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THE CASE CONCERNING THE WINDSCALE ISLANDS

REPUBLIC OF ASPATRIA
(APPLICANT)
v.
THE KINGDOM OF RYDAL
(RESPONDENT)

MEMORIAL FOR THE APPLICANT


TABLE OF CONTENTS

INDEX OF AUTHORITIES

STATEMENT OF JURISDICTION

QUESTIONS PRESENTED

STATEMENT OF FACTS

SUMMARY OF PLEADINGS

PLEADINGS
I.
II. RYDAL’S REJECTION OF MDR’S BID VIOLATED ITS OBLIGATIONS UNDER THE
ASPATRIA-RYDAL BIT..........................................................................................
A. The claim of Aspatria is admissible because all local remedies have been exhausted
B. Rydal’s rejection of the bid of MDR violated its obligations under Article V of the
Aspatria-Rydal BIT. ................................................................................................
C. Rydal owes obligations under the Aspatria-Rydal bit to Aspatrian investors and
investments in the islands.........................................................................................
III. RYDAL OWES OBLIGATIONS UNDER THE ASPATRIA-RYDAL BIT TO
ASPATRIAN INVESTORS AND INVESTMENTS IN THE ISLANDS........................

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A. Rydal’s rejection of the MDR bid violated its obligation under Article IV of the
Aspatira-Rydal BIT.................................................................................................
B. Rydal treated MDR less favourably than it did ROCO when the two were in “like
circumstances”........................................................................................................
C. The rejection of the MDR bid bore no reasonable nexus to a rational government
policy that does not discriminate against investors.....................................................
D. Rydal lacks standing to invoke Aspatria’s responsibility for measures taken against
an Aspatrian company..........................................................................................
E. Rydal cannot exercise diplomatic protection on behalf of ROCO for measures taken
against ALEC........................................................................................................
F. Nothing in the Aspatria-Rydal BIT permits Rydal to deviate from the general rule.
G. Rydal’s claim is inadmissible because local remedies were not exhausted.
IV. THE REPUBLIC OF ASPATRIA DID NOT VIOLATE ARTICLE VI OF THE
ASPATRIA-RYDAL BIT
A. The actions of the Republic of Aspatria against ALEC does not fall within the
definition of “Expropriation” as enunciated by Article VI of the treaty.................

CONCLUSION AND PRAYER FOR RELIEF

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INDEX OF AUTHORITIES

Declaration on Principles of International Law Concerning Friendly Relations and


CoOperation among States in Accordance with the Charter of the UN (1970)

Advisory Opinion upon the Legal Aspects of the Aaland Islands Question (1920) League
of Nations Official Journal; Western Sahara ¶58 and Construction of a Wall

Aaland Islands Question: Report submitted to the Council of the League of Nations by
the Commission of Rapporteurs, League of Nations Doc. B7/21/68/106 1921, 28.

ELSI, id., at para.59; Draft Articles on Diplomatic Protection, art. 14(1), International
Law Commission, U.N. GAOR, 61st Sess., Supp. No. 10, U.N. Doc. A/61/10 [Draft
Articles on Diplomatic Protection]; Draft Articles on State Responsibility, supra n.85, art.
44(b).

VCLT, supra n.71, art. 31(3)(c); Antonio Parra, Applicable Substantive Law in ICSID
Arbitrations Initiated Under Investment Treaties, 16 ICSID REV. FOREIGN INV. L.J. 20,
21 (2001).

Legal Consequences for States of the Continued Presence of South Africa in Namibia
(SouthWest Africa) Notwithstanding Security Council Resolution 276 (1970), Advisory
Opinion, 1971 I.C.J. 16, para.118 (June 21)

International Thunderbird Gaming Corp. v. Mexico, para.147 (NAFTA/UNCITRAL)


(Award) (Jan. 25, 2006), available at
http://ita.law.uvic.ca/documents/ThunderbirdAward.pdf. See also GAMI Investments Inc.
v. Mexico, at para. 76 (NAFTA/UNCITRAL) (Final Award) (Nov. 15, 2004), available at
http://ita.law.uvic.ca/documents/Gami.pdf.

