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MEMORIAL FOR CLAIMANT

NAIROBI CENTRE FOR INTERNATIONAL ARBITRATION MOOT 2019.

JOHN FOSTER MCLANE……….………………CLAIMANT

-VS-

UNITED KINGDOM…………….…………...RESPONDENT

COUNSEL
MARKS & SPENSER LLP
5005 Kensington Avenue
London 10004
United Kingdom
(Phone) 202.624.2500
(Facsimile) 202.628.5116
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TABLE OF CONTENTS

TABLE OF ABBREVIATIONS ................................................................................................................... 3

SUMMARY OF FACTS ............................................................................................................................... 4

ISSUES OF MERIT ..................................................................................................................................... 5

LIST OF SOURCES .................................................................................................................................... 5

I. TREATIES....................................................................................................................................... 5

II. JURISPRUDENCE .......................................................................................................................... 5

A. INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES

TRIBUNAL.......................................................................................................................................... 5

B. DECISIONS FROM OTHER COURTS AND TRIBUNALS ........................................................ 6

i. International Court of Justice (ICJ) ................................................................................................. 6

ii. Permanent Court of International Justice (PCIJ) .............................................................................. 7

iii. London Court of International Arbitration...................................................................................... 7

III. LITERATURE ............................................................................................................................. 7

STATEMENT OF JURISDICTION ............................................................................................................ 8

SUMMARY ARGUMENTS ........................................................................................................................13

SUBSTANTIVE ARGUMENTS. ................................................................................................................14

i. Whether the United Kingdom breached its obligations under the CDN.-UK Free Trade Agreement; ....14

A. UK expropriated Mr. Maclane’s Investments. .................................................................................14

B. Mr. Maclane was treated contrary to the ‘National Treatment’ principles. .........................................16

C. Mr. Maclane and his investments were treated below the Minimum Standard of Treatment ..............20

PRAYER.....................................................................................................................................................23
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TABLE OF ABBREVIATIONS

UNCITRAL United Nations Commission on International Trade Law

ICSID International Centre for Settlement of Investment Disputes

ICJ International Court of Justice

PCIJ Permanent Court of International Justice

BIT Bilateral Investment Treaty

NAFTA North American Free Trade Agreement

ICCPR International Covenant on Civil and Political Rights

ICESCR International Covenant on Economic, Social and Cultural Rights

UK United Kingdom

FTA / CDN.-UK FTA Free Trade Agreement between Canada and the United Kingdom

BR LLC. Bedrock Rubble LLC

Crust Crust Aggregate & Mining LLC

UK CO. United Kingdom Mining Company LLC

US United States
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SUMMARY OF FACTS

Mr. John Foster Mclane is a naturalized citizen of Canada. At no time has Mr. Mclane ever been a

national or citizen of the UK. In 2014, he began to explore opportunities related to quarrying and

limestone supply in the United Kingdom. Atlantic Properties, a major real estate developer in the UK

and a UK state-owned enterprise approached Mr. Mclane to ascertain his interest in building,

managing, and operating a quarry in the Portland region of London near the UK-France border.

Atlantic also offered to and did ultimately introduce Mr. Mclane to the relevant UK authorities.

Following the introductions made by Atlantic, and after lengthy negotiations between the parties, on 8

April 2015, Mr. Mclane and UK CO concluded an "Agreement ofpo Lease for Limestone Quarrying

Project." One month later, on 25 May 2015, Mr. Mclane executed a nearly identical agreement with UK

CO to operate a limestone quarrying and crushing project.

In 2015, having achieved considerable success as a result of various business ventures in Canada, Mr.

Mclane invested in the UK through two United Kingdom (UK) based investment vehicles, Crust and

BR LLC. Crust is established and registered pursuant to the laws of the UK. It has a branch in London,

Crust London Branch LLC. Mr. Mclane owns, either directly or indirectly, 49% of the shares of Crust

and, as a result of an agreement between the Crust shareholders, is entitled to 80% of the profits

generated by Crust; he also has sole decision-making control over the Company.

BR LLC is established and registered pursuant to the laws of Highbury Free Zone, in London, UK. BR

LLC is entirely owned by Mr. Mclane.

Until he was arrested in May 2018 and the Companies' operations were shut down by UK authorities,

the Companies were actively and lawfully engaged in the quarrying, crushing, screening, and sale of

limestone and other natural stones in the territory of UK. Mr. Mclane contributed tens of millions of

pounds to the UK economy, assumed risk, and expected to gain from his investments in the territory

of UK.
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ISSUES OF MERIT

i. Whether the United Kingdom has breached its obligations under the CDN.-UK Free

Trade Agreement.

