NLIU INTERNATIONAL POOL SELECTIONS, 2017

INTERNATIONAL COURT OF JUSTICE

SPECIAL AGREEMENT

BETWEEN THE FEDERATION OF AARUNIA (APPLICANT)

AND THE UNITED REPUBLIC OF NORTHERN RYCHAN (RESPONDENT)
TO SUBMIT TO THE INTERNATIONAL COURT OF JUSTICE
THE DIFFERENCES BETWEEN THE PARTIES
CONCERNING CERTAIN ACTIVITIES IN THE BLACKBURT OCEAN

jointly notified to the Court on 12 June 2017

COUR INTERNATIONALE DE JUSTICE

COMPROMIS

ENTRE LA FÉDÉRATION DES AARUNIA (DEMANDERESSE)

ET LE REPUBLIQUE UNIE DES NORD RYCHAN (DÉFENDERESSE)
VISANT À SOUMETTRE À LA COUR INTERNATIONALE DE JUSTICE
LES DIFFÉRENDS QUI OPPOSENT LES DEUX PARTIES CONCERNANT LES
CERTAINES ACTIVITES DANS L’OCEAN BLACKBURT

notifié conjointement à la Cour le 12 Juin 2017

 NLIU INTERNATIONAL POOL SELECTIONS, 2017

JOINT NOTIFICATION

ADDRESSED TO THE REGISTRAR OF THE COURT:

The Hague, 12 June 2017

On behalf of the Federation of Aarunia and the United Republic of North Rychan, and in
accordance with Article 40(1) of the Statute of the International Court of Justice, we have the
honor to transmit to you an original of the Special Agreement for submission to the International
Court of Justice of the Differences between the Applicant and the Respondent concerning certain
activities in the Blackburt Ocean, signed in The Hague, The Netherlands, on the twelfth day of
June in the year two thousand seventeen.

His Excellency Sagniko Dasier His Excellency Adityum Ladrov

Ambassador of the Federation of Ambassador of the United Republic
Aarunia to the Kingdom of the of North Rychan to the Kingdom of
Netherlands the Netherlands
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

SPECIAL AGREEMENT

SUBMITTED TO THE INTERNATIONAL COURT OF JUSTICE

BY THE FEDERATION OFAARUNIA
AND THE UNITED REPUBLIC OF NORTH RYCHAN
ON THE DIFFERENCES BETWEEN THEM
CONCERNING CERTAIN ACTIVTIES IN THE BLACKBURT OCEAN

The Federation of Aarunia (“the Applicant”) and the United Republic of North Rychan (“the
Respondent”) (hereinafter “the Parties”);

Considering that differences have arisen between them concerning the certain activities in the
Blackburt Ocean;

Recognizing that the Parties have been unable to settle these differences by direct negotiations;

Desiring further to define the issues to be submitted to the International Court of Justice (“the
Court”) for resolution;

In furtherance thereof the Parties have concluded this Special Agreement:

Article 1

The Parties submit the questions contained in the Special Agreement (together with Corrections
and Clarifications to follow) (“the Case”) to the Court pursuant to Article 40(1) of the Court’s
Statute.

Article 2

It is agreed by the Parties that the Federation of Aarunia shall appear as Applicant and the United
Republic of North Rychan as Respondent, but such agreement is without prejudice to any question
of the burden of proof.

Article 3

(a) The Court is requested to decide the Case on the basis of the rules and principles of international
law, including any applicable treaties.

(b) The Court is also requested to determine the legal consequences, including the rights and
obligations of the Parties, arising from its Judgment on the questions presented in the Case.
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

Article 4

(a) Procedures shall be regulated in accordance with the applicable provisions of the Official
Rules of the NLIU International Pool Selections, 2017.

(b) The Parties request the Court to order that the written proceedings should consist of Memorials
presented by each of the Parties not later than the date set forth in the Official Schedule of the
NLIU International Pool Selections, 2017.

Article 5

(a) The Parties shall accept any Judgment of the Court as final and binding upon them and shall
execute it in its entirety and in good faith.

(b) Immediately after the transmission of any Judgment, the Parties shall enter into negotiations
on the modalities for its execution.

In witness whereof, the undersigned, being duly authorized, have signed the present Special
Agreement and have affixed thereto their respective seals of office.

Done in The Hague, The Netherlands, this twelfth day of June in the year two thousand seventeen,
in triplicate in the English language.

