Memorial for the Claimant (Team Brower)

TEAM BROWER

FOREIGN DIRECT INVESTMENT MOOT COMPETITION

Seoul, 28 October – 3 November 2021

IN THE MATTER OF AN ARBITRATION UNDER CHAPTER 9 OF THE

BONOORU-MEKAR COMPREHENSIVE ECONOMIC PARTNERSHIP AND
TRADE AGREEMENT AND THE INTERNATIONAL CENTER FOR
SETTLEMENT OF INVESTMENT DISPUTES (“ICSID”) ARBITRATION
(ADDITIONAL FACILITY) RULES

ICSID Case No. ARB(AF)/20/78

-BETWEEN-
Vemma Holdings Inc.
Claimant
- AND –

The Federal Republic of Mekar

Respondent

MEMORIAL FOR CLAIMANT

Registry
International Center for Settlement of Investment Disputes
Memorial for the Claimant (Team Brower)

TABLE OF CONTENTS

TABLE OF CONTENTS ...................................................................................................... i

INDEX OF ABBREVIATIONS .......................................................................................... iv

LIST OF AUTHORITIES ................................................................................................... vi

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

STATEMENT OF ARGUMENTS....................................................................................... 5

I. THE TRIBUNAL HAS JURISDICTION RATIONE PERSONAE TO HEAR THE DISPUTE ........ 6
A. The Claimant is “an investor” Under the CEPTA ............................................................. 6
1. The Claimant is “an enterprise with the nationality of a Party” ........................................ 6
(a). State-ownership is irrelevant for the assessment of “an enterprise with the nationality of a
Party” 7
(b). Alternatively, the Claimant is not a “government-owned” enterprise .................................... 8
2. The Claimant “has made an investment in the territory of the other Party” ...................... 9
(a). The Claimant is an active investor ....................................................................................... 10
(b). The shareholdings are an investment of the Claimant ......................................................... 10
B. The Claimant is “a national of another State” Under the ICSID AF Rules ................... 11
1. The Broches test is the jurisdictional test under the ICSID Convention.......................... 11
2. The Broches test is not applicable to arbitration under the ICSID AF Rules .................. 12
3. In the alternative, the Broches test is not met in the current arbitration .......................... 13
(a). The Claimant did not act as an agent of Bonoori government in its investment activity ..... 13
(b). The Claimant did not discharge Bonoori government’s function over its investment activity
15
i. The Claimant is not entrusted with any governmental functions ......................................... 15
ii. Alternatively, the investment activity concerned the governmental function ...................... 16
C. The Corporate Restructuring does not Deprive the Claimant of Standing .................. 16
1. The critical date for jurisdiction under the ICSID AF Rules ........................................... 17
2. The critical date for jurisdiction under the CEPTA ......................................................... 18

II. THE TRIBUNAL SHOULD GRANT THE LEAVE SOUGHT FOR FILING ONLY AMICUS
SUBMISSION BY THE CBFI ................................................................................................... 19
A. Article 41(3) of the ICSID Arbitration (AF) Rules and Article 9.19 of the CEPTA
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Memorial for the Claimant (Team Brower)

Specifies the Test to Apply in This Case .................................................................................... 19

B. The CBFI Should Be Accorded Amicus Standing in This Arbitration .......................... 21
1. The CBFI would assist the Tribunal in the determination of the Claimant’s standing issue
21
2. The CBFI’s submission would address the standing issue in this case ............................ 22
3. The CBFI has a significant interest in this proceeding .................................................... 23
4. The CBFI is independent from the Claimant ................................................................... 24
5. The CBFI’s submission pursues a public interest in this case ......................................... 26
C. The CRUP Should be, on the Other Hand, Denied Amicus Standing in This Case ..... 27
1. The CRUP is, as amicus curiae, incapable of raising an issue that is not questioned by the
Parties ....................................................................................................................................... 27
2. In any event, the CRUP addresses an issue manifestly irrelevant to the dispute ............. 28

III. THE RESPONDENT HAS VIOLATED ARTICLE 9.9 OF THE CEPTA .......................... 31
A. The CCM Exposed Arbitrary Acts to the Claimant’s Investment ................................. 31
1. The CCM’s first and second investigations were arbitrary .............................................. 31
2. The continuous airfare caps in the economic crisis was arbitrary ................................... 32
B. Mekari Judiciary Denied the Claimant Justice ............................................................... 33
1. The denial of justice come from the unreasonable delays in the airfare cap case............ 34
2. The denial of justice derives from the recognition and enforcement of the arbitral award,
which was set aside at the seat of arbitration............................................................................ 35
C. The Alleviative Measures Under Executive Order 9-2018 Were Discriminatory ......... 36
1. The Claimant was in “like circumstances” with Star Wings and JetGreen in relation to
Executive Order 9-2018 ........................................................................................................... 36
2. The Claimant was accorded a less favourable treatment ................................................. 37
3. The Respondent fails to raise any reasonable justifications ............................................ 38
D. In Any Event, the Respondent Engaged in the Creeping FET Violation ...................... 39

IV. THE APPROPRIATE COMPENSATION STANDARD IS ONE THAT ASSESSES THE

EFFECT OF THE BREACH ON THE FAIR MARKET VALUE OF THE INVESTMENT AND THERE
EXISTS NO REASONS TO DEDUCE THE AMOUNT OF COMPENSATION ................................. 41
A. The Respondent Shall Compensate USD 700 Million as Remaining Part of the “But-
for” Sale of the Investment on the Basis of the FMV Standard .............................................. 41
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Memorial for the Claimant (Team Brower)

1. Article 9.21 of the CEPTA reflects the customary full reparation principle, including the
FMV standard ........................................................................................................................... 42
2. Alternatively, the MFN clause under Article 9.7 of the CEPTA imports the FMV standard
under Arrakis-Mekar BIT (2006) into the current arbitration................................................... 43
(a). The FMV-compensation is a more “favourable” than the MV-compensation ..................... 43
(b). The Respondent’s actual FMV-compensation to Arrakis-investors constitutes a “treatment it
accords in like situations” .................................................................................................................. 44
i. The meaning of the term “treatment” .................................................................................. 44
ii. The meaning of the term “in like situations” ....................................................................... 45
(c). The FMV-compensation is “with respect to the […] sale or disposal” of the Claimant’s
investment .......................................................................................................................................... 46
(d). The FMV-compensation relates to the Claimant’s investment “in the territory” ................. 46
B. The Respondent Does Not Have Any Defences to Reduce the Amount of Compensation
(USD 700 Million) ....................................................................................................................... 46
1. The Claimant did not contribute to the occurrence of the damages ................................. 47
2. The economic distress is not pertinent for the calculation of the compensation ............. 48

PRAYER FOR RELIEF..................................................................................................... 49

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INDEX OF ABBREVIATIONS

¶/¶¶ Paragraph(s)

Act (2009) Monopoly and Restrictive Trade Practice

Act, as Amended in 2009

CBFI Consortium of Bonoori Foreign Investors

CBFI’s Amicus Application Amicus Submission by the Consortium of

Bonoori Foreign Investors

CCM Competition Commission of Mekar

CEPTA Comprehensive Economic Partnership and

Trade Agreement

CRUP Committee on Reform of Public Utilities

CRUP’s Amicus Application Amicus Submission by External Advisors

to the Committee on Reform of Public
Utilities

Facts Uncontested Facts

FET Fair and Equitable Treatment

FMV Fair Market Value

ICSID (AF) International Center for Settlement of

Investment Disputes (Additional Facility)

ILC Articles Draft Articles on responsibility of States

for Internationally Wrongful Acts

L Line

MFN Most Favoured Nation

MV Market Value

NAFTA North American Free Trade Agreement

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Notice Notice of Arbitration

P Page

PO Procedural Order

Response Response to the Notice of Arbitration

SOE(s) State-Owned Enterprise(s)

VCLT Vienna Convention on Law of the Treaties

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Memorial for the Claimant (Team Brower)

LIST OF AUTHORITIES

ARBITRAL DECISIONS

AAPL (Award) Asian Agricultural Products Ltd. (AAPL) v.

Sri Lanka ― Award, ICSID Case No.
ARB/87/3 (27 June 1990)

Abengoa (Laudo) Abengoa, S.A. y COFIDES, S.A. v. Mexico

― Laudo, ICSID Case No. ARB(AF)/09/2
(18 Apr. 2013)

ADM (Award) Archer Daniels Midland and Tate & Lyle

Ingredients Americas, Inc. v. Mexico ―
Award, ICSID Case No. ARB(AF)/04/5 (21
Nov. 2007)

Agility (Final Award) Agility Public Warehousing Company

K.S.C. v. Iraq ― Final Award, ICSID Case
No. ARB/17/7 (22 Feb. 2021)

Aguas del Tunari (Jurisdiction) Aguas del Tunari S.A. v. Bolivia ― Decision
on Respondent’s Objections to Jurisdiction,
ICSID Case No. ARB/02/3 (21 Oct. 2005)

Alapli (Award) Alapli Elektrik B.V. v. Turkey ― Excerpts of

Award, ICSID Case No. ARB/08/13 (16 Jul.
2012)

Almås (Award) Mr. Kristian Almås and Mr. Geir Almås v.

Poland ― Award, PCA Case No. 2015-13
(27 Jun. 2016)

Alpha (Award) Alpha Projektholding GmbH v. Ukraine ―

Award, ICSID Case No. ARB/07/16 (8 Nov.
2010)

Apotex (III) (PO on Mr. Appleton) Apotex Holdings Inc. and Apotex Inc. v. U.S.
― Procedural Order on the Participation of
the Applicant, Mr. Barry Appelton, as a
Non-Disputing Party, ICSID Case No.
ARB(AF)/12/1 (4 Mar. 2013)

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Memorial for the Claimant (Team Brower)

Apotex (III) (Award) Apotex Holdings Inc. and Apotex Inc. v. U.S.
― Award, ICSID Case No. ARB(AF)/12/1
(25 Aug. 2014)

Aricia Grace (PO No.4) Alicia Grace and others v. Mexico ―

Procedural No. 4, ICSID Case No.
UNCT/18/4 (24 Jun. 2019)

AWG (Jurisdiction) AWG Group Ltd. v. Argentina ― Decision

on Jurisdiction (3 Aug. 2006)

Azinian (Award) Robert Azinian, Kenneth Davitian, & Ellen

Baca v. Mexico ― Award, ICSID Case No.
ARB(AF)/97/2 (1 Nov. 1999)

Bayindir (Award) Bayindir Insaat Turizm Ticaret Ve Sanayi

A.S. v. Pakistan ― Award, ICSID Case No.
ARB/03/29 (27 Aug. 2007)

Beijing Shougang (Award) Beijing Shougang Mining Investment

Company Ltd., China Heilongjiang
International Economic & Technical
Cooperative Corp., and Qinhuangdaoshi
Qinlong International Industrial Co. Ltd. v.
Mongolia ― Award, PCA Case No. 2010-
20 (30 Jun. 2017)

Berschader (Award) Vladimir Berschader and Moïse Berschader

v. Russia ― Award, SCC Case No.
080/2004 (21 Apr. 2006)

Biwater (PO No.5) Biwater Gauff (Tanzania) Limited v.

Tanzania ― Procedural No. 5, ICSID Case
No. ARB/05/22 (2 Feb. 2006)

BUCG (Jurisdiction) Beijing Urban Construction Group Co. Ltd.

v. Yemen ― Decision on Jurisdiction, ICSID
Case No. ARB/14/30 (31 May 2017)

Casinos (Jurisdiction) Casinos Austria International GmbH and

Casinos Austria Aktiengesellschaft v.
Argentina ― Decision on Jurisdiction,
ICSID Case No. ARB/14/32 (29 Jun. 2018)
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Memorial for the Claimant (Team Brower)

Chevron (I) (Merits) Chevron Corporation and Texaco

Petroleum Company v. Ecuador (I) ―
Partial Award on the Merits, PCA Case No.
2007-02/AA277 (30 Mar. 2010)

CME (Final Award) CME Czech Republic B.V. v. Czech Republic

― Final Award (14 Mar. 2003)

CMS (Award) CMS Gas Transmission Company v.

Argentina ― Award, ICSID Case No.
ARB/01/8 (12 May 2005)

Corn Products (Decision on Responsibility) Corn Products International, Inc. v. Mexico

― Decision on Responsibility, ICSID Case
No. ARB(AF)/04/1 (15 Jan. 2009)

Crystallex (Award) Crystallex International Corporation v.

Venezuela ― Award, ICSID Case No.
ARB(AF)/11/2 (4 Apr. 2016).

CSOB (Jurisdiction) Ceskoslovenska Obchodni Banka, a.s. v.