A. Mr. Maclane and his investments were treated below the Minimum Standard of

Treatment

B. Mr. Maclane was treated contrary to the ‘National Treatment’ principles.

C. UK expropriated Mr. Maclane’s Investments.

LIST OF SOURCES

I. TREATIES

1. International Centre for Settlement of Investment Disputes Convention

2. United Nations Commission on International Trade Law

II. JURISPRUDENCE

A. INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES

TRIBUNAL.

1. Cortec Mining Kenya Limited, Cortec (Pty) Limited and Stirling Capital Limited v. Republic of

Kenya, ICSID Case No. ARB/15/29

2. Phoenix Action Ltd. V Czech Republic, ICSID Case No. ARB/06/5

3. Caratube Internationa Oil Company LLP and Devincci Salah Hourani v Republic of

Kazakhstan ICSID CASE No. ARB/13.13

4. Bear Creek Mining Corporation v. Republic of Peru ICSID CASE No. ARB/14/21

5. United Parcel Service of America Inc. v. Canada, ICSID Case No.UNCT/02/1

6. Champion Trading Company Ameritrade International, Inc. v. Egypt, ICSID Case No.

ARB/02/9
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7. Archer Daniels Midland Company and Tate & Lyle Ingredients Americas, Inc. v. Mexico,

ICSID Case No. ARB (AF)/04/5

8. Alex Genin, Eastern Credit Limited, Inc. and A.S. Baltoil Genin v. Republic of Estonia, ICSID

Case No ARB/99/2

9. Pope & Talbot, Inc. v. Canada, UNCITRAL Arbitration Rules, NAFTA, Award on the Merits,

April 10, 2001.

10. CME (Netherlands) v. Czech Republic (Partial Award) (13 September, 2001) available at

www.mfcr.cz/scripts/hpe/default.asp

11. American Manufacturing & Trading, Inc. (AMT) (US) v. Republic of Zaire, ICSID case No.

ARB/93/1

12. Maffezini v. Spain, Decision on Jurisdiction of 25 January 2000, 40 ILM 1129

13. Tokios Tokelės v. Ukraine, Decision on Jurisdiction of 29 April 2004

14. Lucchetti v. Peru, Award of 7 February 2005

15. Impregilo v. Pakistan, Decision on Jurisdiction of 22 April 2005

16. AES v. Argentina, Decision on Jurisdiction of 26 April 2005

17. El Paso Energy Intl. Co. v. Argentina, Decision on Jurisdiction of 27 April 2006

18. Suez, Sociedad General de Aguas de Barcelona S.A., and InterAguas Servicios Integrales del

Agua S.A. v. Argentina, Decision on Jurisdiction of 16 May 2006

19. M.C.I. v. Ecuador, Award of 31 July 2007

B. DECISIONS FROM OTHER COURTS AND TRIBUNALS

i. International Court of Justice (ICJ)

1. Nottebohm Case [1955] ICJ 1

2. Interpretation of the Peace Treaties with Bulgaria, Hungary and Romania, Advisory

Opinion of 30 March 1950 (first phase), 1950 ICJ Rep. 65

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ii. Permanent Court of International Justice (PCIJ)

3. Mavrommatis Palestine Concessions (Greece v. Great Britain), Judgment of 30 August

1924, 1924 PCIJ (Ser. A) No. 2

iii. London Court of International Arbitration

4. Occidental Exploration and Production Company v. Ecuador, London Court of

International Arbitration Case No. UN3467, US-Ecuador BIT, Final Award, July 1, 2004.

III. LITERATURE

1. United Nations Conference on Trade and Development, (2003), Dispute Settlement –

International Centre for Settlement of Investment Disputes; Requirements Ratione Materiae,

New York and Geneva, United Nations.

2. B. A. Garner (ed.) Black’s Law Dictionary (1999)

3. Andrea Vinzce (Ph.D. student, Department of European Law and Private International Law,

University of Miskolc), Field of research: Jurisdiction in ICSID arbitration

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STATEMENT OF JURISDICTION

Article 10.15 of the CDN-UK FTA provides for the submission of a claim to arbitration. It states;

“1. In the event that a disputing party considers that an investment dispute cannot be settled by

consultation and negotiation: (a) the claimant, on its own behalf, may submit to arbitration under this

Section a claim.”

