TELDERS INTERNATIONAL LAW MOOT COURT

COMPETITION

2021

Case concerning the Almontan Shrubland

(Foria v. Costat)

Written Memorial on behalf of Costat

(Respondent)

Registration Number:

1
 ii

a) Table of Contents

b) List of Abbreviations

c) List of Sources

d) Statement of Relevant Facts

e) Issues

f) Summary of Arguments

g) Jurisdiction of the Court

h) Argument

i) Submissions
 iii

(b) List of Abbreviations

ARSIWA Draft Articles on Responsibility of States for Internationally

Wrongful Acts

Art. Article

BEAR Business, Environment and Amicable Relations

BIT Bilateral Investment Treaty

DIP Dynamic Inconsistency Problem

EEZ Exclusive economic zone

FCC Fundamental Change of Circumstances

FET Fair and Equitable Treatment

Ibid Ibidem

ICESCR International Covenant on Economic, Social and Cultural Rights

ICJ International Court of Justice

ICSID International Centre for Settlement of Investment Dispute

ILC International Law Commission

Kyoto Protocol Kyoto Protocol to the United Nations Framework Convention on

Climate Change

NAFTA North American Free Trade Agreement

No(s). Number(s)

OECD Organisation for Economic Co-operation and Development

p. Page

Para. Paragraph(s)

PCIJ Permanent Court of International Justice

PM Prime Minister

RCP The Rebuilding Costat Programme

Rio Declaration Rio Declaration on Environment and Development

 iv

RTD Right to Development

Ser. Serie

Stockholm Declaration Declaration of the United Nations Conference on the Human

Environment

UA Unilateral Act

UNCAC United Nations Convention against Corruption

UNCLOS United Nation Convention on the law of the sea

UNDRD United Nations Declaration on the Right to Development.

UNFCCC United Nations Framework Convention on Climate Change

VCLT Vienna Convention on the Law of Treaties

Vol. Volume

v. Versus

(c) List of Sources

 v

[Link]

Modèle : Vienna Convention on the Law of Treaties, 23 May 1969, entry in force 27 January
1980, United Nations Treaty Series, vol. 1155, p. 331 (hereinafter cited as: VCLT)

→ Traité, date, entry into force, organe d’adoption, volume (ou page ect…)

Convention for the Protection and Use of Transboundary Rivers and International Lakes,
17 March 1992, Helsinki, entry into force 6 October 1996. (hereinafter cited as: the UNECE)

Convention on the Law of the Non navigational uses of International Watercourses, 1997
(hereinafter cited as: UNWC)

International Covenant on Economic, Social and Cultural Rights adopted and opened for
signature, ratification and accession by General Assembly resolution 2200A (XXI) of 16
December 1966 entry into force 3 January 1976. (hereinafter cited as: ICESCR)

Kyoto Protocol to the United Nations Framework Convention on Climate Change, 1998
(hereinafter cited as: Kyoto Protocol)

The Paris Agreement, 2016

United Nations Convention on the Law of the Seas, 1973 (hereinafter cited as: UNCLOS)

United Nations Framework Convention on Climate Change, New York, United Nations,
1992 (hereinafter cited as: UNFCCC)

Vienna Convention on the Law of Treaties, 23 May 1969, entry in force 27 January 1980,
United Nations Treaty Series, vol. 1155, p. 331 (hereinafter cited as: VCLT)

II. Multilateral Declarations

Declaration on Social Progress and Development Adopted by General Assembly Resolution

2542 (XXIV) of 11 December 1969

Declaration of the United Nations Conference on the Human Environment (Stockholm)

1972

Rio Declaration on Environment and Development Adopted in Rio de Janeiro, Brezil on 14

June 1992 by the United Nations Conference on Environment and Development,
A/CONF.151/26 (Vol. I) (hereinafter cited as: the Rio Declaration)

United Nations Declaration on the Right to Development Adopted by General Assembly

Resolution 41/128 of 4 December 1986 (hereinafter cited as: UNDRD)

Vienna Declaration and Programme of Action. Adopted by the World Conference on Human
Rights in Vienna on 25 June 1993 (hereinafter cited as: the Vienna Declaration)

III. Cases
 vi

1. International Court of Justice cases

a) Judgements / Advisory Opinions

Case Fisheries Jurisdiction (United Kingdom of Great Britain and Northern Ireland v.
Iceland), Jurisdiction of the Court, ICJ Reports of Judgements, Advisory Opinions and Orders,
Judgement of 2 February 1973 (hereinafter cited as: Case Fisheries Jurisdiction, (United
Kingdom of Great Britain and Northern Ireland v. Iceland))

Case Nuclear Tests (Australia v. France), Judgment, ICJ Reports 1974, p. 268 (hereinafter
cited as: Nuclear Tests)

Case concerning the Frontier Dispute (Burkina Faso v. Republic of Mali), 1986, ICJ Rep. 573
(hereinafter cited as: Case concerning the Frontier Dispute (Burkina Faso v. Republic of Mali))

Case concerning the Gabcikovo-Nagymaros Project (Hungary v. Slovakia), ICJ Judgment,

1997 (hereinafter cited as: Gabcikovo-Nagymaros Project)

Case concerning Armed Activities on the Territory of the Congo (New Application: 2002)
(Democratic Republic of the Congo v. Rwanda), ICJ, Judgment of 3 February 2006 (hereinafter
as: Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v.
Rwanda))

Pulp Mills on the River Uruguay (Argentina v. Uruguay), ICJ, Judgment of 20 April 2010
(hereinafter cited as: Pulp Mills)

Case obligations concerning negotiations relating to cessation of the nuclear arms race and
to nuclear disarmament (Marshall Islands v. United Kingdom), ICJ, Memorial of the Marshall
Islands of 16 March 2015 (hereinafter cited as: Case obligations concerning negotiations
relating to cessation of the nuclear arms race and to nuclear disarmament (Marshall Islands v.
United Kingdom), Memorial)

b) Separate opinions

Case Concerning the Temple of Preah Vihear (Cambodia v. Thailand), Separate Opinion of
Judge Alfaro, Judgment of 15 June 1962, merits, ICJ (hereinafter cited as: Case Concerning the
Temple of Preah Vihear (Cambodia v. Thailand), Separate Opinion of Judge Alfaro)

2. Permanent Court of International Justice (PCIJ) cases

Advisory Opinion Concerning the Status of Eastern Carelia, 1923, PCIJ, ser. B, No. 5.
(hereinafter cited as: Advisory Opinion Concerning the Status of Eastern Carelia)

Case Concerning Certain German Interests in Polish Upper Silesia, 1926, PCIJ, ser. A, No.
7, (hereinafter cited as: Case Concerning Certain German Interests in Polish Upper Silesia)

Case Concerning the Payment of Various Serbian Loans issued in France (French Republic
v. Kingdom of Serbs, Croates and Slovenes) 1929, PCIJ, (Ser. A), Nos. 20/21. (hereinafter cited
as: Case concerning the payment of Various Serbian Loans issued in France)
 vii

Legal Status of Eastern Greenland, 1933, PCIJ., ser. A/B, No. 53, 71, (Dissenting Opinion of
Judge Anzilotti (hereinafter cited as: Legal Status of Eastern Greenland, Dissenting Opinion of
Judge Anzilotti)

3. Arbitration awards

Award between the United States and the United Kingdom relating to the rights of jurisdiction
of United States in the Bering’s sea and the preservation of fur seals (US v GB), 1893
(hereinafter cited as: Bering Sea Arbitration)

Case Salvador Commercial Company (El Salvador v. United States of America), 1902, Arbitral
Award, p.477 (hereinafter cited as: Salvador Commercial Company)

IV. UN Documents

Draft articles on Responsibility of States for Internationally Wrongful Acts, adopted by

the International Law Commission, 2001 (hereinafter cited as: the ARSIWA)