The Slovak Republic ― Decision of the
Tribunal on Objections to Jurisdiction,
ICSID Case No. ARB/97/4 (24 May 1999)

Daimler (Award) Daimler Financial Services AG v. Argentina

― Award, ICSID Case No. ARB/05/1 (22
Aug. 2012)

Dan Cake (Jurisdiction and Liability) Dan Cake (Portugal) S.A. v. Hungary ―
Decision on Jurisdiction and Liability,
ICSID Case No. ARB/12/9 (24 Aug. 2015)

Deutsche Bank (Award) Deutsche Bank AG v. Sri Lanka ― Award,

ICSID Case No. ARB/09/2 (31 Oct. 2012)

Devas (Quantum) CC/Devas (Mauritius) Ltd., Devas

Employees Mauritius Private Limited, and
Telcom Devas Mauritius Limited v. India ―
Award on Quantum, PCA Case No. 2013-09
(13 Oct. 2020)

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EBO (Award) EBO Invest AS, Rox Holding AS and Staur

Eiendom AS v. Latvia ― Award, ICSID
Case No. ARB/16/38 (28 Feb. 2020)

Eco Oro (PO No.6) Eco Oro Minerals Corp. v. Colombia,

ICSID Case No. ARB/16/41 ― Procedural
Order No. 6 (18 Feb. 2019)

EDF (Award) EDF (Services) Limited v. Romania ―

Award, ICSID Case No. ARB/05/13 (8 Oct.
2009).

El Paso (Jurisdiction) El Paso Energy International Company v.

Argentina ― Decision on Jurisdiction,
ICSID Case No. ARB/03/15 (27 Apr. 2007)

El Paso (Award) El Paso Energy International Company v.

Argentina ― Award, ICSID Case No.
ARB/03/15 (31 Oct. 2011)

Energorynok (Final Award) State Enterprise Energorynok v. Moldova

― Final Award, SCC Case No. 2012/175
(29 Jan. 2015)

Flughafen Zürich (Laudo) Flughafen Zürich A.G. and Gestión e

Ingenería IDC S.A. v. Venezuela ― Laudo,
ICSID Case No. ARB/10/19 (18 Nov. 2014)

Garanti Koza (Jurisdiction) Garanti Koza LLP v. Turkmenistan ―

Decision on the Objection to Jurisdiction for
Lack of Consent, ICSID Case No.
ARB/11/20 (3 Jul. 2013)

Hamester (Award) Gustav F W Hamester GmbH & Co KG v.

Ghana ― Award, ICSID Case No.
ARB/07/24 (18 Jun. 2010)

Iberdrola (I) (Award) Iberdrola Energía, S.A. v. Guatemala (I) ―

Award, ICSID Case No. ARB/09/5 (17 Aug.
2012)

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Memorial for the Claimant (Team Brower)

Içkale (Award) İçkale İnşaat Limited Şirketi v.

Turkmenistan ― Award, ICSID Case No.
ARB/10/24 (8 Mar. 2016)

Inceysa (Award) Inceysa Vallisoletana S.L. v. El Salvador ―

Award, ICSID Case No. ARB/03/26 (2 Aug.
2006)

Infinito Gold (Amicus Curiae) Infinito Gold Ltd. v. Costa Rica ―

Procedural Order No. 2, ICSID Case No.
ARB/14/5 (1 Jun. 2016)

Infinito Gold (Award) Infinito Gold Ltd. v. Costa Rica ― Award,

ICSID Case No. ARB/14/5 (3 Jun. 2021)

Jan de Nul (Award) Jan de Nul N.V. and Dredging International

N.V. v. Egypt ― Award, ICSID Case No.
ARB/04/13 (6 Nov. 2008)

Kardassopoulos (Jurisdiction) Ioannis Kardassopoulos v. Georgia ―

Decision on Jurisdiction, ICSID Case No.
ARB/05/18 (6 Jul. 2007)

Lemire (II) (Jurisdiction and Liability) Joseph Charles Lemire v. Ukraine (II) ―
Decision on Jurisdiction and Liability,
ICSID Case No. ARB/06/18 (14 Jan. 2010)

Masdar (Award) Masdar Solar & Wind Cooperatief U.A. v.

Spain ― Award, ICSID Case No. ARB/14/1
(16 May 2018)

Merrill (Award) Merrill & Ring Forestry L.P. v. Canada ―

Award, ICSID Case No. UNCT/07/1 (31
Mar. 2010)

Methanex (Final Award) Methanex Corporation v. U.S. ― Final

Award of the Tribunal on Jurisdiction and
Merits (3 Aug. 2005)

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Memorial for the Claimant (Team Brower)

Mera (Jurisdiction) Mera Investment Fund Limited v. Serbia ―

Decision on Jurisdiction, ICSID Case No.
ARB/17/2 (30 Nov. 2018)

MNSS (Award) MNSS B.V. and Recupero Credito Acciaio

N.V v. Montenegro ― Award, ICSID Case
No. ARB(AF)/12/8 (4 May 2016)

OAO Tatneft (Jurisdiction) OAO “Tatneft” v. Ukraine ― Partial Award

on Jurisdiction, PCA Case No. 2008-8 (28
Sep. 2010)

Occidental (II) (Award) Occidental Petroleum Corporation and

Occidental Exploration and Production
Company v. Ecuador (II) ― Award, ICSID
Case No. ARB/06/11 (5 Oct. 2012)

Parkerings (Award) Parkerings-Compagniet AS v. Lithuania ―

Award, ICSID Case No. ARB/05/8 (11 Sep.
2007).

Philip Morris (Award) Philip Morris Brand Sàrl (Switzerland),

Philip Morris Products S.A. (Switzerland)
and Abal Hermanos S.A. (Uruguay) v.
Uruguay ― Award, ICSID Case No.
ARB/10/7 (8 Jul. 2016)

Pope & Talbot (Award on Merits of Phase Pope & Talbot v. Canada ― Award on the
2) Merits of Phase 2 (10 Apr. 2001)

Quiborax (Award) Quiborax S.A., Non-Metallic Minerals S.A.

v. Bolivia ― Award, ICSID Case No.
ARB/06/2 (16 Sep. 2015)

RFP (PO No.6) Resolute Forest Products Inc. v. Canada ―

Procedural Order No. 6, PCA Case No.
2016-13 (29 Jun. 2017)

RosInvest (Jurisdiction) RosInvestCo UK Ltd. v. Russia ― Award on

Jurisdiction, SCC Case No. 079/2005 (5
Oct. 2007)

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RosInvest (Final Award) RosInvestCo UK Ltd. v. Russia ― Final

Award, SCC Case No. 079/2005 (12 Sep.
2010)

RREEF (Jurisdiction) RREEF Infrastructure (G.P.) Limited and

RREEF Pan-European Infrastructure Two
Lux S.à r.l. v. Spain ― Decision on
Jurisdiction, ICSID Case No. ARB/13/30 (6
Jun. 2016)

Saluka (Partial Award) Saluka Investments BV v. Czech Republic ―

Partial Award, PCA Case No. 2001-04 (17
Mar. 2006)

SCB (Award) Standard Chartered Bank v. Tanzania ―

Award, ICSID Case No. ARB/10/12 (2 Nov.
2012)

S.D. Myers (Partial Award) S.D. Myers, Inc. v. Canada ― Partial Award
(13 Nov. 2000)

Sempra (Award) Sempra Energy International v. Argentina

― Award, ICSID Case No. ARB/02/16 (28
Sep. 2007)

Siag (Award) Waguih Elie George Siag and Clorinda

Vecchi v. Egypt ― Award, ICSID Case No.
ARB/05/15 (1 Jun. 2009)

Stadtwerke München (Award) Stadtwerke München GmbH and others v.

Spain ― Award, ICSID Case No. ARB/15/1
(2 Dec. 2019)

Swisslion (Award) Swisslion DOO Skopje v. Macedonia ―

Award, ICSID Case No. ARB/09/16 (6 Jul.
2012).

Tidewater (Award) Tidewater Investment SRL and Tidewater

Caribe, C.A. v. Venezuela ― Award, ICSID
Case No. ARB/10/5 (13 Mar. 2015)

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Tokios Tokelés (Jurisdiction) Tokios Tokelés v. Ukraine ― Decision on

Jurisdiction, ICSID Case No. ARB/02/18
(29 Apr. 2004)

UPS (Amici Curiae) United Parcel Service of America, Inc.

(UPS) v. Canada ― Decision of the
Tribunal on Petitions for Intervention and
Participation as Amici Curiae, ICSID Case
No. UNCT/02/1 (17 Oct. 2001)

Venezuela Holdings (Award) Mobil Cerro Negro Holding, Ltd., Mobil

Cerro Negro, Ltd., Mobil Corporation and
others v. Venezuela ― Award, ICSID Case
No. ARB/07/27 (9 Oct. 2014)

Vivendi (II) (Amicus Curiae) Suez, Sociedad General de Aguas de

Barcelona, S.A. and Vivendi Universal, S.A.
(formerly Aguas Argentinas, S.A., Suez,
Sociedad General de Aguas de Barcelona,
S.A. and Vivendi Universal, S.A.) v.
Argentina (II) ― Order in Response to a
Petition for Participation as Amicus Curiae,
ICSID Case No. ARB/03/19 (17 Mar. 2006)

von Pezold (PO No.2) Bernhard von Pezold and others v.

Zimbabwe ― Procedural Order No. 2, CSID
Case No. ARB/10/15 (26 Jun. 2012)
von Pezold (Award) Bernhard von Pezold and others v.
Zimbabwe ― Award, CSID Case No.
ARB/10/15 (28 Jul. 2015)

Waste Management (II) (Award) Waste Management v. Mexico (II) ― Award,

ICSID Case No. ARB(AF)/00/3 (30 Apr.
2004)

White Industry (Award) White Industries Australia Limited v. India

― Final Award (30 Nov. 2011)

Yucos (Final Award) Yukos Universal Limited (Isle of Man) v.

Russia ― Final Award, PCA Case No.
2005-04/AA227 (18 Jul. 2014)

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INTENATIONAL COURTS DECISIONS

Chorzów (PCIJ, Merits) PCIJ ― Factory at Chorzów (Germany v.

Poland), 13 Sep. 1928

TEXTBOOKS AND ARTICLES

Banifatemi (2010) Y. Banifatemi, “The Law Applicable in

Investment Treaty Arbitration”, Arbitration
Under International Investment
Agreements: A Guide to the Key Issues
(2010)

Born/Forrest (2019) G. Born and S. Forrest, “Amicus Curiae

Participation in Investment Arbitration”,
ICSID Review ― Foreign Investment Law
Journal, Vol. 34, Issue 3 (2019)

Daigremont (2019) C. Daigremont, “Most Favoured Nation

Treatment”, Foreign Investment Under the
Comprehensive Economic and Trade
Agreement (CETA) (2019)

Douglas (2014) Z. Douglas, “International Responsibility

for Domestic Adjudication: Denial of
Justice Deconstrued”, International &
Comparative Law Quarterly, Vol.63, Issue
4 (2014).

Dumberry (2019) P. Dumberry, “Fair and Equitable

Treatment”, Foreign Investment Under the
Comprehensive Economic and Trade
Agreement (CETA) (2019)

Ishikawa (2019) T. Ishikawa, “Intervention: Investment

Arbitration”, Max Plank Encyclopedias of
Public International Law (2019)

Marboe (2018) I. Marboe, Damages in Investor State

Arbitration: Current Issues and Challenges
(2018)

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Memorial for the Claimant (Team Brower)

Sabahi (2011) B. Sabahi, Compensation and Restitution

in Investor-State Arbitration: Principles
and Practice (2011)

Shill (2017) S. Shill, “MFN Clauses as Bilateral

Commitments to Multilateralism: A Reply
to Simon Batifort and J. Benton Heath”,
American Journal of International Law,
Vol. 111, Issue 4 (2017)

Wolff (2019) R. Wolff, New York Convention: Article-

by-Article Commentary (2nd. ed.) (2019)

TREATIES

Canada-Honduras FTA (2013) Free Trade Agreement between Canada and

Honduras

CPTPP Comprehensive and Progressive

Agreement for Trans-Pacific Partnership
(CPTPP)

EU-Mercosur Trade Agreement European Union-Mercosur Free Trade

Agreement

Japan-Georgia BIT (2021) Agreement between Japan and Georgia for

Liberalisation, Promotion and Protection of
Investment

OTHERS

Draft Code Draft Code of Conduct for Adjudicators in

Investor-State Dispute Settlement

ICSID History (Vol.II-1) The History of the ICSID Convention (Vol.