Mr. Maclane, the claimant in this claim therefore has the right to bring forth this claim for arbitration as

the CDN-UK FTA possesses an arbitration clause.

Article 25(1) of the ICSID Convention defines the scope of the Centre's jurisdiction.

“(1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an

investment, between a Contracting State (or any constituent subdivision or agency of a Contracting

State designated to the Centre by that State) and a national of another Contracting State, which the

parties to the dispute consent in writing to submit to the Centre. When the parties have given their

consent, no party may withdraw its consent unilaterally.”

Therefore, for as long as there is an investment made by a national of one contacting state in another

contracting state, then the ICSID has the jurisdiction to handle an arbitration arising out of a dispute

the subject matter of which is the investment. Mr. Maclane, being a national of Canada and having an

investment in the UK, both states being Contracting Parties to the ICSID Convention gives the ICSID

the jurisdiction.

An Investment was defined in the case of Phoenix Action Ltd. V Czech Republic, ICSID Case

No. ARB/06/5. In that case, the “Salini”1 test was used. According to this test, four criteria2 are used

to ascertain if an investment was made in conformity with the ICSID Convention. “There has to be a

contribution by the investor;

1 Invented by the ICSID in Salini v. Morocco (ICSID Case No. ARB/00/04)

2 However in Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania (ICSID Case No. ARB/05/22) , the Salini
test was described as having five Criteria: adequate duration, regularity of profit and return, risk, substantial commitment of
resources; financial or otherwise, and contribution to the host State’s development.
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1. Of money or other assets of economic value;

2. For a certain duration;

3. With an element of risk;

4. That makes a contribution to the host state’s development.”

The Tribunal however did not find itself strictly bound by the Salini criteria and thus proposed its own

rendition of the elements that must be taken into account for an investment to be protected under the

ICSID Convention:3

1. A contribution in money or other assets;

2. A certain duration;

3. An element of risk;

4. An operation made in order to develop an economic activity in the host State;

5. Assets invested in accordance with the laws of the host State;

6. Assets invested bona fide.

This dispute is a "legal dispute" within the meaning of Article 25(1) of the Convention because it

involves allegations of breach of legal obligations by UK. Further, the dispute arises directly out of Mr.

Mclane's significant investments in UK. Mr. Mclane personally invested tens of millions of dollars of

capital in establishing the quarry works in the concession area, including the building of facilities, the

hiring of hundreds of employees, the creation of roads and additional infrastructure, and the buying

and leasing of quarrying equipment.

The requirement that there is a legal dispute is an absolute requirement for ICSID’s jurisdiction. 4

Black’s Law Dictionary defines ‘dispute’ as a conflict or controversy, especially one that has given rise

3This new criteria has been applied by the ICSID in Cortec Mining Kenya Limited, Cortec (Pty) Limited and Stirling Capital
Limited v. Republic of Kenya, ICSID Case No. ARB/15/29
4United Nations Conference on Trade and Development, (2003), Dispute Settlement – International Centre for Settlement

of Investment Disputes; Requirements Ratione Materiae, New York and Geneva, United Nations, Page 9
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to a particular lawsuit. 5 In the Mavrommatis Palestine Concessions Case, the Parmanent Court of

Justice gave the following broad definition of a dispute;

“A dispute is a disagreement on a point of law or fact, a conflict of legal views or of interests between

two persons.”6

The International Court of Justice has also defined a dispute as;

“A situation in which the two sides held clearly opposite views concerning the question of the

performance or non-performance of certain treaty obligations” 7

ICSID tribunals have adopted similar descriptions of ‘disputes’, often relying on the PCIJ’s and ICJ’s

definitions.8

The parties to the dispute are a State, UK, and a natural person, Mr. John Foster Mclane, who is a

national of Canada. UK and the Canada have both signed and ratified the ICSID Convention and are

therefore Contracting States within the meaning of Article 25(1) of the Convention. UK signed the

ICSID Convention on 26th May 1965 and deposited instruments of ratification on 19th December,

1966. The ICSID Convention entered into force for UK on 18th January 1967. Canada signed the

ICSID Convention on 15th December, 2006 and deposited instruments of ratification on 1st

November, 2013. The ICSID Convention entered into force Canada on 1st December, 2013.

Identification of a State party is not difficult, the list of Contracting States is registered at the ICSID

Secretariat continuously9.