The Agenda for Sustainable Development, UN Agenda adopted by the General Assembly
Resolution 70/1, 2015

The Millennium Declaration, 2000

UN Office of the High Commissioner for Human Rights (OHCHR), Fact Sheet No. 21, The
Human Right to Adequate Housing, November 2009, Fact Sheet No. 21/Rev.1 (hereinafter
cited as: UN Fact Sheet No. 21)

Vienna World Conference on Human Rights, 1993

Yearbook of the International Law Commission, Report of the 18th session of the ILC, 1966,
International Law Commission, United Nations (hereinafter cited as: Report of the 18th session
of the ILC, 1966)

Yearbook of the International Law Commission, Report of the 58th session of the ILC, 2006,
vol. II, International Law Commission, United Nations (hereinafter cited as: Report of the 58th
session of the ILC, 2006)

V. Academic Literature

Bodansky, D., Brunnée, J. and Hey E. (2008) Oxford Handbook of International

Environmental Law

Betz, K. and Pieth, M. (2019) Corruption and Money Laundering in International

Arbitration - A Toolkit for Arbitrators, Competence Centre Arbitration and Crime and Basel
Institute on Governance

Brunnée, J. and Streck, C. (2013), The UNFCCC as a negotiation forum: towards common
but more differentiated responsibilities, Climate Policy, 13:5, 589-607
 viii

Nwauche, E.S. and Nwobike, J.C. (2005), ’Implementing the Right to Development’, in:
SUR – Human Rights University Network. International Journal on Human Rights (2005), Year
2, Number 2.

Sengupta, A. (2009), ‘Dams and development: a controversy’, Jamis Millia Islamia (A

Central University)

Warren, G. (2013), ‘Hydropower: Time for a Small Makeover’, University of Houston Law
Center

(d) Statement of Relevant Facts

The State of Costat and the Democratic Republic of Foria are neighbouring States. Costat is

classified as a lower-middle-income economy while Foria is classified as a high-income

economy. President-elect Verlossen launched the Rebuilding Costat Programme (RCP), a

project aiming to restore Costat’s economy. With a view to promoting flourishing economic

relations, the two states have concluded the Business, Environment, and Amical relations
 ix

(BEAR) Treaty governing the investments between Costat and Foria. On 3rd November 2018,

Prime Minister (PM) Green announced during a press conference that Foria will cover the cost

of 30% of the RCP’s first ten projects in order to promote sustainable development as embodied

in the United Nations Declaration on the Right to Development (UNDRTD) and the Rio

Declaration on Environment and Development (Rio Declaration). This declaration was then put

into writing by the distribution of a press release. This announcement was gladly received by

Costat as President Verlossen expressed on 4th November 2018 his eagerness to collaborate

with Foria as well as his confidence that both States will reach an agreement. Therefore, on 11

December 2018, Forian Minister of the Economy Cameron Odnal and Costatian State Treasurer

Liza Warenova met in quality of States’ representatives in Costat’s capital Olloras. The parties

agreed for Foria to cover 30% of the costs of the first RCP project, namely the construction of

a motorway. It was also agreed that the funds would be transferred one week later.

Consequently, on 20 December 2018, Costat’ s government re-allocated certain of its own funds

(which) it had earmarked for the RCP to other government programs. In early January 2019,

the government of Costat launched a public procurement process for the supply of heavy

machinery for various RCP projects. The Forian Resources Administration Corporation

("FraCorp") won the contract even though it was not the most specialized and inexpensive

company in comparison to other multinational construction firms battling it out. On 8 January

2019, President Verlossen of Costat ordered the construction of a new project of the RCP: a

dam to provide electricity in Costat's Southern regions. Costatian Civil engineers recommended

a point along the Nahash River in the middle of the Almontan Shrubland, a mangrove extending

on both parts of the border of Costat and Foria. Following a Pdt Verlossen’s order, a

“Preliminary Feasibility Study and Environmental Assessment” from the National Technical

University of Costat (NTUC) report was published on the 10 March 2019 and indicated the

need for a portion of the mangrove to be cleared as it has only a minimal chance to harm Foria

territory, being over 80 kilometres from Foria’s border. On 17 March 2019, cleaning works
 x

started. On 20 March 2019, Costat State Treasurer reached Forian Minister of Economy to

discuss Foria contributions. On 4 April 2019, Forian Prime Minister Green addressed a letter to

Costatian President Verlossen expressing her concerns on the absence of greenhouse gas

challenge in the NTUC report. Consequently, Forian Prime Minister Green requested to

postpone the construction of the dam. On 9 April 2019, Costatian President Verlossen reassured

FPM Green and stressed the impossibility to postpone the construction of the dam. On 26 April

2019, PM Green issued a press release and declared that Foria will discontinue funding the RCP

on the ground of its alleged lack of environmental consciousness. On May 2019, Foria’s

Minister of Economy is suspected of corruption in his role of Chair of Fracorp. The press based

its argument on the fact that the Minister and Luis Nozena, a lobbyist in Costat, had private

communication on the machinery of Costat government and the decision-makers involved in

the public procurement process who are none other than friends of Nozena. According to the Commenté [CT1]: Peut-être que la phrase est un peu
trop longue
same source, Luis Nozena received his position of Consultant inside FraCorp with an initial

salary of 150 000€. The 28th May of 2019 the Minister of Justice of Costat, Cecilia Lowe

formally charged Minister Odnal of violating the Influence Peddling Act. Foria replied that

Minister Odnal benefits ministerial immunities. The 30th May of 2019, Costatian government

rescinded the contract with Fracorp and declared they would not honour their commitment to

pay machinery. Costat stated in the press that the contract with Fracorp is null and void as it

was concluded by blatant acts of corruption. In addition, BEAR Treaty does not protect such

acts. Fracorp contested this statement by considering that the recission of a contract without

prior notice or due process breaches FraCorp’s rights under BEAR treaty, especially the

prohibition on unlawful expropriation.

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(e) Issues

Costat respectfully asks the Court to decide the following questions:

a) Whether Foria undertook a binding legal obligation to supply 30% of the funding for

each project of the RCP, and, if so, whether that obligation remains in force?

I. Did Foria undertake a binding obligation through a Unilateral Act regarding the

funding of 30% of each RCP project?

A. Does Prime Minister Green’s declaration constitute a Unilateral Act as a clear will to be

bound was expressed?

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B. Is the funding of 30% of each RCP project, constituting a Unilateral Act, binding as Costat

relied on it?

II. Does Foria’s legal obligation to supply 30% of each RCP project remain in force?

A. Did fundamental change of circumstances regarding the Unilateral Act occur?

B. Does Foria’s withdrawal from the Unilateral Act violate customary international law?

b) Whether Costat’s actions relating to the building of the Nahash River dam are in

accordance with international environmental law?

I. Whether Costat’s actions relating to the building of the Nahash River Dam are lawful

as it is a concretisation of the right to development?

A. Does Costat have a right to enhance economic and social development by utilising its natural

resources?

B. As a developing country, does Costat have the right to priorities development over its Commenté [CT2]: Prioritise ?

environmental obligations?

1. Does Costat have a right and duty to improve living conditions?

2. Does Costat have the right to prioritize eradication of poverty?

II. Does the principle of common but differentiated responsibility apply in international

environmental law?

