tribunal cited the ECT cases of Petrobart128 and Electrabel129 whereby the
claimants were the original investors who „owned and controlled its claim to payment
for gas that it […] supplied‟ and maintained „substantial influence in the operation of
the transmission lines‟.130
[67] The tribunal distinguished Energorynok‟s lack of standing because ownership and
control over a „claim of money‟ does not constitute an investment:
„The asset which the Claimant asserts is its Investment, namely a claim
to money, is not in the territory of Moldova […] The Claimant is not
and never was engaged in the transmission of electricity in Moldova
[…] Its Investment cannot be the Overflow. In summary, the APO
121
Energorynok, ¶¶15-19.
122
ibid ¶22.
123
ibid ¶5.
124
ibid ¶26.
125
ibid ¶¶27-30.
126
ibid ¶¶81-82.
127
ibid ¶¶80,89.
128
Petrobart, ¶72.
129
Electrabel (Jurisdiction), ¶¶5.52-5.53.
130
Energorynok, ¶¶86-87.
16
appears to continue to operate but without the Claimant having any

role, control or activity in it, and never having any role, control or
activity in it.‟131
[68] Indeed, the resemblances with our dispute are uncannily striking:
(a) The Claimant does not own nor control the operations of T-1.
(b) The Claimant is not a shareholder of T-1 LLC.
(c) The Assignment Agreement was executed between the Claimant and MFNB
(two Mercurian companies) in Mercuria.132
(d) Such assignment occurred after the adoption of Law 66/2016 and Law
72/2016.
[69] Hence, the contractual rights over MFNB‟s loan to Ticadia-1 LLC assigned to the
Claimant do not constitute an „asset owned or controlled‟ under the ASNEC EIT.
ii. The Claimant’s rights over the Financing Agreement is not ‘associated
with an Economic Activity in the Energy Sector’
[70] Assuming arguendo that the Claimant‟s rights assigned from MFNB fulfills the first
definitional limb, the requisite nexus with Laoc‟s energy sector is absent.
[71] In Amto, the ECT tribunal construed the term „associated with‟ as requiring a „factual
rather than legal association between the alleged investment and an Economic
Activity in the Energy Sector‟.133 In short, a „functional relationship‟ with the energy
sector is required, whilst a „mere contractual relationship with an energy producer‟ is
not protected.134
[72] Similarly, the Energorynok tribunal found that the claimant „acquired a debt, or was
authorized to collect a debt, but did not acquire an Investment under the ECT‟.135
131
ibid ¶95.
132
Record, p.23.
133
Amto, ¶42.
134
ibid.
135
Energorynok, ¶101.
17
[73] Here, all that the Claimant acquired from MFNB was a legal right over its loan to
Ticadia-1 LLC under the Financing Agreement.136 Such right provides no functional
link with the operations of T-1, not even from a financing aspect (i.e. additional
contribution of capital). The sole aim of the assignment was to save MFNB from
insolvency.137
[74] In short, the assignment is purely a debt collection claim that does not contribute
towards an economy activity to Laoc‟s energy sector worthy of protection under the
ASNEC EIT.
B. The Claimant is not an active Investor protected by the ASNEC EIT (ratione
personae)
[75] By virtue of the assignment,138 the Claimant considers itself the „legal successor to
MFNB in all matters pertaining to the Financial Agreement‟. 139 The Respondent
disputes this proposition in part. Yes, the assignment is valid as to the Claimant‟s
contractual rights against parties under the Financing Agreement (i.e. Ticadia-1 LLC
and Mountaintop).
[76] However, the Claimant‟s treaty claim against the Respondent under the ASNEC EIT
is intuitu personae and non-assignable. 140 This is implicit from two interpretive
approaches: [i] contextual; and [ii] teleological.
i. The contextual interpretation of the ASNEC EIT incorporates intuitu

personae
[77] To be clear, the Respondent is not disputing the Claimant‟s status as an „Investor‟
under Article I(4) of the ASNEC EIT. Such definition reflects the „seat of
136
Record, p.123.
137
Record, p.60.
138
ibid p.23.
139
ibid p.7, ¶15.
140
ibid p.27, ¶7.
18
incorporation‟ test, 141 which the Claimant being a Mercurian company clearly
satisfies.142
[78] Nevertheless, being an „Investor‟ merely entitles the Claimant to accept the
Respondent‟s open offer to arbitrate under the ASNEC EIT,143 but not sufficient in
itself to seize this Tribunal‟s jurisdiction.144 A further condition is required – that the
Claimant directly made an Investment in Laoc.
[79] In SCB, the tribunal found the UK-Tanzania BIT only protected active investors, not
passive investors. 145 Interestingly, the tribunal‟s interpretive reasoning rested on
several clauses also present in the ASNEC EIT:
Category UK- Tanzania BIT ASNEC EIT
(a) Temporal „all investments, whether made „The Treaty shall also apply to
application before or after the date of entry Investments made prior to its
into force of this Agreement‟146 entry into force by Investors‟147
(b) Preamble „create favorable conditions for „create stable […] conditions
greater investment by nationals for Investors […] to make
[…] of one State in the territory Investments in the ASNEC
of the other State‟148 Region‟149
(c) Treatment „create favourable conditions „accord to Investors […] as

for nationals […] of the other regards the Making of
Contracting State to invest Investments in its Area‟151
capital in its territory‟150
141
Tokios, ¶30; Plama, ¶124; Saluka, ¶240; Yukos, ¶416; Douglas, pp.22-23, ¶46.
142
Record, p.5.
143
Tokios, ¶98; Schreuer & Malintoppi, p.218.
144
Amto, ¶¶46-47.
145
SCB, ¶230.
146
ibid ¶222.
147
Record, p.62.
148
SCB, ¶227.
149
Record, p.62.
150
SCB, ¶229.
151
Record, p.63.
19
[80] Admittedly, both treaties are somewhat dissimilar in wordings. However, this only
serves to reinforce the Respondent‟s case. The ASNEC EIT uses the root word
„make‟ three times, whilst the UK-Tanzania BIT only uses once. Yet, even with
weaker language, the SCB tribunal found that only investments directed, funded or
controlled by an investor „in an active and direct manner‟ were protected.152
[81] Similarly, in Alapli, the tribunal adopted a similar contextual interpretation of the term
„make Investments‟ in Article 10(1) of the ECT 153 and held that „a person must
actually make an investment, in the sense of an active contribution‟ to qualify as an
investor.154
[82] In sum, the root word „make‟ permeating throughout the ASNEC EIT must
necessarily imply „some action in bringing about the investment, rather than purely
passive ownership‟.155
[83] Here, it was MFNB – not the Claimant – who funded T-1‟s construction. The
Claimant being the assignee of MFNB‟s rights is merely a passive and indirect
investor. Hence, the Claimant lacks the requisite intuitu personae to commence this
claim.
ii. The teleological construction of the ASNEC EIT incorporates intuitu

personae
[84] It is common for arbitral tribunals to adopt a teleological (or purposive) approach to
interpret the jurisdictional scope of BITs.156 Such approach supplements the textual
approach in yielding a consistent interpretation.157 In Alapli, the tribunal highlighted
152
SCB, ¶230.
153
Alapli, ¶354.
154
ibid ¶350.
155
SCB, ¶222.
156
Tokios, ¶77; Telefónica, ¶77; IBM, ¶44.
157
Bear Creek, ¶96; Micula (Abi-Saab), ¶16; Pac Rim Cayman (Wallace), ¶42
20
the importance of examining the object and purpose of BITs so to prevent its usage
„by persons not intended to receive their benefits‟.158
[85] Further, ASNEC EIT disputes shall be decided in accordance with „applicable rules
and principles of international law‟. 159 According to eminent scholars such as
Scheuer160 and Judge Crawford,161 general international law prohibits the assignability
of treaty claims. The overriding policy reasoning is the prevention of abuse of
process. 162 Such view is reflected in the jurisprudence constante of investment
tribunals.
[86] The first case is Mihaly concerning an assignment of an ICSID claim between two
affiliate companies over a power project in Sri Lanka.163 The tribunal opined:
„A claim under the ICSID Convention with its carefully structured