His Excellency Sagniko Dasier His Excellency Adityum Ladrov

Ambassador of the Federation of Ambassador of the United Republic
Aarunia to the Kingdom of the of North Rychan to the Kingdom of
Netherlands the Netherlands
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

**SPECIAL AGREEMENT**

THE CASE CONCERNING CERTAIN ACTIVITIES IN THE BLACKBURT OCEAN

AARUNIA/NORTH RYCHAN

1. The Federation of Aarunia and the United Republic of North Rychan are neighbouring
countries located in the Southern Hemisphere. To the south of both these countries lies the
Blackburt Ocean. In the 19th century, both Aarunia and Rychan were under colonial rule
for close to a hundred and fifty years and received independence in 1905 and 1907
respectively. Soon after independence, Rychan broke into civil war and was partitioned
into two independent nations - North and South Rychan. However, Aarunia operated as the
official ruling body of South Rychan from 8th October, 1910 to 3rd August, 1913; while
North Rychan remained under the civil administration of Rushanistan until the formation
of its own government.
2. The relationship between North Rychan and South Rychan has been plagued by hostility
and suspicion - with both countries having exchanged frequent artillery fires and
skirmishes on their borders in the past. Aarunia and South Rychan are allies and have
maintained friendly relations with each other, partnering on several independent projects
together.
3. Aarunia and North Rychan have maintained diplomatic but cautious relations with each
other in light of Aarunia’s relations with South Rychan. While Aarunia is a developed and
prosperous country, North Rychan is a developing and rapidly industrializing country. Both
countries have a parliamentary system of democracy, with the President being the head of
the State in Aarunia and the Prime Minister being the head in North Rychan. Aarunia
possesses superior naval forces and aerial reconnaissance capabilities than North Rychan.
Aarunia has been in possession of nuclear weapons since 2nd October, 1960 and became a
party to the Treaty on the Non-Proliferation of the Nuclear Weapons (“NPT”) on 14th
September, 1969.
4. Owing to the rapid industrialisation across the country, North Rychan had witnessed large-
scale depletion of its fossil fuel reserves and an increasing demand for energy. Moreover,
due to limited domestic production, North Rychan imports coal, oil, nitrogen and
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

phosphatic fertilizers from other countries. In order to reduce dependence on these limited
resources, North Rychan decided to invest in alternative sources of energy. Since the State
had a rich uranium reserve, it signed and ratified the NPT, so as to obtain international
assistance for establishing and developing its nuclear power sector. This ratification was
made on 1st April, 2000, where the Prime Minister of North Rychan made the following
statement at a press conference:

“The fossil fuel reserves of North Rychan are at a risk of being depleted. To ensure that
these limitations do not hamper the continued development of our State, we have decided
to invest in nuclear energy. To achieve this we have now become a party to the NPT. We
also believe that becoming a party to this treaty will contribute towards our goal of making
the Blackburt ocean region a non-nuclear zone.”

5. Over the course of the next ten years, North Rychan also developed its hydroelectric
generation capabilities so as to minimise the use of fossil fuels and meet the increasing
energy demands of the economy. In 2004, North Rychan passed the Nuclear Power Act
through which the State established nuclear power plants for electricity generation.
6. In the same year, North Rychan and Rushanistan, a nuclear weapon state under the NPT,
signed a bilateral nuclear energy cooperation agreement which entered into force pursuant
to the necessary notifications on 6th October, 2004. Under the agreement, two pressurised
heavy water nuclear reactors were transferred from Rushanistan to North Rychan. In order
to fuel the reactors, Rushanistan also agreed to enter into long term fuel supply
commitments with North Rychan. Following the success of its nuclear power generating
project, North Rychan announced its plans to strengthen this sector by building small
indigenous plants that would recycle the fuel used to power the reactors.
7. In 2005, Aarunia marked a hundred years of its independence from colonial rule with State-
wide celebrations. As a part of these celebrations, Aarunia and North Rychan ministers
held a number of high-level meetings in which they reaffirmed their mutual goal of
maintaining mutual friendship and cooperation between the two countries. In order to
bolster and strengthen friendship between both the countries, they signed a number of
bilateral agreements, the most significant of which was the Treaty of Friendship and
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

Commerce and Promotion of Reciprocal Investments of 2005 (“2005 Treaty”), relevant

portions of which are extracted in Annex A to the Compromis.
8. In 2009, in an attempt to strengthen its military and naval capabilities and ammunitions,
North Rychan invited Aarunia to participate in a joint military and naval exercise. The
military exercise was held in Sevarstol, the capital city of North Rychan, while the naval
exercises were conducted in the Blackburt Ocean. This joint exercise was a highly
successful affair and provided another instance of mutual trust and cooperation between
the two countries. Since Aarunia possessed superior weapons, arms and other arsenal, as
well as better technical capabilities in modern warfare, it was decided after the joint
exercise that the Ministry of Defence of Aarunia would establish a permanent presence in
North Rychan in order to ensure capacity building and personnel training in North Rychan
and train personnel in their country.
9. As per the terms of the 2005 Treaty, it was mutually agreed that the Defence Research and
Analysis Wing (“DRAW”), which was an undertaking of the Ministry of Defence of
Aarunia, would establish its presence in North Rychan, and would have the same rights as
that of an “investor” under the terms of the treaty. It was agreed that the mandate of the
DRAW would include establishing a plant in the city of Sevarstol, from where it would
manufacture equipment necessary for modern military and naval warfare. These
equipments would then be sold to the North Rychan government or shipped back to
Aarunia, depending on the needs and demands of each party. There was also no prohibition
on selling these equipments to the governments of third States. As a part of the capacity
building process, the technicians of the DRAW establishment would employ engineers and
other personnel of North Rychan in order to train them in manufacturing and handling such
sophisticated equipment. By January 2011, the DRAW plant was established in Sevarstol
and began operations by the next month itself.
10. In late 2010, South Rychan in collaboration with Aarunia conducted its first massive scale
joint nuclear-test war exercise called the ‘Team Skeleton Army’. After the exercise, there
was a huge uproar in North Rychan’s Parliament regarding the country’s safety and
integrity. The minority party in the Parliament urged the Government to develop its own
nuclear arsenal. In response, the North Rychan Defence Minister said, “North Rychan must
consider all options that ensure its safety. What remains clear is that we can no longer
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