A. Does Costat enjoy a differentiated responsibility in international environmental law?

B. Does Foria have the duty to cooperate with Costat in international environmental law?
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(f) Summary of Arguments

I. Foria undertook a binding obligation through a Unilateral Act to fund 30% of each

RCP project

A. Prime Minister Green's declaration regarding the funding of 30% of each RCP project

constitutes a Unilateral Act

B. Foria's Unilateral Act constitutes a binding obligation to fund 30% of each RCP project

II. Foria's binding obligation to supply 30% of each RCP project remains in force as

conditions to withdraw from a Unilateral Act are not fulfilled

A. Foria’s binding obligation to supply 30% of each RCP project remains in force as no

fundamental change of circumstances occurred

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B. Foria’s obligation remains in force as a withdrawal would be against international customary Commenté [CT3]: Violate ? contrary to?

law

III. Costat’s actions relating to the building of the Nahash River Dam are lawful as it is a

concretisation of the right to development

1. Costat has a right to enhance economic and social development by utilising its natural

resources

2. As a developing country, Costat can legitimately priorities development

3. As the right to development is fundamental, Costat have a right and duty to improve living

conditions

4. Eradication of poverty is Costat first, overriding priority

IV. The application of the principle of common but differentiated responsibility in

international environmental law

A. Costat’s enjoyment of a differentiated responsibility in international environmental law

B. Foria’s obligation to cooperate in international environmental law

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(g) Jurisdiction of the Court

The Heads of State of Costat and Foria agreed the 5th June 2019 on the existence of a dispute.

With regards to Article 36(1) of the ICJ Statute, they submitted the case to the Court on 8

August 2019 by a Special Agreement.

The Parties did not raise questions on the jurisdiction of the Court or on the admissibility of

claims.
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(h) Argument

I. Foria undertook a binding obligation through a Unilateral Act to fund 30% of each

RCP project

A. Prime Minister Green's declaration regarding the funding of 30% of each RCP project

constitutes a Unilateral Act

Defendant argues that PM Green’s declaration constitutes a Unilateral Act (UA) as it is an

expression of will emanating from a State. 1 Indeed, any act of a State organ is attributable to

that State,2 in particular when taken by the State’s rulers.3 As a consequence, heads of

government can bind the State by their statements. 4 Furthermore, a UA’s bindingness depends

on the State's intention to be bound.5 This intention needs to be expressed in clear and specific

terms.6 Thus, the UA becomes binding “immediately upon communication to the addressee”.7 Commenté [CT4]: Verifier la footnote

In the matter of the case, PM Green statement is attributable to Foria as it was expressed by the

head of that State. Moreover, the declaration was made with the explicit intent to reach a

settlement. Indeed, a will to be bound was expressed in clear and specific terms by the

1
Article 1 of Guiding Principles applicable to unilateral declarations of States capable of
creating legal obligations, Report of the 58th session of the ILC, 2006
2
Article 4 (1) of the ARSIWA

3
Salvador Commercial Company, p.477
4
Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Rwanda),
para. 47; Nuclear Tests, para. 43

5
Case concerning the Frontier Dispute (Burkina Faso v. Republic of Mali), para. 39

6
Nuclear Tests, para. 45; Armed Activities on the Territory of the Congo (Democratic Republic
of the Congo v. Rwanda), para. 50, 52, or “serious and unequivocal”; Case concerning the
payment of Various Serbian Loans issued in France, p. 39

7
Legal Status of Eastern Greenland, Dissenting Opinion of Judge Anzilotti, para. 91; Case
Concerning Certain German Interests in Polish Upper Silesia, p.13
 2

quantification of funds participation for a precise number of infrastructures.8 Furthermore, by

addressing Costat as well as President Verlossen, PM Green directly communicated this will to

be bound to the addressee. Therefore, the declaration of PM Green constitutes a UA as it is an

expression of will emanating from a State.

B. Foria's Unilateral Act constitutes a binding obligation to fund 30% of each RCP

project

Defendant argues that Foria’s UA is binding as Costat deeply relied on it. Indeed, good faith is

a general principle of international law, 9 one that asks for consistency in States’ behaviour. 10 Commenté [CT5]: Pas de paragraphe pour le Bering
Arbitration
Thus, a clear and unequivocal representation of the obligation entitles another State to rely on

it.11 Moreover, it has been determined by the ICJ in the Nuclear Tests case that such a principle

apply to UA : «Just as the very rule of pacta sunt servanda in the law of treaties is based on

good faith, so also is the binding character of an international obligation assumed by unilateral

declaration ».12

In the matter of the case, a high degree of confidence was shared between Foria and Costat. A

trust testified by the express support of Foria in Costat new government as well as President

Verlossen «vision for his country ».13 This resulted in a political and economic alliance,

embodied in a treaty to “establish a lasting spirit of friendship in the region”. 14 Indeed, not only

the extent of Foria’s engagement was clear and unequivocal, allowing Costat to rely on it. In

8
Para. 8 of the case
9
Article 26 VCLT
10
Bering Sea Arbitration; Nuclear Tests, para. 46; Case obligations concerning negotiations
relating to cessation of the nuclear arms race and to nuclear disarmament (Marshall Islands v.
United Kingdom), Memorial, para. 175
11
Case concerning the payment of Various Serbian Loans issued in France, p. 38, 39

12
Nuclear Tests, para.46
13
Para. 8 of the case
14 Conclusion on 2 October 2018 of the BEAR Treaty; Para. 6 of the case
 3

addition, the establishment of amicable relations between the two States, compelled Costat to

presume in its neighbor’s good faith and thus, to rely on its engagement. Consequently, Costat

reallocated funds to other governmental programs following PM Green’s declaration.

Therefore, Costat legitimately relied on Foria’s engagement to fund 30% of each RCP project

as it constitutes a legally binding obligation.

II. Foria's binding obligation to supply 30% of each RCP project remains in force as

conditions to withdraw from a Unilateral Act are not fulfilled

A. Foria’s binding obligation to supply 30% of each RCP project remains in force as no

fundamental change of circumstances occurred

Defendant argues that Foria’s obligation is still in force as no fundamental change of

circumstances (FCC) has occurred. While FCC is a common condition for withdrawal, it has to

be determined that circumstances changed since the act was adopted and that such

circumstances could not be foreseen by the author of the act. 15 Furthermore, it has been

determined by the ICJ that passiveness in light of certain facts is “indicative of tacit consent”. 16 Commenté [CT6]: Footnotes à revoir car pb de
numérotation de page : [Link]
[Link]/public/files/case-related/45/045-19620615-JUD-
Indeed, States cannot invoke invalidity when, by conduct, they implicitly agreed on the facts. 17 [Link]

In the matter of the case, Foria interrupted its monetary support in response to the building of

the Dam. However, the construction of a hydroelectric dam was part of the RCP project from

the start, an information well-known from PM Green in time of her declaration.18 Therefore, by

adopting a passive behaviour, Foria implicitly agreed to those terms. Thus, it can no longer

invoke invalidity based solely on those facts. Moreover, it was public knowledge that only two

15
Article 62 of the VCLT; Gabčíkovo-Nagymaros Project, para. 104; Case Fisheries
Jurisdiction, (United Kingdom of Great Britain and Northern Ireland v. Iceland), para. 36, 37
16
Case Concerning the Temple of Preah Vihear (Cambodia v. Thailand) (merits) [1962] ICJ,
6, (Separate Opinion of Judge Alfaro) 40.

17 Article 45 VCLT

18 Clarification 4
 4

rivers were suitable for such a project, it could then have been foreseen that the location chosen

would be the ‘Nahash river’.19 Therefore, Foria remains bound by its obligation as no FCC has

occurred.

B. Foria’s obligation remains in force as a withdrawal would be against international

law

Defendant argues that a withdrawal would be against international law. Indeed, it has been

determined by international jurisprudence that “a binding unilateral act stands on the same

footing as a treaty”. 20 Therefore, withdrawal is only possible “in conformity with the

provisions of the treaty” or “by consent of all the parties”. 21 Moreover, an obligation of written

notification lies on the party that wishes to withdraw.22 Indeed, an unilateral withdrawal would

be arbitrary, thus in breach of the principle of good faith. 23 Commenté [CT7]: Checker footnote

In the matter of the case, neither conditions of withdrawal are specified in the UA, nor did the

parties agree on its termination. Moreover, Foria failed to notify its claim in written form. Thus,

Foria’s withdrawal is illegal as it contravenes with good faith, core principle of international

law. Therefore, Foria’s obligation is still in force.

b) Does Costat’s actions relating to the building of the Nahash River Dam violate

international environmental law?

