TEAM VISSCHER

ARBITRATION PURSUANT TO THE RULES OF THE LONDON COURT OF

INTERNATIONAL ARBITRATION

IN THE PROCEEDING BETWEEN

VASIUKI, LLC.
(Claimant)
v.
REPUBLIC OF BARANCASIA
(Respondent)

SKELETON BRIEF FOR CLAIMANT

I. JURISDICTION
A. LCIA HAS JURISDICTION AND CLAIMANTS CLAIMS ARE ADMISSIBLE.
DID NOT

1. Accession to EU will not terminate the BIT.

1.1 Harmonious Interpretation is a customary principle of international law
(Article 31, VCLT; Electrabel v. Hungary, 2012, 5.15). Uniform principles on
common commercial policy can be attained without terminating the BIT by
harmonizing the two separate treaties rather than terminating the other.
1.2 Elements for the effective application of Article 59 (VCLT) are not satisfied.
Terminative intention, beyond reasonable doubt, on the part of both parties, must
be present otherwise the same cannot be made applicable (Drr, The Vienna
Convention on the Law of Treaties: A Commentary, 2012). The silence of Cogitatia
regarding the termination of the BIT cannot be implied as a terminative intent
beyond reasonable doubt.

2. Termination is valid if done in accordance with the BIT.

2.1 The BIT must be terminated in accordance with its provisions. The Intra-EU
BITs entered into by EU member states are binding to the contracting parties.
European Commission recognizes the binding effects of Intra-EU BITs by ordering
to follow the manner of termination despite insistence of its termination (Eastern
Sugar v. Czech Republic, 2007, 119).
2.2 Notification to terminate by Barancasia was premature. Non-compliance of the
preconditions of termination under the BIT renders the said termination void
Barancasia must wait until the expiration of the fixed 10-year period before it can
notify Vasiuki of its intention to terminate.

3. As a generally accepted principle of international law, the sunset clause allows the
provisions of the treaty to remain in force after its termination. The Cogitatia-

Barancasia BIT contains a Sunset Clause that would empower the application of the
BIT for a period of ten years from the date of its termination for investments made prior
to termination (Article 13, BIT, 3).
II. MERITS
B. RESPONDENTS MEASURES BREACHED THE BIT.
4. Breach of FET.
4.1 The interpretation of the FET standard is lower than the minimum standard
of treatment. Article 2 of the BIT refers to an unqualified FET, which requires a
case-by-case interpretation according to general notions of fairness, equitability
and reasonableness (UNCTAD, Fair and Equitable Treatment, p.22; Merrill &
Ring v. Canada, 2010, 210). This interpretation sets that the FET standard is
autonomous, and not restricted by the international minimum standard in customary
international law.
4.2 Respondent failed to provide a stable and predictable legal framework. The
core element of the FET obligation is to ensure a consistent and stable legal
environment (PSEG v. Turkey, 2007, 240). Treatment must not detract from the
basic expectations relied upon by the investor (Tecmed v. Mexico, 2003, 154).
Vasiuki would not have invested in the manner and scale that it did if not for the
expectation that the incentives would remain for the full 12-year period.
4.3 Absence of a stabilization clause did not mean Respondent could renege on its
commitment. A stabilization clause is not the only type of measure pursuant to
which a state can promise to freeze or stabilize an existing regulatory framework
(Parkering v. Lithuania, 2007, 322). An express promise enshrined in the
legislation to keep a particular regulatory framework in place for a defined period
constitutes such undertaking. Barancasia in effect agreed to provide the incentives
for twelve years without changing the law. An additional promise not to renege is
superfluous.