Our task is with the plaintiff and whether he is encompassed under the jurisdiction ratione personae.

5 B. A. Garner (ed.) Black’s Law Dictionary (1999)

6 Mavrommatis Palestine Concessions (Greece v. Great Britain), Judgment of 30 August 1924, 1924 PCIJ (Ser. A) No. 2, at
page 11
7 Interpretation of the Peace Treaties with Bulgaria, Hungary and Romania, Advisory Opinion of 30 March 1950 (first

phase), 1950 ICJ Rep. 65, at 74

8 Maffezini v. Spain, Decision on Jurisdiction of 25 January 2000, 40 ILM 1129, at paras. 93, 94 (2001); Tokios Tokelės v.

Ukraine, Decision on Jurisdiction of 29 April 2004, at paras. 106, 107; Lucchetti v. Peru, Award of 7 February 2005, at para.
48; Impregilo v. Pakistan, Decision on Jurisdiction of 22 April 2005, at paras. 302, 303; AES v. Argentina, Decision on
Jurisdiction of 26 April 2005, at para. 43; El Paso Energy Intl. Co. v. Argentina, Decision on Jurisdiction of 27 April 2006,
at para. 61; Suez, Sociedad General de Aguas de Barcelona S.A., and InterAguas Servicios Integrales del Agua S.A. v.
Argentina, Decision on Jurisdiction of 16 May 2006, at para. 29; M.C.I. v. Ecuador, Award of 31 July 2007, at para. 63.
9 As of 3 November 2003 (status displayed on http://www.worldbank.org/icsid/constate/c-states-en.htm on 26 October

2004), there are 154 signatories to the Convention 140 of which have deposited the instruments of ratification.
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Clause 25(2) of the ICSID Convention stipulates that;

“(2) National of another Contracting State means:

(a) any natural person who had the nationality of a Contracting State other than the State party to the

dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration

as well as on the date on which the request was registered pursuant to paragraph (3) of Article 28 or

paragraph (3) of Article 36, but does not include any person who on either date also had the nationality

of the Contracting State party to the dispute; and

(b) any juridical person which had the nationality of a Contracting State other than the State party to

the dispute on the date on which the parties consented to submit such dispute to conciliation or

arbitration and any juridical person which had the nationality of the Contracting State party to the

dispute on that date and which, because of foreign control, the parties have agreed should be treated as

a national of another Contracting State for the purposes of this Convention.”

From the above provision, a party to an ICSID Arbitration with a State Party can be:

“(a) a natural person having a nationality of a Contracting State other than that of the State party on the

date on which the parties consented to submit such dispute to conciliation or arbitration as well as on

the date on which the request was registered, (b) a juridical person having the nationality of a

Contracting State other than the State party to the dispute on the date on which the parties consented

to submit such dispute to arbitration, or (c) a juridical person which had the nationality of the

Contracting State party to the dispute on the date on which the parties consented to submit such

dispute to arbitration and which, because of foreign control, the parties have agreed should be treated

as a national of another Contracting State for the purposes of the Convention.”10

In the Nottebohm case11 the International Court of Justice stipulated guidelines to be used in the

determination of a Natural person.12 In that case, basic attributes of nationality are; a social fact of

10Andrea Vinzce (Ph.D. student, Department of European Law and Private International Law, University of Miskolc), Field
of research: Jurisdiction in ICSID arbitration, at pages 3-4
11 [1955] ICJ 1
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attachment, a genuine connection of existence, interests and sentiments and the existence of reciprocal

rights and duties.

However, usually the basis of determining nationality is the municipal law of the country in question,

and only if this is not explicit can the Nottebohm decision be used. 13

Under Article 10.16 of the FTA, UK consented to the submission to arbitration, under the ICSID

Convention and the ICSID Rules of Procedure, of claims that it has breached the obligations contained

in Section A of Chapter 10 of the FTA. Pursuant to paragraph 2 of Article 10.16 of the FTA, that

consent, together with Mr. Mclane's submission of claims to arbitration, satisfies the requirements of

Chapter II of the ICSID Convention.

Mr. Mclane and UK have a legal dispute that arises directly out of an investment; Mr. Mclane is a

national of Canada, a Contracting State to the ICSID Convention; UK is a Contracting State to the

ICSID Convention; and both Mr. Mclane and UK have consented in writing to ICSID arbitration. The

UK therefore has no right to withdraw from this arbitration without the Claimant consenting to their

withdraw. Thus, ICSID has jurisdiction over this legal dispute.