I. Costat’s actions relating to the building of the Nahash River Dam are lawful as it is a

concretisation of the right to development

19
Clarification 7
20
Advisory opinion Concerning the Status of Eastern Carelia, p. 26
21
Art. 57 VCLT; Pulp Mills para. 141; Report of the 18th session of the ILC, 1966 p. 251,
article 54
22 Art.65 VCLT; Art.67 VCLT
23 “Pacta Sunt Servanda” Art. 26 VCLT
 5

A. Costat has a right to enhance economic and social development by utilising its natural

resources

Defendant argues that as a sovereign State, Costat rightly utilised its natural resources to

improve the living situation of its population.24 While electricity is essential to social and

economic development, the construction of a hydroelectric dam represents the best option for a

developing country. Affordable, it also offers reliability as it is « green efficient ».25

Indeed, dams provide an expansion of irrigated agriculture, allow for self-sufficiency in food,

supply water, and properly heat homes.26 Moreover, it has been determined by the ICJ that the

right to adequate housing should be granted to populations.27 A clear link is drawn between

adequate housing and providing electricity.28

Applied to the current case, it transpires that Costat has a right to utilise its natural resources to

grant adequate housing and growth opportunities to its population. Indeed, the location for the

dam was chosen to provide quickly and efficiently electricity in the southern regions.29 The

construction of the Dam was then clearly motivated by the will to enhance economical and

social development in a region in need. Therefore, Costat legitimately used its natural

ressources.

B. As a developing country, Costat can legitimately priorities development

1. As the right to development is fundamental, Costat has a right and duty to improve

24
Principle 21 Stockholm Declaration; Principle 2 of the Rio Convention
25Warren, G. (2013) ‘Hydropower: Time for a Small Makeover’, University of Houston Law
Center.
26 Sengupta, A. (2009) ‘Dams and development: a controversy’, Jamia Millia Islamia (A Central
University)
27
Sarrahwitz v Maritz N.O. and Another, Para 41; SERAC v. Nigeria African Commission,
Para. 63; Decision n°94-359 DC, Para. 7
28 UN Fact Sheet No. 21
29 Case para.14
 6

living conditions

Defendant argues that the right to development (RTD) is fundamental, granting rights and

imposing obligations on States.30 Indeed, the RTD draws its legal foundation from binding

human rights covenants, holding then an undeniable position in international law.31

Furthermore, States showed their commitment toward the realisation of such a right, 32 and

have the duty to adopt policies aiming to the improvement of the well-being of their

population.33 More than a duty, States have “the primary role and ultimate responsibility” to

ensure the well-being of their population by notably adopting social development measures.34

It should also be noted that States choose freely objectives of social development as well as

means and methods of achievement, without external interference. 35

Indeed, by exercising their right to self-determination,36 people can freely determine their

political status as well as pursue their economic and social development. 37

Costat as a State, has the obligation to take measures for the realisation of its population’s right

to development. Indeed, the government’s order to construct Dam is a realisation of the State's

right and duty to improve its citizen’s living conditions. It is a measure that should not be

30
“the right to development is a legal human right, grounded in moral norms but reaffirmed as
a legal right in international law” (Arjun Sengupta, Development as a Human Right: Legal,
Political and Economic Dimensions (2006)). As a legal human right, it imposes positive
obligations on States, thus to take measures for the realisation of that right.

31
ICCPR
32 Vienna World Conference on Human Rights of 1993; Millennium Declaration of 2000
33 Art.2§3 Declaration on the Right to Development; Article 11 of the ICESCR
34 Article 8 of the Declaration on Social Progress and Development
35
Article 3(e) of the Declaration on Social Progress and Development
36 Article 1 UN Charter
37 Art. 1§1 ICCPR; Art.1 ICESC
 7

questioned by another State as by determining policies of social and economic development,

Costat is exercising its right to self-determination.

2. Eradication of poverty is Costat first, overriding priority

Defendant argues that eradication of poverty is Costat’s first, overriding priority. Indeed,

States have the “essential task” to work toward such a goal.38 Furthermore, economic growth

and eradication of poverty is recognized by international environmental law as “overriding

priorities” for developing countries.39

In the matter of the case, Costat was in the urgency to provide electricity in the southern regions,

thus the location of the Nahash river was chosen. While Costat abides by its environmental

obligations, providing an adequate standard of living to its population remains its first priority.

A priority that has also been devoted by international environmental law, a testament of the

global recognition of the precedence of development for developing countries. Therefore,

Costat legitimately prioritize its population’s social and economic development.

II. The application of the principle of common but differentiated responsibility in

international environmental law

A. Costat’s enjoyment of a differentiated responsibility in international environmental

law

Defendant argues that as a developing country, Costat enjoys a differentiated responsibility in

international environmental law.40 A principle that offers a more nuanced approach to

international environmental efforts, one that acknowledges the deep inequalities between, and

38 Principle 5 of the Rio Declaration

39 Preamble of the UNFCCC; Article 4(7) of the UNFCCC; Article 12(1) of the BEAR treaty
40 Article 3(1) of the UNFCCC; Article 4(1) of the UNFCCC; Article 10 of the Kyoto Protocol
 8

differing priorities of, developed and developing countries.41 Moreover, this differentiated

responsibility results from different participation in the current climate crisis.42 As a result, it

would neither be equitable nor practical to impose equal requirements on all States. 43

In the matter of the case, Costat’s environmental engagements need to be balanced in view of

its need for economic and social development. As a developing country with a struggling

economy, Costat enjoys a differentiated responsibility that allows a comprehensive

implementation of his obligations to protect the climate. Reaffirmed by International

environmental law, a distinction needs to be made between developing countries and developed

countries.

B. Foria’s obligation to cooperate in international environmental law

Defendant argues that Foria, as a developed country, has a duty to cooperate with Costat.

Indeed, the RTD is also rendering legal obligations on developed States.44 Only by the

promotion of a new international economic order, based on sovereign equality,

interdependence, common interest and cooperation, can States achieve the RTD.45 Therefore,

States have a duty to cooperate in order to diminish inequalities between them. 46 States showed

their engagement toward such a goal with the adoption of an agenda to “Reduce inequalities

among countries”.47

41
Brunnée, J. and Streck, C. (2013) The UNFCCC as a negotiation forum: towards common
but more differentiated responsibilities, in: Climate Policy
42 Principle 7 of the Rio Declaration
43 Ibid. 14
44 Nwauche, E.S. and Nwobike, J.C. (2005) ’Implementing the Right to Development’ in: SUR
– Human Rights University Network. International Journal on Human Rights

45
Article 3(3) UNDRD
46 ibid
47
“The agenda for sustainable development”, UN 2015
 9

In the matter of the case, as a developed State, Foria has a responsibility to cooperate with

developing countries. When it can be argued that Foria is currently failing to meet this

obligation of cooperation, Foria’s decision to interrupt its funding of the RCP project also had

the adverse effect of challenging Costat’s attempt to develop. Therefore, Foria is in breach of

its obligation to cooperate under international environmental law.

(i) Submissions

(e) Issues

III. Whether the criminal proceedings initiated against Minister Cameron Odnal violate
immunities to which he is entitled under international law?
1. Are the criminal proceedings initiated against Minister Cameron Odnal violate
immunities under which he is entitled under international law?
a. Could Minister Odnal benefit from state immunity?
i. Could Minister Odnal benefit from ratio personae immunity?
ii. Could Minister Odnal benefit from ratio materia immunity?
IV - Whether, by rescinding the contract awarded to FraCorp, Costat has violated the BEAR
Treaty’s provision on expropriation?
1. Does the recognition of corruption in the relationship between FraCorp and Costat allow
termination of the contract?
1.1 Is there any evidence of corruption between FraCorp and Costat?
1.2 Does the burden of proof fall on Costat regarding the rescinding of the contract when there
is corruption?
 10

1.3 Does the corruption between FraCorp and Costa correspond to influence peddling, provided
for in article 18 of the UNCAC?
1.4 Are there any negative consequences due to corruption on the contract, the BEAR treaty
and the legal rights of FraCorp?
1.4.1 What are the consequences of influence peddling on the contract between FraCorp and
Costat?
1.4.2 What are the consequences of influence peddling on the BEAR Treaty?
1.4.3 Because of termination of the BEAR Treaty, did FraCorp still protect by the BEAR
Treaty?
1.4.5 Was the expropriation legal?