II-1)

ILC Commentary on ARSIWA Draft Articles on Responsibility for

Internationally Wrongful Acts, with
Commentaries

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UNCITRAL Rules on Transparency UNCITRAL Rules on Transparency in

Treaty-based Investor-State Arbitration

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STATEMENT OF FACTS

Claimant and Respondent

[1] Vemma Holdings Inc. (“Vemma” or “Claimant”) is an airline holding company

incorporated under the law of the Commonwealth of Bonooru (“Bonooru”). Prior
to its privatization on 17 June 1980, Claimant (then called as Bonooru Air) had
been wholly owned and managed by Bonooru. Now, Bonooru’s control over Vemma
is no more than the limited one, corresponding to its shareholdings.

[2] The Federal Republic of Mekar (“Mekar” or “Respondent”) is a developing

country where the Mekari Mon (“MON”) circulates as a domestic currency.

Pre-Investment

[3] In 2009, Respondent decided to privatize some State-controlled industrial sectors

such as civil aviation (Caeli Airways). In order to achieve the privatization, Mekar
appointed a State-owned and controlled company (Mekar Airservices Ltd.) “to
which Carei Airways’ assets and part of its debt liability were transferred”.

Investment

[4] On 5 January 2011, the Claimant was selected as an appropriate partner in the civil
aviation. On 5 March 2011, the Competition Commission of Mekar (“CCM”)
approved Vemma’s acquisition of an 85% stake in Caeli and the airline’s
participation in the Moon Alliance. On 29 March 2011, Claimant concluded a Share
Purchase Agreement with Mekar Airservices Ltd. for the purpose of purchasing an
85% stake of Caeli Airways.

[5] From August 2011 to December 2013, Claimant had enthusiastically invested in
Caeli Airways, therefore these investments led to the successful result.

The CEPTA

[6] In April 2014, Bonooru and Mekar signed the Comprehensive Economic
Partnership and Trade Agreement (“CEPTA”), and the CEPTA entered into force

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Memorial for the Claimant (Team Brower)

on 15 October 2014.

The Launch of the CCM’s First Investigation and Its Interim Measure

[7] On 9 September 2016, although Caeli’s market share in Mekar was merely 43%, the
CCM launched the first investigation to Caeli under Monopoly and Restrictive Trade
Practice Act, as Amended in 2009 because the Caeli’s market share was 54% in
conjunction with the Moon Alliance partner (Royal Narnian).

[8] As an interim measure, the CCM also imposed caps upon Caeli Airways’ airfare.

The Launch of the CCM’s Second Investigation

[9] In December 2016, on a basis of the complaint by a consortium of regional airlines,

the CCM lunched the second investigation against Caeli Airways, focusing upon the
price undercutting on certain routes and from the Airport.

Mekari Financial Crisis

[10] In late 2016, MON began to nosedive. Eventually, by March 2017, Mekari financial
crisis ensued, which led to drastic inflation in Mekar.

[11] On 30 January 2018, the new cabinet passed a decree, according to which all
companies operating in Mekar were required to “offer goods and services
denominated exclusively in MON”.

The First Litigation against the CCM

[12] Caeli sought the CCM to remove the caps on its airfare. However, this urgent plea
was rejected by the CCM.

[13] On 27 March 2018, Caeli initiated a litigation against the CCM, requiring a removal
of the caps. However, the Court Registrar scheduled the hearing in April 2019 and
rejected the separate hearing citing lack of resource in Mekar Court.

The Conclusion of the CCM’s First Investigation

[14] In August 2018, the CCM concluded its first investigation and reported that Caeli

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Memorial for the Claimant (Team Brower)

Airways violated Meakr’s antitrust legislation. Accordingly, the CCM imposed a

total penalty of MON 150 million on Caeli Airways and kept the caps during its
second investigation. Caeli Airways’ attempt to delay the imposition of the fines
failed.

Mekar’s Discriminatory Subsidies

[15] On September 2018, Makar passed Executive Order 9-2018 for the purpose of
alleviating some of the airline industry’s concern. Under the Order, the Secretary of
Civil Aviation (“Secretary”) was vested with the discretion to decide who was
granted subsidies.

[16] Caeli Airways made an application for the support scheme, but the request was
rejected without the reasons for the dismissal.

The Conclusion of the CCM’s Second Investigation and the Second Litigation

[17] On 1 January 2019, the CCM completed its second investigation and reported that
Caeli Airways “had engaged in anti-competitive behavior in conducting its business
activities in Phenac International Airport”. As the result, MON 200 million fine was
imposed upon Caeli Airways. Also, the CCM decided to keep the caps upon airfare
until Caeli Airways’ market share was to fall below 40%.

[18] Since the ground cited by the CCM had been approved by itself in March 2011,
Caeli Airways appealed the measures in Mekari courts. On 20 January 2019, Caeli
Airways requested the courts to join the application with the April 2019 hearing
upon the airfare caps. However, the Court Registrar denied this plea and scheduled
an initial hearing in May 2020.

Denial of Meetings

[19] In April 2019, the deputy CEO of Claimant and a member of Caeli Airways
repeatedly requested private meetings and an aid for the Secretary. However, these
requests had been rejected.

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Memorial for the Claimant (Team Brower)

Decision upon the Caps Matter

[20] On 15 June 2019, the court made a decision upon the caps imposed by the CCM,
according to which the plea by Caeli Airways was denied because the court
considered the balance of convenience. Under Mekari law, Caeli Airways had no
further appeal.

International Commercial Arbitration and Enforcement the Award

[21] On 11 February 2020, Mekar Airservices filed a request for arbitration with the
Sinnoh Chamber of Commerce.

[22] Mr. Cavanaugh made an award in favour of Mekar Airservices on 9 May 2020.
However, some evidence showed Mr. Cavanaugh had received bribes by Mekar
Airservices.

[23] On 1 August 2020, the Supreme Arbitrazh Court of Sinnograd set aside the award
because failure to set aside the award would be contrary to the public policy of
Sinnoh.

[24] On 23 August 2020, Mekari Court issued a ruling recognizing and enforcing the 9
May 2020 award in Mekar.

Vemma’s Sale of Their Stake in Caeli to Mekar Airservices and the Initiation of the
Current Proceedings

[25] Vemma’s efforts between February and September 2020 failed to yield another
buyer such as Hawthorne Group LLP for its shares. As a result, Vemma sold its stake
in Caeli to Mekar Airservices on 8 October 2020 for 400 million US

4
Memorial for the Claimant (Team Brower)

STATEMENT OF ARGUMENTS

Jurisdiction

[1] The Tribunal has jurisdiction ratione personae over the current investor-State dispute.
This is because the Claimant retains the requisite status: “an investor” under the
CEPTA; and “a national of another State” under the ICSID AF Rules [I.].

Amicus Curiae

[2] The Tribunal should grant amicus status upon the CBFI since its application satisfies
all minimum conditions: its perspective on SOEs will assist the Tribunal in resolving
the standing issue; such a matter is relevant to this case; the CBFI has a significant
interest here; the CBFI is independent from the Claimant; and its application pursues
a public interest. On the other hand, the Tribunal should reject the application by the
CRUP because it addresses an irrelevant issue here which both Parties have not
touched [II.].

Merits

[3] The Claimant suffered from a series of aberrant conducts: the CCM’s arbitrary acts;
the denial of justice; and the unjustifiable discrimination. These acts and omissions,
separately or in combination, constitute the violation of the FET standard under
Article 9.9 of the CEPTA [III.].

Compensation

[4] The Tribunal shall assess the damages on the basis of the FMV standard under Article
9.21.1 of the CEPTA. Even if the Tribunal found that the Article did not provide the
FMV standard, the conclusion would not change since the Claimant would be entitled
to enjoy the FMV standard under Arrakis-Mekar BIT (2006) via the MFN clause
under Article 9.7 of the CEPTA. Also, there exists no grounds to reduce the amount
of compensation here [IV.].

5
Memorial for the Claimant (Team Brower)

PART ONE: JURISDICTION

I. THE TRIBUNAL HAS JURISDICTION RATIONE PERSONAE TO HEAR THE DISPUTE

[5] As a jurisdictional objection, the Respondent challenged jus standi of the Claimant,
alleging that “the present dispute constitutes State-to-State arbitration”.1

[6] Such objection is based on three unfounded hypotheses: [A.] the Claimant is not “an
investor” under the CEPTA; [B.] the Claimant does not gain the status as “a national
of another State” under the ICSID AF Rules; and [C.] in any event, the Claimant
assimilated to Bonoori government by virtue of its restructuring (which occurred after
Notice of Arbitration).2 The claims are, however, without merit.

A. The Claimant is “an investor” Under the CEPTA

[7] Under Article 9.16.1 of the CEPTA, only claims lodged by “an investor” may be
submitted to the dispute solution mechanism. 3 In this context, Article 9.1 of the
CEPTA defined the term “an investor” as follows:

“Investor means […] an enterprise with the nationality of a

Party or seated in the territory of a Party that […] has made an
investment in the territory of the other Party”.4
Here, [1.] the Claimant is “an enterprise with the nationality of a Party” and [2.] “has
made an investment in the territory of the other Party”.

1. The Claimant is “an enterprise with the nationality of a Party”

[8] The thrust of the Claimant’s contention is two-fold: [a.] a SOE is “an enterprise”
pursuant to Article 9.1 of the CEPTA; and [b.] if not, the Claimant is not regarded as
the defined SOEs under Bonooru-Mekar BIT (1994).

1
Response, P6:¶2.
2
Response, P6:¶¶3-5.
3 CEPTA, art.9.16.1.
4 CEPTA, art.9.1.
6
Memorial for the Claimant (Team Brower)

(a). State-ownership is irrelevant for the assessment of “an enterprise with the
nationality of a Party”

[9] The term “an enterprise with the nationality of a Party” is defined as “an enterprise
that is constituted or organised under the laws of that Party and has substantial
business activities in the territory of that Party”.5

[10] It is not disputed that the Claimant is constituted under the law of Bonooru and has
engaged materially in the aviation industry.6

[11] Furthermore, the CEPTA does not distinguish legal persons in terms of whether the
entities are owned or controlled by a State. The Respondent’s argument goes squarely
against the plain text of the CEPTA.7

[12] Remarkably, the tribunal in Beijing Shougang sided with the Claimant’s position,
holding that an independent status from a State was not required under China-
Mongolia BIT (1991).8 Also, in Stadtwerke München, the tribunal opined that “the
ECT does not provide that companies owned by States are to be treated differently
from companies owned by private individuals and entities”.9 The same rationale was
affirmed in Energorynok.10

[13] In this regard, the Respondent may refer to Bonooru-Mekar BIT (1994) (which was
replaced with the CEPTA).11 It is true that the term “whether […] government-owned”
under the BIT disappears from the CEPTA’s text as compared below:

Treaty The Definition of an Enterprise

“enterprise means any entity constituted

5
CEPTA, art.9.1.
6
Notice, P2:¶1.
7 RREEF (Jurisdiction), ¶145; Mera (Jurisdiction), ¶150.
8
Beijing Shougang (Award), ¶413.
9
Stadtwerke München (Award), ¶134.
10 Energorynok (Final Award), ¶79.
11 Facts, P33:¶32.
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Memorial for the Claimant (Team Brower)

Bonooru-Mekar BIT (1994) or organized under applicable law,

whether for profit or not, whether
privately-owned or government-owned
[…]”.12
“enterprise that is constituted or
CEPTA (2014) organised under the laws of that Party
and has substantial business activities in
the territory of that Party”.13

[14] Yet, this deletion cannot be equated with the drafters’ intention that governmentally-
owned entities are excluded from the CEPTA’s protection. Such interpretation is one-
sided, in that the term “privately-owned” was also deleted from the CEPTA. Did the
drafters intend that all privately-owned entities fall outside the CEPTA? Hence, the
above difference has no effect upon the Claimant’s status as “an enterprise with the
nationality of a Party”.

[15] In sum, the Claimant is “an enterprise with the nationality of a Party”.

(b). Alternatively, the Claimant is not a “government-owned” enterprise

[16] Should the Tribunal applaud the Respondent’s interpretation that the CEPTA excludes
a “government-owned” enterprise from its scope, the Claimant would not be true of
the category.