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Pope and Talbot Interim Award at para.78; S.D. Myers, Inc. v. Canada, 40 I.L.M. 1408,
1437 (Partial Award) (ICSID, Nov. 13, 2000); Organization for Economic Cooperation
and Development [OECD], National Treatment for Foreign-Controlled Enterprises at 16-
17 (1985).

United Nations Conference on Trade and Development, National Treatment, 8,


UNCTAD Series on Issues in International Investment Agreements,
UNCTAD/ITE/IIT/11(Vol. IV) (2000).

BRITISH PETROLEUM, ANNUAL REPORT AND ACCOUNTS, 7 (2007), available at


http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/set_branch/ST
AGING/ common_assets/downloads/pdf/ara_2007_annual_report_and_accounts.pdf

KENNETH VANDEVELDE, UNITED STATES INVESTMENT TREATIES: POLICY AND


PRACTICE AT 77 (1992); Loewen v. The United States of America, 7 ICSID (W. Bank)
421, para.132 (Award) (2003); Antoine Goetz v. Burundi, 6 ICSID (W. Bank) 5, para.121
(Award) (2004).

Legal Consequences for States of the Continued Presence of South Africa in Namibia
(SouthWest Africa) Notwithstanding Security Council Resolution 276 (1970), Advisory
Opinion, 1971 I.C.J. 16, para.118 (June 21).

I.C.J. Statute, art. 38(1)(d).

ROGER BLANCHARD, THE FUTURE OF GLOBAL OIL PRODUCTION: FACTS,


FIGURES, TRENDS AND PROJECTIONS, BY REGION 20 – 21 (2005).

U.N. Charter, supra n.65, art. 2, para.7.

United Nations General Assembly, Note verbale from States addressed to the Secretary
General, 3, U.N. Doc. A/62/658 (Feb. 2, 2008).

GRAZHDANSKII KODEKS RF [GK] [CIVIL CODE] art. 48(1) (Russ.),


中国人民共和国公司法 [COMPANY LAW] art. 3 (promulgated by the Standing Comm.
Nat’l People’s Cong., Oct. 7, 2005, effective Jan. 1, 2006) (P.R.C.); Salomon v.
Salomon & Co Ltd, [1897] A.C. 22 (H.L.) (U.K.).

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Ahmadou Sadio Diallo (Guinea v. Dem. Rep. Congo.) 46 I.L.M. 712, 727 (I.C.J.,
Preliminary Objections, May 27, 2007), Draft Articles on Diplomatic Protection.

Barcelona Traction, supra n.120 at para.96

UNCTAD Series on Issues in International Investment Agreements II, page 22.

Mostafa, Ben. The Sole Effects Doctrine, Police Powers and Indirect Expropriation
under International Law.

Convention on the Settlement of Disputes between States and Nationals of Other


States, art. 25(2)(b), Oct. 14, 1966, 575 U.N.T.S. 159 [ICSID Convention]; CHRISTOPH
SCHREUER, THE ICSID CONVENTION: A COMMENTARY 292–293 (2001).

CASES:

Legal Status of Eastern Greenland (Judgment) [1933] PCIJ Rep Series A/B No 53, 45-
46. [hereinafter Eastern Greenland].

Island of Palmas

Burkina Faso/Mali, 17 ¶25-26; Shaw The Heritage of States: The Principle of Uti
Possidetis Juris Today‘ 67 BYIL (1996) 75, 81; Opinion No. 2 International Conference
on the Former Yugoslavia Arbitration Commission 1992

MCLACHLAN, supra n.94 at 178-179; Zhinvali Development Limited v. Georgia, 10


ICSID (W. Bank) 6, para.415 (2003)

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Mihaly International Corporation v Sri Lanka, 41 I.L.M. 867, para.48, 49, 60 (Award)
(ICSID, 2002).