(f) Summary of arguments

III. Criminal proceedings initiated against Minister Cameron Odnal do not violate his
immunities under which he is entitled under international law due to its corruption.
3.. Criminal proceedings against Minister Cameron Odnal do not violate immunities to
which he is entitled under international law
b. Minister Odnal cannot benefit from the immunities provided for state officials
i. Minister Odnal cannot benefit from ratio persona immunity
ii. Minister Odnal cannot benefit from ratio materiae immunity

IV. The acts of corruption exercised by FraCorp make the contract null between FraCorp and
Costat, end the effect of the BEAR Treaty for this investment and make FraCorp lose its legal
rights
A. The recognition of corruption in the relationship between FraCorp and Costat
justifying the rescinding of the contract
1. The acts of corruption are recognized through "the red flag” system
2. The specific case of indirect corruption between FraCorp and Costat : Article 18
of the UNCAC provides the influence peddling
B. Consequences of corruption and especially influence peddling on the rescinding of
the contrat, on the BEAR Treaty and on the FraCorp’s legal rights
 11

1. The contract between FraCorp and Costat is cancel

2. Termination of the effect of BEAR Treaty
3. Consequences of termination of the BEAR Treaty - No legal protection by the
BEAR Treaty for FraCorp since the investment was concluded on the basis of
corruption
4. A lawful expropriation made by Costat on the ground of the « clean hands »
doctrine

(g) Jurisdiction of the Court

(h) Argument

III. CRIMINAL PROCEEDINGS INITIATED AGAINST MINISTER ODNAL DO NOT

VIOLATE HIS IMMUNITIES TO WHICH HE IS ENTITLED UNDER
INTERNATIONAL LAW DUE TO ITS CORRUPTION

2. The non-application of the immunities provided for by international law regarding

the status and function of the Applicant

A. Ratione personae immunity cannot be applied to a Minister of the Economy

Defendant argues Minister Odnal does not benefit from the ratione personae immunity

because Minister Odnal is accused by the Defendant of corruption in his capacity as Chair of

Fracorp.48 For that, he has been the subject of an arrest warrant. 49

48 Telder case, para. 11

49 Telder case, para
 12

Pursuant to art.25 of the BEAR Treaty, the immunity of public officials is acquired “[to

the extent required under customary international law]”. 50 Immunity means a privilege of

exemption, suspension or non-applicability of the exercise of jurisdiction by the competent

authorities of a territorial State.51 Ratione personae immunity extends to acts performed by a

State official both in an official capacity and in a private capacity. 52 The gravity of a crime of

corruption can lead to the limitation of the right to immunities.53 Indeed, in the Arrest Warrant

case, the Court rules on the rank of state agent in order to determine whether it is high enough

to benefit from ratione personae immunity.54 In principle, in international law, this right is

conferred on three persons: The Head of State, Head of Government and Minister of Foreign

Affairs.55

The capacity of the Minister of the Economy as a state agent cannot be considered

sufficiently high as it cannot be extended to that limited to the three top executives.56

The Applicant's status does not allow him to benefit from the absolute immunity that is

ratione personae.

B. Ratione materiae immunity cannot cover acts exceeding the official function

Defendant argues Minister Odnal does not benefit from rationae materiae immunity

because Minister Odnal is accused by the Defendant of corruption in his capacity as Chair of

Fracorp.57

Article 25, Chapter IV, Business, Environment and Amicable Relations (BEAR)
50

Treaty, 2 October 2018

51 Yearbook of the International Law Commission, vol. II (Part 1) [1980]

52 Arrest Warrant (Democratic Republic of the Congo v. Belgium), ICJ [2002]
53 A. Fortas, Corruption and immunities: questions about the fight against impunity, European

Society of International Law [2016]

54 Arrest Warrant (Democratic Republic of the Congo v. Belgium), ICJ [2002]
55 Article 7 (2) (a), Vienna Convention on the Law of Treaties [1969]
56 H. Ascensio, B. I. Bonafe, The Lack of Immunity of State Agents in International Crime:
Why Still Debate ?, Revue générale de droit international public, [2018]
57 Telder case, para. 11
 13

According to art.25 of BEAR Treaty, he immunity of public officials is acquired “[to

the extent required under customary international law]”.58 Ratione materiae immunity covers

only acts performed in an official capacity, that is to say within the framework of the exercise

of official functions.59 The international custom does not extend the functional immunity of a

State official to acts performed outside of the official functions. 60 By way of example, European

law provides that an arrest warrant may be issued for acts punishable by the law of the issuing

Member State or for offenses such as corruption or fraud.61 In the American system, an arrest

warrant is issued when there is a probable cause of crime such as corruption. 62

In the matter of the case, Minister Odnal has an immunity from the official functions he

occupies, as provided by the BEAR Treaty. 63 The alleged act of corruption was carried out

within the framework of his function as Chair,64 therefore in his personal capacity. So, he cannot

invoke ratione materiae immunity. Moreover, the reasons which prevent the applicability of

immunity ratione personae notably deprive him of immunity ratione materiae65. Indeed, if this

act is not included in the scope of functional immunity, 66 it cannot be covered by the BEAR

Treaty and the Minister may engage his responsibility. An arrest warrant was issued against

Minister Odnal on May 28, 2019.67 Indeed, corruption is one of the categories of serious crimes

Article 25, Chapter IV, Business, Environment and Amicable Relations (BEAR)
58

Treaty, 2 October 2018

59 Report of the International Law Commission – Sixty-third session [2011]
60 Arrest Warrant (Democratic Republic of the Congo v. Belgium), ICJ [2002]
61 2002/584 / JHA: Council Framework Decision of 13 June 2002 on the European arrest

warrant and the surrender procedures between Member States - Statements by certain
Member States on the adoption of the framework decision
62

Article 25, Chapter IV, Business, Environment and Amicable Relations (BEAR)
63

Treaty, 2 October 2018

64 Telder case, para. 11
65 Nezzar, Federal Criminal Court (Switzerland), judgment of July 25, [2012]
66 Arrest Warrant (Democratic Republic of the Congo v. Belgium), ICJ [2002]
67 Questions for clarification 2021, question (8)
 14

reprehensible on the territory of Costat.68 So, performing such an act, Minister Odnal cannot be

protected by this immunity.

Thereby, since functional immunity does not cover acts having a personal interest,69

Minister Odnal cannot enjoy his immunity. The Costatian government can thus carry out the

criminal proceedings against him without violating its right to immunity.

C. Immunity of Minister Odnal does not prevent from impunity

Defendant argues Minister Odnal does not benefit from immunity according to the

seriousness of his crime. Applicant Minister of Economy, Minister Odnal is accused of

corruption, nonetheless, he is entitled to immunity.70 Nevertheless, immunity is more and more

set aside to punish corruption.71 Commenté [MT8]: METTRE DANS LA LISTE DES
SOURCES
-Resolution 1/17 Human rights and the fight against
Even though Applicant Minister of Economy is entitled to immunity regardless of the impunity and corruption, September 12, 2017 ; Court of
Constitutionality, Case File 4182-2017, August 29, 2017
act of corruption, this immunity can be lifted. There is a need to have a balance between

immunities and possibility to effectively investigate and prosecute72 and the possibility to

remove, suspend or erasing the public official. 73 Corruption is considered to be a serious crime

that needs to be punished and where immunity has to be set aside, as the International Law

Commission said in its 2017 Reports.74 Besides, the ICJ also states on the immunity of State

officials,75 which prove the will of the international community to try to set aside immunity.