12 The Tribunal referred to the Nottebohm case in Marvin Roy Feldman Karpa v. United Mexican States (Case No.
ARB(AF)/99/1) where it was ruled that jurisdiction does extend to the Claimant being a US citizen but having his
permanent residence in Mexico since citizenship and not residence is the main criterion to decide upon nationality. We must
also note that this particular case involved the NAFTA Agreement which provides for additional jurisdictional requirements.
13 Andrea Vinzce (Ph.D. student, Department of European Law and Private International Law, University of Miskolc), Field

of research: Jurisdiction in ICSID arbitration, at page 4

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SUMMARY ARGUMENTS

Mr. Mclane decided to invest tens of millions of dollars in UK relying on the Government's invitation

and promises of support as well as the legal framework for foreign investment in the country.

Irrespective of his commitment to this investment, and contrary to the CDN-UK FTA as well as other

binding legal frame work, the UK has carried out various illegal actions and omissions against Mr.

Maclane and his investments in the following forms.

The UK CO failed to obtain the necessary permitting per its obligations under the lease agreements

with Mr. Maclane, and further misrepresentated in denial regarding the permits it had obtained.

Consequently, the lease agreements made by Maclane’s investments were arbitrarily, and capriciously

terminated, and never reinstated. As if that wasn’t enough illegality, the enforcement of the

terminations was through the improper arrest and detention of Mr. Mclane and the forcible shutting

down of his quarry sites. This was coupled by the coercion of Mr. Mclane to provide a commitment to

cease permanently, quarrying and crushing operations as a condition of his release from police custody.

There was also threatening and forced dispersal of Mr. Mclane‟s employees as well as the auctioning of

his quarrying equipment.

Quite evidently therefore, by the sovereign actions of the UK, Mr. Maclane was deprived of his existing

right and therefore the UK expropriated Mr. Maclane’s investments. Mr. Maclane and his investments

were treated less favourably than the local investors and local investments in like circumstances. United

Kingdom was therefore in breach of the National Treatment Clause under the CDN-UK FTA. United

Kingdom also did not accord Mr. Maclane as well as his investments fair and equitable treatment in

terms of full protection and security, an omission that was contrary to the minimum standard treatment

requirement under the CDN-UK FTA.

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SUBSTANTIVE ARGUMENTS.

i. Whether the United Kingdom breached its obligations under the CDN.-UK Free

Trade Agreement;

A. UK expropriated Mr. Maclane’s Investments.

Article 10.6.1 of the FTA provides that;

“1. Neither Party may expropriate or nationalize a covered investment either directly or indirectly

through measures equivalent to expropriation or nationalization (“expropriation”), except:

(a) for a public purpose;

(b) in a non-discriminatory manner;

(c) on payment of prompt, adequate, and effective compensation; and

(d) in accordance with due process of law and Article 10.5.1 through 10.5.3”

In Caratube Internationa Oil Company LLP and Devincci Salah Hourani v Republic of

Kazakhstan, the Tribunal defined expropriation as;

“(i) unreasonable substantial deprivation of existing rights,

(ii) of a certain duration, and

(iii) caused by a sovereign act of the host state.”14

From the facts,15 the lease agreements made for Mr. Maclane’s investments were arbitrarily, and

capriciously terminated, and never reinstated and his quarry sites were forcefully shut down.

Furthermore, Mr. Maclane’s quarrying equipment were auctioned by the state and never did he receive

proceeds from these auctions. This amounted to unreasonable substantion deprivation of the

Claimant’s rights by the UK that was supposed to be the claimant’s supportive host.

14 Caratube Internationa Oil Company LLP and Devincci Salah Hourani v Republic of Kazakhstan ICSID CASE No.
ARB/13.13 at para. 825
15
Paragraph 10 of the Introduction to the Moot question.
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In Bear Creek Mining Corporation v. Republic of Peru,16 the Tribunal held that the ‘Supreme

Decree 032’ constituted an illegal expropriation. The Claimant Bear Creek Mining Corporation was a

Canadian Company headquartered in Vancouver. In 2004, Bear creek found indications of significant

silver ore deposits in the Santa Ana mine, located in the Puno department of Peru.