[17] Notably, Bonooru-Mekar BIT (1994) does not define the term “government-owned”.
In such an ambiguous situation, tribunals have resorted to other treaties, accompanied
by the exposition that “the ordinary meaning of a word or phrase also includes the
legal meanings given to such words or phrases”.14

[18] By way of illustration, the Claimant refers to the CPTPP for the purpose of clarifying
the ordinary meaning under Article 31.1 of the VCLT. The CPTPP defines SOEs as

12
Bonooru-Mekar BIT (1994), art.I(a).
13 CEPTA, art.9.1.
14 Aguas del Tunari (Jurisdiction), ¶230; AAPL (Award), ¶40(F).
8
Memorial for the Claimant (Team Brower)

legal persons satisfying the three conditions below:

(a). “directly owns more than 50 per cent of the share capital;
(b). controls, through ownership interests, the exercise of more than 50 per cent of
the voting rights; or
(c). holds the power to appoint a majority of members of the board of directors or
any other equivalent management body”.15
The same definition is employed in EU-Mercosur Trade Agreement.16

[19] Reflectively, none of them is present here. Bonoori shareholding ratio had ranged
between 31% and 38%, which corresponded to its minority control over the
Claimant.17 Also, Bonooru is competent to appoint only one member in the board
(which is constituted by eight members).18

[20] Indeed, the tribunal in OAO Tatneft did not find any assimilation of the SOE-claimant
with the Russian government, whereas Ukraine alleged the contrary.19 Strikingly, in
the view of the tribunal, the shareholding rate (36%) and officials’ participation in the
board (but not majority) “[was] not unusual” in economic transition.20

[21] In light of the above, the Claimant is not a “government-owned” enterprise and thus,
it is “an enterprise with the nationality of a Party” under the CEPTA.

2. The Claimant “has made an investment in the territory of the other Party”

[22] The Claimant breaks the term “has made an investment in the territory of the other
Party” down into two points: [a.] “has made”; and [b.] “an investment in the territory
of the other Party”.

15
CPTPP, art.17.1.
16 EU-Mercosur Trade Agreement, art.1.f.
17
Facts, P29:¶10.
18
Annex IV, P46:L1569-1576.
19 OAO Tatneft (Jurisdiction), ¶127.
20 Id., ¶¶130-131.
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Memorial for the Claimant (Team Brower)

(a). The Claimant is an active investor

[23] The term “has made” was under an in-depth consideration in SCB as follows:

“To be considered to have made an investment, SCB must have

contributed actively to the investment. […] For a putative
investor to have valid rights pursuant to the UK-Tanzania BIT,
that investor should have “made” the investment in an active
sense”.21
Similarly, the tribunal in Alapli noted that “a person must actually make an investment,
in the sense of an active contribution”.22

[24] Here, the Claimant entered into the bid and purchased Caeli Airways’ shares for USD
800 million.23 Hence, it is an active investor and thus, “has made” the investment.

(b). The shareholdings are an investment of the Claimant

[25] The Claimant has shares in Caeli Airways which constituted “investment” under the
CEPTA. Article 9.1 provides that “investment” means:

“every asset that an investor owns or controls, directly or

indirectly, that has the characteristics of an investment,
including such characteristics as the commitment of capital or
other resources, the expectation of gain or profit, or the
assumption of risk.”.24
As the term “every asset” indicates, the CEPTA lists a broad definition of “investment”
and thus there exists no room for putting an implicit condition into it.25

[26] In casu, the shareholdings in Caeli Airways retain the above characteristics:

(a). Commitment of Capital ― the Claimant made the substantial contribution

21 SCB (Award), ¶257.

22
Alapli (Award), ¶350.
23
Facts, P31:¶24.
24 CEPTA, art.9.1.
25 Mera (Jurisdiction), ¶150; Tokios Tokelés (Jurisdiction), ¶36.
10
Memorial for the Claimant (Team Brower)

(USD 800 million) in purchasing the shares:26

(b). Expectation of Profit ― the Claimant expected a future dividend; and

(c). Assumption of Risk ― the Claimant assumed an investment risk since the
Respondent’s economic instability could make the value of the share decline.27

Besides, the CEPTA enumerates the quintessential “investment”, including shares.28

[27] Hence, the Claimant made an investment in territory of the Respondent.

B. The Claimant is “a national of another State” Under the ICSID AF Rules

[28] Article 2 of the ICSID AF Rules provides as follows:

“The Secretariat of the Centre is hereby authorized to administer,

subject to and in accordance with these Rules, proceedings
between a State (or a constituent subdivision or agency of a
State) and a national of another State”.29
It is the Respondent‘s allegation that the Claimant is not “a national of another State”
since “it exercises its functions under the entrustment and/or direction of the Bonoori
government” (that is, the Broches test is satisfied).30

[29] However, [1.] the Broches test is non-applicable to this arbitration under the auspices
of the ICSID AF Rules. [2.] If appliable, the Broches test is not met here.

1. The Broches test is the jurisdictional test under the ICSID Convention

[30] The Broches test is the standard to assess whether legal persons are “a national of
another State” under Article 25(1) of the ICSID Convention.31 Notably, its travaux

26
Facts, P31:¶24; Casinos (Jurisdiction), ¶187.
27 Facts, P35:¶39; Deutsche Bank (Award), ¶301; Kardassopoulos (Jurisdiction), ¶117.
28
CEPTA, art.9.1.
29
ICSID AF Rules, art.2.
30 Response, P6:¶3.
31 ICSID Convention, art.25(1).
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Memorial for the Claimant (Team Brower)

préparatoires makes it clear that “[SOE], if it elected to assimilate itself to a private

enterprise rather than a government agency, should not be permitted to make use of
the machinery of the Center” within the meaning of Article 32 of the VCLT reflecting
customary rule.32

[31] In this context, the tribunal in CSOB formulated the Broches test in the following
seminal passage:

“[F]or purposes of the Convention […] government-owned

corporation should not be disqualified as a ‘national of another
Contracting State’ unless it is acting as an agent for the
government or is discharging an essentially governmental
function”.33
Also, this standard has affirmed in BUCG,34 Masdar,35 and Flughafen Zürich.36

[32] Certainly, the two-pronged test is, to a great degree, analogical to Articles 5 and 8 of
the ILC Articles. 37 Yet, as the tribunal in Masdar noted, an attention needs to be
casted upon whether a shadow of a State is in investment activities, not specific acts.38

[33] To sum up, under the Broches test, legal persons is not regarded as “a national of
another State” where they acted as an agent of a State or exercised a governmental
function over their investment activities.

2. The Broches test is not applicable to arbitration under the ICSID AF Rules

[34] The current arbitration is under the auspices of the ICSID AF Rules.39 As confirmed

32 ICSID History (Vol.II-1), P11:¶30.

33
CSOB (Jurisdiction), ¶17.
34
BUCG (Jurisdiction), ¶33.
35 Masdar (Award), ¶170.
36
Flughafen Zürich (Laudo), ¶274.
37
BUCG (Jurisdiction), ¶34; Masdar (Award), ¶167.
38 Masdar (Award), ¶169.
39 Notice, P2:¶3.
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Memorial for the Claimant (Team Brower)

in Article 3 of the ICSID AF Rules, the ICSID Convention has no application in this
arbitration. 40 As a corollary, the Broches test is irrelevant for the assessment of
whether the Claimant is “a national of another State” under the ICSID AF Rules.

[35] In Abengoa under the ICSID AF Rules, Mexico attempted to persuade the tribunal
that one of the claimants was a public investor akin to Spain in light of the Broches
test.41 This plea was rejected by the tribunal since the test was not applicable to the
ICSID AF Rules arbitration:42 rather, the tribunal concentrated on the interpretation
of the term “investors” under Article 1.5 of Mexico-Spain BIT (2006).43

[36] Given the above jurisprudence, the Tribunal needs to exclude the Broches test (which
originates in the ICSID Convention) from the jurisdictional consideration here. In
other words, as long as the Claimant is “an investor” under the CEPTA, the Tribunal’s
jurisdiction ratione personae exists.

3. In the alternative, the Broches test is not met in the current arbitration

[37] Assuming arguendo the Broches test applied here, the Respondent would fail to
establish that over its investment activity, the Claimant [a.] acted as an agent of
Bonooru and [b.] discharged Bonoori governmental function.

(a). The Claimant did not act as an agent of Bonoori government in its
investment activity

[38] The first limb of the Broches test is whether SOEs acted as a State’s agent in their
investment activities.44 The tribunal in Masdar made it clear that SOEs were agents
in the circumstances where they are “under effective control of the State”.45 In this

40
ICSID AF Rules, art.3.
41 Abengoa (Laudo), ¶¶301&313.
42
Id., ¶557.
43
Id., ¶¶540-556.
44 Masdar (Award), ¶169.
45 Id, ¶169.
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Memorial for the Claimant (Team Brower)

regard, the meaning of “effective control” was defined in Hamester: it needs to be

demonstrated that a State compels SOEs to engage in a certain investment activity.46

[39] Here, the Respondent may note two points: (1) the acquisition of Caeli Airway’s
shareholding (investment activity)47 might be related to “Horizon 2020” (which is
Bonoori policy to attract Mekari tourists) 48 and (2) the route between Mekar and
Bonooru is more beneficial to Bonooru than to the Claimant.49 Considering these
facts, the Respondent may infer that Bonooru compelled the Claimant to purchase the
share in order to achieve “Horizon 2020”.

[40] However, the cited facts lead, at best, to the inference that Bonooru encouraged the
Claimant’s investment activity. Like the Respondent, the investors in von Pezold
turned in the evidence implying Zimbabwe’ s facilitation of the challenged acts50.
This attempt failed since encouragement did not mean “effective control”.51

[41] Besides, the Claimant participated in the tender for a purchase of Caeli Airways’
shares, openly competed with other companies, and won the bid by the most
financially attractive business model.52 The series of acts are the same as ones by
private enterprises. As the tribunal in BUCG noted, such a point strongly indicates the
lack of “effective control”.53

[42] From the above-mentioned, there exists no evidence implying Bonoori government’s
compelling sign over the investment project. The Claimant merely pursued its own
best economic interest and thus, the Claimant did not act as an agent of Bonooru.

46 Hamester (Award), ¶199.

47
Facts, P32:¶26.
48
Facts, P32-33:¶28.
49 Annex VII, P55:L1866-1871.
50
von Pezold (Award), ¶28.
51
Id., ¶448
52 Facts, P31:¶¶22&24.
53 BUCG (Jurisdiction), ¶40.
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Memorial for the Claimant (Team Brower)

(b). The Claimant did not discharge Bonoori government’s function over its
investment activity

[43] The second limb of the Broches test is whether SOEs discharged a governmental
function in their investment activity.54 Here, [i.] the Claimant is not de jure mandated
with any governmental function and in its alternative, [ii.] the investment activity was
acta jure gestionis.55

i. The Claimant is not entrusted with any governmental functions

[44] Firstly, the Respondent may allege that the Claimant is, through its privatization,
empowered to engage in the aviation services for Bonoori citizens as a governmental
function. However, this allegation is meritless.

[45] In Flughafen Zürich, the tribunal opined that what is a governmental function under
the Broches test rested upon its nature, i.e., whether States commonly delegate a
function to private entities.56 To be more precise, the tribunal held that the sovereign
investor’s airport management business has been commonly engaged in the hands of
private companies, which denied the governmental nature.57

[46] Likewise, the tribunal in CSOB held that the activity taken by the sovereign investor
“[did] not differ in their nature from measures a private bank might take”.58 Thereby,
the engaged function deemed to be commercial in nature.59

[47] Notably, this case is parallel with the above-cited ones. The Claimant’s aerial services
(which are allegedly a governmental function) have no difference from the business
by private entities.

54
Masdar (Award), ¶169.
55 Cf, Hamester (Award), ¶193; EBO (Award), ¶338.
56
Flughafen Zürich (Laudo), ¶286.
57
Id., ¶¶284-286.
58 CSOB (Jurisdiction), ¶25.
59 Id., ¶27.
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Memorial for the Claimant (Team Brower)

[48] In this sense, the Claimant is not mandated with any governmental functions.

ii. Alternatively, the investment activity concerned the governmental

function

[49] Secondly, even if the Claimant was entrusted with the public aerial function, the
current investment activity would not concern the delegated function. As held in
Almås, the Respondent needs to demonstrate that the activity itself involves the
exercise of the governmental function.60

[50] In casu, the Claimant purchased Caeli Airways’ shareholdings for the purpose of
expanding its international market share. As one member in the Claimant’s board
explained, Phenac International Airport positions near approximately 90 major
regional airports, the geographical advantage of which was determinative for the
Claimant’s investment decision.61

[51] Hence, the Claimant made the investment in the pursuit of its best commercial interest,
which means that the project is unrelated to the alleged function of ensuring aerial
services for Bonoori citizens.

C. The Corporate Restructuring does not Deprive the Claimant of Standing

[52] On 2 March 2021 (after the notice of arbitration here), the Claimant restructured itself
as follows:

(a). Shares ― Bonooru increased its stock ratio from 31-38% to 55%;

(b). Boad of Directors ― the members were replaced with Bonoori officials;

(c). Business ― paramilitary activities were included in the function; and

(d). Assistance ― Bonoori officials assist the Claimant in this arbitration.62

60
Cf, Almås (Award), ¶215; Jan de Nul (Award), ¶163.
61 Facts, P31:¶25:P32:¶27.
62 Facts, P40:¶65.
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Memorial for the Claimant (Team Brower)

[53] Concomitantly, the Respondent alleges that, “[e]ven if Vemma was not a State-owned
enterprise at the time it made its investment in Mekar, it certainly acquired this status
by March 2021”.63

[54] However, any subsequent changes after the notice of arbitration do not have an effect
over the Tribunal’s jurisdiction once established under [1.] the ICSID AF Rules and
[2.] the CEPTA.