The ICJ provides that “the immunity from jurisdiction enjoyed by incumbent Minister for

Foreign Affairs does not mean that they enjoy impunity in respect of any crimes they might have

68 European Parliament resolution of 27 February 2014 containing recommendations to the

Commission on the revision of the European arrest warrant (2013/2109 (INL))
69 United States Diplomatic and Consular Staff in Tehran (United States of America v. Iran),

Judgment, I.C.J. Reports, [1980]

70 Telders case para.25

71 Resolution 1/17 Human rights and the fight against impunity and corruption, September 12,

2017 ; Court of Constitutionality of Guatemala, Case File 4182-2017, August 29, 2017
72 Article 30 para.2, UNCAC [2004]

73 Article 30 para.6, UNCAC [2004]

74 International Law Commission, Report A/72/10, GE.17-13796 p172, project of article 7

75 Arrest Warrant (Democratic Republic of the Congo v. Belgium), ICJ [2002]

 15

committed, irrespective of their gravity”.76 Furthermore, the practice has shown a tendency to

consider the commission of international crimes as one of the grounds for non-application of

immunity ratione materia.77 Additionally, some members of the International Law Commission Commenté [MT9]: METTRE DANS LA LISTE DES
SOURCES
- Report of the International Law Commission of
points out that domestic courts have often denied immunity to authors of corruption offences, 2017

that many States have adopted laws to prevent and punish such crimes.78 Commenté [MT10]: METTRE DANS LA LISTE DES
SOURCES
- Inter American Convention Against Corruption 1999
In the present case, Minister Odnal uses his immunity to evade responsibility for - OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transaction
criminal offences.79 Nevertheless, Applicant State pursuant article 30 paragraph 2 can prosecute 1997

Applicant Minister.80 Moreover, according to article 30 paragraph 6, Applicant State can also

revoke his minister, so he will no longer enjoy immunity and could be prosecuted. 81 Defendant

State can also pursue the Minister because his jurisdictional immunity “do not represent a bar

to criminal prosecution”.82 Indeed, Defendant State can prosecute Minister Odnal even with his

immunity.83

Hence, criminal proceedings do not violate the Minister's immunity. It is an international

trend to minimise or even abolish immunities to improve the punishment of corruption

crimes.8485

76 Arrest Warrant (Democratic Republic of the Congo v. Belgium) ICJ, [2002], para.60
77 International Law Commission, Report A/72/10, GE.17-13796 p175
78 Inter-American Convention Against Corruption [1999], Article I, Article III ; OECD

Convention on Combating Bribery of Foreign Public Officials in International Business

Transactions [1997], Article 1, Article 3
79 Immunity provisions for ministers and members of parliament, Transparency International,

[2018], p1
80 Article 30 para. 2, UNCAC [2004]

81 Article 30 para. 6, UNCAC [2004]

82 Arrest Warrant (Democratic Republic of the Congo v. Belgium) ICJ, [2002], para. 61

83 La Cour Internationale de Justice : commentaires de jurisprudence, Revue québécoise de

droit international, [2002], volume 15-2, p147

84 State of implementation of the United Nations Convention against Corruption,

Criminalization, law enforcement and international cooperation, UNODC (hereinafter United

Nations Office on Drugs and Crime), 2017, p109
85 There is an increasing need to uphold the integrity of public administration and to

strenghten democracy in the international scene. The several conventions against corruption
drastically added some changes to the traditional definitions of corruption. Stessens, Guy, The
international fight against corruption, Revue internationale de droit pénal, p.891-937, 2001
 16

IV. THE ACTS OF CORRUPTION EXERCICED BY FRACORP MAKE THE

CONTRACT NULL BETWEEN FRACORP AND COSTAT

FraCorp's actions are recognized as corruption through the red flag. It justifies that the contract
between Costat and FraCorp is null and the loss of FraCorp's legal protection vis-à-vis the
BEAR treaty.

A. The recognition of corruption in the relationship between FraCorp and Costat

justifying the rescinding of the contract
1. The specific case of indirect corruption between FraCorp and Costat : Costat’s
law provides the influence peddling

Defendant argues that the corruption exercised by FraCorp is indirect, it is akin to influence
peddling according to Costat’s Influence Peddling Act.

According to the BEAR Treaty, Article 4 of Chapter 2, concerning investments, the applicable
law is the one of the host state. 86 Costat's Influence Peddling act which takes Article 18 of the
UNCAC in trading in influence stipulates: “The promise, offering or giving to a public official
or any other person, directly or indirectly, of an undue advantage in order that the public official
or the person abuse his or her real or supposed influence with a view to obtaining from an
administration or public authority of the State Party an undue advantage for the original
instigator of the act or for any other person.”.87 The United States, a country with a strong
lobbying industry, has acknowledged influence peddling in the case of lobbyist Jack
Abramoff.88

In the present case, the company's investment is made in Costat so Costat's law apply. 89
According to the commentary of Article 18 aforementioned, two elements are necessary to
recognize indirect influence, the Actus Reus and the Mens Rea.90 There is the Actus Reus, Luis
Nozena was paid to influence his friends in the government in order to give the public contract
to the company FraCorp. 91 This initial payment is indicative of the crime, it is an undue
advantage. Moreover there is the Mens Rea, Cameron Odnal intended to hire Luis Nozena to
abuse his influence for the benefit of his company FraCorp. There is evidence of communication
between Cameron Odnal and Luis Nozena where Nozena talk about Costat’s government
functioning, the name of the person involved in the public procurement process and the fact

86 BEAR Treaty
87 Telders 2021, §4
88 Lessig, Lawrence, Reply to Professor Hasen, A [comments], (Harvard Law Review Forum,
Vol. 126, pp. 61-74, 126 Harv. L. Rev. F. 61) 2012-2013
89 Telders case §12

90 Aloysius, Llamzon, The United Nations Convention Against Corruption: A Commentary,

(Oxford Public International Law, Edited By: Cecily Rose, Michael Kubiciel, Oliver
Landwehr, [Link] Criminalization and Law Enforcement, art. 18: Trading in Influence) page
13, 04 February 2019
91 Telders case 2021, §23
 17

that he was a childhood of some Costatian government officials. 92 Therefore, Nozena has a
privileged relationship with the people involved in the public procurement process.

FraCorp's behavior, and especially FraCorp’s Chair, meets the conditions of Costat’s Influence
Peddling act which takes Article 18 UNCAC. There are undue advantage and undue influence
which prouve there has been influence peddling.

2. The acts of corruption are recognized through the system of "the red flag"

Denfendant argues it is possible to find influence peddling in the act of FraCorp through the
system of “the red flag”.93 When concluding the investment contract between FraCorp and
Costat, there is circumstantial evidence that demonstrates that FraCorp has engaged corruption.