system is not a readily assignable chose in action as shares in the
stock-exchange market or other types of negotiable instruments, such
as promissory notes or letters of credit.‟164
[87] The second case is Vannessa Ventures concerning a joint venture with a governmental
agency to extract gold and copper at the Las Cristinas mine.165 As works stalled, the
original investor sold its shares to the claimant.166 The agency terminated the mining
contract. 167 In dismissing the claim, the tribunal found that parties‟ relationship
possessed an intuitu personae character.168 The original investor had been chosen „not
as an anonymous supplier of services, but for its own particular qualities‟.169
158
Alapli, ¶334.
159
Record, p.65.
160
Schreuer & Malintoppi, pp.177–190.
161
Crawford, p.704.
162
Société Générale, ¶¶108-110; Banro, ¶¶23-26.
163
Mihaly, ¶11.
164
ibid ¶24.
165
Vannessa, ¶¶56-61.
166
ibid ¶¶84-85.
167
ibid ¶¶93,98.
168
ibid ¶149.
169
ibid.
21
[88] Here, T-1 was a special project – the only power plant in Ticadia.170 The Governor
personally solicited for foreign investments by frequently travelling to Mercuria and
delivering pitches at corporate forums. 171 MFNB had a long-standing relationship
with Mountaintop, and was heavily involved in all key negotiations with the
Respondent.172 In contrast, the Claimant is a complete stranger who has never met
Laocan officials, or even stepped foot in Laoc.
[89] The third case is Daimler concerning the transfer of shareholding between two
affiliate German companies. Whilst finding that the ICSID claim of the transferor did
not transfer along,173 the tribunal opined in obiter that there is no rule of customary
international law prohibiting the selling of distressed debts (inclusive of ICSID
claims).174 Such dictum has been hailed by scholars as the „clearest view‟ that treaty
claims are assignable.175
[90] However, a closer reading reinforces the Respondent‟s case, as the tribunal further
opined:
„Indeed, the rationale for recognizing the severability of a damages

claim from the underlying asset may be even stronger in the case of
ICSID claims, since a strong argument can be made that the ICSID
Convention and many BITs accord standing only to the original
investor and not to any subsequent would-be purchasers of the
underlying investment.‟176
[91] Even Daimler‟s teleological approach is in consonant with the contextual approach –
that only an active and original investor (rather than a bare assignee) has standing to
bring a BIT claim. Hence, the proper claimant is MFNB, and not the Respondent.
170
Record, p.6.
171
ibid p.67.
172
ibid p.57.
173
Daimler, ¶¶151-153.
174
ibid ¶144.
175
Goh, 28.
176
Daimler, ¶144.
22
C. The Claimant did not own nor control any Investment at the time of alleged
breach (ratione temporis)
[92] The Respondent‟s third objection focuses on the singular fact that the Claimant only
acquired MFNB‟s financial rights in 2017 after the adoption of Law 66/2016 and Law
72/2016 in 2016 177 . This falls outside the Tribunal‟s temporal jurisdiction as the
ASNEC EIT only protects investors having interest in the investment prior to the
alleged breach.
[93] The general rule of international law is that treaties do not operate retroactively, as
recognized by the VCLT,178 ARSIWA179 and arbitral decisions.180
[94] Whilst Article XIII of the ASNEC EIT protects „Investments made prior to its entry
into force by Investors‟,181 such protection does not extend to retrospective breaches
of such investments.182
[95] The overriding object of ratione temporis is to limit this Tribunal‟s jurisdiction to
„only those acts and omissions occurring after the date of the investor’s purported
investment‟.183
[96] In Phoenix Action, the tribunal linked the factor of timing to prevention of abuse:
„The ICSID Convention/BIT system is not deemed to protect economic

transactions undertaken and performed with the sole purpose of taking
advantage of the rights contained in such instruments, without any
significant economic activity, which is the fundamental prerequisite of
any investor’s protection. Such transactions must be considered as an
abuse of the system.‟184
[97] In Daimler, the tribunal opined:
177
Record, pp.18-20.
178
VCLT, art.28.
179
ARISWA, art.13.
180
Phoenix Action, ¶¶136-138.
181
Record, p.65.
182
Phoenix Action, ¶136.
183
ibid ¶68; Gami, ¶98.
184
Phoenix Action, ¶93.
23
„Rather, the Tribunal finds that it should accord standing to any

qualifying investor under the relevant treaty texts who suffered
damages as a result of the allegedly offending governmental measures
at the time that those measures were taken...‟185
[98] Hence, only investors who have suffered from the alleged breach are entitled to claim
under BITs. Put simply, BIT protection is not accorded to late-comers and gate-
crashers.
[99] The Pac Rim Cayman tribunal even favoured an earlier „dividing line‟ to deny abuse
i.e. „when the relevant party can see an actual dispute or can foresee a specific future
dispute as a very high probability‟.186 Such „dividing line‟ was similarly drawn in
Alapli.187
[100] The Respondent‟s objection as to the assignment‟s timing is not a mere technicality.
Ultimately, as noted in Tidewater188 and ConocoPhillips,189 the test of abuse of rights
or process takes into account all the circumstances.
[101] Here, the circumstances lean heavily against treating the Claimant as a genuine
investor. Due to Law 66/2016, the Ticadia-1 Plant‟s market value dropped
significantly. 190 This triggered MFNB‟s right under the Financing Agreement to
request for additional security from Mountaintop.191 However, Mountaintop refused
the request, and instructed Ticadia-1 LLC to file for bankruptcy due to insufficient
funds to repay the loan.192
[102] That signaled the beginning of the end of T-1. MFNB filed an ICC arbitration against
Mountaintop to enforce the guarantee (but lost).193 Concurrently, MFNB prepared a
185
Daimler, ¶145.
186
Pac Rim Cayman, ¶2.99.
187
Alapli, ¶403.
188
Tidewater (Jurisdiction), ¶147.
189
ConocoPhillips, ¶275.
190
Record, p.59.
191
ibid p.21.
192
ibid p.22.
193
ibid p.59.
24
separate claim against the Respondent under the ASNEC EIT. 194 Faced with the
looming threat of insolvency, MFNB sold such rights of claim to the Claimant.195
[103] From the chain of events, we can discern one and only purpose why the Claimant
stands before this Tribunal today – to gain profit from an award of compensation
exceeding the USD150 million assignment fee paid to MFNB (25% of the loan
amount196). The Claimant shows no interest to invest in Ticadia whatsoever.
[104] Lastly, the Claimant suffered no direct damage. All that it stands to lose is the
assignment fee paid after the alleged breach occurred. In short, the Claimant is merely
an opportunistic trader, and not a genuine investor qualified for protection under the
ASNEC EIT.
III. THE CHALLENGED MEASURE IS NOT ATTRIBUTABLE TO THE