remain bound to the NPT. We cannot allow restrictions under a treaty to impinge upon our
national security and the integrity of our nation. Therefore, we shall be beginning the
process of withdrawing ourselves from the NPT.”

11. As a result, on 1st April 2011, the government of North Rychan formally sent a notice of
withdrawal from the NPT to the United Nations Security Council and all the other state
parties to the NPT. The notice was accompanied by a letter from the Minister for Foreign
Affairs of the Union Republic of North Rychan, explaining the extraordinary events that
had jeopardised the national interests of North Rychan, and resulted in such withdrawal.
This letter can be found in Annexure B to the Compromis.
12. North Rychan’s withdrawal notice to the NPT resulted in significant apprehension in the
international community as nation states feared that North Rychan might acquire or
manufacture nuclear weapons. In order to mitigate this risk, Aarunia entered into high-
level bilateral negotiations with the Foreign Minister of North Rychan. The bilateral talks
were completed successfully and North Rychan suspended its notice of withdrawal from
the NPT on 30th June, 2011.
13. Although from 2011, operations in the DRAW plant continued for about three years
without any issue, in March 2014, the office of the Comptroller and Auditor General of
North Rychan (“CAG”), an independent ombudsman of North Rychan tasked with
investigating and unearthing corruption at the highest bureaucratic and political levels in
North Rychan, published a report titled “The Corruption and Scams in the DRAW’s
activities”. This 560 page report contained detailed allegations of corruption against the
high-ranking officers of DRAW, especially its Chairman, Mr. Alee Thornan. The report
stated that high level officials of the DRAW had used low quality materials in
manufacturing defence equipment in order to significantly lower their raw materials’ cost,
but in turn would continue to sell them at high rates to the Government of North Rychan.
Some bureaucrats and politicians of North Rychan were also alleged to be complicit in the
corruption; overall, the loss to the exchequer was estimated to be at US$ 140 billion.
14. In response to this report, the North Rychan Prime Minister ordered the formation of a
High-Level Inspection Committee to look into the allegations made by the CAG in its
report. In June 2014, the High-Level Committee concluded that the allegations made by
the CAG were in fact well-founded and the Committee identified the DRAW officials who
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

were primarily responsible for the corruption scandal. Thereafter, on 6th July, 2014, the
Central Agency of Investigation (“CAI”) of North Rychan, entered into the DRAW
premises in Sevarstol and arrested the top officials of DRAW who were implicated in the
CAG report, including its Chairman. In the ensuing trial, the Criminal Court of First
Instance in Sevarstol found that the DRAW officials had in fact indulged in corrupt
practices at the highest level and in accordance with the domestic laws of North Rychan,
ordered for the deportation of these officials back to Aarunia.
15. In response to this decision of the Criminal Court, the President of Aarunia, Mr. Joseph
Cusi, issued the following statement:
“The recent actions of the Government of North Rychan are deeply troubling. Not only
have they arrested and tried such senior officials of the DRAW, an arm of the Aarunian
Government, but they have now even gone to the extent of deporting them, in flagrant
violation of the 2005 Treaty in force between us and against all the goodwill and friendly
relations we have built over the years. The absence of such senior DRAW officials will
deeply impact the ability of the plant at Sevarstol to function sustainably and efficiently.”
16. Over the course of the next few months, the plant at Sevarstol ran into a number of issues.
In the absence of most of their top personnel, who had been deported to Aarunia, the plant
could not function effectively. Finally, in April 2015, the plant shut its operations
permanently. The rest of the DRAW personnel were also asked by the Government of
Aarunia to come back to their home country.
17. In May 2015, the Government of Aarunia invoked the dispute settlement mechanism in the
2005 Treaty and accordingly initiated arbitration proceedings against the Government of
North Rychan. In accordance with the terms of the Treaty, an arbitral tribunal consisting
of three members was formed. The Government of Aarunia alleged violations of the 2005
Treaty against the Government of North Rychan by claiming that the actions of the North
Rychan government in arresting and deporting the officials of the DRAW amounted to an
expropriation and a violation of the full protection and security clause of the Treaty. On
18th August, 2015, the arbitral tribunal started its proceedings and over the course of the
next month in several subsequent hearings, the arbitral tribunal heard both the parties’
claims.
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

