TEAM HACKWORTH

IN THE INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES

UNDER THE ARBITRATION RULES OF THE INTERNATIONAL CENTRE FOR THE

SETTLEMENT OF INVESTMENT DISPUTES

CASE NO. ARB/18/155

ON BEHALF OF CLAIMANTS:

FriendsLook plc. SpeakUp Media Inc. Whistler Inc.

AGAINST RESPONDENT:

Republic of Tyrea

SKELETON BRIEF FOR CLAIMANTS

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CLAIMANT’S SKELETON SUBMISSIONS

Unless otherwise stated, Claimant’s adopts all abbreviations as used in the Record.

I. THE TRIBUNAL SHOULD NOT GRANT THE PROVISIONAL MEASURES REQUESTED

BY THE RESPONDENT

A. Article 47 of the ICSID Convention should be used to protect the rights of either party in
situation of absolute necessity and the tribunal has right to exercise self-restraint in their
application.1
B. Provisional measures in the instant case should not be granted as there is no violation of
legal right of the Respondent by the Claimants’.2 Arguendo, even if there was a violation
of right the same should exist at the time of request and be neither hypothetical nor to be
one created in the future.3
C. The Provisional measures should not be granted as the criteria to grant them is not satisfied4
in the instant case i.e., situation of absolute necessity5, urgency6 and irreparable harm7.
D. They are meant to protect the requesting party from the imminent harm and not from any
hypothetical harm.8
E. There is no aggravation of the dispute nor exacerbation of Tyrea’s position in the dispute.9
F. Arguendo, even if there was a situation of absolute necessity, urgency and imminent harm
caused to the Respondent, it does not have the proper evidence to prove that the same was
caused by the Claimants’.

1
The ICSID Convention: A commentary, pg. 775
2
Article 47 of the ICSID Convention; Occidental v. Ecuador.
3
Maffezini v. Spain, ¶. 13.
4
Ibid.
5
Saipem v. Bangladesh.
6
Ibid.
7
Occidental v. Ecuador; Cemex v. Venezuela.
8
Ibid.
9
Amco v. Indonesia.

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II. THE TRIBUNAL HAS JURISDICTION OVER THE DISPUTE, GIVEN THAT THE
RESPONDENT HAS DENOUNCED THE ICSID CONVENTION.

A. The Ld. Tribunal has Jurisdiction to entertain the instant dispute as the requirements of the
ICSID Convention enshrined under Article 25 are met:
A.1The Dispute arises out of investment and the same satisfied the cumulative criteria as
laid down under the Salini Test10.
A.1.1 The investment as done by the claimants’ in the host state have a certain
duration.11
A.1.2 The investment involves an expectation of gain and profit.12
A.1.3 An element of risk is involved in the investment.13
A.1.4 Investment made by the Claimants’ territory account for a substantial
commitment to the host state economy14.
A.1.5 The investment made by Claimants’ has a significance in the development of the
host state15.
A.2 The nationality of an individual or corporation is determined with reference to the place
of incorporation16 requirements of ratione personae jurisdiction are met:
A.2.1 FriendsLook plc. is a national of other contracting state as the same was
incorporated in and accordance with the laws of Novanda.17
A.2.2 Whistler and SpeakUp Media Inc. are nationals of other contracting state as the
same were incorporated in and accordance with the laws of Kitoa.18
A.3The requirements of ratione voluntatis jurisdiction are met as consent is the cornerstone
of any Investor-State dispute.
B. The Ld. Tribunal has Jurisdiction to entertain the instant dispute as the requirements of the
Tyrea – Novanda BIT and Tyrea – Kitoa BIT are met:
B.1 Claimants’ are investor within the meaning of Article 1 (a) of the BITs.

10
Salini v. Morocco, ¶. 53-58.
11
Ibid.
12
CME v. Czech Republic, ¶.34.
13
Saipem v. Bangladesh, ¶.109; See Also, MHS v. Malaysia, ¶.112.
14
Consortium RFCC v. Morocco, ¶. 61; See Also, Bayindir v. Pakistan, ¶. 137, Joy Mining v. Egypt, ¶. 57.
15
Supra at 10 and 13.
16
Barcelona Traction Case (1970).
17
Statement of Uncontested Facts, ¶.7.
18
Statement of Uncontested Facts, ¶.8-9.