RESPONDENT
[105] The source of the Claimant‟s grievance is measures adopted by the Respondent (i.e.
Law 66/2016 and Law 72/2016197) to comply with its international obligation under
the ASNEC Charter (i.e. Coal Directive 198 ). All Member States of ASNEC –
including the Claimant‟s home State, Mercuria – enacted similar measures.199
[106] Put simply, the Claimant is barking at the wrong tree. Even assuming that such
measures breach the FET standard (which is denied), the Claimant‟s remedy lies
against ASNEC.200 The Respondent relies on to two sources of law governing the
attribution of conduct to international organizations: [A] lex specialis (Article 64 of
DARIO); and [B] general principles (Articles 6-7 of DARIO). Further, the
Respondent rejects any alternative plea on „dual attribution‟ on the basis of [C] the
Monetary Gold rule.
194
ibid p.60.
195
ibid p.23.
196
ibid.
197
ibid p.18
198
ibid pp.16-17.
199
ibid p.75.
200
ibid pp.27-28, ¶¶12-13.
25
A. The Challenged Measure is solely attributable to the Respondent under lex

specialis
[107] This Tribunal may be tempted to follow the Claimant‟s lead in directly applying
Articles 6 and 7 of DARIO. However, the Respondent will demonstrate that: [i]
normative control is the more appropriate legal test of attribution; and [ii] ASNEC
exercised normative control over the Challenged Measure.
i. The normative control test is lex specialis applicable to ASNEC
[108] The normative control test originates from the EU regime.201 It is therefore necessary
to demonstrate the primacy of EU law, and its similarities with the ASNEC regime.
[109] Today, it is well-accepted that EU regime is a „sui generis legal order‟202 and „supra-
national law‟203 governing EU Member States. Its sphere of influence has grown to
the extent that the ILC even acknowledged the „possible existence of a special rule‟
that attributes the conduct of EU Member States‟ implementing EU‟s binding acts
back to EU – a rule which would apply to „other potentially similar organisations‟.204
In short, EU‟s special rule on attribution constitutes lex specialis under DARIO.205
[110] There are strong indications that ASNEC is modeled after EU:
(a) Both EU 206 and ASNEC 207 are empowered to adopt legal acts binding on
Member States (i.e. regulation, directive, and decision).
(b) Both EU208 and ASNEC209 have an internal mechanism to impose sanctions on
Member States for non-compliance (i.e. suspension of rights and penalty).
201
Durán, p.705; Casteleiro, p.195.
202
Electrabel (Jurisdiction), ¶4.117; van Gend, p.12; Costa, p.593; EC-Geographical Indications, ¶4.15;
Accession to ECHR, ¶157; Phelan, p.380.
203
Electrabel (Jurisdiction), ¶6.72.
204
DARIO Commentaries, art.64 cmt. 2.
205
DARIO, art.64.
206
TFEU, art.288(2).
207
ASNEC Charter, art.115(3).
208
TEU, art.7.
209
ASNEC Charter, art.124.
26
(c) Both EU and ASNEC have a multilateral investment treaty on energy (i.e.
ECT and ASNEC EIT).
[111] One distinguishing factor is the explicit reference to Articles 6-7 of DARIO under
Article 120 of the ASNEC Charter 210. Does this mean that such provisions would
exclusively apply? Not necessarily so. In Eiser, the tribunal found its jurisdiction
primarily ‘derived from the express terms of the ECT‟.211 Similarly, the ECT tribunals
in Vattenfall, 212 RREEF, 213 and LBW 214 affirmed the ECT as the starting point of
analysis.
[112] Likewise, this Tribunal is bound by the ASNEC EIT, first and foremost. This is also
self-evident from the treaty text. First, Article 120 merely stipulates that „the
attribution of conduct‟ between ASNEC and Member States „shall be governed, in
particular, by Articles 6 and 7‟.215 This means that such provisions are not exhaustive,
and used primarily to determine liability between themselves under the ASNEC
Charter (and not third parties).
[113] Second, the ASNEC EIT entered into force after the ASNEC Charter, and focuses on
„promoting intra-ASNEC investment flows‟. 216 This means that the ASNEC EIT is
both lex posterior217 and lex specialis218 (when in doubt, the „special and more recent
agreement […] should prevail‟219).
[114] Third, the ASNEC EIT provides a definition of REIO identical to the ECT220:
„organization constituted by states to which they have transferred

competence over certain matters a number of which are governed by
210
Record, p.33 (800-804).
211
Eiser (Award), ¶199.
212
Vattenfall, ¶¶227,229.
213
RREEF, ¶74.
214
LBW, ¶¶193-194.
215
Record, p.33.
216
ibid p.62.
217
VCLT, art.30(3)
218
DARIO, art.64.
219
Mavrommatis Palestine, ¶97; Southern Bluefin Tuna, ¶¶38,52.
220
ECT, art.2(3).
27
this Treaty, including the authority to take decisions binding on them

in respect of those matters.‟221
Most critically, such terms actually mirror the test of normative control.
ii. ASNEC exercises normative control over the Challenged Measure
[115] The test of „normative control‟ can be traced back to EU‟s observations to the ILC
during the drafting of DARIO:
„European Union Member States have transferred competences (and

therefore decision-making authority) on a range of subject matters to
the European Union […] This requires special rules of attribution and
responsibility in cases where European Union Member States are in
fact only implementing a binding rule of the international
organization. In other words, the European Union exercises normative
control of the Member States who then act as Union agents rather than
on their own account when implementing Union law.‟222
[116] Whilst there is no definitive formulation of the test, prominent EU scholars (i.e.
Hoffmeister, 223 Castellarin,224 Casteleiro 225 and Nollkaemper 226 ) have identified two
factors: [a] substantive legality; and [b] availability of remedies.
a. The Coal Directive is legally binding upon the Respondent
[117] Normative control rests on the concept of „executive federalism‟.227 In EU, Member
States are required to „adopt all measures of national law necessary to implement
legally binding Union acts‟.228 In short, normative control is not only exercised over
EU institutions at the federal level (e.g. European Council and CJEU), but also State
organs implementing EU‟s directives at the state level (e.g. Parliament and national
courts).229
221
ASNEC EIT, art.1(5).
222
Observation 2011, ¶¶37–38.
223
Hoffmeister, p.745.
224
Castellarin, p.113.
225
Casteleiro, pp.204-206.
226
Nollkaemper, p.335.
227
Casteleiro, p.42
228
TFEU, art.291(1).
229
Hoffmeister, p.742.
28
[118] A prime example is MOX Plant whereby protection of marine environment by

Member States fell within the exclusive competence of EU directives. 230 Hence, the
CJEU found Ireland wrongful in commencing PCA arbitration over UK‟s nuclear
plant without availing to the consultation mechanism within EU.231
[119] Recently, in Electrabel, the ECT tribunal absolved Hungary from responsibility for
liberalizing its electricity generation sector due to being ‘required to act in
compliance with a legally binding decision‟ of the EU:
„The Tribunal considers that it would be absurd if Hungary could be

liable under the ECT for doing precisely that which it was ordered to
do by a supranational authority whose decisions the ECT itself
recognises as legally binding on Hungary.‟232
Similarly, the ECT tribunal in AES critically examined whether Hungary‟s electricity
pricing energy was motivated by pressure from EU.233
[120] Hence, the critical issue is whether the Coal Directive fell within ASNEC‟s
competence. The answer is a resounding yes.
[121] The ASNEC‟s competence encompasses the environment (vide Articles 61-62) and
energy (vide Article 75).234 Specifically, Article 75 empowers the ASNEC Council to
formulate energy policies including inter alia the development of renewables.235 Such
policies must have „regard for the need to preserve and improve the environment‟.236
Hence, both energy and environment are intricately intertwined.
[122] Both ASNEC237 and the Respondent238 ratified the Seoul Agreement – essentially a
mixed agreement having the same status as the ASNEC legal order.239 ASNEC did
230
MOX Plant, ¶¶110-116; Directive 93/75.
231
MOX Plant, ¶¶174-182.
232
233
AES, ¶¶10.3.18-10.3.19.
234
Record, pp.32-33.
235
ibid p.33.
236
ibid.
237
ibid p.38.
238
ibid p.58.
239
Commission v France, ¶25.
29
not act jointly with its Member States when communicating the NDCs. 240 This is
critical because a Member State will only share responsibility for NDCs submitted
jointly with the REIO.241
[123] The goal of the Coal Directive is to promote renewables pursuant to the ASNEC‟s
energy competence, and reduce greenhouse gas emissions in compliance with the
Seoul Agreement. 242 Specifically, the directive required ASNEC Member States to
reduce production from coal-fired power plants to zero by 31.12.2028 without
compensation.243 Law 66/2016 was an exact implementation of such requirement.244
[124] The Respondent could not ignore a binding directive expressed in such clear and
unconditional terms. 245 Such directive takes immediate effect (and cannot be
suspended even if the Respondent challenges its validity).246 Hence, the Challenged
Measure was a direct result of ASNEC‟s exercise of exclusive competence over
energy policies vested under the ASNEC Charter and Seoul Agreement.
b. Only ASNEC can grant an effective remedy by reversing or

