I.

THE ILLEGAL BLOCKADE OF THE SUITE OF SOFTWARE OFFERED BY

BATTERSOFT IN ARSENALIA IS A DISPROPORTIONATE AND UNNECESSARY
USE OF FORCE AGAINST ROJO DIABLO AND IS FURTHER IN VIOLATION OF
THE PRINCIPLES ENSHRINED IN THE ARBIT.

1. The Counsel of the Respondent submits before the Honorable Court that has the
illegal blockade of the suite of software offered by BatterSoft in Arsenalia is a
disproportionate and unnecessary use of force against Rojo Diablo and is further in
violation of the principles enshrined in the ARBIT, and accordingly the blockade
needs to be ceased immediately. The Government of Arsenalia( hereinafter
‘Claimant’),on 1st October 2021,vide Notification No. 111/2021 dated October 1,
2021, the Ministry of Information Technology of Arsenalia, invoking it’s power under
the Information Technology Act of Arsenalia, decided to block the entire suite of
software offered by BatterSoft ‘alleging’ that these software are engaged in activities
which is “prejudicial to sovereignty and integrity of Arsenalia, defence of Arsenalia,
security of state and public order, and the blocking of these software is a justified
proportional and legitimate economic sanction for the trans boundary harm caused
due to Arsenalia by Rojo Diablo during the Wenger Incident”1.
Arsenalia by virtue of the far-reaching measure, vide Notification No. 111/2021 dated
October 1, 2021, has violated several obligations owed to the Claimant under the
Treaty of Concerning the Encouragement and Reciprocal Protection of
Investment( ARBIT). Firstly, Claimant’s issuance of the Decree amounted to a
violation of the ARBIT (1). Secondly, the Claimant cannot rely on the principles of
proportionality or necessity to defend its action (2).

A. Claimant’s issuance of the Decree amounted to a violation of the ARBIT

1. Arsenalia by virtue of the far-reaching measure, vide Notification No.

111/2021 dated October 1, 2021, has violated several obligations owed to the
1
Moot Proposition,¶14
 Claimant under the Treaty of Concerning the Encouragement and Reciprocal
Protection of Investment( ARBIT).According to Article VI of ARBIT states
that-

“(a) Neither Party may expropriate or nationalise an investment either directly or

indirectly through measures equivalent to expropriation or nationalisation
("expropriation"), except for a public purpose; in accordance with due process of
law; in a non-discriminatory manner; and on prompt, adequate, and effective
compensation.”2

2. The action taken by the Government of Arsenalia can be described as

measures “tantamount to expropriation or as measures having equivalent
effect”. These measures and actions of the Claimant action has resulted in
Respondent losing all effective control over its investment, including the right
to use, enjoy and dispose of its investment, without formal transfer of title or
outright seizure.

3. EXPROPRIATION

Expropriation in simple terms is the action by the state or an authority of taking

property from its owner for public use or benefit. “Indirect Expropriation” is
broadly understood as interference with an investment that “deprives [the
investor] of the possibility to utilize the investment in a meaningful way.3

In the case of CME v. The Czech Republic that involved interference with an
investor’s contractual rights by a regulatory authority, the tribunal held:
“measures that do not involve an overt taking but that effectively neutralized the
benefit of the property of the foreign owner, are subject to expropriation claims.
This is undisputed under international law.”4

2
Article VI, Annexure I
3
Dolzer & Schreur, p. 92
4
CME Czech Republic BV v Czech Republic(2003), (2006) 9 ICSID Rep 264 (Other Reference)
 4. For a finding of indirect expropriation, there is no need for a corresponding
benefit to accrue to the State. In Metalclad Corporation vs United Mexican
States, it was held that expropriation includes “covert or incidental
interference with the use of a property, which has the effect of depriving the
owner” use or economic benefit “even if not for the obvious benefit of the host
state”5

5. DISCRIMINATION AND FAIR AND EQUITABLE TREATMENT

Article IV and Article V of the ARBIT stated that:
“Article IV
Each Party shall accord investments and investors of the other Party
treatment no less favourable than that it accords, in like circumstances, to its
own investors and to investors of any non-Party.
Article V
Each Party shall accord to investments treatment in accordance with
customary international law, including fair and equitable treatment, full
protection and security, and non-discrimination.”6

6. The Claimant disregarded and ignored one of the main articles of ARBIT
when issuing the Decree. The Honorable Court should compare Respondent
with other similar industries in Arsenalia to ensure that the Respondent was
not subjected to an unfair or unequitable treatment.

7. Respondent, as an investor, relied on the legitimate and reasonable

expectations created by Claimant to invest in its territory. These expectations
were to help define what is set as fair and equitable regarding the investor-
state relations. In the Saluka Investments B.V v. Czech Republic it was held
that when the State acts unreasonably or in a discriminatory manner it can
5
Metalclad Corporation vs United Mexican States, ICSID Case No. ARB(AF)/97/1
6
Article IV, Article V, Annexure I
 give rise to breach of fair and equitable treatment. In this case, the
Respondent’s rights over its investment were unreasonably taken away by the
Claimant without any reliable research and Study and in a discriminatory
manner.