18. Finally, the tribunal concluded its hearings on 20th September, 2015. On 22nd September,
the legal counsel of Aarunia wrote to the President of the arbitral tribunal, Mr. Vinayakum
Panikkarin:
“On behalf of the Government of Aarunia, I wish to bring to your kind notice that
Government of Aarunia has just discovered some new evidence that would conclusively
establish that the Government of North Rychan has indeed acted in a mala fide manner in
arresting and deporting the senior DRAW officials of the Sevarstol plant. While we
understand that the tribunal has concluded its hearings, the Government of Aarunia
believes that this crucial evidence would have immense value in assisting the tribunal to
arrive at a just and fair decision. We would therefore urge the tribunal to provide the
Government of Aarunia an opportunity to present this evidence, before the tribunal arrives
at its final decision.”
In response to this letter, Mr. Panikkarin urgently convened a meeting of the tribunal at
midnight on 23rd September, and communicated to the legal counsel of the Government of
Aarunia to appear before the tribunal and present the evidence. However, no
communication was sent to the Government of North Rychan. Over the next three hours,
till 3:00 am local time, the tribunal perused the evidence presented and the arguments made
by the legal counsel of Aarunia. Thereafter, the tribunal concluded the session.
19. On 25th September, 2015, the tribunal pronounced its award. The award was pronounced
by a majority to 2 to 1, with the arbitrator appointed by North Rychan dissenting. The
award, in its entirety, read:
“The arbitral tribunal by a majority of 2 to 1, finds that the actions of the Government of
North Rychan amount to expropriation and accordingly violate Article VI of the Treaty of
Friendship and Commerce and Promotion of Reciprocal Investments of 2005, in force
between the parties. Therefore the Government of North Rychan is liable to compensate
Aarunia, to the tune of US$ 150 million.
Signed.
Date- 25th September, 2015.”
20. Immediately after the tribunal passed its award, the Minister of External Affairs of North
Rychan, Ms. Aradhnya A. Delacour, issued the following statement:
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

“The Government of North Rychan wholly and unequivocally rejects the award passed by
the arbitral tribunal. The tribunal’s actions were manifestly biased. The arbitrators took
evidence from Aarunia after the hearings were closed, in the absence of North Rychan and
without letting our Government contradict or examine the evidence presented to the
tribunal. It is only later that the Government of North Rychan through its sources and
diplomatic channels got to know of the secret hearing that took place at midnight, merely
a day before passing of the award. Such actions of the tribunal go against all established
principles of due process and natural justice! It therefore came as no surprise to us that
the final award of the tribunal also did not contain reasoning and merely pronounced the
amount of damages that we must pay. We will take all appropriate legal recourses to get
this award nullified.”
21. On 6th October, 2015, the Government of North Rychan filed an application at the District
Court of The Nague, the capital city of Kinlands, for setting aside the arbitral award. The
District Court of The Nague issued notice to the Government of Aarunia to appear as
Respondent in the matter. However, the Government of Aarunia did not send any reply to
the said notice, nor did it appear before the District Court in the ensuing proceedings.
Proceeding ex-parte, on 21st October, 2015, the District Court of The Nague in its judgment
decided that it had jurisdiction to hear the matter as it was the court at the seat of the
arbitration. Applying the provisions of its domestic law, the District Court of The Nague
proceeded to set aside the arbitral award of 25th September, 2015 between Aarunia and
North Rychan.
22. On 29th October, 2016, the President of Aarunia, Mr. Cusi made the following statement:
“The Government of Aarunia calls upon North Rychan to forthwith pay the amount due to
Aarunia by virtue of the arbitral award of 25th September, 2015. In case North Rychan
refuses to pay us the amount lawfully due to us immediately, we will be forced to take
enforcement action against the assets of North Rychan in Aarunia’s territory. We do not
recognize the decision of the District Court of The Nague, which had no authority to set
aside an arbitral award between two sovereign States. In fact, the mere assumption of
jurisdiction by the District Court in this matter, without our consent, is a flagrant violation
of our rights and immunities under international law. As such, the arbitral award is valid
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