modifying the Coal Directive
[125] According to Professor Hoffmeister, normative control is present where the REIO
governs the „available remedies‟ to start and end a measure:
„In such a situation, it would also only be the Union which could
modify or allow the modification of such measure in order to bring it
into line with an international norm.‟ 247
[126] What he essentially means is that where the domestic measure of a Member State can
only be properly remedied by the REIO itself (i.e. to comply with a conflicting
international rule), then attribution lies with the REIO. This explains why the EU is
made the respondent before the WTO for measures taken by individual Member
240
Record, p.72.
241
ibid p.36.
242
ibid p.16.
243
ibid p.17.
244
ibid p.18.
245
van Gend, p.13
246
247
Hoffmeister, pp.742-743; Contartese, p.429.
30
States (e.g. EC–LAN248 and EC–Biotech249) – the effective remedy is compelling EU

to modify its regulations.250
[127] This begs the critical question – is the filing of an investor claim against the
Respondent (or any ASNEC Member State) an effective remedy against measures
taken in compliance with the Coal Directive? The answer is a resounding no.
[128] Even if the Claimant successfully obtains compensation, any attempt to enforce the
award opens yet another can of worms. This is because the Respondent runs the risk
of further breaching the Coal Directive‟s prohibition against compensation. It is quite
likely that the domestic courts will refuse enforcement on the ground of public
policy.251
252
[129] The appropriate legal remedy is cessation – to stop an unlawful act from
continuance. 253 The Claimant should directly claim against ASNEC under the
ASNEC EIT for the withdrawal of the Coal Directive.
[130] Perhaps the more practical solution is not litigation. Aggrieved investors throughout
ASNEC254 should urge Member States to consult with the ASNEC Council to reverse
or modify the Coal Directive (e.g. extension of the coal-phase deadline for specially
affected States like Laoc).
[131] In sum, a claim against the Respondent will not put an end to the matter. The
Respondent‟s hands are tied, and cannot provide the remedy that the Claimant seeks.
To pursue an investor-state arbitration is trying to force a square peg into a round
hole. Hence, normative control lies with ASNEC.
248
EC-LAN, ¶4.15.
249
EC-Biotech, ¶7.101.
250
Contartese, p.432.
251
New York Convention, art.V(2)(b).
252
ARSIWA, art.30.
253
Rainbow Warrior, ¶114.
254
Record, p.50.
31
B. Alternatively, the Challenged Measure is solely attributable to ASNEC under

general law
[132] Assuming arguendo that Articles 6-7 of DARIO applies, the Challenged Measure
should still be attributed to ASNEC.
i. The Respondent is an organ or agent of ASNEC (Article 6 of DARIO)
[133] Article 6 of DARIO provides that the ‘conduct of an organ or agent of an

international organization‟ in performing its functions is deemed „an act of that
organization‟.255
[134] An „organ‟ refers to „any person or entity which has that status according to the rules
of the organization‟.256 As opined by the ICJ in Reparations for Injuries, the term
„agent‟ should be construed „in the most liberal sense‟ and refers to:
‘any person who, whether a paid official or not, and whether

permanently employed or not, has been charged by an organ of the
Organization with carrying out […] one of its functions.‟257
[135] In practice, the distinction between an „organ‟ and „agent‟ is blurry.258 Unlike States,
organizations do not „possess a general competence‟ and are instead vested with
specific functions by Member States. 259 Hence, the scope of its functions must be
determined based on „rules of the organization‟.260
[136] In EC–Geographical Indications, the WTO panel recognized that when EU Member
States enforce EU laws, they are acting as „de facto organs‟ of the EU, for which the
EU „would be responsible under WTO law and international law in general‟.261 The
same view was shared in EC–Selected Customs.262
255
DARIO, art.6(1).
256
DARIO, art. 2.
257
Reparation for Injuries, p.177.
258
DARIO Commentaries, art.6 cmt.5.
259
Nuclear Weapons in Armed Conflict, ¶25.
260
DARIO, art.6(2).
261
EC-Geographical Indications, ¶¶7.98,7.725.
262
EC-Selected Customs, ¶7.553.
32
[137] Here, Respondent was entrusted to perform the functions of ASNEC.263 The ASNEC
Charter explicitly provides that the „Association enforces or implements its legal acts
through the organs of its Member States‟ (vide Article 120). 264 Further, Member
States are required to „implement environmental policies‟ (vide Article 62(2)).265
[138] Further, the Coal Directive contains a „transposition‟ clause requiring Member States
to „bring into force the laws, regulations and administrative powers necessary to
comply‟ with the coal phase-out. 266 In van Gend, the CJEU held that EU Member
States are required to transpose the EU law into national legislation. 267 Non-
compliance constitutes a breach of their international obligation.268
[139] Hence, due to such functional link with ASNEC, 269 the Respondent‟s Parliament
adopted Law 66/2016 and Law 72/2016 in the capacity of an organ or agent of
ASNEC.
ii. The Respondent acted under the effective control of ASNEC (Article 7 of
DARIO)
[140] Article 7 of DARIO provides that the conduct of State organ „placed at the disposal‟
of an international organization is deemed an act of such organization „if the
organization exercises effective control over that conduct‟.270
[141] Unlike normative control, „effective control‟ requires a higher degree of „factual
control‟ over the specific conduct.271 In Behrami, the ECtHR framed the inquiry as
whether the UNSC „retained ultimate authority and control so that operational
command only was delegated‟. 272 The same approach was taken to attribute the
263
DARIO Commentaries, art.6 cmt.5-7; Applicability of Article VI, ¶48.
264
Record, p.33.
265
ibid.
266
ibid p.17.
267
van Gend, p.13.
268
Commission v Belgium, ¶68; Andrea v Italy, ¶44.
269
Gaja (2004), ¶17; Amerasinghe, p. 241.
270
DARIO, art.6(1).
271
DARIO Commentaries, art. 7 cmt.4.
272
Behrami, ¶139.
33
conduct of KFOR national contingents (Kasumaj 273 and Gajić 274 ) and High
Representative in Bosnia and Herzegovina (Berić275) to the UN.
[142] To illustrate the test of „ultimate authority‟: if a troop is required to receive orders
from national authorities before executing UN‟s orders, their operations cannot be
attributed to the UN (i.e. UNOSOM II276 and UNAMIR277). However, if the order was
executed pursuant to a UNSC resolution without the authority of the home State, the
operation is attributable to the UN (i.e. UNMIK278).
[143] As recently held in Avotiņš 279 and Michaud, 280 the critical question is whether the
national authorities retained any „margin of maneuver‟ and faced the „deployment of
the full potential of the supervisory mechanism‟ of the international organization.
[144] First, under the ASNEC Charter, a directive is „binding as to the result to be achieved
[…] but shall leave to the national authorities the choice of form and methods‟ (vide
Article 115(3)).281 The Coal Directive is crystal clear that the coal-phase out by 2028
is mandatory, as evinced by the word „shall‟ (vide Article 7(1)).282 The word „shall‟
in the transposition clause reinforces the necessity of compliance (vide Article 18)).283
The only discretion lies in Member States phasing-out coal before 2028 (vide Article
7(2)).284
[145] Second, under the ASNEC Charter, the ASNEC Council may suspend the rights of
the Respondent or impose penalty upon determining that the Respondent has
273
Kasumaj, ¶1.
274
Gajić, ¶1.
275
Berić, ¶27.
276
UNSC Report 1994, ¶¶243-244.
277
Mukeshimana-Ngulinzira, ¶38.
278
Behrami, ¶133.
279
Avotiņš, ¶105.
280
Michaud, ¶¶113-115.
281
Record, p.33.
282
ibid p.17.
283
ibid.
284
ibid.
34
committed „a serious and persistent breach […] including the failure to enforce or
implement a legal act of the Association‟ (vide Article 124(3)-(4)).285
[146] In sum, the Respondent has no margin of maneuver in the coal phase-out, and risks
facing the full brunt of ASNEC‟s sanction machinery by non-compliance. Hence,
Law 66/2016 and Law 72/2016 were adopted under ASNEC‟s effective control.
C. The Claimant cannot invoke the dual attribution of ASNEC and the
Respondent without the Respondent’s presence (Monetary Gold rule)
[147] It is anticipated that the Claimant will alternatively plead that the Challenged Measure
is a shared responsibility between ASNEC and the Respondent. However, such plea is
untenable as the Claimant did not add ASNEC as a co-respondent.
[148] It is axiomatic under international law that a judicial body cannot decide a dispute
where the legal interests of a third State „would not only be affected by a decision, but
would form the very subject-matter of the decision‟.286 This rule is also known as the
„indispensable parties‟ principle, 287 and consistently affirmed by the ICJ in El
Salvador/Honduras, 288 Nauru 289 and East Timor 290 (and a few separate opinions in
Marshall Islands291).
[149] In Larsen, the PCA tribunal declined jurisdiction over a claim against Hawaii for
failing to protect Hawaiians from prolonged occupation of the US without the
participation of US.292 The tribunal affirmed that the rule applies with equal force to
international arbitration.293
[150] ASNEC‟s presence is necessary because there are critical issues affecting its interest
(arguably, going to the core of its very existence), including:
285
ibid p.34.
286
Monetary Gold, p.32.
287
Nicaragua, ¶88.
288
El Salvador/Honduras, ¶56.
289
Certain Phosphate, ¶55.
290
East Timor, ¶34
291
Marshall Islands (Judge Xue), ¶9; Marshall Islands (Judge Bhandari), ¶18.
292
Larsen, ¶12.15.
293
ibid ¶11.17.
35
(a) The interpretation of the ASNEC Charter;
(b) The validity of directives adopted by the ASNEC Council;
(c) The conflict of treaty obligations between ASNEC and Member States under
the ASNEC Charter, Seoul Agreement and ASNEC EIT.
(d) The jurisdictional competence of ASNEC EIT tribunals to evaluate measures