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B.1.1 Claimants participation in providing social media platforms in the

respondent territory falls within the meaning of Investment and does satisfy
the Salini Test19.
B.1.2 Claimants investment in the territory of Tyrea were in conformity with the
laws and regulations of the host state.
B.2 Claimants’ are nationals of other contracting state within the meaning of Article 1 (b)
of the BITs.
C. The jurisdiction of the Ld. Tribunal is not curtailed by the fact that the host state or
respondent has denounced the ICSID Convention.
C.1Under Article 41 of the ICSID Convention the tribunal is the judge of its own
competence and the competence of the tribunal is decided in accordance with the
requirements of Article 25 of the ICSID Convention.
C.2After the host state has denounced the ICSID Convention as per the requirements of
Article 71 of the ICSID Convention the host state ceases to be a contracting party to
the Convention.
C.3However, Article 72 of the ICSID Convention acts as an exception of Article 25 of the
ICSID convention and does not require that a party be a contracting state to the
convention to initiate investment claims.20
C.4 Furthermore, it can also be argued that Article 72 acts as a modification of Article 71,
it requires that consent is given before the notice of denunciation.21 In the instant case
the consent by the host state was given prior to the notice of denunciation and the same
was accepted by the Claimants’ as inherent under Article 9 of the Tyrea – Kitoa BIT
and Tyrea – Novanda BIT.22
C.5The basis of jurisdiction in the cases decided by the ICSID convention required consent
through a BIT and this is called as ‘Arbitration without Privity’.23
C.6Article 25 (3) of the ICSDI Convention states that consent cannot be revoked
unilaterally, it is a manifestation of the maxim pacta sunt servanda as enshrined under
Article 26 of the VCLT. Hence, the same cannot be revoked.

19
Supra at 10.
20
Plama Consortium Limited v. Republic of Bulgaria.
21
Ibid
22
American Manufacturing & Training v. Zaire, ICSID Case No. ARB/93/1; Goetz v. Burundi, ICSID Case No.
ARB/93/5.
23
Jan Paulson, Arbitration without Privity, 10 ICSID Rev. 232, 232 (1995).

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III. THE TRIBUNAL HAS JURISDICTION OVER THE MULTI-PARTY ARBITRATION

CLAIM BROUGHT AGAINST THE RESPONDENT.

A. The Ld. Tribunal has ratione personae, ratione materiae and ratione voluntatis jurisdiction
to entertain the Multi-Party claim under Article 9(1) of Tyrea – Novanda BIT & Tyrea –
Kitoa BIT.
B. The Ld. Tribunal has ratione personae, ratione materiae and ratione voluntatis jurisdiction
to entertain the Multi-Party claim under Article 25 of the ICSID Convention.
C. In the instant case the claim submitted before the Ld. Tribunal is inclusive of multi-party
arbitration.
C.1 Mere silence in the ICSID Convention and the relevant BITs pertaining to jurisdiction
of the Ld. Tribunal to entertain the multi-party claims is to be regarded as an affirmation
of such claims.24
C.2There is no need of secondary or special consent to invoke the jurisdiction of the Ld.
Tribunal in respect of multiparty claims.25
D. Claimants’ have instituted sole arbitration proceedings in the instant case as there are
sufficient grounds for their claims to be heard in a single arbitration proceeding.
D.1The dispute arose due to a single cause of action against the same respondent state.26
D.2The remedies sought by the Claimants’ are identical reliefs aligned in the same
direction.27
D.3Joining of the both the claims was required by a third-party funding agency.28
E. The Ld. Tribunal is the judge of its own competence29 and Hence, competent to hear the
claims pertaining to multiple BITs:
E.1 A multi-party arbitration proceeding is not necessarily related to a single BIT, it can
occur in the case of multiple BITs.30

24
Abaclat and others v. Argentina, ICSID Case No. ARB/07/5.
25
Ibid; See Also, Giovanni Alemanni & Others v. The Argentine Republic.
26
Noble Energy & Machala Power v. Ecuador & Conelec, ICSID Case No ARB/05/12.
27
Ibid.
28
Statement of Uncontested Facts, ¶.24.
29
Article 41(1) of the ICSID Convention.
30
Proposal for Amendment of ICSID Rules – Working Paper (2018) ICSID Secretariat Vol. 3 Schedule 7 ¶10.

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E.2 The Ld. Tribunal has jurisdiction to hear the multi-party claim as the same is neither
forbidden nor any provision prohibiting the same is enshrined in either of the BITs
involved in the case.

IV. THE BLOCKING OF CLAIMANTS’ PLATFORMS IS IN VIOLATION OF ARTICLES 3(1)

AND 6 OF THE TYREA – NOVANDA BIT AND ARTICLES 3(1) AND 6 OF THE TYREA

– KITOA BIT.