and we must call upon the Government of North Rychan to respect it immediately or face
consequences.”
On the same day, Mr. Cusi asked the Governor of the Central Bank of Aarunia (“CBA”),
a state-owned enterprise, to freeze the account of the Bank of North Rychan which was
North Rychan’s central bank, in the CBA, in case the Government of North Rychan failed
to pay the award amount within a particular stipulated time.
23. While these events were going on, in March 2015, the Government of Aarunia started
conducting extensive naval exercises within their territorial waters in the Blackburt Ocean.
As a part of their naval exercises, the Government of Aarunia also tested the capabilities
of a fleet of stealth submarines that had the capacity to carry nuclear weapons undetected
for long ranges. Some of these submarines could travel for long distances across the ocean,
without being manned by anyone at all. These unmanned submarines were operated
remotely from the naval base within Aarunia’s territorial waters. Concerned by such overt
display of their naval power as well as the possible environmental impacts on the Blackburt
Ocean of any such exercise, particularly those involving the stealth submarines, North
Rychan’s Prime Minister, Mr. Sehviks Walsingham, on 22nd March 2015, sent a Note
Verbale to his counterpart in Aarunia, voicing these concerns of North Rychan.
24. In response to the Note Verbale, the Aarunian President reassured North Rychan of
Aarunia’s bona fide intentions in conducting naval exercises and assured Mr. Walsingham
of Aarunia’s continued commitment to ensure that the “Blackburt Ocean and its entire
marine environment were not used for any non-peaceful activities and any naval exercise
conducted by Aarunia would of course, in accordance with international law, remain
confined to its own jurisdiction.” The exercises however continued and the use of the
unmanned stealth submarines was increasingly becoming a more common feature of the
exercise. It would often be the case that in order to test their potential, these unmanned
submarines carrying some amount of nuclear material or weaponry would be operated
outside the territorial waters of Aarunia, into the high seas. Since these submarines could
not be detected by ordinary ships or other vessels passing through the high seas in the
Blackburt Ocean, the naval force of Aarunia would always send two to four naval warships
carrying the Aarunian flag, in order to warn nearby ships of the presence of a stealth
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

submarine in the vicinity and to ensure that there is no interference with the free passage
of other ships in the area.
25. Noting with concern these developments in the Blackburt Ocean, on 11th April, 2015, Mr.
Sehviks Walsingham made the following statement in a publicly televised address,
“North Rychan is concerned about the recent experiments involving stealth submarines
that are being conducted by Aarunia. While it would be undoubtedly be the right of Aarunia
to conduct such experiments within their own territorial waters, conducting them in the
high seas of the Blackburt Ocean, where we and indeed all other nations of the world have
equal rights, is a matter of grave concern. Since some of these submarines are unmanned,
we are extremely anxious of what may happen if somehow Aarunia loses control of any of
them while they are at large on the seas. We also reiterate that if any of these vessels were
to enter those waters where North Rychan has exclusive sovereignty, then these vessels will
be dealt with in accordance with our municipal laws.”
26. On the night of 27th April, 2015, at around 10:30 pm, the Commander of North Rychan’s
naval base within its territorial waters, Captain Mcdaar Shelfmake, noticed some
suspicious activity within the exclusive economic zone of North Rychan. He noticed on his
monitor that some vessel was continuously travelling in a circular path beneath the surface
of the water and was not moving in any particular direction. Since the vessel was below
the surface of the water, he could not ascertain the make or the type of vessel, or which
country it belonged to, since the flag of the vessel was also not visible. He tried to establish
some contact with the vessel by trying to send across a message through all the known
radio frequencies commonly used in the area by ships or vessels. However, he could not
establish contact with the vessel. After around an hour, the vessel seemed to be moving
slowly towards the North Rychanian territorial waters, all the while moving below the
surface of the water.
27. Noticing the vessel approaching the North Rychanian territorial waters, Captain Shelfmake
ordered his naval troops to reach the zone immediately. Within 20 minutes, the HMS
Froster, one of the warships of the North Rychan naval fleet, reached the area where the
vessel was moving, close to the territorial waters of North Rychan. On being at a distance
of 5.5 nautical miles away from the vessel, the captain of the Froster sent the following
message to Captain Shelfmake:
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

“The vessel seems to be a submarine that is currently about five nautical miles away from
our territorial waters. We cannot say for sure, but it seems like one of the stealth
submarines that are being used by Aarunia. There is no way of confirming whether the
vessel is manned or unmanned. We await further instructions from you.”
28. Captain Shelfmake responded by asking the captain of the Froster to stand on guard and
use the loudspeaker on board the ship to ask the vessel to come up to the surface and warn
it that if it entered the territorial waters, then it would be subject to search or seizure as per
the domestic laws of North Rychan. Having made this announcement, the captain of the
Froster noticed that the submarine did not stop nor did it come up to the surface and instead
kept moving towards the ship, entering into the territorial waters of North Rychan. Upon
entering the territorial waters however, the submarine seemed to slow down as it neared
the Froster and ultimately stopped. Once the submarine stopped, it started coming up to
the surface level and the captain of the Froster noticed that the submarine bore the symbol
of the Aarunian navy and was flying the Aarunian flag. He immediately contacted Captain
Shelfmake asking for instructions. Captain Shelfmake ordered for the vessel to be
immediately taken into custody and inspected properly. He ordered the navy troops to
board the vessel and to declare it to be under the custody of the North Rychan navy.
29. When the North Rychan troops boarded the vessel, they found it to be completely
unmanned. The vessel was also containing what appeared to be some nuclear material on
board in nuclear equipped containers. On behalf of the North Rychan government, Captain
Shelfmake sent the following message to the Aarunian navy:
“The North Rychan navy has taken custody of an unmanned submarine bearing the symbol
of the Aarunian navy and flying Aarunia’s flag, carrying nuclear materials, for operating
in flagrant breach of the domestic laws of North Rychan and in violation of the norms of
international law. Despite repeated warnings and repeated attempts to establish contact
with the submarine, the submarine continued to move below the surface of the water and
entered North Rychan’s territorial waters. We will now inspect the materials on board the
vessel and determine whether there is any threat to the peace and security of North
Rychan’s waters.”
30. On the 29th April, the Aarunian Commander-in-Chief of the Navy, made the following
public statement:
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