1. The critical date for jurisdiction under the ICSID AF Rules

[55] The ICSID Convention provides the temporal requirement in Article 25(2), which
specifies that a nationality of person is to be decided “on the date which the parties
consented to submit such dispute”. 64 As the provision vividly demonstrates, the
critical date for jurisdiction is the date of an arbitral notice.

[56] Indeed, the tribunal in CSOB opined that:

“[I]t is generally recognized that the determination whether a

party has standing in an international judicial forum for
purposes of jurisdiction to institute proceedings is made by
reference to the date on which such proceedings are deemed to
have been instituted”.65
Further to it, the tribunal in Siag had little hesitation to find that only dates of notice
was determinative of its jurisdiction ratione personae.66

[57] Hence, the date when the notice of arbitration was made is the critical date for the
Tribunal’s jurisdiction ratione personae under the ICSID AF Rules.67

63 Response, P6:¶4.
64
ICSID Convention, art.25(2).
65
CSOB (Jurisdiction), ¶31; El Paso (Jurisdiction), ¶127.
66 Siag (Award), ¶499.
67 MNSS (Award), ¶184-186.
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Memorial for the Claimant (Team Brower)

2. The critical date for jurisdiction under the CEPTA

[58] The Respondent may contend that the CEPTA requires the Claimant to retain a status
as “an investor” even after the notice of arbitration, putting an emphasis upon the
term “the investor” under Article 9.16 of the CEPTA. For instance, Article 9.16.4
provides that “[t]he investor may, when submitting its claim, propose that a sole
Member of the tribunal should hear the claim”. 68 That is, according to the
Respondent, the CEPTA necessitates a continuous status as “an investor” in an arbitral
proceeding.

[59] However, the Respondent unduly broadens the application of Article 9.16. As the
above-highlighted term “when submitting its claim” indicates, Article 9.16 prescribes
how to submit a notice of arbitration.69 In other words, the provision, rather, affirms
the general proposition that the critical date is “when submitting its claim”. In fact,
subsequent Articles consistently employ the term “a disputing party”, not the term
“an investor”.70

[60] To sum up, the CEPTA does not depart from the general critical date for jurisdiction.
Thus, the Claimant’s restructuring after the notice of arbitration has no effect upon its
standing here.

68
CEPTA, art.9.16.4.
69 CEPTA, art.9.16.4.
70 See, e.g., CEPTA, art.9.19.6.
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Memorial for the Claimant (Team Brower)

PART TWO: AMICUS CURIAE

II. THE TRIBUNAL SHOULD GRANT THE LEAVE SOUGHT FOR FILING ONLY AMICUS
SUBMISSION BY THE CBFI

[61] Two named Petitioners described below submitted each request for leave to
participate in this arbitration as amicus curiae.

(a). The CBFI ― A non-profit industry association who represents Bonoori

investors applied for the status of amicus curiae on the critical issue of SOEs’
standing under the CEPTA (on 19 April 2021).71

(b). The CRUP ― An advising group in Mekar who involved in Caeli’s

privatization sought amicus standing in order to inform the Tribunal regarding
the Claimant’s alleged corruption (on 28 May 2021).72

[62] Pursuant to [A.] Article 41(3) of the ICSID Arbitration (AF) Rules and Article 9.19
of the CEPTA, the Claimant exhorts the Tribunal [B.] to admit, on one side, CBFI’s
petition; [C.] to reject, on the other side, CRUP’s participation.

A. Article 41(3) of the ICSID Arbitration (AF) Rules and Article 9.19 of the CEPTA
Specifies the Test to Apply in This Case

[63] The starting point is Article 41(3) of the ICSID Arbitration (AF) Rules, according to
which tribunals “may allow” amicus petition by considering the following points:

(a). Assistance ― whether amicus submission “would assist the Tribunal in the
determination of a factual or legal issue”;

(b). Relevance ― whether amicus submission “would address a matter within the
scope of the dispute”;

(c). Significant Interest ― whether potential amicus “has a significant interest in

71 CBFI’s Amicus Application, P16:¶2.

72 CRUP’s Amicus Application, P19:L616-631.
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Memorial for the Claimant (Team Brower)

the proceeding”; and

(d). Procedural Fairness ― whether amicus submission “does not disrupt the
proceeding or unduly burden or unfairly prejudice either party”.73

As the term “may allow” indicates, tribunals have discretion to grant amicus status in
a particular case. 74 Yet, the discretion is not unlimited: the above-cited points, as
“certain minimum criteria”, direct tribunals’ discretion.75

[64] Remarkably, Article 9.19 of the CEPTA provides, on one hand, the same standard as
the ICSID Arbitration (AF) Rules.76 On the other hand, the CEPTA adds a unique
element in Article 9.20.6 as follows:

“Mekar shall duly consider the application of the UNCITRAL

rules on transparency in treaty-based investor-State arbitration
to any international arbitration proceedings initiated against
[…] Mekar pursuant to this Agreement”.
Here, the Respondent “asks that the Tribunal apply the UNCITRALL Rules on
Transparency in Investor-State Arbitration to these proceedings”. 77
Thereby,
pursuant to Article 1.3, 78 the UNCITRAL Rules on Transparency apply to this
arbitration.

[65] Hence, the Tribunal shall take an additional factor below into account in accordance
with Article 1.4(a) of the Rules:

(e). Public Interest ― whether amicus submission has a public interest in

transparency in a proceeding.79

73
ICSID Arbitration (AF) Rules, art.41(3).
74
Born/Forrest (2019), P644.
75 Eco Oro (PO No.6), ¶23.
76
CEPTA, art.9.19.3.
77
Respondent’s Comment on Amici Submissions, P24:L771-772.
78 UNCITRAL Rules on Transparency, art.1.3.
79 UNCITRAL Rules on Transparency, art.1.4(a).
20
Memorial for the Claimant (Team Brower)

[66] To sum up, the abovementioned factors (a)-(e) are the criteria for the Tribunal to
confer amicus status upon two petitioners (the CBFI and the CRUP).

B. The CBFI Should Be Accorded Amicus Standing in This Arbitration

[67] As regards the CBFI, its application comports with the above factors: [1.] assistance;
[2.] relevance; [3.] significant interest; [4.] procedural fairness; and [5.] public interest.
As such, the Tribunal should invite the CBFI to make a submission in this case.

1. The CBFI would assist the Tribunal in the determination of the Claimant’s
standing issue

[68] As regards the first condition, the Respondent rebuts that the CBFI does not “assist”
and “advance any novel arguments”.80 The CBFI would, however, assist the Tribunal
in the analysis of SOEs’ standing issue “by bringing a perspective, particular
knowledge or insight that is different from that of the disputing parties”.81 In other
words, the CBFI put into this case information that “go[es] beyond, or differ[s] in
some respect from [insight] of the disputing parties”.82

[69] Such information is saturated with Bonoori business framework in relation to SOEs:
for example, SOEs’ substantial contributions to economy in Great Narnian region;
and SOEs’ structural relationship with their owner (Bonoori government).83 Only the
CBFI, as a union representing Bonoori enterprises, 84 is prepared to provide the
Tribunal with a comprehensive knowledge of Bonoori SOEs.

[70] Indeed, the knowledge must add the following two new legal and factual perspectives
to the Tribunal’s consideration of the standing issues:

80 Respondent’s Comment on Amici Submissions, P24:L776-777:L780-781.

81
ICSID Arbitration (AF) Rules, art.41.3(a): CEPTA, art.9.19.3.
82
Apotex (III) (PO on Mr. Appleton), ¶31.
83 CBFI’s Amicus Application, P17:¶10.
84 CBFI’s Amicus Application, P16:¶2.
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Memorial for the Claimant (Team Brower)

(a). Interpretation of the CEPTA ― SOEs’ presence in Great Narnian region would
highlight the CEPTA drafters’ intention that SOEs are protected as “an investor”
within the meaning of “the circumstances of its conclusion” under Article 32 of
the VCLT85; and

(b). The Broches test ―inclusive analysis on SOEs’ ties with Bonoori government
would provide the Tribunal with the most accurate description of how the
Claimant pursued its interest in the investment activity, being independent of
Bonooru.

[71] Hence, the CBFI must lead the Tribunal’s attention to an in-depth discussion about
the Claimant’s jus standi. In this sense, it “would assist the Tribunal”.

2. The CBFI’s submission would address the standing issue in this case

[72] Secondly, the CBFI limits its participation to “a matter within the scope of the
dispute”.86 This criterion is satisfied in the eyes of the tribunal in Aricia Grace when
amicus submission “facilitate[s] [tribunals’] process of inquiry into, understanding
of, and resolving that very dispute which has been submitted to them”.87

[73] In casu, as the Claimant has pointed out previously, the CBFI concentrates upon the
standing issue: whether SOEs are barred from investor-State dispute regime set out
in the CEPTA.88 This is the very dispute with which the Tribunal is faced.

[74] Thus, the CBFI’s submission relates to the jus standi issue that the Tribunal shall
decide in this case.

85
VCLT, art.32.
86
ICSID Arbitration (AF) Rules, art.41.3(b); CEPTA, art.9.19.3.
87 Aricia Grace (PO No.4), ¶51; UPS (Amici Curiae), ¶60.
88 CBFI’s Amicus Application, P16-17:¶¶9-10.
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Memorial for the Claimant (Team Brower)

3. The CBFI has a significant interest in this proceeding

[75] Thirdly, the CBFI certainly “has a significant interest in this proceeding”. 89 The
tribunal in Apotex (III) commented on what comprises “significant interest” as
follows:

“[T]he applicant needs to show that he has more than a general

interest in the proceeding. For example, the applicant must
demonstrate that the outcome of the arbitration may have a
direct or indirect impact on the rights or principles the applicant
represents and defends”.90
[76] Here, the CBFI “represents” a number of Bonoori investors investing in Great
Narnian region,91 thirty-eight members of which made investments in Mekar under
the protection of the CEPTA. 92 Given their formal or informal ties with Bonoori
government,93 the Tribunal’s future decision on the standing matter (whether SOEs
can avail themselves of investor-State regime under the CEPTA) must have a direct
effect upon their interests as investors under the CEPTA.

[77] Notably, this case is a far cry from RFP where one applicant, like the CBFI, alleged
a significant interest in the interpretation of the NAFTA’s standing clause. 94 The
tribunal did not find any significant interests since the applicant was not/did not
represent the NAFTA investors, i.e., the outcome had no effect in legal sense upon
himself.95

[78] In contrast, as we have repeated, the CBFI represents Bonoori investors who would
be subject to the Tribunal’s interpretation of the CEPTA’s standing provision.

89
ICSID Arbitration (AF) Rules, art.41.3(c); CEPTA, art.9.19.3.
90
Apotex (III) (PO on Mr. Appleton), ¶38; Eco Oro (PO No.6), ¶34.
91 CBFI’s Amicus Application, P16:¶2.
92
CBFI’s Amicus Application, P16:¶6.
93
CBFI’s Amicus Application, P16:¶8.
94 RFP (PO No.6), ¶2.6.3.
95 Id., ¶4.6.
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Memorial for the Claimant (Team Brower)

Therefore, the CBFI has a significant interest in this case.

4. The CBFI is independent from the Claimant

[79] With respect to the fourth condition, the Respondent casts a doubt upon the CBFI’s
independence from the Claimant as follows:

“An essential attribute of amici curiae is independence from the

disputing parties. The participation of Lapras Legal Capital in
this arbitration through CBFI raises a conflict of interest”.96
It is undisputed with the Respondent that “independence” is required, derived from
the condition that amicus submission “does not […] unfairly prejudice either party”.97
In fact, this point has been affirmed in Philip Morris98 and von Pezold.99

[80] Admittedly, as disclosed by the CBFI, one member (Lapras Legal Capital) advises
the Claimant on funding strategies in this case.100 Yet, this fact is insufficient to meet
the requisite threshold, i.e., “apparent lack of independence”.101

[81] In this regard, the tribunal in von Pezold demonstrated to what extent potential amicus
curiae apparently lacks independence. Therein, did the tribunal find that the interests
below (which pursued in the case) were conflicted:

(a). The claimants ― they pursued the restitution of lands unlawfully expropriated
by Zimbabwe;

(b). One applicant ― it expressed the desire to occupy the lands with the hands of
indigenous peoples.102

96
Respondent’s Comment on Amici Submissions, P24:L778-780.
97
Ishikawa (2019), ¶24; ICSID Arbitration (AF) Rules, art.41.3; CEPTA, art.9.19.3.
98 Philip Morris (Award), ¶55.
99
von Pezold (PO No.2), ¶49.
100
CBFI’s Amicus Application, P16:¶7.
101 von Pezold (PO No.2), ¶56.
102 Id., ¶51.
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Memorial for the Claimant (Team Brower)

That is, a conflict of interest may occur in the circumstance where an interest pursued
by amicus curiae runs afoul of one pursued by either party.