From 2011 onwards, Santa Ana encountered significant social opposition, resulting in protests that

sometimes turned violent. Concern spread within some of the nearby communities that mining

activities were contaminating local land and the nearby Lake Titicaca. When a new president was

elected in June 2011, Peru issued a decree revoking Bear Creek’s authorization (Supreme Decree 032).

In August 2014, Bear Creek filled a Request for Arbitration with the International Centre for

Settlement of Investment Disputes which held that the ‘Supreme Decree 032’ constituted an illegal

expropriation.

Similary, the UK Government has under the facts prevented Mr. Mclane from resuming any operations

at his site following the illegal termination of the Lease Agreements and the enforcement of that

termination at the Quarry. The Companies' machinery was seized and auctioned off and its employees

were threatened and eventually forced to evacuate the site.17 Mr. Mclane's investments in the UK have

been destroyed.

UK's actions constitute breaches of its obligations under the CDN.-UK FTA with respect to Mr.

Mclane's investments in the UK, and have caused losses and damages to Mr. Mclane of approximately

£560 million.18 By the sovereign actions of the UK, Mr. Maclane has been deprived of his existing right

and therefore the UK has expropriated Mr. Maclane’s investments.

16 ICSID CASE No. ARB/14/21

17 Paragraph 10 of the Introduction to the Moot question.
18 Paragraph 11 of the Introduction to the Moot question.
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B. Mr. Maclane was treated contrary to the ‘National Treatment’ principles.

Article 10.3 of the FTA provides that;

“1. Each Party shall accord to investors of the other Party treatment no less favourable than that it

accords, in like circumstances, to its own investors with respect to the establishment, acquisition,

expansion, management, conduct, operation, and sale or other disposition of investments in its

territory.

2. Each Party shall accord to covered investments treatment no less favorable than that it accords, in

like circumstances, to investments in its territory of its own investors with respect to the establishment,

acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.

3. The treatment to be accorded by a Party under paragraphs 1 and 2 means, with respect to a regional

level of government, treatment no less favorable than the treatment accorded, in like circumstances, by

that regional level of government to natural persons resident in and enterprises constituted under the

laws of other regional levels of government of the Party of which it forms a part, and to their respective

investments.”

In United Parcel Service of America Inc. v. Canada,19 it was held that a foreign investor that alleges

a violation of national treatment must establish the following elements:

1. that the Respondent State accorded treatment with respect to the establishment, acquisition,

expansion, management, etc. of investments;

2. that the foreign investor or investment was “in like circumstances” with local investors or

investments; and

3. that the Respondent State has treated the foreign investor or investment less favourably than it

treated the local investors or investments.

Definitely, Mr. Maclane was accorded treatment with respect to his investments and this treatment was

less favourable than is given to local investors. Upon the illegal termination of Mr. Maclane’s leases, the

19 ICSID Case No.UNCT/02/1

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enforcement of the terminations was through the improper arrest and detention of Mr. Mclane and the

forcible shutting down of his quarry sites. These actions were the direct opposite of the way UK

nationals are handled when it comes to arrest and to compulsory acquisition of property. Mr. Mclane

was coerced to provide a commitment to cease permanently, quarrying and crushing operations as a

condition of his release from police custody. By so doing, the UK government deprived Mr. Maclane

of his economic freedom contrary to the laws that govern the rights of the UK nationals. Mr. Mclane‟s

employees were also forced off the sites as well as the auctioning of his quarrying equipment.

It was further held in United Parcel Service of America Inc.20 that in determining whether investors

were “in like circumstances,” all the relevant circumstances in which the treatment was accorded must

be considered.

In Champion Trading Company Ameritrade International, Inc. v. Egypt21a “like situation” was

defined as a similar situation that should be assessed within the same business or economic sector.

Champion Trading (a US company), et al. submitted a request for arbitration, claiming that the

Egyptian government’s decision to implement a compensation program (granting an amount equivalent

to the gap between the market price and the government-designated price), which only benefited the

state-owned cotton companies to the exclusion of foreign companies, including Champion Trading,

constituted a violation of the national treatment obligation under the US-Egypt BIT. The BIT provides

that each party shall accord companies of the other party treatment no less favorable than that

accorded in like situations to its own companies.