“The seizure of the Aarunian submarine by the North Rychan naval forces is unprecedented
and one of the most egregious violations of international law. The Aarunian navy was
testing the unmanned submarine, when momentarily it lost all communication with and
control over the submarine. Unfortunately, the submarine could not be stopped from
entering into the territorial waters of North Rychan. All of this happened because of a
technical glitch. However, our technicians solved the problem within minutes and as soon
as connection was re-established with the vessel, we brought the submarine to a halt and
made it come up to the surface level. Once it stopped, it was plainly evident to the North
Rychan navy that the vessel belonged to the Aarunian navy and was flying the Aarunian
flag. Instead of establishing contact with us at that point, North Rychan’s decision in
boarding and subsequently capturing our vessel is in violation of all laws governing the
seas, applicable between the two nations. We demand that our vessel be released
immediately by the North Rychan Navy.”
31. In response to this public statement, in a nationally televised interview, Captain Shelfmake
said:
“We were well within our rights to seize the Aarunian vessel. Operating such stealth
submarines, particularly those carrying inherently hazardous nuclear material within our
sovereign waters is a violation of international law. Besides Aarunia has been operating
such unmanned submarines for a while now and this by itself is a dangerous practice,
posing a huge threat to all other vessels passing through the area peacefully. In such
circumstances, we thought it fit to seize their vessel and it was a justified retort to Aarunia’s
actions!”
32. In response to a question posed by a journalist, Captain Shelfmake said that if Aarunia
were willing to apologize for its actions and offer guarantees of non-repetition and that
such testing of submarines will not occur in the future, then the North Rychan navy may
be willing to consider Aarunia’s request for return of the vessel. Till date, the submarine
remains in the custody of North Rychan’s navy.
33. Around the same time, on 15th April, 2015, the Coast Guard of North Rychan, while
patrolling the State’s exclusive economic zone observed that three naval warships flying
Aarunia’s flag were in the high seas and heading towards the coast of South Rychan. These
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

warships warned other merchant ships of the existence of stealth submarines in the area.
The Coast Guard reported this incident to the North Rychian Navy and the Government.
34. The North Rychian Prime Minister issued a public statement on 18th April, 2015, which
said,

“Another grave situation has arisen whereby the integrity and security of our State is being
seriously endangered. The Aarunian submarines, equipped with nuclear weapons that
were seen heading towards South Rychan are a clear indication of Aarunia’s hostile policy
towards North Rychan. As our state's supreme interests are most seriously threatened, the
North Rychanian government declares an automatic and immediate effectuation of its
withdrawal from the NPT, which it unilaterally suspended, according to the bilateral talks
it had with Aarunia in June, 2011.”

35. On 20thApril 2015, in a nationally televised address, the Foreign Minister of Aarunia said:-

“Aarunia is concerned about North Rychan’s announcement of its withdrawal from the
Nuclear Non-Proliferation Pact and the possible ramifications this may have. This pact is
of major significance for preventing the spread of nuclear weapons and enhancing
international peace and security. North Rychan’s withdrawal from the NPT has created
significant uncertainty in the region. We would like to unequivocally state that Aarunia has
no hostile intentions toward North Rychan and seeks a peaceful solution to this
misunderstanding. We hope that North Rychan reverses its decision and seeks a diplomatic
solution instead.”

North Rychan did not issue any response to this statement.

36. On 21st June, 2015, various newspapers across North Rychan published news of land in an
area 50 kms from a small North Rychanian village, which appeared to ‘rise and fall like a
liquid’ and was followed by the formation of a large sinkhole in the area. This news gained
international attention when the Aarunian Geological Survey, an Aarunian State agency
responsible for monitoring seismic activity, reported seismic disturbances along the border
with North Rychan. The epicentre of such disturbances were reported to be within North
Rychan’s territory. Various international newspapers published articles arguing how these
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

events could only take place if underground nuclear tests had been conducted in such area.
North Rychan’s Government refused to comment on this matter.
37. President Cusi of Aarunia, called a press conference in Aarunia on 24th June, 2015, where
he made the following statement,

“North Rychan’s decision to conduct underground nuclear weapon tests is a blatant

violation of its international commitments of non-proliferation of nuclear weapons and
nuclear disarmament. Not only is the development of nuclear weapons through such tests
a possible threat to peace, it also has the strong likelihood of releasing radioactive
radiation in the atmosphere, which risks the survival of generations to come. Such acts
cannot be tolerated by any State party to the NPT and therefore, North Rychan must cease
its nuclear armament at once.”