Through the red flags system94 it is possible to identify corruption.95 A red flag is a fact,
circumstances, or information that may indicate a potential legal compliance concern for illegal
or unethical business conduct.96 The more there are, the greater the probability that there has
been corruption. After identifying the "red flags", it is possible to adopt a "connect-the-dots"
approach, that is, to link the circumstantial evidence to show that there has been corruption.97
Such circumstantial evidence has been used in international case law to establish corruption, in
Metal-Tech case, Sorelec v Libya and Spentex Netherlands v Republic of Uzbekistan.98 In
Metal-tech case, it was estimated that the fact that the brother of the former Prime Minister of
Uzbekistan was hired when he had no experience in this field requires the conclusion that Mr.
Sultanov was paid to use his family relationship to facilitate the creation of Metal-Tech's
investment in Uzbekistan. In Spentex case, the court determined that a payment to the public
official the day before the public tender proved it was a bribe.99

In the matter of the case, there are some circumstantial evidences and “dots” demonstrate
corruption. Firstly, there is an advisor who has a lack of experience in the sector because Luis
Nozena is not qualified for the consultant position offered by FraCorp. Although he is a

92 Telders case 2021, §22

93 Using ‘Red Flag’ Indicators to Identify Corruption and Analyse Reform Efforts in the
Procurement Process, Global Integrity Anti-Corruption Evidence (2019)
[Link]
94 Common Red Flags of Fraud and Corruption in Procurement, World Bank,

[Link]
of-fraud-and-corruption-in- procurement.
95 Betz, K. and Pieth, M. (2019) Corruption and Money Laundering in International

Arbitration - A Toolkit for Arbitrators, Competence Centre Arbitration and Crime and Basel
Institute on Governance p.7-8
96 Integrity Vice Presidency (INT) (2019), Warning Signs of Fraud and Corruption in Procurement in
World Banck Group
97 Beale, K. Roughton, D. (2019) The international Comparative Legal Guide to: Investor-State

Arbitration, 1st edition, published by Global Legal Group

98 Sorelec v Libya, Paris Court of Appeal, N°RG18/07347 (2020): The fact that a state official
accepted a contract that was not in the best interests for his state can prove that he signed the
contract because he accepted a bribe.
99 Spentex Netherlands, B.V. v. Republic of Uzbekistan, ICSID Case (No. ARB/13/26)
 18

lobbyist, he has absolutely no knowledge of construction or public works.100 Fictitious

employment contracts serve as a vector of corruption and the post of « consultant » 101 is the one
that comes up the most in this type of scheme. 102
Additionally, the company lacks experience in the sector because it was selected to supply
machinery for a wide range of public works projects while it is only specialized in construction
machinery for extraction of minerals. 103 Other companies competing were more qualified than
it for this public tender. Then there is a questionable invoice. Indeed, Luis Nozena received an
"initial payment" of 150,000 € for a consultant position for the company FraCorp 104 when the
average salary of a consultant is between 95,000 and 125,000 € per year. 105 This payment helps
to enlighten that even considering this is a real post, it is clear this amount has been inflated.
By performing the connect-the-dots technique, this invoice is all the more doubtful as it was
made two days before the start of the public procurement process,106 same deduction as that
made in Spentex case.107

There is a close personal relationship with the government that could improperly influence the
awarding of public contracts.108 In private communications with the president of FraCorp,
Cameron Odnal, Luis Nozena explained that he knows the ins and outs of government. Actually
he “was a childhood friend of several Costatian government officials involved in the public
procurement process”.109 It should be noted that Nozena had been involved in the awarding of
public contracts.110 And two days after the decision of the government to give the public
contract to FraCorp, the company chose to make the « initial payment" to Nozena. FraCorp won
the public contract even though it was not the cheapest company, nor the one that would supply
the machines as quickly as possible and it was not specialized in this work field, it won this
contract thanks to corruption. It remains the Metal-Tech case, Nozena and Cameron Odnal are
not brothers but their closeness makes it possible to establish a bribe.

In all likehood, The Constat’s judicial authorities come to the same conclusion that the
circumstantial evidences enlighten corruption by issuing an arrest warrant against Minister
Odnal.111

100 Telders 2021, §22

101 Invalidity of Contract due to Bribery, Cologne, Prof Dr Klaus Peter Berger, LL M. ,.
University of, et Klaus Peter Berger. Principle IV.7.2
102 David Lawler, Frequently Asked Questions in Anti-Bribery and Corruption, p. 381
103 Telders case 2021, §23
104 Telders case 2021, §23
Ritter, Sébastien. « All About Management Consulting Salaries (2020) ». Career in
105

Consulting, 24 mai 2020, [Link]

106 Telders case 2021, §23
107Spentex Netherlands, B.V. v. Republic of Uzbekistan, ICSID Case (No. ARB/13/26)
108« The Master List of Third-Party Corruption Red Flags ». Corporate Compliance Insights,
7 février 2014, [Link]
corruption-red-flags/.
109 Telders 2021, §22
110 Telders case 2021, §22
111 Questions for clarifications, question 8
 19

There is corruption because three red flags can be identified in FraCorp’s behavior toward
Costat.

B. Consequences of corruption and especially influence peddling on the rescinding of

the contract, on the BEAR Treaty and on the FraCorp’s legal rights
The consequence of influence peddling is that it rendered the contract between FraCorp and
Costat null and void and dispossess FraCorp of its rights to protection guaranteed in the bilateral
BEAR treaty.

1. The contract between FraCorp and Costat is null and void

Defendant argues that, by using corruption to get its way and investment, FraCorp breached
Costat’s Influence Peddling Act which takes Article 18 UNCAC and an international public
policy that is recognized « in most, if it’s not all States ».112
In the case “Duty Free v. Kenya” of the 4 October of 2006, the ICSID recognized that an act of
corruption from public agents of the State constitutes an obstacle to fulfil the legitimate
expectations, the FET clause, of the other party.113 Thus, Costat’s legitimate expectations about
the BEAR treaty were violated by Foria, which means that the behaviour of Costat toward the
BEAR treaty is rightful.114 The commentary of Article 18 of the UNCAC states that trading in
influence will lead to the presumption of a contract obtained through undue influence, the
consent of the State is therefore tainted. 115 In the World Duty Free v Kenya decision judgment,
corruption is considered as violation to international public order and good morals 116, it has
disastrous effects on trade, which is why this justifies the annulment of an act that has force of
law. 117 A transnational public policy is « the general principles of morality accepted by

112World Duty Free v Kenya (2006) at 157. See discussion in Betz (2017) at 21 & 75 et seq;
Kreindler R (2010) Corruption in International Investment Arbitration: Jurisdiction and the
Unclean Hands Doctrine in Hober K et al (eds) Between East and West: Essays in Honour of
Ulf Franke Huntington: JurisNet Publishing at 309; Losco (2014) at 1223
113
ICSID, World Duty Free Company Limited v. Kenya, 4 October 2006, , ARB/00/7, para. 179

114 Telder case, para. 6

Llamzon, A. ”Ch. III Criminalization and Law Enforcement, Art. 18: Trading in Influence” by Oxford
115

Public International Law p. 192

116 Alexis Blois, Contracts and Corruption: Kickbacks and Claimants, 2008 INT'l Bus. L.J.
459 (2008)
117 World Duty Free Company v Republic of Kenya, 2006, ICSID (No. Arb/00/7)
 20

civilized nations ».118 And it shown through national jurisprudence119 and also by the
ICSID120 that trading on influence have a bad impact and a corrosive effect on the attractiveness
of a country in driving future investors away and that it must bear consequences. In international
private law there is a clear ambition to clarify the repercussions created by the corruption of
one party121. Indeed, the Civil Law Convention Article 8 (2) wants to affirm the fact that civil Commenté [e11]: METTRE DANS LA LISTE DES
SOURCES
law tools are usable against corruption especially with the ability to render contracts void. There
is the idea of contractual balance to restore. Moreover, in the Merida Convention which is
adopted by the Assembly General of the UN in 2003 holds the existence of corruption or bribery Commenté [e12]: METTRE DANS LA LISTE DES
SOURCES
to be determining factor in the validity of a contract.

In the matter of the case, since it was influence peddling that led to the signing of the contract
between FraCorp and Costat, the consent of the state of Costat has been tainted during the
public procurement process and the effect of such a conclusion on the validity of the contract
is its annulation.122 Due to its paste economic and political difficulties 123, Costat can
not afford an investor to be the cause of its setback. 124
Then, the infringement of transitional public policy but also international customs by
corruption is recognized to be a worldwide issue by the ICSID and the doctrine but it is also
written in national texts. Therefore, FraCorp acts have consequences, the investment has been
unlawfully established which leads to the annulment of the contract on the basis of its
international obligation. The violation of such a policy nullifies a contract because it breaches
the company’s international obligations and creates moral issues.