A. The actions of contracting state amounts to violation of Fair and Equitable Treatment
standards as enshrined under Art. 3 (1) of the Tyrea – Novanda BIT and Tyrea – Kitoa BIT.
A.1The actions of respondent state violated the legitimate expectations of the investors.
A.1.1 The provision of legitimate expectation is considered in the light of good faith
principle.31 The respondent in the instant case acted in bad faith and without any
reasonable justification.
A.1.2 The stability of legal and business framework is an essential element of fair and
equitable treatment.32
A.1.3 The treatment of host state is in breach of representations made by the host state
and have reasonably relied on by the Claimants.33
A.2The actions of respondent state amount to violation of due process.
A.3The actions of respondent were discriminatory in nature.
B. The actions of Contracting State Tyrea amounted to Expropriation under Art. 6 of the Tyrea
– Kitoa BIT and Tyrea – Novanda BIT respectively.
B.1 The actions of respondent to block Claimants’ social media platform amounted to
expropriation.34
B.2 Respondent Tyrea has directly as well as indirectly expropriated the Investments of the
Claimants.

31
Tecmed v. Mexico; See Also, Genin v Estonia, Sempra v Argentina, Article 26 of VCLT.
32
Occidental v Ecuador, CMS v Argentina.
33
Waste Management v United Mexican States (Award) 5 ICSID Rep. 209, 208 (NAFTA/ICSID (AF), 2000)
34
Statement of Uncontested Facts, ¶.21.

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B.1.1 The conduct of respondent cumulatively constitutes “substantial deprivation”35 of

claimants’ rights under the BITs as the investment of them cannot be put to
reasonable use.36
B.1.2 The Claimants’ has suffered economic loss along with sufficient interference with
their investor rights.
B.3 The respondent cannot escape the its liability by relying upon the conditions as
enshrined under article 6 (a) to 6 (c) of the BITs.
B.3.1 The measures taken by respondent amount to breach of due process of law as
there was no opportunity of being heard37 given by the respondent before blocking
the claimants’ platforms.38 Furthermore, the actions are not proportional to public
interest presumably protected.39
B.3.2 The actions of respondent are discriminatory in nature as other social media
platforms such as Wink and TruthSeeker were still functioning in the respondent
territory.40
B.3.3 The actions are not accompanied by any kind of just compensation or payment of
money.

V. THE COMPENSATION REQUESTED BY THE CLAIMANTS’ IS NOT SPECULATIVE AND

DISCOUNTED CASH FLOW METHOD IS APPROPRIATE FOR THE QUANTIFICATION
OF DAMAGES IN THE INSTANT CASE.

A. The Claimants are entitled for the Damages in the Instant Case, since:
A.1The Respondent state of Tyrea have breached BITs.
A.2Respondent have expropriated Claimants Property in the host state.
A.3Claimants social media platform are a going concern.41
B. The Compensation as requested by the Claimants based on the DCF method is not
speculative in nature as the compensation includes:

35
Metalclad v. Mexico.
36
Biwater Gauff v. Tanzania.
37
Bear Creek v Peru, ¶. 446.
38
ADC, para. 435.
39
Supra at 31. ¶ 122.
40
Statement of Uncontested Facts, ¶.22.
41
Supra at 35.

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B.1 Direct damages;42

B.2 Lost profits;43
B.3 Market Expansion.44
C. Discounting Cash Flow is the appropriate method for quantification of damages.
C.1DCF method reflects both the value of money and the risk attached to it.
C.2Future projections are based on actual data and not on unsupported assumptions.45
C.3Reasonable Methodology for determining the market value of a going concern with
a proven record of profitability.46
C.4Logical and appropriate.47

42
Metaclad v. Mexico, Award, 30 August, 2000, para 122; Azurix v. Argentina, Award 14 July, 2006, para 425.
43
AMCO v. Indonesia, Resubmitted Case: Award 5 June 1990, ¶. 163-284, LETCO v. Liberia, Award, 31 March
1986, 2 ICSID Reports 346, at 373-7.
44
Seimens v. Hungary, Award, 6 February 2007, ¶.352, 353, 360.
45
Claimants’ Expert Damage Report.
46
World Bank Guidelines on Treatment of foreign Direct Investment, 1383.
47
Starett Housing Corporation and anr. v. Islamic Republic of Iran, 1987, 16Iran-USCTR 201.