38. In response, the Prime Minister of North Rychan issued a press note which read:

“President Cusi has raised baseless allegations against our State. Since 2004 North
Rychan has only used nuclear energy for peaceful purposes of electricity generation. There
exists no proof of any underground nuclear tests conducted in our territory. Nonetheless,
Aarunia can no longer enforce any other international obligations on us as we have
already withdrawn from the NPT.”

39. On 28th June, 2015, President Cusi delivered an internationally televised address on all of
the major news networks announcing the following:

“North Rychan’s withdrawal from the NPT, followed by its act of conducting underground
nuclear weapon tests is proof of the threat that the State poses to international peace and
security. It is evident that in such a scenario, all existing diplomatic relations between
Aarunia and North Rychan must be severed.
Aarunia has always been a nation committed to the goal of nuclear non-proliferation. We
cannot risk any attack or security threat against our citizens or the international
community. Thus, to limit North Rychan’s ability to further develop its nuclear and warfare
capabilities and halt this offensive build-up, a strict blockade on all shipment to and from
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

the State being initiated in the Blackburt Ocean. All ships of any kind bound for North
Rychan, from whatever nation or port, will be blocked. This blockade shall continue until
North Rychan declares and dismantles its nuclear weapon building facilities. We do not at
this time, however, deny the movement of medical supplies which are necessities of life.”

40. Following this address, President Cusi ordered the Aarunian Commander-in-Chief of the
Navy to deploy his warships along the exclusive economic zone of North Rychan. The
warships were stationed outside the range of the coastal weapons of the North Rychan. The
warships were to ensure that in accordance with President Cusi’s address, no ships of any
type should be allowed to reach the ports of North Rychian or leave its exclusive economic
zone. The Navy was also given the discretion to use naval mines to enforce the naval
blockade.
41. On 30th June, 2015, the Prime Minister of North Rychan sent a telegram to President Cusi
in which he warned him that Aarunia’s blockade of the Blackburt Ocean was a disguised
economic coercive measure. He also wrote that such acts violated international law and the
principle of sovereign equality of States. However, Aarunia issued no further response to
this and continued the naval blockade.
42. The National Centre for Agricultural and Food Research (“NCAFR”), a State owned
institution of North Rychan, published a study in April, 2017, which revealed that the
average agricultural productivity in North Rychan had declined by 33-37% between 2015
and 2017. Further, the NCAFR also found that per capita overall food availability had
declined by approximately 30%.
43. On 21st May, 2017, North Rychan’s ministry of home affairs released another study noting
the effects of the blockade on the country’s industrial sector. The ministry’s study noted
that the ships which were carrying fuels from the Rushanistan for the reactors were also
not able to reach the North Rychan’s ports. As fuel was necessary to meet electricity
demands of North Rychan’s industrialised sector – and therefore the GDP of North Rychan
declined sharply.
44. Owing to growing hostilities, since 25th June, 2015, armed naval forces of North Rychan
and Aarunia were engaged in situations of armed conflict. Both the countries had in fact,
suffered loss of lives of its soldiers and incurred economic expenditures. However, the
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

blockade was increasingly reducing North Rychan’s ability to sustain itself in the Blackburt
ocean naval warfare.
45. On 24th April, 2017, the Prime Minister of North Rychan sent a diplomatic note to President
Cusi stating:
“For almost two years, Aarunia has denied Rychan its essential means of survival by
continuing the naval blockade. Aarunia has not only crippled our economy but also denied
the Rychanian population of adequate food supplies and their sustenance. The maritime
blockade was part of a comprehensive closure regime that had disproportionate effects on
the civilian population of North Rychan. Such intentional starvation and targeting of
innocent civilians is against all principles of international humanitarian law and must
cease at once.”
46. President Cusi responded by stating:

“The decision of the blockade by Aarunia, taken on 28th June, 2015, is justified as a
measure permitted by international law and laws of armed conflict. The objective of the
blockade was to prevent proliferation of nuclear weapons into the hands of North Rychan
as that would seriously jeopardise the security interests of the world community and
Aarunia. Moreover, as a sovereign state, Aarunia has a right to defend its country in times
of impending threat of an armed attack by the North Rychan. The blockade will remain in
force till the North Rychan gives a guarantee to give up its ambitions of possessing nuclear
weapons.”