The Arbitral Tribunal noted that in order for companies to be eligible for the compensation program,

they had to purchase cotton from the government’s Collection Center at a price designated by the

government, not from the market. The Tribunal determined that there was a significant difference

between a company opting to buy cotton from the Collection Centres at fixed prices and a company

opting to trade on the free market. The Tribunal then determined that the claimant, which bought

20
ibid
21 ICSID Case No. ARB/02/9
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cotton solely from the market, and other companies were not in comparable situations in terms of the

payment of compensation. Since the Tribunal reached the conclusion that the claimant and other

companies were not in “like situations,” as stated above, it determined, without examining whether

there was a discriminatory treatment based on nationality, that Egypt did not violate the national

treatment obligation.

This case can however be distinguished from the situation faced presently by this tribunal. The UK

does not treat quarrying companies like Mr. Maclane’s investments in the manner that the latter were

treated. Be that as it may, the treatment given to Mr. Maclane himself in the form of illegal arrest was in

itself treatment inappropriate and in contravention of the National Treatment principles. It should also

be noted that The Court of Appeal of the UK also ruled that Mr. Maclane had been unlawfully

detained.

In Archer Daniels Midland Company and Tate & Lyle Ingredients Americas, Inc. v. Mexico22

the Tribunal stated that the object of Article 1102 of NAFTA is to ensure that a national measure does

not upset the competitive relationship between domestic and foreign investors. The Tribunal held that

a violation of the national treatment obligation is established by showing that a foreign investor has

unreasonably been treated less favorably than domestic investors in like circumstances.

The claimants, two US companies, established a joint venture ALMEX in Mexico. It had been

producing high fructose corn syrup (HFCS). However, the Mexican government decided to impose a

20% tax on the trading of soft drinks and syrups using sweeteners other than sugar, such as HFCS. The

claimants submitted a request for arbitration, claiming that the tax was intended to discriminate against

the HFCS industry and to protect the domestic sugar industry, and that the Mexican government

violated the national treatment obligation.

The Arbitral Tribunal first examined whether the HFCS producers and the Mexican sugar industry

were “in like circumstances.” With reference to the precedents under NAFTA, the Tribunal determined

that they were “in like circumstances,” because they both were part of the same sector, competing face

22 ICSID Case No. ARB (AF)/04/5

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to face in supplying sweeteners to the soft drink and processed food markets. With respect to whether

the tax constituted discriminatory treatment, the Tribunal noted that;

1. The tax on HFCS was higher than that on domestic products; and

2. The tax had an intent and effect to protect the Mexican sugar industry.

Based on these findings, the Tribunal determined that the measure taken by the Mexican government

was discriminatory in its nature and concluded that Mexico violated the national treatment obligation.

In Pope & Talbot, Inc. v. Canada,23 it was held that domestic investors and foreign investors are

deemed as being “in like circumstances”;

a) If they belong to the same economic or business sector.

b) If the difference in the treatment of domestic investors and that of foreign investors bears a

reasonable relationship to rational policies not motivated by preference of domestic over foreign

owned investments.

Be that as it may, in Occidental Exploration and Production Company v. Ecuador,24 it was held

that in light of the purpose of national treatment obligation, domestic investors and foreign investors

may be deemed as being “in like situations” even if they do not belong to the same business sector.

The Arbitral Tribunal stated that the purpose of national treatment obligation is to protect foreign

investors as compared to local producers, and whether investors were “in like situations” cannot be

determined by referring exclusively to the sector in which that particular activity was undertaken.

Furthermore, the Tribunal stated that the reference in the BIT to “in like situations” is different from

that to “like products” in the GATT, because “like products” relates to competitive and substitutable

products, while “in like situations” can relate to all exporters that share such condition. Accordingly,

the Tribunal concluded that there was a violation of the national treatment obligation.

23 UNCITRAL Arbitration Rules, NAFTA, Award on the Merits, April 10, 2001.
24 London Court of International Arbitration Case No. UN3467, US-Ecuador BIT, Final Award, July 1, 2004.
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Accordingly, there is no obligation on the claimant to prove that other domestic Quarrying Companies

were treated in a like manner as Crust and BR LLC. It is enough to establish that Crust, BR LLC as well

as Mr. Maclane were treated in a manner contrary to that in which the Nationals and other Corporate

Entitites in the UK are treated. It is therefore true that UK was in breach of the National Treatment

principles of International Investment.

C. Mr. Maclane and his investments were treated below the Minimum Standard of Treatment

Article 10.5 of the FTA provides that;

“1. Each Party shall accord to covered investments treatment in accordance with customary

international law, including fair and equitable treatment and full protection and security.