taken under the ASNEC Charter and Seoul Agreement (which contain their
own internal dispute settlement mechanism).
[151] Indeed, in all complaints against EU-mandated domestic measures brought under the
WTO294 and ECT295, EU is always notified and provided the opportunity to intervene
in proceedings. Since ASNEC is also a Contracting Party to the ASNEC EIT, the
Claimant has little excuse not to add ASNEC into the proceedings.
[152] So long as ASNEC‟s interests is affected (solely or jointly), the Monetary Gold rule
would apply. In light of ASNEC‟s absence, there is no dispute in which this Tribunal
can rule.296
IV. THE RESPONDENT DID NOT UNFAIRLY AND INEQUITABLY TREAT

MFNB IN VIOLATION OF ARTICLE II(1) OF THE ASNEC EIT
[153] The Claimant asserts that Law 66/2016 „fundamentally changed the legal framework
under which the investment in T-1 had been made‟ and constituted an unfair and
inequitable treatment against MFNB. 297 Further, the Claimant characterizes Law
72/2016 as a ploy by the Respondent to dominate its domestic energy market.298
[154] The protection of FET is encapsulated in Article II(I) of the ASNEC EIT. Yet, despite
emerging as the most common basis of investment claims,299 Schill rightly notes that
294
EC-Biotech, ¶7.101; EC-Asbestos, ¶¶3.32 – 3.35; EC-Commercial Vessels, ¶¶7.33,7.53.
295
Eureko, ¶175; Micula, ¶316; Vattenfall, ¶80; Electrabel (Jurisdiction), ¶5.8.
296
Larsen, ¶12.19.
297
Record, pp.6-7, ¶¶12-13.
298
ibid p.6, ¶14.
299
UNCTAD Series on FET, p.1.
36
the term has „no consolidated and conventional core meaning as such nor a definition
of standard that can be applied easily‟.300
[155] The prevailing view is that the FET standard is an „autonomous‟ treaty standard.301
Concomitantly, our evaluation should conform closely to the treaty text construed in
accordance to the VCLT.302 This Tribunal should not be concerned with applying the
„minimum, maximum or average‟ standard under customary international law.303
[156] When analysed closely through the lens of the ASNEC EIT, the Claimant‟s complaint
rests on two bases: [A] legitimate expectations; and [B] non-discrimination.
A. The Challenged Measure did not frustrate MFNB’s legitimate expectations
[157] „Legitimate expectations‟ is nowhere found in the text of the ASNEC EIT. 304
Nonetheless, it is trite law that such concept is „firmly rooted in arbitral practice‟305
and forms the „dominant element‟ of the FET standard. 306 In Micula, the tribunal
opined that any „regulatory stability‟ argument must be analysed in the context of
legitimate expectations.307 This is because the FET standard „does not give a right to
regulatory stability per se‟.308
[158] Legitimate expectations are to be evaluated on an objective standard309 at the time the
investment was made.310 Broadly, there are two ways such expectations can arise: [i]
binding promise;311 or [ii] legal framework.312
300
Schill, p.293.
301
Lemire, ¶284; National Grid, ¶¶170-172; Total, ¶107; Saluka, ¶294; Antin, ¶533.
302
Azurix, ¶364; Enron, ¶¶258-259; CMS, ¶284.
303
Mann, p.244; Sornarajah, p.411; Glamis, ¶615.
304
Record, p.63.
305
Dolzer & Schreuer, p.134.
306
Saluka, ¶302.
307
Micula, ¶666.
308
Eiser (Award), ¶362; Saluka, ¶305; El Paso, ¶352.
309
Charanne, ¶495.
310
Tecmed, ¶157; LG&E, ¶127; Mamidoil, ¶695; AES, ¶9.3.8; Duke Energy, ¶340; Enron, ¶264; CMS, ¶275.
311
Parkerings, ¶331; Micula, ¶¶668-669; Waste Management, ¶98; Thunderbird, ¶147.
312
Duke Energy, ¶340; Micula, ¶673; Bayindir, ¶179; Charanne, ¶494; EDF, ¶217.
37
i. The Respondent did not make any binding promise of regulatory stability
which induced MFNB’s investment
[159] As observed by Dolzer and Schreuer, specific representations „play a central role in
the creation of legitimate expectations‟.313 Representations can either be explicit or
implicit.314
[160] Two independent (but interrelated) elements are unfulfilled: [a] the Respondent did
not make a binding promise to MFNB; and alternatively, [b] MFNB‟s reliance on
such promise was unreasonable.315
a. The Governor’s political statements had no legal effect
[161] Only representations specifically addressed to a particular investor can give rise to
legitimate expectations. 316 Nevertheless, not every representation has legal effect.317
As observed in El Paso:
„It might well be that these representations contributed to inducing