118
International Law Association (2000) Report on the Sixty-Ninth Conference London at
345.
119 Swiss Federal Court in the case G. v. L., lère Cour civ., 22 July 1980, résumé, Semé jud.

103 (1981), 192; SAS 53 (1981) para.69 (the contract is null and void because the purchase of
the illegal influence of a party upon a third person was against “good morals”
120
World Duty Free v Kenya (2006) at 157. See discussion in Betz (2017) at 21 & 75 et seq;
Kreindler R (2010) Corruption in International Investment Arbitration: Jurisdiction and the
Unclean Hands Doctrine in Hober K et al (eds) Between East and West: Essays in Honour of
Ulf Franke Huntington: JurisNet Publishing at 309; Losco (2014) at 1223
121
Carlos F. Concepcion, Combating Corruption and Fraud from an International Arbitration
Perspective, 11 Disp. Resol. INT'l 23 (2017)
122 Aloysius, Llamzon, The United Nations Convention Against Corruption: A Commentary,

(Oxford Public International Law, Edited By: Cecily Rose, Michael Kubiciel, Oliver
Landwehr, [Link] Criminalization and Law Enforcement, art. 18: Trading in Influence) pages
10-11, 04 February 2019
123
Tedler para.3
[Link]-manu. Anti-Corruption Module 4 Key Issues: Corruption in Public Procurement.
//[Link].
 21

2. The end of the effect of the BEAR Treaty for this investment based on influence
peddling

Defendant argues the influence peddling has for consequence to terminate the effect of the
BEAR Treaty for this investement between Costat and FraCorp.

In international custom, an adage is often used, "clausula rebus sic stantibus" which means
"things remaining as they are". 125 It means that the provisions of a treaty or contract remain
applicable only insofar as the essential circumstances which justified the conclusion of these
acts falling as they stand and that their change does not radically alter the imposed obligations
accepted. Such a clause could be taken over by the Vienna Convention on the Law of Treaties
(1969). Herein Article 60 para.3 b)126 of the Vienna Convention on the Law of Treaties 1969,
it is clear that in the event of a material violation of the bilateral treaty by one of the parties, the
other can invoke this violation as a ground to terminate the treaty. The judges consider that the
adjective "substantial" does not refer to the intensity of the violation but to the quality of the
obligation violated.127 Moreover, according to article 34 of UNCAC “Consequences of acts of
corruption with due regard to the rights of third parties acquired in good faith, each State Party
shall take measures, in accordance with the fundamental principles of its domestic law, to
address consequences of corruption.” In this context, States Parties may consider corruption a
relevant factor in legal proceedings to annul or rescind a contract, withdraw a concession or
other similar instrument or take any other remedial action.

In the case, the fact that the FraCorp company vitiated the consent of the Costat State by trading
in influence infringed Chapter 2, Article 4 of the BEAR Treaty aforesaid, which constitutes a
material infringement allowing the termination of the effect of the treaty to be invoked for this
investement.

The consent of Costat was vitiated by FraCorp, this material infringement explains the
termination of effect of the BEAR Treaty for this investment.

3. Consequences of termination of the BEAR Treaty - No legal protection by the

BEAR Treaty for FraCorp since the investment was concluded on the basis of
influence peddling

Defendant argues this type of corruption has the consequences of nullifying the legal rights of
an investor vis-à-vis the host state.

125 Renzo Tosi, Dictionnaire des sentences grecques et latines, préface par Umberto Eco,
Milan, Jérôme Millon, trad. Rebecca Lenoir, 2010 (2282 sentences).
126
Vienna Convention on the Law of Treaties, [23 May 1969], United Nations, Treaty Series,
vol. 1155, p. 331
127 Thanapat, Chatinakrob, Material Breach and its Exception: An Analysis of a

‘Humanitarian Character’, p.4

 22

This is a decision that was endorsed in the World Duty Free v Kenya decision128 as well as in
the the L.E.S.I- DIPENTA v. Algeria decision.129 When an investment is caught in violation of
hosts State's law, national or international principals by corruption, then that investment is no
longer protected.130

In the matter of the case, the company FraCorp cannot therefore rely on the fact that Costat
would have violated its international commitments by stopping the contract which bound it with
FraCorp since it itself infringed Article 4 Chapter 2 of the BEAR Treaty by violating Costat's
law on influence peddling. Thus, this investment made on the basis of influence peddling is no
longer protected by the bilateral investment treaty BEAR. Furthermore, the rights of the parties
to such contracts do not deserve any legal protection.131 The denial of legal protection aims to
undermine mutual trust between these parties and encourage them to renounce their illegal
promises.

FraCorp cannot claim legal rights to which it is entitled in relation to a treaty that it has itself
violated.

4. A lawful expropriation made by Costat on the ground of the « clean hands »

doctrine (Alternative argument).

Even though the Court was to consider that the contract is not null and void and still protected
by the BEAR treaty, Costat is still within its rights when it comes to the expropriation of
FraCorp’s machinery through to the doctrine of the “clean hands”. By making use of influence
peddling FraCorp went against the « clean hands » doctrine which is more and more being used
in Courts, when it concerns investment law and corruption issues, as a valid reason for a party
not to respect its obligations in a contract.

Equitable principles are part of the international law according inter alia to art. 34 UNCAC.
This Court has confirmed that « the legal concept of equity is a general principle directly
applicable as law ».132 The clean hands doctrine consists in depriving of the necessary locus

128 Berger, Klaus Peter. World Duty Free Co Ltd v. The Republic of Kenya, ICSID Case No.
ARB/00/7. [Link]
kenya-icsid-case-no-arb-00-7/.
129 Consortium Groupement L.E.S.I.- DIPENTA v République Algérienne démocratique et

populaire, para 24(iii), 2005, Award ICSID (Case No ARB/03/08)

130
Gustav F W Hamester GmbH & Co KG [Link] of Ghana (ICSID Case No.
ARB/07/24) page 36
131 Prof Dr Klaus Peter Berger, LL M, Invalidity of Contract Due to Bribery (University of, et

Klaus Peter Berger. Principle IV.7.2 )

132
Tunisia/Libyan Arab Jamahiriya, Judgment of February 1982, I.C.J Reports, 60 para 71.
 23

standi in judicio for complaining of corresponding illegalities on the part of other when a state
133
is guilty of illegal conduct. For judge Schwebel in Nicaragua v. United States of America,
previous actions of one party can unclean its hands and undoubtedly lead to consequences on
the decision of the Court. Also in the Al-Warraq v. Indonesia case134 of 2014 the claimant’s
claim was found inadmissible on the ground of this doctrine. In another case of the ICSID
Spentex v. Uzbekistan 135 the Centre even came to the conclusion that corruption constitutes a
violation of the principle of good faith and hence that a claimant entering an arbitral procedure
with "unclean hands" should not be heard.136
Foria representative, M. Odnal, in paying to win the public tender did not respect the obligations
incumbent upon its State and created a situation which will undeniably have an impact on the
reaction of Costat. FraCorps’ efforts to bribe Costat officials created an unequal situation that
impacted Costat’s investments.

In this case, FraCorp is illegitimate when claiming the payment of the machinery fabricated for
Costat due to the fact that the company never had clean hands when entering the contract.
FraCorp is not in its right when demanding the Court to identify an unlawful expropriation.

133
Moloo, Rahim A Comment on the Clean Hands Doctrine in International Law (SSRN
Electronic Journal, 2010)
134
Hesham Talaat M Al-Warraq v The Republic of Indonesia Award, UNCITRAL Case, 15
December 2014 (at para 646)
135
Spentex Netherlands, B.V. v. Republic of Uzbekistan, ICSID Case (No. ARB/13/26)
136
Stefan Mbiyavanga, Combating Corruption through International Investment Treaty Law,
1 JACL 132 (2017).