2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of

treatment of aliens as the minimum standard of treatment to be afforded to covered investments. The

concepts of “fair and equitable treatment” and “full protection and security” do not require treatment

in addition to or beyond that which is required by that standard, and do not create additional

substantive rights. The obligation in paragraph 1 to provide:

(a) “fair and equitable treatment” includes the obligation not to deny justice in criminal, civil, or

administrative adjudicatory proceedings in accordance with the principle of due process embodied in

the principal legal systems of the world; and

(b) “full protection and security” requires each Party to provide the level of police protection required

under customary international law.

Mr. Maclane was instead brutalised by the UK police and detained unlawfully. Even when the Court of

Appeal had declared that he had so been treated, its judgment was not enforced by the authorities.

Clause 4 of Article 10.5 of the FTA further provides that each Party shall accord to investors and to

covered investments, non-discriminatory treatment with respect to measures it adopts or maintains

relating to losses suffered by investments in its territory owing to armed conflict or civil strife.
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The property that belonged to Mr. Maclane’s investments was auctioned and his employees threatened

and dispersed. This was treatment that was discriminatory basing on the fact that any other investor

would not be treated that way.

In the case of American Manufacturing & Trading (AMT) (US), Inc. v. Republic of Zaire,25 the

ICSID Tribunal found a violation of the standards of fair and equitable treatment and full protection

and security as contained in the US-Zaire 1989 BIT, as a result of loss to AMT investment caused by

widespread looting in Zaire. The tribunal found that Zaire has “manifestly failed to respect the

minimum standard required of it by international law” 26 and stated that:

“…These treatments of protection and security of investment required by the provisions of the BIT of

which AMT is beneficiary must be in conformity with its applicable laws and must not be any less than

those recognised by international law. For the Tribunal, this last requirement is fundamental for the

determination of the responsibility of the [host state]. It is thus an objective obligation which must not

be inferior to the minimum standard of vigilance and of care required by international law”. 27

In Alex Genin, Eastern Credit Limited, Inc. and A.S. Baltoil (US) v. Republic of Estonia,28 the

claimant sought to recover losses related to its investment in an Estonian financial institution. The

ICSID tribunal, after having considered whether certain actions of the Bank of Estonia amounted to a

violation of its obligation to accord “fair and equitable treatment” and “non-discriminatory and

nonarbitrary treatment” under the US-Estonia 1994 BIT, dismissed the claim. In its consideration, it

described the standard as follows:

“..Under international law, this requirement is generally understood to ‘provide a basic and general

standard which is detached from the host State’s domestic law’. While the exact content of the standard

is not clear, the Tribunal understands it to require an ‘international minimum standard that is separate

from domestic law, but that is, indeed, a minimum standard.

25 ICSID Case No. ARB/93/1

26 para. 6.10., p. 30.
27 para. 6.06, p. 29.
28 ICSID Case No ARB/99/2
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There is therefore a standard below which foreign investors cannot be treated. In the event therefore

that there is no domestic law against a various illegality that an investor claims against, then

international customary law should be resorted to. In the case of CME (Netherlands) v. Czech

Republic,29 The Tribunal stated:

“The standard for actions being assessed as fair and equitable are not to be determined by the acting

authority in accordance with the standard used for its own nationals. Standards acceptable under

international law apply”.

The lease agreements made for Mr. Maclane’s investments were arbitrarily, and capriciously terminated,

and never reinstated. As if that wasn’t enough illegality, the enforcement of the terminations was

through the improper arrest and detention of Mr. Mclane and the forcible shutting down of his quarry

sites. This kind of treatment is against the internationally recognised social and economic rights as well

as the civil and political rights under the ICESCR and the ICCPR respectively.

CME (Netherlands) v. Czech Republic (Partial Award) (13 September, 2001) available at
29

www.mfcr.cz/scripts/hpe/default.asp
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PRAYER.

Mr. Mclane respectfully requests that the Tribunal grant him the following relief:

i. A declaration that the United Kingdom has breached its obligations under the CDN.-UK Free Trade

Agreement;

ii. Compensation in an amount of approximately £560 million for the damages caused by UK's failure

to provide Mr. Mclane national treatment, fair and equitable treatment, and full protection and security

and its expropriation of Mr. Mclane's valuable interest in unrestricted mining concessions, which sum

includes profits Mr. Mclane reasonably could have expected to receive had the Government of UK not

deprived him of the opportunity through its breaches and indirect losses;

iii. Moral damages;

iv. Costs associated with these proceedings, including all professional fees and disbursements;