[82] In casu, Lapras Legal Capital has merely provided the Claimant with financial
advices. 103 Put it differently, the advisor does not have any interests and hostile
principles contrary to the Respondent’s side.

[83] Further to it, the independence in question was confirmed under the CBFI’s “Amicus
Brief Submission Guidelines”, according to which a conflict of interest presumably
exists when Lapras Legal Capital “has a direct financial interest in the outcome of the
case”. 104 On the basis of the Guidelines, the CBFI did not find that the financial
advices would trigger any conflict of interest.105

[84] Strikingly, the Guidelines is analogical to Article 10.2(a)(iv) of the Draft Code of
Conduct for Adjudicators in International Investment Disputes as follows:

“Adjudicators shall make disclosures […] any third-party

funder with a financial interest in the outcome of the proceeding
and identified by a party”.106
Its Commentary clarifies that “[a]djudicator’s remuneration for work performed and
reimbursement […] is not considered a financial interest”.107

[85] Whilst the arbitrator’s disclosure obligation is not comparable to amicus curiae
independence, procedural fairness is commonly necessitated in both contexts. In this
regard, as the Draft ensures, Lapras Legal Capital’s remuneration from the Claimant
does not bring any conflict of interest into this proceeding. Last but not least, the
CBFI initiatively disclosed the advisor’ membership in accordance with Article 9.19.3

103 CBFI’s Amicus Application, P16:¶7.

104
PO No.3, P87:¶12.
105
PO No.3, P87:¶12.
106 Draft Code, art.10.2(a)(iv).
107 Id, P13:¶51.
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Memorial for the Claimant (Team Brower)

of the CEPTA.108

[86] Cumulatively considering, the CBFI does not apparently lack the independence from
the Claimant and in this sense, the alleged conflict of interest is irrelevant to the
CBFI’s participation.

5. The CBFI’s submission pursues a public interest in this case

[87] As regards the last condition, the Respondent alleges that the “CBFI does not file its
amicus application in pursuit of any public interest”.109 Truly, as required in Article
1.4(a) of the UNCITRAL Rules on Transparency, the CBFI’s submission need to have
a public interest in transparency here.110

[88] In RFP, the tribunal found that the public interest factor exists when amici curiae
“show[s] any link between their [a]pplication and furtherance of the public
interest”.111

[89] Here, the public interest pursued is the economic development in Great Narnian
region. As the Claimant explained previously, SOEs have developed a marketplace,
stronger economic growth, new jobs, and greater prosperity in the region. 112 In this
vein, should they be denied the CEPTA’s protection, SOEs would be loath to make an
investment regionally. Thus, an outcome of the SOEs’ jus standi matter has a far-
reaching effect not only upon the SOEs themselves, but also upon the regional
interest.113

[90] Moreover, there exists a link between the CBFI’s application and furtherance of the

108
CBFI’s Amicus Application, P16:¶7; CEPTA, art.9.19.3.
109 Respondent’s Comment on Amici Submissions, P24:L776.
110
UNCITRAL Rules on Transparency, art.1.4(a).
111
RFP (PO No.6), ¶4.7.
112 CBFI’s Amicus Application, P16:¶8.
113 Cf, Apotex (III) (PO on Mr. Appleton), ¶43.
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Memorial for the Claimant (Team Brower)

public interest. In this regard, the dictum in Vivendi (II) is instructive as follows:

“Given the public interest […], it is possible that appropriate

non parties may be able to afford the tribunal perspectives,
arguments and expertise that will help it arrive at a correct
decision".114
Thereby, amicus curiae who assists a tribunal’s deliberation contributes to a
furtherance of the public interest. And, this is true of the CBFI as demonstrated above.

[91] In sum, the CBFI’s submission is in the pursuit of the public interest.

C. The CRUP Should be, on the Other Hand, Denied Amicus Standing in This Case

[92] Meanwhile, with respect to the CRUP’s application, the Tribunal should not grant
leave for the CRUP to make an argument as amicus curiae.

[93] In its brief, the CRUP is adamant that the Claimant’s claims “remain tainted by
allegations of corruption”, which “is crucial to the determination of the Tribunal’s
competence-competence”. 115 However, the alleged corruption question has not
addressed by either Party until this time.116

[94] The thrust of the Claimant’s objection is straightforward: the CRUP does not address
“a matter within the scope of the dispute”.117 The Claimant breaks such objection
down into two points: [1.] the CRUP cannot raise a new issue that is not questioned
by the Parties; [2.] in any event, the issue is unequivocally an irrelevant issue to the
dispute.

1. The CRUP is, as amicus curiae, incapable of raising an issue that is not

114
Vivendi (II) (Amicus Curiae), ¶20; Biwater (PO No.5), ¶52.
115
CRUP’s Amicus Application, P19:L650-651:L656.
116 Claimant’s Comment on Amici Submissions, P22:L714-716.
117 ICSID Arbitration (AF) Rules, art.41.3(b); CEPTA, art.9.19.3.
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Memorial for the Claimant (Team Brower)

questioned by the Parties

[95] The fundamental tenet of arbitration is the principle of party autonomy.118 Amicus
curiae, as a non-party to a dispute, cannot be permitted to “turn the dispute the subject
of the arbitration into a different dispute”.119 Rather, amicus curiae should be invited
in order to make an inquiry into “[a] dispute which had been submitted to it in
accordance with the consent of the disputing parties”.120

[96] In UPS where two applicants made amici applications as regards non-pertinent
procedural issues to the parties’ submissions, the NAFTA tribunal declined to grant a
permission since “it [was] for the respondent to take jurisdictional points”.121

[97] Furthermore, much like in this case, in Infinito Gold, one petitioner requested the
ICSID tribunal’s invitation on the basis of the investor’s corruption, whereas neither
party put the matter before the tribunal.122 It is noteworthy that the tribunal sided with
the Claimant’s position by holding that “the [t]ribunal cannot rule out […] without
having heard the Parties that these matters may play some role in its assessment of
this dispute”.123

[98] Considering the above-cited jurisprudence, the CRUP cannot broaden the legal
boundary of this arbitration by raising a new legal issue. In this vein, the CRUP’s
application is beyond “the scope of the dispute” set by the Parties, and thus the
Tribunal needs to reject it.

2. In any event, the CRUP addresses an issue manifestly irrelevant to the dispute

[99] Even if, arguendo, amicus curiae could make a submission pertaining to such a legal

118
Banifatemi (2010), P192; Born/Forrest (2019), P650.
119 UPS (Amici Curiae), ¶60.
120
Id., ¶60.
121
Id., ¶71.
122 Infinito Gold (Amicus Curiae), ¶33.
123 Id., ¶33.
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Memorial for the Claimant (Team Brower)

issue that parties have not disputed, an attempt would fail in the event that the raised
issue does not “address exclusively within the scope of the dispute”.124

[100] For instance, in von Pezold, two applicants sought to put human rights issue in the
investment arbitration. 125 However, the ICSID tribunal opined that any decision
about the matter “is clearly outside the scope of the dispute”.126

[101] Similarly, in casu, the alleged corruption issue raised by the CRUP is “clearly”
irrelevant to the dispute here. Admittedly, it is trite law that such kind of offences may
deprive a tribunal of its jurisdiction: however, this is the case when an explicit legality
requirement exists in a treaty.127

[102] In stark contrast, the CEPTA does not encapsulate any anti-corruption provisions
depicted below:

Treaty Article Text

“the following is not an
Canada-Honduras FTA Article 10.1 investment: an investment
(2013) allowed or made pursuant
to […] corruption”.128
“the term ‘investment’
means every kind of asset
Japan-Georgia BIT Article 1.a […] that is made […] in
(2021) accordance with
applicable laws and
regulations of the other
Contracting Party”.129
Nowhere does such provisions appears under the CEPTA.

[103] Further to the above-difference, the circumstances of the CEPTA’s conclusion under

124
RFP (PO No.6), ¶4.5.
125 von Pezold (PO No.2), ¶¶25-28.
126
Id., ¶60.
127
Inceysa (Award), ¶¶201-207; Kardassopoulos (Jurisdiction), ¶¶174-182.
128 Canada-Honduras FTA (2013), art.10.1.
129 Japan-Georgia BIT (2021), art.1.a.
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Memorial for the Claimant (Team Brower)

Article 32 of the VCLT demonstrates the Parties’ intention that a corruption issue does
not result in a denial of a tribunal’s jurisdiction.130 In the Respondent, “corruption is
considered a friendly custom that is a part and parcel of doing business”.131

[104] In totality, the CRUP’s submission questions an irrelevant issue to the Tribunal’s
jurisdiction, and hence it is clearly outside the scope of the dispute.

130 VCLT, art.32.

131 PO No.3, ¶13.
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Memorial for the Claimant (Team Brower)

PART THREE: MERITS

III. THE RESPONDENT HAS VIOLATED ARTICLE 9.9 OF THE CEPTA

[105] During its investment activity, the Respondent introduced a series of the judicial,
administrative, and governmental acts, which denied, separately or in combination,
the Claimant the “fair and equitable treatment” under Article 9.9.1 of the CEPTA.132

[106] Uniquely, the FET clause enumerates what the parties consider to be the standard as
follows:

(a). denial of justice in criminal, civil or administrative proceedings; or

(b). arbitrary or discriminatory conduct.133

This is a closed list of situations resulting in a breach of the FET standard.134

[107] In particular, the Claimant’s problem here pertains to [A.] the CCM’s arbitrary acts;
[B.] the denial of justice; and [C.] Mekari government’s discriminatory measure.
Even if the acts did not constitute a breach respectively, [D.] the Respondent would,
taken together, run counter to the FET standard.

A. The CCM Exposed Arbitrary Acts to the Claimant’s Investment

[108] Firstly, the Respondent adopted a series of arbitrary measures, thereby inflicting
damage upon the Claimant’s investment. Specifically, the Claimant complains of two
administrative acts: [1.] the CCM’s first and second investigations; and [2.] the
CCM’s continuous airfare caps in the economic crisis.

1. The CCM’s first and second investigations were arbitrary

[109] The CCM launched the first and second investigation on the ground that Caeli
Airways engaged in anti-competitive acts (e.g., the 54% market share and low-cost

132
CEPTA, art.9.9.1.
133 CEPTA, art.9.9.2.
134 Cf, Dumberry (2019), P100.
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Memorial for the Claimant (Team Brower)

services), resulting in the huge fines.135 However, these investigations were contrary
to the Claimant’s legitimate expectation and in this sense, the Respondent acted
arbitrarily.

[110] Indeed, Article 9.9.3 of the CEPTA incorporates investor’s legitimate expectations
into an assessment of an arbitrariness.136 Such expectations may arise in a situation
where a State “made a specific representation to an investor to induce a covered
investment […] and upon which the investor relied in deciding to make […] the
covered investment”.137

[111] Here, in making the investment (i.e., purchasing the shares), the CCM approved Caeli
Airways’ partnership with Moon Alliance and low-cost services due to the alliance.138
This representation was a determinative factor for the Claimant to make an investment.
Hence, the Claimant expected that the CCM would not complain of its participation
in Moon Alliance.

[112] Nonetheless, the CCM added the alliance partner’s market share (11%) into Caeli
Airways’ market share (43%), thereby alleging that “Caeli’s market share exceeds
54%” and launched the first investigation. 139 Moreover, the second investigation
focused upon Caeli Airways’ low-services and but, this was approved by the CCM.140

[113] In sum, the CCM frustrated the Claimant’s legitimate expectation and thus, the first
and second investigations were arbitrary.

2. The continuous airfare caps in the economic crisis was arbitrary

[114] Next, in the middle of the economic crisis, Caeli Airways requested the CCM to

135
Facts, P34:¶36; Facts, P35:¶38.
136 CEPTA, art.9.9.3.
137
CEPTA, art.9.9.3.
138
Facts, P32:¶25.
139 Facts, P34:¶36.
140 Facts, P35:¶38.
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Memorial for the Claimant (Team Brower)

modify the airfare caps, i.e., to raise the fixed fares in correspondence with rising
inflation. 141 Regrettably, this request was rejected with the explanation that
“interference with inflation rates was beyond its competence”.142

[115] Surely, the CCM is not competent to change the inflation rate itself. However, it had
competence to change the fixed fares. Indeed, Act (2009) allows the CCM to “renew[]
insofar this is necessary and proportionate”.143

[116] In this regard, the CCM’s rejection was not accompanied with the clarification of why
the requested renewal was unnecessary and disproportionate. Rather, it was based on
“discretion, prejudice and personal preference”.144

[117] Hence, the CCM’s continuous airfare caps in the economic crisis was arbitrary.