47. At the suggestion of the Secretary General of the United Nations, the governments of
Aarunia and North Rychan immediately convened high-level discussions of the naval
blockade issue in May 2017. The discussions quickly revealed to both parties that the crisis
was part of a much larger dispute concerning all of the issues set out in this Special
Agreement. In June 2017, the parties agreed to refer all of these matters to this Court.
Pending the decision of the International Court of Justice, Aarunia has agreed to stay any
enforcement action in respect of the arbitral award, against any of North Rychan’s assets
within Aarunia’s territory.
48. Aarunia and North Rychan are both members of the United Nations, and are parties to the
Statute of the International Court of Justice; the Vienna Convention on the Law of Treaties;
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

the International Covenant on Civil and Political Rights; the International Covenant on
Economic, Social, and Cultural Rights; Geneva Conventions of 1949 and their Additional
Protocols; Additional Protocol I to the Geneva Conventions Relating to the Protection of
Victims of International Armed Conflicts; United National Convention on the Law of Seas.
Aarunia, North Rychan and Kinlands are parties to the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, 1958. Aarunia, North Rychan
and Kinlands are parties to the UN Convention on Jurisdictional Immunities of States and
their Property, 2004. Aarunia and North Rychan are also signatories to the Comprehensive
Nuclear Test Ban Treaty (CTBT), but have not ratified the same.

49. Aarunia respectfully requests that this Court adjudge and declare that:

1. The arbitral award of 25th September, 2015, is valid and subsisting, and in any event,
this Court does not have the authority to restrict Aarunia from taking enforcement
action against North Rychan’s assets for its failure to pay the award amount.
2. The seizure of Aarunia’s vessel by North Rychan is a violation of international law and
North Rychan must immediately release and return the vessel to Aarunia.
3. North Rychan has violated the NPT and international law generally in respect of its
nuclear testing actions.
4. The naval blockade by Aarunia is lawful and justified under international law;

50. North Rychan respectfully requests that this Court adjudge and declare that:

1. The arbitral award of 25th September, 2015 is unenforceable and accordingly, Aarunia
must refrain from taking any action against North Rychan’s assets within Aarunia’s
territory.
2. North Rychan’s capture of Aarunia’s submarine is in accordance with international
law.
3. North Rychan has not violated the NPT or international law generally.

4. The naval blockade by Aarunia violates international law and must immediately cease.
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

Annex A
(Relevant portions of the Treaty of Friendship and Commerce and Promotion of
Reciprocal Investments of 2005)

The Federation of Aarunia and the United Republic of North Rychan,

Recognizing the invaluable and long-standing friendship of the two nations and in the spirit of
continued cooperation,

Believing that promotion of commerce and investments between the two countries is an essential
prerequisite to maintaining harmonious relations in the long term.

Desiring the establishment of a mutually beneficial domestic framework that will ensure the
protection of all future reciprocal investments

Having regard to the purposes and principles enshrined in the United Nations Charter.

Article VI- Expropriation

1. Investments of investors of either Contracting Party in the territory of the other Contracting
Party shall not be expropriated, nationalized or subject to measures having an equivalent
effect (hereinafter referred to “expropriation”) except for a public purpose, in accordance
with due process of law, on a non-discriminatory basis and against prompt, adequate and
effective compensation.
2. Such compensation shall amount to the market value of the expropriated investment
immediately before expropriation has taken place or become public knowledge whichever
is earlier.

Article XXV-Dispute Resolution

1. All disputes between the Contracting Parties concerning the interpretation or application
of this Treaty shall be resolved by arbitration at the Permanent Council of Arbitration,
situated at The Nague, Kinlands.
2. It is hereby clarified that investors acting privately shall have no right to institute arbitral
proceedings against either Contracting Party. Any claims of any investor must necessarily
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

be brought by the Contracting Party of which the investor is a national, against the other
Contracting Party.
3. The seat of such arbitration referred to in paragraph 1, shall be at Kinlands and all hearings
shall be conducted at the Council’s premises at The Nague.
4. The arbitral tribunal shall consist of three arbitrators. One arbitrator each shall be appointed
by each Contracting Party and the third arbitrator will be appointed by the two arbitrators
so appointed.
 NLIU INTERNATIONAL POOL SELECTIONS, 2017

Annex B

Letter dated 1st April 2011 from the Minister for Foreign Affairs of the Union Republic of North
Rychan address to the President of the Security Council

“I would like upon authorization to inform the Security Council of the United Nations that the
Government of North Rychan decided on 1st April, 2011 to withdraw from the Treaty on the Non-
Proliferation of Nuclear Weapons (NPT), in accordance with paragraph 1 of Article X of the NPT,
in connection with the extraordinary situation prevailing in Rychan, which jeopardises its supreme
interests.

Aarunia together with South Rychan has resumed the “Team Skeleton Army” joint military
exercises, a nuclear war rehearsal, threating North Rychan. This is an undisguised strong-arm act
designed to disarm North Rychad in order to gain exclusive economic and administrative control
over the Blackburt ocean region.”

(Signed)
Ms. Ellaria Russo