potential investors to invest in the sectors concerned […] But it is one
thing to be induced by political proposals to make an economic
decision, and another thing to be able to rely on these proposals to
claim legal guarantees.‟318
[162] As held by the tribunals in Total,319 Crystallex,320 and Wirtgen,321 the form, content
and intent of the representation are relevant factors.
[163] First, consider the authority of the representor.322 As cautioned by the El Paso323 and
Continental324 tribunals, mere political statements create no legal expectations. The
313
Dolzer & Schreuer, p.371.
314
Parkerings, ¶331.
315
Micula, ¶¶668-669.
316
Charanne, ¶490; Total, ¶119; AES, ¶9.3.31.
317
Mamidoil, ¶643;
318
El Paso, ¶395.
319
Total, ¶121.
320
Crystallex, ¶547.
321
Wirtgen, ¶409.
322
Armed Activities, ¶168.
323
El Paso, ¶378.
324
Continental Casualty, ¶261.
38
test is whether an official‟s statements were made „in areas falling within their
competence‟.325
[164] In Laoc, the Regional Governorship is a temporary political position, and not a
permanent civil service. The Governor was appointed by the central government.326
Despite remaining in office throughout the period of MFNB‟s investment from 2009
to 2019, his role was limited to meeting with potential investors and facilitating
communications with the local authorities.327 He was not the Minister of Energy, nor
holds any authority at the federal governmental level to make national policies.
[165] Second, consider the specificity of content. 328 The test is whether the official
expressed statements „manifesting the will to be bound‟. 329 Further, this Tribunal
should consider the context and circumstances in which the statements were made.330
Mere press releases331 and promotional materials332 are legally insignificant.
[166] In El Paso, the Argentinian President publicly announced that a newly-passed decree
would „give[s] the required legal certainty to the process of transformation of the
electricity sector, thus preventing the ancient lack of stability of the rules of the
game‟.333 The tribunal found such declaration „clearly must be viewed by everyone as
a political statement‟.334
[167] Here, both the form and substance of the Governor‟s representations lack legal
weight. In conformity with his earlier meeting with MFNB and Mountaintop,335 the
Governor made the following press statements:
325
Principles on Unilateral Declarations, Principle 4.
326
Record, p.67.
327
ibid pp.67-68.
328
Principles on Unilateral Declarations, Principle 7.
329
ibid Principle 1; Total, ¶121.
330
Nuclear Tests, ¶53.
331
Antaris, ¶¶425-429,440; PV Investors, ¶615.
332
Charanne, ¶496.
333
El Paso, ¶393.
334
ibid ¶394.
335
Record, p.10.
39
(a) „we strived to convince our partners that from an economic perspective,
Ticadia would be the best place in Laoc to build a power plant.’ 336
(b) ‘maintain favourable conditions for foreign investors so that we can see more
projects like Ticadia-1 in the future‟.337
[168] Hence, the Governor made no specific representations as to legal or regulatory

stability. Such representations were purely political and aspirational, giving rise to a
mere „subjective hope that nothing will change for the worse‟ falling short of
„objective expectations‟.338
b. MFNB could not reasonably rely on the Governor’s statements as a

binding promise of regulatory stability
[169] Next, this Tribunal has to determine whether MFNB was reasonable in relying on
expectations (if any) flowing from such representations. As opined in Micula, the
„expectation must be a determining factor in an investor’s decision to invest, or in the
manner or magnitude of its investments‟. 339 The test is objective and „cannot
exclusively be determined by foreign investors’ subjective motivations and
considerations‟.340
[170] Hence, the inquiry is not whether MFNB was swayed by the Governor‟s pitch, but
whether a third party observer would interpret it as a promise of regulatory stability.
[171] First, the Governor is a regional functionary. He merely promised to ensure his
deputies will assist Mountaintop and MFNB in the T-1 project „within the scope of
their competence‟.341 Since they were not „empowered to enact rules or regulations
on energy issues‟, their words could not have been reasonably construed as legal
guarantees.342
336
ibid p.14.
337
ibid.
338
Mamidoil, ¶731.
339
Micula, ¶672.
340
Saluka, ¶304.
341
Record, p.10.
342
PV Investors, ¶615.
40
[172] Second, the validity of T-1‟s license was subject to two conditions: compliance with
domestic law on the operation of power plants, and environmental regulations.343
[173] Third, the decision of MFNB‟s directors to approve the loan was primarily driven by
financial factors (i.e. loan amount and Mountaintop‟s guarantee).344
[174] In light of all the relevant circumstances, no investor in MFNB‟s shoes would
reasonably expect that the Respondent‟s energy and environmental laws would
345
remain unchanged. Hence, no expectation of „immutability of the legal
framework‟346 nor an „immutable tariff for the operational lifetime of their plants‟347
could have arisen.
ii. The Respondent’s right to regulate over its energy sector was reasonably
exercised and foreseeable
[175] The preamble of the ASNEC EIT recognises „the need to encourage and create stable,
equitable, favourable and transparent conditions for Investors‟.348 In interpreting the
closely identical term „encourage and create… stable conditions‟ in Article 10(1) of
the ECT, the AES tribunal opined:
„The stable conditions that the ECT mentions relate to the framework
within which the investment takes place. Nevertheless, it is not a
stability clause. A legal framework is by definition subject to change as
it adapts to new circumstances day by day and a state has the
sovereign right to exercise its powers which include legislative acts.‟349
[176] Similarly, the ECT tribunals in Eiser350 and Parkerings351 recognised the host State‟s
right to regulate in the absence of a stabilisation clause. By deciding to invest despite
the possibility of instability, investors take „the business risk to be faced with changes
343
Record, p.30.
344
ibid p.11.
345
Saluka, ¶304; National Grid, ¶175; Wirtgen, ¶407.
346
PV Investors, ¶616; Charanne, ¶500.
347
Electrabel (Award), ¶7.77.
348
Record, p.62.
349
AES, ¶9.3.29.
350
351
Parkerings, ¶332.
41
of laws‟ that may be detrimental to their investments.352 After all, BITs are „not an
insurance risk against business risk‟, 353 and „economic and legal life is by nature
evolutionary‟.354
[177] Of course, such right is not absolute. As the Parkerings tribunal further opined:
„It is each State’s undeniable right and privilege to exercise its

sovereign legislative power [and] to enact, modify or cancel a law at
its own discretion… What is prohibited however is for a State to act
unfairly, unreasonably or inequitably in the exercise of its legislative
power.‟355
[178] The test of whether the Respondent‟s exercise of its right to regulate domestic matters
in the public interest has frustrated MFNB‟s legitimate expectations turns on two
issues: [a] reasonableness of the Respondent‟s changes;356 and [b] MFNB‟s exercise
of due diligence.357
a. The Challenged Measure was a rational policy to protect human

health and the environment
[179] In AES, the ECT tribunal succinctly formulated the test of „reasonableness‟:
„A rational policy is taken by a state […] with the aim of addressing a

public interest matter […] A challenged measure must also be
reasonable. That is, there needs to be an appropriate correlation
between the state’s public policy objective and the measure adopted to
achieve it.‟358
359
[180] Rational policy relates to public interest, including economic, social and
360
environmental matters. In Glamis, the tribunal took cognizance that the investor
was ‘operating in a climate that was becoming more and more sensitive to the
352
ibid ¶336.
353
MTD, ¶178.
354
El Paso, ¶352.
355
Parkerings, ¶332.
356
Saluka, ¶304; Duke Energy, ¶340.
357
Parkerings, ¶333; Mamidoil, ¶643.
358
AES, ¶¶10.3.8-10.3.9.
359
Saluka, ¶305; Lemire, ¶285; AES, ¶10.3.8; 9REN, ¶254.
360
Mamidoil, ¶¶614,617.
42
environmental consequences of open-pit mining‟.361 In WA Investment, the tribunal

held that the Czech Republic‟s right to regulate tariffs was reasonable in light of the
„solar boom‟.362
[181] Indeed, ECT tribunals have constantly shown positive reception towards the growth
of renewables.363 In PV Investors, the tribunal opined:
„It is not disputed that renewable energy (including photovoltaic,

thermal, solar, wind and certain other technologies) offers significant
environmental benefits […] Accordingly, like many other countries,
Spain decided to promote the development of renewable energy
through what are in essence State subsidies.‟364
[182] Similarly, the overriding public interest here is combatting climate change, as evinced
by the universal ratification of the Seoul Agreement by ASNEC Member States.365
[183] Further, environmental pollution is a localized problem, posing serious immediate