B. Mekari Judiciary Denied the Claimant Justice

[118] As the second ground, Mekari justice’s aberrant acts amounted to denial of justice
under the CEPTA.145 Denial of justice was well-conceptualized by the tribunal in
Helnan, according to which it includes:

“deficiencies, in procedure or substance, [that] are shown in

regard to the local proceedings which are of a nature of
rendering these deficiencies unacceptable from the viewpoint of
international law”.146
Notably, the application of denial of justice is not limited to procedural faults (e.g., a
lack of due process). 147 As Professor Douglas rightly noted, substantive faults in

141
Facts, P36:¶43.
142
Facts, P36:¶43.
143 Annex V, P47:L1623-1627.
144
Crystallex (Award), ¶578; EDF (Award), ¶303.
145
CEPTA, art.9.9.2(a).
146 Helnan (Award), ¶106.
147 Iberdrola (I) (Award), ¶432, Infinito Gold (Award), ¶445; Azinian (Award), ¶103.
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Memorial for the Claimant (Team Brower)

decisions can also constitute denial of justice.148

[119] In casu, Mekari court has fallen short of the standard: [1.] it exposed the Claimant to
the undue delays in the proceeding on interim measures; and [2.] it recognized and
enforced the arbitral award which was set aside at the seat of arbitration.

1. The denial of justice come from the unreasonable delays in the airfare cap case

[120] The first denial of justice claim has an origin in the delay in interim measure hearing.
A category of denial of justice has included an undue delay in a domestic litigation.149
In this regard, the tribunal in White Industry enumerated elements for the assessment
of whether alleged delays were undue, two of which were (1) “the behaviour of the
courts themselves” and (2) “the need for swiftness”.150

[121] Here, (1) Mekari judiciary materially ignored the necessity to respond Caeli Airways’
request for interim measures. In the wake of the economic crisis, the CCM’s airfare
caps put Caeli Airways into the enough dire financial situation to push it to brink of
bankruptcy.151 Hence, Caeli Airways exhorted the court to hear its claim to remove
provisionally the caps and but, the hearing was scheduled after about one year.152

[122] In this regard, (2) the Respondent attempts to justify the delay, noting its lacking
judicial resources and the necessity to prioritize criminal issues. 153 Surely, the
Claimant is aware of the need to resolute swiftly the matters due to human rights
concern.

[123] Yet, even in such a situation, Mekari justice should have not deprive Caeli Airways

148
Douglas (2014), P900:¶5.
149 Azinian (Award), ¶102; Chevron (I) (Merits), ¶250.
150
White Industry (Final Award), ¶10.4.10.
151
Facts, P36:¶44.
152 Facts, P36:¶44.
153 Facts, P36:¶44.
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Memorial for the Claimant (Team Brower)

“of the chance ― whether great or small ― to avoid the sale of its asset”. 154
Otherwise, any civil cases in Mekar would not be effective for any litigants. As noted
above, the one-year delay might be short, but was crucial for Caeli Airways’
avoidance of insolvency. In fact, it had no choice but to sell its investment to third-
party before the scheduled date for hearing an interim measure.155

[124] To sum up, Mekari judiciary failed to accord an opportunity for Caeli Airways to
secure itself through interim measures. In this sense, denial of justice was found.

2. The denial of justice derives from the recognition and enforcement of the
arbitral award, which was set aside at the seat of arbitration

[125] Mekari judiciary recognized and enforced the award, which was set aside in its
country of origin (Sinnoh) due to the corruption.156 According to the superior court:

“[T]he award […] was an international award which by

definition was not integrated into the legal order of [a] country
such that its existence continues despite its nullification and that
its recognition in Mekar”.157
[126] Notably, this reasoning is in line with French judicial practices, according to which
an international award is independent from legal order at a seat of arbitration and thus,
setting aside is not a ground to deny recognition and enforcement.158

[127] Yet, in a sharp contrast to the Respondent, France excludes the setting aside ground
from its domestic arbitration law, thereby complying with NY Convention on the
basis of the most-fouvourable-right provision under Article VII(1).159

[128] Here, even though its judiciary excludes the setting aside ground, Mekari Commercial

154
Dan Cake (Jurisdiction and Liability), ¶145; Agility (Final Award), ¶211.
155 Facts, P37-38:¶51.
156
Facts, P39:¶62.
157
Annex XV, P68:¶11.
158 Wolff (2019), P384-385:¶390.
159 Id., P384-385:¶390.
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Memorial for the Claimant (Team Brower)

Arbitration Act leaves the possibility of refusing recognition and enforcement of an

award by claiming the setting aside.160 This contradictory position triggers denial of
justice here.

C. The Alleviative Measures Under Executive Order 9-2018 Were Discriminatory

[129] As the third basis, the Claimant invites the Tribunal’s attention to Executive Order 9-
2018 whereby the Respondent granted subsidies for some airlines (Star Wings and
JetGreen): however, Caeli Airways was refused only due to the reason that it had been
owned by the State.161

[130] This treatment violated the FET standard under the CEPTA.162 Precisely, Executive
Order 9-2018 breached the duty not to adopt a differential measure in the same
sector.163

[131] Here, the Claimant’s problem here clears a three-step review: [1.] like circumstances;
[2.] a less favourable treatment; and [3.] without any justifications.164

1. The Claimant was in “like circumstances” with Star Wings and JetGreen in
relation to Executive Order 9-2018

[132] The first step is to identify comparators who are in “like circumstances” with the
Claimant.165 The inquiry is inherently context-specific.166 As the tribunal in ADM
noted, “all circumstances in which the treatment was accorded are to be taken into
account in order to identify the appropriate comparator”.167

160 Annex XIV, P65:L2245-2250.

161
Facts, P36-37:¶36.
162
CEPTA, art.9.9.2(c).
163 Waste Management (II) (Award), ¶98; Lemire (II) (Jurisdiction and Liability), ¶261.
164
Bayindir (Award), ¶399; Saluka (Partial Award), ¶313.
165
Merrill (Award), ¶88.
166 S.D. Myers (Partial Award), ¶250; Pope & Talbot (Award on Merits of Phase 2), ¶77.
167 ADM (Award), ¶197.
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Memorial for the Claimant (Team Brower)

[133] That being said, three elements have appeared on “like circumstances”: whether (1)
comparators are in the same economic sector as the claimant; (2) have invested in
businesses that compete with the claimant in terms of goods or services; (3) are
subject to the same legal regime that produced an offending measure.168

[134] As for (1), it is undoubtful that Star Wings and JetGreen operated in the same business
sector with Caeli Airways. They were all foreign airlines in Mekar.169 Furthermore,
with respect to (2), the Claimant had competed with Star Wings and JetGreen, in that
they all had served for the aerial transport of Mekari citizens via Phenac International
Airport. 170 Additionally, as regards (3), Star Wings, JetGreen, and Caeli Airways
were all subject to Executive Order 9-2018 whereby Caeli Airway’s application for
subsidies was denied.171

[135] Last but the least, the Respondent may refer to some dim difference between Star
Wings/JetGreen and Caeli Airways. Yet, as the tribunal in Methanex held, the “like
circumstances” inquiry does not require an identification of comparators in situations
identical to the Claimant: “like” is not “identical”.172

[136] To sum up, Caeli Airways identifies Star Wings and JetGreen as the comparators who
were in “like circumstances” with itself in relation to Executive Order 9-2018.

2. The Claimant was accorded a less favourable treatment

[137] As the next step, Executive Order 9-2018 afforded “a less favourable treatment” to
the Claimant. The tribunal in Alpha opined that such a treatment may be found “if the
measure is not explicitly or inherently discriminatory but discriminates between

168 Apotex (III) (Award), ¶8.15.

169
Facts, P36-37:¶36.
170
Facts, P36-37:¶36.
171 Facts, P36-37:¶36.
172 Methanex (Final Award), Part IV:Ch. B:¶15; Corn Products (Decision on Responsibility), ¶129.
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Memorial for the Claimant (Team Brower)

domestic and foreign investors in the way in which it is applied”.173

[138] In casu, Caeli Airways’ application for subsidies was rejected by the Secretary of
Civil Aviation, whereas the Secretary granted the monetary relief for Star Wings and
JetGreen in “like circumstances” with Caeli Airways. 174 Put it simply, Executive
Order 9-2018 was differentially applied.

[139] In this context, Caeli Airways was accorded “a less favourable treatment” than Star
Wings and JetGreen in “like circumstances” with itself.

3. The Respondent fails to raise any reasonable justifications

[140] The last step is to assess if there is a reasonable ground to justify discrimination.175
In other words, the Respondent must persuade the Tribunal that the discrimination
was apposite and non-excessive to achieve its legitimate objective.176

[141] In this regard, the Respondent alleged that the differential treatment was justified
since “the Claimant enjoyed a benefit that several of its competitors in Mekar did not
– continuous influx of funds from its home State under the Horizon 2020 Scheme”.177

[142] Certainly, the Claimant had received subsidies from Bonooru.178 However, the same
was true of Star Wings and JetGreen, who had enjoyed subsidies from their home
States greater than the Claimant received under the Horizon 2020. 179 This fact
demonstrates that the above excuse was contradictory and inapposite.

[143] Consequently, the Respondent fails to justify the differential treatment between the

173
Alpha (Award), ¶426.
174
Facts, P36-37:¶36.
175 Saluka (Partial Award), ¶313.
176
Parkerings (Award), ¶368.
177
Response, P8:¶15.
178 Facts, P32-33:¶28.
179 Facts, P32-33:¶28.
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privately-owned airlines (Star Wings and JetGreen) and Caeli Airways.

D. In Any Event, the Respondent Engaged in the Creeping FET Violation

[144] Even if the above acts were individually lawful, they would constitute, in combination,
the FET violation. This kind of the FET breach can be found in a circumstance where
there exists “a succession or an accumulation of measures which, taken separately,
would not breach [the FET] standard but, when taken together, do lead to such a
result”.180

[145] In El Paso, the tribunal found the creeping FET violation, in that the cumulative effect
of Argentina measures compelled the investor to sell its investment, whereas the
measures were, in isolation, reasonable in order to cope with the difficult economic
situation.181

[146] Likewise, in the present case, a series of the Respondent’s acts cumulatively
contributed to the Claimant’s compelling sell of its investment. In Mekari economic
crisis, the CCM continued to impose the airfare caps upon the Caeli Airways, thereby
deteriorating its financial situation.182 Moreover, by granting subsidies only to other
airlines, the Respondent hurt Caeli Airways’ market position further.183

[147] In this vein, the Claimant had no choice but to resort to the judicial measures for the
purpose of protecting its investment. Yet, this way was closed by the delays in the
proceeding and the recognition and enforcement of the arbitral award which was set
aside in the seat of arbitration.184

[148] To sum up, the measures, in combination, pushed the Claimant to brink of the
bankruptcy and compelled it to sell its investment to the Respondent. In this sense,

180 El Paso (Award), ¶518; Swisslion (Award), ¶275.

181
El Paso (Award), ¶¶510-519.
182
Facts, P34:¶36, P35:¶38, P36:¶43.
183 Facts, P36-37:¶46.
184 Facts, P36:¶44, P38:¶54, P39-40:¶¶57-62.
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Memorial for the Claimant (Team Brower)

the creeping FET violation is established, which engages the Respondent’s

responsibility.

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Memorial for the Claimant (Team Brower)

PART FOUR: COMPENSATION

IV. THE APPROPRIATE COMPENSATION STANDARD IS ONE THAT ASSESSES THE EFFECT OF
THE BREACH ON THE FAIR MARKET VALUE OF THE INVESTMENT AND THERE EXISTS
NO REASONS TO DEDUCE THE AMOUNT OF COMPENSATION

[149] As discussed above, the Respondent breached Article 9.9.1 of the CEPTA, resulting
in the distressed sale of the investment (USD 400 million).185 As held in Chorzów,
such a wrongful act obligates the Respondent to “wipe out all the consequences of the
illegal act and reestablish the situation which would, in all probability, have existed
if that acted had not been committed”.186

[150] But-for the breach, the Claimant could have sold the shares at USD 1.1 billion equal
to its FMV.187 Hence, it requires the Respondent to pay the remaining amount (USD
700 million) as compensation.188

[151] In the following scenario, the Claimant demonstrates that [A.] the FMV standard is
an appropriate method to assess the value of the investment; and [B.] there exist no
grounds to deduce the amount of compensation (USD 700 million).