4.4 The amended Article 4 of the LRE undermined Claimants legitimate

expectations. When the state generated a legitimate expectation which the investor
relied upon, action by the state that reverses or destroys those legitimate
expectations will be in breach of the FET standard (Saluka v. Czech Republic, 2006,
302). The incentive of the LRE created a legitimate expectation and the
amendment without adequate justification and consultations reversed the same.
4.5 Respondent failed to act transparently. A foreign investor expects the host state
to act in a consistent manner, free from ambiguity and totally transparent in its
relations with the foreign investor, so that it may know beforehand any and all rules
that will govern its investments (Tecmed v. Mexico, 2003, 154). The arbitrary
denial of license for Vasiuki citing confidentiality obligations to disclose any
criteria in the approval procedure hampers the ability of Vasiuki to understand what
is required by the government in order for the investment to succeed.
4.6 Respondent failed to provide adequate advance notice of measures that will
negatively impact the investment. Fairness requires that the host State be
informed when laws and other binding decisions are to be imposed concerning the
investment. (UNCTAD, Fair and Equitable Treatment, p.51). The private hearings
conducted to amend the LRE involving specially invited representatives and
groups, without notice and to the exclusion of Vasiuki, an investor-stakeholder,
constitute host state misconduct (Saluka v. Czech Republic, 2006, 302).
5. Failure to provide full protection and security.
5.1 The FPS standard requires the host state to exercise due diligence and
protect the foreign investment (Dolzer and Stevens, Bilateral Investment
Treaties, 1991, p.61). It is an obligation of vigilance by the host state necessary to
ensure the full enjoyment of protection and security of its investments and should
not be permitted to invoke its own legislation to detract from any obligation (Wena
v. Egypt, 2000, 84; AMTI v. Zaire, 1997, 6.05). The use of Barancasias
legislative process to circumvent the fulfillment of the specific entitlement brought
by the granted licenses violated Article 2 of the BIT.

C. RESPONDENTS ACTIONS DO NOT FALL WITHIN THE CUSTOMARY

INTERNATIONAL LAW DEFENSE OF NECESSITY.
6. Respondents measures are not the only way to cope with the situation (Total v.
Argentina, 2010, 220-224). Necessity defense may only be invoked when the
measures are the only way for the State to safeguard the interests (CMS v. Argentina,
2005, 323-324). The reduction of feed-in tariffs as a solution is incongruent to
Barancasias problems of infrastructure, higher public financial allocations to
Education and exceeding EU-mandated borrowing limits.
7. Respondent contributed to the situation of necessity. Necessity may not be invoked
to preclude wrongfulness if the State has contributed to the situation of necessity
(Article 25(2)(b), ILC Draft Articles). Barancasia issued 6000 licenses on January 3,
2013 notwithstanding that it knew that LRE was a mistake and created a solar bubble
from the beginning of 2012 (Procedural Order no.2(13); Uncontested Facts, 28).
D. RESPONDENT CAN BE ORDERED TO PERFORM SPECIFIC PERFORMANCE.
8. Treaties limit or restrict the absoluteness of sovereignty. UN Charter confirms that
the sovereignty of states is limited by subjecting sovereignty to international law
(Ferreira-Snyman, M.P., The Evolution of State Sovereignty, 2006, p.23). The tribunal
can order specific performance without being inconsistent with Respondents
sovereignty and restore the legal framework.

9. Restitution or continuance of paying the pre-2013 feed-in tariff can alternatively

be granted. Rescission of a legal act as a form of restitution can be granted when the
restoration of the previous situation is not materially impossible (Article 35, ILC Draft
Articles for State Responsibility; AlBahloul v. Tajikistan, 2010, 47). Rescinding the
amended LRE is consistent with maintaining the legal framework. Alternatively,
ordering Barancasia to pay the pre-2013 is possible as it excludes other licensees, being
not part of the case, from the grant of the same award.

E. CLAIMANTS BASIS FOR CLAIMING AND QUANTIFYING COMPENSATION

IS APPROPRIATE.
10. The appropriate standard for compensation is the principle of full
compensation under customary international law (Chorzow Factory Case on
Merits, Germany v. Poland, 1928, p.28). Compensation shall cover any financially
assessable damage including loss of profits insofar as it is established (Article 36(2),
ILC). Vasiuki can only be fully compensated by being placed in the position in which
they would have been had Barancasia not breached the BIT (Sapphire v. National
Iranian Oil Co., 1963; (IV)(B)).
11. Claimants are alternatively entitled to restitution of the legal framework or full
damages. Investors shall be accorded restitution or just and adequate compensation for
losses sustained (Article 4(2), BIT). Barancasia harmed the Claimant by denying
license to Alfa, decreasing the feed-in tariff from 0.44/kWh to 0.15/kWh and causing
Claimant to lose profits it would have earned based on the 0.44/kWh feed-in tariff.
12. Leniency in proving claim for loss of future profits allowed when the Respondents
breach of the BIT caused such loss (Gemplus v. United Mexican States, 2010, 1392). Barancasias draconian reduction of the feed-in tariffs caused Vasiuki to lose the
profits it would have earned based on the 0.44/kWh. Furthermore, Claimant is entitled
to reliance damages calculation. The expenditures in land and equipment will continue
to suffer reduced revenues as a result of the change in tariff (Annex 4, Kovic, pp.1-2).