social and economic harm. In 2013, the Respondent‟s task force of environmental
scientists reported that the increasingly devastating annual floods in the past decade
were caused by greenhouse emissions emitted by coal plants.366 Between 2000 and
2015, the ASNEC region experienced 14 major floods – 6 floods struck Laoc, killing
85,000 people and destroying over 50,000 homes.367
[184] To address this escalating problem, the ASNEC Council adopted the Coal Directive
by majority vote with a two-prong policy:
(a) Increase the share of energy from renewables in ASNEC‟s gross final
consumption of energy to 75% by 2030 through support schemes incentivizing
integration of electricity from renewables (vide Article 2 and 3);368
361
Glamis, ¶767.
362
WA Investments, ¶576.
363
Antin, ¶540.
364
365
Record, pp.35-37.
366
ibid p.31.
367
ibid p.58.
368
ibid p.16.
43
(b) Reduce gross production of energy from coal-fired power plants to 0 by 2028
without compensation to owners and operators (vide Article 7)369
[185] Consequently, the Respondent adopted Law 72/2016 370 and Law 66/2016 371 to
implement those two binding policies respectively.
[186] The next inquiry is whether such policies were proportionate. 372 The test of
proportionality „requires the measure to be suitable to achieve a legitimate policy
objective […] and not excessive considering the relative weight of each interest
involved‟.373
[187] First, the Coal Directive leaves no „margin of appreciation‟ 374 in implementation
(except for an earlier coal phase-out before 2028 and form of incentives). All ASNEC
Member States have duly enacted domestic measures. 375 Law 66/2016 and Law
72/2016 were adopted by the Respondent in „subjective good faith‟ in order to comply
with such „general practice‟.376
[188] Second, the coal phase-out will only take effect 12 years later in 31.12.2028. Further,
even as Law 66/2016 closes one door, Law 72/2016 opens another door for re-
investment in renewables. Such regime provides an adequate „fall back‟ for coal
investors to make contingency plans.377
[189] In sum, the Respondent‟s direct implementation of the Coal Directive is based on a
rational policy to protect human health and the environment, in line with the ASNEC
EIT itself (vide Article VII and IX).378
369
ibid p.17.
370
ibid pp.19-20.
371
ibid p.18.
372
Tecmed, ¶122; Azurix, ¶313; LG&E, ¶195; MTD, ¶109; EDF, ¶293; Continental Casualty, ¶232; Lemire,
¶285.
373
Electrabel (Award), ¶179.
374
PV Investors, ¶¶582-583; Electrabel (Award), ¶6.92.
375
Record, p.75.
376
Total, ¶164.
377
ibid ¶122.
378
Record, pp.64-65.
44
b. MFNB failed to exercise due diligence
[190] Corollary to the test of reasonableness is the duty of due diligence.379 In Charanne,
the tribunal noted that such duty is even more „exhaustive‟ in a „highly regulated
sector such as energy‟.380 Similarly, the Eiser tribunal remarked that „experienced and
sophisticated investors‟ with substantial financial resources to build three large-scale
solar plants should recognize that „regulatory regimes for utilities are sometimes
adjusted‟.381
[191] A prudent investor is required to take reasonable efforts to collect information on

possible regulatory changes that are reasonably foreseeable at the time of
investment.382
[192] Here, even before T-1‟s construction began on 15.12.2010,383 there were plenty of
warning signs that political winds were shifting in Laoc:
(a) Since 2008, most States in ASNEC were transitioning to „green energy‟.384
(b) Since 2000, as deadly floods engulfed ASNEC, pro-environmental political

parties have been gaining public support and winning elections throughout
ASNEC.385
(c) In December 2010, the Respondent‟s government announced that a „draft law
capping the amount of greenhouse emissions by coal plants in Laoc‟ was
under review in light of the task-force report tracing a „direct correlation‟
between the growth of coal production and intensity of floods.386
(d) Since 1997, the Respondent is a State party to the UNFCCC.387
379
Parkerings, ¶333; MTD, ¶633; Biwater, ¶601; Lemire, ¶285; Mamidoil, ¶634
380
Charanne, ¶¶505,507.
381
382
Charanne, ¶505; Isolux, ¶781.
383
Record, p.14.
384
ibid p.9.
385
ibid p.58.
386
ibid p.31.
387
ibid p.76.
45
[193] Moreover, Mountaintop specializes in long-term investments of power generation (i.e.

coal, gas and nuclear), and has invested six other high-efficiency coal power plants
across the globe.388 MFNB would be able to leverage on such expertise, both from an
economic and environmental aspect.389
[194] It is unfortunate that T-1‟s market value dropped by 40% and Mountaintop wishes to
wind-up Ticadia-1 LLC.390 However, that is purely a business decision to mitigate a
business risk that they took upon themselves. 391 With due diligence, MFNB could
have foreseen the increasing instability of the energy sector in Laoc, and taken
reasonable steps to mitigate the risks (e.g. more favourable financing terms with
Ticadia-1 LLC).
[195] By failing to exercise due diligence, MNFB should bear the consequences of their
own bad business judgments as experienced businessmen.392
B. The Challenged Measure was non-discriminatory
[196] Article II(I) of the ASNEC EIT stipulates that „no Contracting Party shall in any way
impair by […] discriminatory measures their [Investments] management,
393
maintenance, use, enjoyment or disposal‟. Discrimination arises when the host
State „benefited or harmed someone more in comparison with the generality‟.394
[197] The most common form of discrimination is nationality – treating foreign investors
less favourably than nationals.395 This somewhat overlaps with the MFN treatment in
Article II(3) of ASNEC EIT.396 Discrimination can also be sectoral.397
388
ibid p.57.
389
Mamidoil, ¶614.
390
Record, p.22.
391
Biwater, ¶601.
392
MTD, ¶178; Maffezini, ¶64.
393
Record, p.63.
394
AES, ¶10.3.53.
395
Alex Genin, ¶369; Waste Management, ¶98; Glamis, ¶559.
396
Record, p.63.
397
Waste Management, ¶98; Glamis, ¶559.
46
[198] The evaluation of discriminatory treatment involves a three-step analysis:398 [i] like
circumstance; [ii] less favourable treatment; and [iii] justification.
i. MFNB is not in a ‘like circumstance’ with energy producers and

generators
[199] The first step is to ascertain whether the foreign investor is comparable with domestic
investor in the host State in a „like circumstance‟.399
[200] LRC is an investment fund primarily responsible in constructing large-scale

400
installations generating electricity from renewables. MFNB is a financial
institution.401 This is a far cry from Alex Genin whereby a foreign financial investor
claimed against the Bank of Estonia for revocation of its license to operate in
Estonia.402
[201] Further, in our situation, MFNB is a mere creditor of Ticadia-1 LLC. Their interest is
purely to recover a loan. They cannot be treated in a „like circumstance‟ as energy
producers, or electricity grid operators operating in Laoc, including LRC.
ii. Law 72/2016 does not treat foreign coal investors less favourably than
domestic renewables investors
[202] Next, this Tribunal must evaluate whether the foreign investors were afforded a less
favourable treatment than domestic investors in a „like circumstance‟.403
[203] First, in relation to nationality discrimination, nowhere in the text of Law 72/2016
grants special treatment to Laocan entities. In fact, anyone is free to take advantage of
Law 72/2016‟s 20-year premium by investing in renewable energy production. 404
Such premium is automatically granted (but not limited) to LRC‟s installations.405 The
398
Bayindir, ¶399.
399
Parkerings, ¶371; Total, ¶210.
400
Record, pp.19-20,70.
401
ibid p.6.
402
Alex Genin, ¶¶368-369.
403
Total, ¶210.
404
Record, p.19.
405
ibid p.20.
47
transitional phase-out period until 2028 provides ample time for coal producers like
Ticadia-1 LLC to convert their plants to process renewables406 – a factor considered
sufficient by the ASNEC Council to dispense with compensation.407
[204] Second, in relation to sectoral discrimination, it is true that Law 72/2016

differentiates between sources of energy. Renewables-powered generators are
afforded „priority of access to electricity grid‟ and receive „a premium in addition to
the market price‟.408 However, it is rather disingenuous to treat coal similar to solar or
wind energy.
[205] Simple everyday idioms reveal the flawed leap of logic. Apples and oranges fall under
agriculture, but should we compare apples with oranges? Shrimp and bluefin tuna are
part of fisheries, but what do crustaceans have to do with the price of fish?
[206] Indeed, the Total tribunal rejected cross-sectoral subsidies as being per se
discriminatory:
„The similarity of the investments compared and of their operations is