8. Therefore, Claimant expropriated Claimant’s investment and the expropriation

breached Article IV, V and VI of the ARBIT, for it lacked non-discrimination and
breached Fair and Equitable regarding Claimant’s legitimate expectations.

B. THE CLAIMANT CANNOT RELY ON THE PRINCIPLES OF

PROPORTIONALITY OR NECESSITY TO DEFEND ITS MEASURE

9. The Government of Arsenalia( hereinafter ‘Claimant’),on 1 st October

2021,vide Notification No. 111/2021 dated October 1, 2021, the Ministry of
Information Technology of Arsenalia, invoking it’s power under the
Information Technology Act of Arsenalia, decided to block the entire suite of
software offered by BatterSoft ‘alleging’ that these software are engaged in
activities which is “prejudicial to sovereignty and integrity of Arsenalia,
defence of Arsenalia, security of state and public order, and the blocking of
these software is a justified proportional and legitimate economic sanction for
the trans boundary harm caused due to Arsenalia by Rojo Diablo during the
Wenger Incident”7.
10. In September 2021, local fishers in Emiraton were interviewed by Arsenalia
Watch, a leading investigative journal operating out of Highbury, and most
fishers believed that the cultivation of molluscs and crustaceans had greatly
reduced, while fish produce had largely remained the same.8 The harm that
was caused can be attributed to a Force Majeure event and in any case, owing
to the different standards of care during the COVID-19 pandemic.9

7
Supra Note 1
8
Moot Preposition,¶13
9
Moot Preposition,¶16
 11. Respondent’s rights over its investment were unreasonably taken away by the
Claimant without any reliable research and Study and in a discriminatory
manner. In LG&E v. Argentina, it was held that “For a regulatory measure
not to be expropriatory, it must be at least proportional”. There must be a
reasonable relationship of proportionality between the charge or weight
imposed by the measure and its aim, giving more coherence into legal
systems. A State’s right to regulate is guided by proportionality, as it implies a
balance between state interests and investor´s affected rights.10

12. The Claimant decided for the most invasive decision on the respondent’s rights.
Before taking such measure, the Claimant did not try to contemplate the
consequences of its act. This unexpected measure led to more harm than benefits
for its own population, including the respondent’s former employees, purchasers
and suppliers, which also amounts to disproportionality.

13. NECESSITY

The measures taken by the Claimant do not meet the requirements to claim a
defense of necessity. Art. 25 of ARSIWA talks about these requirements.
The following requirements are the measures:
“
a. The measures were the only way to avoid a grave and imminent peril; and,
b. The measures don‘t impair other states ‘or international community‘s essential
interests. The measures were not exempt if:

i. The obligation excludes the possibility of invoking the necessity

defense; or,
ii. If the state contributed to the situation of necessity.”11

10
Benedict Kingsbury, Stephan Schill, Kingsbury and Schill, p. 88.
11
Article 25, Responsibility of States for Internationally Wrongful Acts 2001
 14. None of the requirements of Article 25 ARSIWA are fulfilled in this case. The
Decree was not the only way for Claimant to safeguard an essential interest. In
CMS Gas Transmission Company v. The Republic of Argentina it was held
that for the measure to be considered necessary there must be no alternative
measure to achieve Government’s purpose12
15. . In Suez v. Argentina, it was acknowledged that the issue in question, a water
provision was an important issue, but it was not convinced that the only way
respondent could satisfy an essential interest was violating treaty obligations,
even during a severe economic crisis.13

CONCLUSION TO THE ISSUE: In conclusion, it is submitted before this court ,

Arsenalia by virtue of the far-reaching measure, vide Notification No. 111/2021 dated
October 1, 2021, has violated several obligations owed to the Claimant under the
Treaty of Concerning the Encouragement and Reciprocal Protection of
Investment( ARBIT). Firstly, Claimant’s issuance of the Decree amounted to a
violation of the ARBIT has resulted in Respondent losing all effective control over its
investment, including the right to use, enjoy and dispose its investment, without
formal transfer of title or outright seizure. (1). Secondly, the Claimant cannot rely on
the principles of proportionality or necessity to defend its action as the rights of the
respondent were unreasonably taken away by the Claimant without any reliable
research and Study and in a discriminatory manner without actually understanding the
gravity of the situation and without considering other possible measures(2).

12
CMS Gas Transmission Company v. The Republic of Argentina(2005), ICSID Case No. ARB/01/8
13
Suez, Sociedad General de Aguas de Barcelona, S.A.and Vivendi Universal, S.A. v. Argentine Republic, ICSID Case
No. ARB/03/19