A. The Respondent Shall Compensate USD 700 Million as Remaining Part of the
“But-for” Sale of the Investment on the Basis of the FMV Standard

[152] The first disagreement with the Respondent is what is an appropriate methodology to
calculate the value of the Claimant’s investment. According to the Respondent, “the
Tribunal should apply the ‘market value’ standard”.189

[153] In response, the Tribunal shall apply the FMV standard here in accordance with [1.]
principles of international law or [2.] the MFN clause in the CEPTA.

185 Facts, P40:¶63.

186
Chorzów (PCIJ, Merits), P47; Quiborax (Award), ¶¶327-328.
187
PO No.3, P87:¶16.
188 PO No.3, P87:¶16.
189 Response, P8-9:¶19.
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Memorial for the Claimant (Team Brower)

1. Article 9.21 of the CEPTA reflects the customary full reparation principle,
including the FMV standard

[154] The starting point is Article 9.21.1(a) of the CEPTA, thereby mandating the Tribunal
to “award, separately or in combination, monetary damages at a market value”.190
Based upon the explicit provision, the Respondent alleges that “the Tribunal should
apply the market value standard contained in […] the CEPTA”.191

[155] Yet, the term “market value” does not exclude the FMV standard from the Tribunal’s
consideration. Remarkably, the term “market value” has been synonymously
construed as the term “fair market value”.192 By way of illustration, both concepts
have been defined respectively as follows:

(a). FMV Standard ― “[T]he price […] at which property would change hands
between a hypothetical willing and able buyer and a hypothetical willing and
able buyer”;193 and

(b). MV Standard ― “[T]he sum that a willing buyer would have been ready to
pay a willing seller”.194

As compared above, no practical differences exist between two standards.195

[156] Indeed, the tribunal in Devas found in direct terms that:

“[T]he debate over whether it must apply the concept of either

market value or fair market value […] is really academic in this
case. […] The phrase ‘market value’ […] does not preclude
reliance on [the] well-recognized [standard in Chorzów]”.196

190
CEPTA, art.9.21.1(a).
191
Response, P8-9:¶19.
192 Marboe (2018), P23; Sabahi (2011), P103.
193
CMS (Award), ¶402; Sempra (Award), ¶405.
194
Venezuela Holdings (Award), ¶385; Tidewater (Award), ¶159.
195 Marboe (2018), P23; Sabahi (2011), P103.
196 Devas (Quantum), ¶205.
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Memorial for the Claimant (Team Brower)

Hence, the term “market value” in the CEPTA does not mean any departure from
customary Chorzów principle, under which the FMV standard is applicable.197

[157] To sum up, Article 9.21.1(a) of the CEPTA merely reflects the FMV standard as a
principle of international law. Hence, pursuant to the provision, the Tribunal shall
apply the FMV standard (synonymous with the MV standard) as an appropriate
method to assess the value of the Claimant’s investment.

2. Alternatively, the MFN clause under Article 9.7 of the CEPTA imports the FMV
standard under Arrakis-Mekar BIT (2006) into the current arbitration

[158] Even if the FMV standard differs from the MV one, the Tribunal shall still apply the
FMV standard via the MFN clause under Article 9.7.1 of the CEPTA, which provides:

“Each Party shall accord to an investor of the other Party […]

treatment no less favourable than the treatment it accords in like
situations, to investors of a third country […] with respect to the
[…] sale or disposal of their investments in its territory”.198
In this context, the Claimant is entitled to enjoy the same treatment as Arrakis-
investors who the Respondent has made the FMV-compensation pursuant to Article
13 of Arrakis-Mekar BIT (2006).199

[159] In the following, it is demonstrated that the actual FMV-compensation to Arrakis-

investors is [a.] a more “favourable” [b.] “treatment it accords in like situations” [c.]
“with respect to the […] sale or disposal” of the Claimant’s investment [d.] “in [the
Respondent’s] territory”.

(a). The FMV-compensation is a more “favourable” than the MV-compensation

[160] The “favourable” assessment requires an objective consideration.200 As the tribunal

197
ILC Commentary on ARSIWA, P102:¶22; Sempra (Award), ¶404.
198
CEPTA, art.9.7.1.
199 PO No.3, P87:¶15; Arrakis-Mekar BIT (2006), art.13.
200 Daimler (Award), ¶243; Garanti Koza (Jurisdiction), ¶88.
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Memorial for the Claimant (Team Brower)

in Daimler opined, investors need to prove that a compared treatment was objectively
preferential one.201

[161] Indeed, in CME under Czech Republic-Netherlands BIT (1991), the tribunal allowed
the investor to avail itself of calculating the compensation on the FMV-basis under
Czech Republic-U.S. BIT (1991) since the amount was objectively higher.202

[162] Similarly, here, the FMV-sum is USD 1.1 billion,203 whereas the MV-amount is USD
400 million.204 Unequivocally, the former is objectively more “favourable” than the
latter.

(b). The Respondent’s actual FMV-compensation to Arrakis-investors

constitutes a “treatment it accords in like situations”

[163] Next, the Claimant put the term “treatment it accords in like situations” into two
interpretative parts: [i.] the term “treatment”; and [ii.] the term “in like situations”.

i. The meaning of the term “treatment”

[164] Article 9.7.2 of the CEPTA clarifies what does not constitute a “treatment”: the MFN
clause is not used to import (1) “procedures for the resolution of investment disputes”
and (2) “[s]ubstantive obligations” in other treaties. 205 In casu, the standard of
compensation is not true of either category.

[165] As regards (1), its import is to prevent investors from cherry-picking preferential
procedural rights in other treaties.206 Yet, the limitation is manifestly not put into a
question here. As Professor Shill rightly categorised, the standard of compensation is

201
Daimler (Award), ¶243.
202 CME (Final Award), ¶500.
203
PO No.3, P87:¶16.
204
Response, P9:¶21.
205 CEPTA, art.9.7.2.
206 Daigremont (2019), P87-88.
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Memorial for the Claimant (Team Brower)

a substantive issue, not a procedural one.207

[166] With respect to (2), investors cannot also benefit from substantive provisions (e.g.,
the FET standard and the expropriation clause) in different treaties. Importantly, the
CEPTA provides an exception to it in the following terms:

“[S]ubstantive obligations in other international investment

treaties […] do not in themselves constitute ‘treatment’ […]
absent measures adopted or maintained by a Party to those
obligations”.208
By construing a contrario this text, in the situation where a host State “adopted or
maintained” measures for third-country investors in correspondence to substantive
obligations, investors can gain the same substantive treatment.209

[167] Such a situation exists here. It is noteworthy that tribunals under Arrakis-Mekar BIT
(2006) have consistently awarded FMV-compensation.210 This fact leads the MFN
clause in the direction that the Respondent’s actual FMV-compensation constitutes a
“treatment”.

ii. The meaning of the term “in like situations”

[168] The term “in like situations” was given the unique content by the tribunal in Içkale,
according to which the wording requires “a comparison of the factual situation of the
investments of the investors of the home State and that of the investments of the
investors of third States”.211

[169] In casu, the Claimant compares itself with Arrakis-investors on the factual basis, in
that they have been, indeed, awarded the FMV-compensation for the FET breach.212

207
Shill (2017), P918-919.
208 CEPTA, art.9.7.2.
209
Daigremont (2019), P88.
210
PO No.3, P87:¶15.
211 Içkale (Award), ¶329.
212 PO No.3, P87:¶15.
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Memorial for the Claimant (Team Brower)

[170] Accordingly, the Respondent’s actual FMV-compensation to Arrakis investors is a

“treatment it accords in like situations” with the Claimant”.

(c). The FMV-compensation is “with respect to the […] sale or disposal” of the
Claimant’s investment

[171] The Claimant requires the FMV-compensation in order to recover the damages in the
distressed sale of its investment. 213 In this vein, the compensation through the
arbitration forms a highly relevant part of “sale or disposal” of the investment.

[172] In fact, the tribunals have confirmed that” [a] resource to international arbitration is
very much related to investors’ […] disposal of their investments”.214

[173] Hence, the FMV-compensation as a treatment is “with respect to the […] sale or
disposal” of the Claimant’s investment.

(d). The FMV-compensation relates to the Claimant’s investment “in the

territory”

[174] The last key textual aspect is the use of the expression “in the territory”. The language
modifies the term “their investments”, which plainly means that investors must be in
a less favourable position pertaining to their investments made in a State’s territory.215

[175] In this sense, the term “in the territory” merely affirms a territorial nexus between
investments and a host State and thus, it is not fatal to the Claimant’s case here.

B. The Respondent Does Not Have Any Defences to Reduce the Amount of
Compensation (USD 700 Million)

[176] Secondly, it is in dispute with the Respondent whether the Tribunal should reduce the
amount of the compensation (USD 700 million). In this vein, the Respondent raises
two unfounded claims: [1.] contributory faults; and [2.] economic emergency ― but,

213
PO No.3, P87:¶16.
214 AWG (Jurisdiction), ¶57; RosInvest (Jurisdiction), ¶130.
215 BUCG (Jurisdiction), ¶119; Berschader (Award), ¶185.
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Memorial for the Claimant (Team Brower)

neither has any merits.216

1. The Claimant did not contribute to the occurrence of the damages

[177] In the first place, the Respondent attempts to relieves its monetary obligation by
alleging that “Mekar, which continuously warned the Claimant against such an
exorbitant approach, cannot be held accountable for the Claimant’s risky business
choices”.217

[178] This allegation is rooted in the customary principle of contributory fault under Article
39 of ILC Articles.218 Surely, the tribunals have recognized its applicability in their
contexts.219 Yet, here, the Respondent fails to reach the requisite threshold that the
Claimant’s worsening situation would not have occurred if it had implemented a
timely measure.220

[179] In Bear Creek, Peru failed to attribute to the investor the cause of the emergence of
social unrest that resulted in the termination of the investor’s mining concessions.221
Notably, the tribunal opined that, even though some feasible measures were available
to the investor, Peruvian authorities had endorsed the mining project, which denied
the contributory nature.222

[180] Similarly, in this case, the Respondent applauded the Claimant’s proposal to expand
Caeli Airways’ market as “the most financially attractive business model” and
selected the Claimant as the owner.223 That is, the alleged “exorbitant approach” was

216 Response, P9:¶22.

217
Response, P9:¶22.
218
ILC Articles, art.39.
219 RosInvest (Final Award), ¶¶634-635; Occidental (II) (Award), ¶¶665-669.
220
Bear Creek (Award), ¶410; Abengoa (Laudo), ¶¶670-671; Yucos (Final Award), ¶1596.
221
Bear Creek (Award), ¶¶411-414.
222 Id, ¶412.
223 Facts, P31-32:¶24.
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Memorial for the Claimant (Team Brower)

just in line with the proposal.

[181] Additionally, the Respondent may complain that the Claimant should have taken
preventive measures for the future decline of fuel prices.224 However, as the experts
noted, “it is hard to blame a company for its failure to predict often unpredictable
commodity prices”.225 Hence, the Claimant did not contribute to the occurrence of
the damages.

2. The economic distress is not pertinent for the calculation of the compensation

[182] As another reducing element, the Respondent highlights its dire economy, alleging
that “any compensation that may be awarded would have to take the dire economic
situation in Mekar into account”.226

[183] Strikingly, such a “theory” has no basis in international law and is manifestly contrary
to the customary full reparation principle as set out in Chorzów. As the term “full”
indicates, a wrongful State is obligated to “wipe out all the consequences of the illegal
act” in the range of damages that the State cause (except in a situation where investors
contribute to damages).

[184] Indeed, the CEPTA is interpreted in the same way, i.e., Article 9.21.1 of the CEPTA
does not depart from the general standard. Notably, Article 1.3(d) of the CEPTA
provides, as its fundamental objective (within the meaning of Article 31.1 of the
VCLT), to “create effective procedures for the resolution of disputes”. 227 In this
context, should if an amount of compensation is reduced solely due to the economic
excuse, the CEPTA’s dispute resolution would not be “effective”.

[185] Hence, CEPTA never allows the Respondent to circumvent the compensation.

224
Facts, P34:¶35.
225
Annex IX, P57:L1959-1960.
226 Response, P9:¶22.
227 CEPTA, art.1.3(d).
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Memorial for the Claimant (Team Brower)

PRAYER FOR RELIEF

[186] In light of the above submissions, the Claimant respectfully requests the Tribunal to
find that:

(i) The jurisdictional objection is dismissed;

(ii) The amicus application by the CBFI is admissible and the one by the CRUP,
on the other hand, should be rejected;

(iii) The Respondent violated the FET obligation under Article 9.9 of the CEPTA;
and

(iv) The appropriate standard for compensation is the FMV one and there exists
no grounds to deduce the amount of compensation.

Submitted on 16 September 2021 by Team Brower

On behalf of the Claimant, Vemma Holdings Inc.

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