a precondition for a fruitful comparison. The alleged cross-sector
subsidisation does not comply with such a condition.‟409
[207] Hence, Law 72/2016 is not discriminatory against foreign investors and coal
producers.
iii. In any event, prioritization of renewables serves the greater public good
[208] Lastly, assuming arguendo that MFNB‟s investment in coal production was treated
less favourably than domestic investors involved in renewables, such differentiation is
justifiable in the public interest.410
[209] As adumbrated above,411 there is a strong rationale to differentiate between coal and
renewables within the energy sector. Coal is a far dirtier pollutant and greater
406
ibid p.75.
407
ibid p.74.
408
ibid p.19.
409
Total, ¶344.
410
Bayindir, ¶399.
411
See [179]-[189] of Memorial.
48
environmental hazard.412 More worryingly, in Laoc, coal production exacerbates the

risk of deadly floods.
[210] As held in AES, treating energy generators differently according to a uniform

methodology is not discriminatory. 413 The overriding object of Law 72/2016 is to
reduce greenhouse gas emissions and promote renewables in consonant with the
Respondent‟s international obligations under the Seoul Agreement.
[211] Further, subsidization of renewables is economically sound, as observed in Antin:
„It is undisputed that investments in the capital-intensive RE sector […]

require economic incentives from the State because such technologies
at least initially cost more than conventional power generating
facilities. The purpose of subsidization […] is to allow the
technologies to be developed in the hope that over time the costs
associated therewith will decline, thus making RE technologies more
competitive.‟414
[212] The public good at stake here transcends beyond national borders. We should not miss
the woods for the trees. In the 2019 Climate Action Summit, UN Secretary-General
Guterres sounded a rallying call: „No new coal power plants should be built after
2020‟. 415 Over 30 States worldwide have pledged to phase-out coal (e.g. 8 EU
Member States by 2030). 416 Hence, discriminating against coal energy is to act in
solidarity with ASNEC to shape a greener, cleaner and safer world for humanity.
[213] Ultimately, finding the equilibrium between the economy and environment is a
delicate balancing act. However, it is not the task of this Tribunal to „evaluate the
policy choices that often underpin economic decisions‟.417 As recently opined by the
PV Investors tribunal:
„[A]n arbitral tribunal asked to review general economic regulation

will normally not second-guess the State’s choices; it will not review
de novo whether they are well-founded, nor assess whether alternative
412
Denchak
413
AES, ¶10.3.50.
414
Antin, ¶540.
415
UN Secretary-General Statement.
416
UN News 2019.
417
49
solutions would have been more suitable. Governments often have to

make controversial choices, which especially those directly affected
may view as mistaken, based on misguided economic theory, placing
too much emphasis on certain social values over others.‟418
[214] Experts may well agree or disagree on whether phasing-out coal is the best method to
combat climate change. But the mere existence of alternative policies does not render
an adopted policy as irrational. As the Electrabel tribunal aptly noted: „A State can be
mistaken without being unreasonable‟.419
[215] Hence, even if the Respondent erred in trusting the judgment of the ASNEC Council,
such error does not entail a violation of the FET standard.
418
ibid.
419
Electrabel (Award), ¶180.
50
PRAYER FOR RELIEF
The Respondent respectfully requests the Tribunal to adjudicate and declare that:
1. Mr. Mason should be replaced as an arbitrator;

2. The Claimant has no standing to bring this claim under the ASNEC EIT;
3. The Challenged Measure is not attributable to the Respondent;
4. The Respondent did not violate the FET standard under Article II(1) of the ASNEC
EIT.
On behalf of the Respondent
Team Gaja
51

Korean Commercial Arbitration Board (Kcab) International: Memorial For Respondent Team Gaja

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Korean Commercial Arbitration Board (Kcab) International: Memorial For Respondent Team Gaja

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Memorial for Respondent TEAM GAJA

KOREAN COMMERCIAL ARBITRATION BOARD (KCAB) INTERNATIONAL

Goliath National Bank JSC

The Republic of Laoc

MEMORIAL FOR RESPONDENT

TABLE OF AUTHORITIES ................................................................................................... i

TABLE OF ABBREVIATIONS .......................................................................................... xiv

STATEMENT OF FACTS ...................................................................................................... 1

EXECUTIVE SUMMARY ..................................................................................................... 2

I. MR. MASON SHOULD BE REPLACED AS AN ARBITRATOR .......................... 3

A. There are justifiable doubts as to Mr. Mason’s independence and impartiality 3

a. Mr. Mason is unable to build a ‘Chinese wall’ in his mind .............................. 5

b. Mr. Mason’s presence causes a manifest imbalance in the arbitral

a. The challenge was made timely ...................................................................... 10

b. Mr. Mason’s statements reveal bias against climate change ......................... 11

B. Mr. Mason’s non-disclosure of his involvement in ASNEC EIT arbitrations

i. Mr. Mason’s non-disclosure of his involvement in ASNEC EIT arbitrations upon

II. THE CLAIMANT HAS NO STANDING TO BRING THIS CLAIM UNDER

i. The Claimant does not own or control any asset..................................................... 15

III. THE CHALLENGED MEASURE IS NOT ATTRIBUTABLE TO THE

A. The Challenged Measure is solely attributable to the Respondent under lex

i. The normative control test is lex specialis applicable to ASNEC ........................... 26

a. The Coal Directive is legally binding upon the Respondent........................... 28

b. Only ASNEC can grant an effective remedy by reversing or modifying the

B. Alternatively, the Challenged Measure is solely attributable to ASNEC under

i. The Respondent is an organ or agent of ASNEC (Article 6 of DARIO) .................. 32

IV. THE RESPONDENT DID NOT UNFAIRLY AND INEQUITABLY TREAT

a. The Governor’s political statements had no legal effect ................................ 38

b. MFNB could not reasonably rely on the Governor’s statements as a binding

b. MFNB failed to exercise due diligence ........................................................... 45

B. The Challenged Measure was non-discriminatory .............................................. 46

i. MFNB is not in a ‘like circumstance’ with energy producers and generators........ 47

PRAYER FOR RELIEF........................................................................................................ 51

Arbitration No.080/2005 (26.3.2008)

Suspension, PCA Case No.2008-13 (26.10.2010)

Case No.ARB/01/7 (25.5.2004)

Salini Salini Costruttori S.p.A. v Morocco [I], Decision on Jurisdiction,

Universal Universal Compression International Holdings v Venezuela, Decision

[1989] ICJ 177

EC-Selected WTO, European Communities – Selected Customs Matters, Panel

Armed Conflict Advisory Opinion [1996] ICJ 66

International Law 697

to the key issues (OUP on Demand 2010)

Organisations, A/CN.4/541, 2004

Denchak M.Denchak, „Fossil Fuels: The Dirty Facts‟ (2018) NRDC,

REIO Regional Economic Integration Organisation

[2] 1990s: In 1997, Laoc ratified the UNFCCC.

[7] 2014: T-1 commenced commercial operations.

[8] 2015: Pro-environmental LEU gained control of Laoc‟s Parliament. In December,

[3] Attribution: The Challenged Measure was a direct implementation of ASNEC‟s

I. MR. MASON SHOULD BE REPLACED AS AN ARBITRATOR

A. There are justifiable doubts as to Mr. Mason’s independence and impartiality

[5] An arbitrator ceases to be independent and impartial when he is „influenced by factors

[7] In CC/Devas, Judge Tomka opined:

Such test was affirmed in İçkale18 and Vattenfall.19

(a) Arbitrators are presumed to be „neutral‟ and exercising „independent arbitral

(a) Concurrence – Where an arbitrator encounters difficulty to „build a Chinese

(b) Commitment – Where an arbitrator is deeply invested on promoting or

i. Mr. Mason’s external knowledge drawn from concurrent ASNEC EIT

a. Mr. Mason is unable to build a ‘Chinese wall’ in his mind

Case Nomination of Mr. Mason Award

GNB v Laoc (this dispute) 31.1.201949 Pending

C-Energy v Wellfalcon 16.3.201850 Pending

Hewer Plants v Wellfalcon 11.8.201651 1.5.201952

Since 2016 Hewer Plants v Wellfalcon