Metalclad Corp v. Mexico, 5 ICSID (W. Bank.) 209, 228 (Award) (ICSID, 2000)

ELSI, supra n.86 at 49 (Judgment), 89 (Judge Oda).

Sedco Inc v National Iranian Oil Co (1985)

ADC v. Hungary (2006). ICSID Case No. ARB 03/16

Técnicas Medioambientales Tecmed S.A. v Mexico, 43 I.L.M. 133, para.154 (Award)


(ICSID, 2003).

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STATEMENT OF JURISDICTION

Pursuant to Article 40 (1) of the Statute of the International Court of Justice, Republic of
Astria and Kingdom of Rydal jointly and respectfully submits the present dispute
concerning the Windscale Islands by virtue of the Joint Notification addressed to the
registrar of the court and the special agreement submitted thereto.

Both Republic of Aspatria and Kingdom of Rydal have agreed to the contents of the
Compromis as submitted by Special Agreement. The said parties to this dispute upon
ratifying the statute of the International Court of Justice accepts the compulsory
jurisdiction of the Court in accordance with Article 36 (2) of the Court’s Statute and shall
enthusiastically accept the judgment of this Court as final and binding and shall execute
it in good faith in its entirety.

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QUESTIONS PRESENTED

1. WHETHER RYDAL HAS SOVEREIGNTY OVER THE WINDSCALE ISLANDS


AND THEREFORE CAN GIVE INDEPENDENCE TO THE ISLANDERS BASED
ON THE PRINCIPLE OF SELF-DETERMINATION

2. WHETHER RYDAL’S REJECTION OF MDR’s BID CONSTITUTED A


VIOLATION OF ASPATRIA-RYDAL BIT AND WHETHER RYDALS HAS LEGAL
STANDING TO INVOKE THE ASPATRIA-RYDAL BIT TO PROTECT ASSETS
OF ALEC.

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STATEMENT OF FACTS

The dispute concerns sovereignty over an archipelago, the Windscale Islands (“the
Islands”). The Republic of Aspatria is the closest country to the Windscale Islands (“the
Islands”) by approximately 500 miles. Aspatria was a colony of the Kingdom of
Plumbland until it attained its independence. The Kingdom of Rydal on the other hand is
located 7,500 miles from “The Islands”.

HISTORICAL CLAIMS TO THE ISLANDS

First Occupation
In 1778, a naval ship from Plumbland called Salkeld, discovered the Islands.
Subsequently, the Viceroy of Aspatria then sent Lieutenant Ricoy to settle and claim the
Islands on behalf of the King of Plumbland by establishing a fort and settlement named
Salkeld for approximately two decades in the islands. Before returning briefly to Aspatria,
Lieutenant Ricoy left the flag of Plumbland flying over the Salkeld fort with a notice
declaring Plumbland’s sovereignty over the Islands.

Shipwreck Survivors
In 1817, The Grizedale landed in the Islands sent by the Viceroy of Aspatria to the
Islands under Commander Javier Crook to establish a penal colony but when they
arrived, they were surprised that a group of armed sailors from Rydal were in the
Islands. The group under Commander Crook was then flabbergasted when they were
given an ultimatum by a certain Admiral Aikton which they were suspecting to beee from
Rydal to leave or be arrested. Outnumbered and out-armed, Commander Crook chose
to depart under protest.

Word reached to King Piero of Plumbland and soon thereafter sent a letter to Queen
Constance of Rydale protesting the erroneous occupation of the territory and the
property of Plumbland. Queen Constance however responded by endorsing actions of

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Admiral Aikton asserting in effect that by “way of discovery” one of the voyages sent by
their kingdom discovered the islands.
Aspatria’s Independence

In 1819, with war between Rydal and Plumbland continues, an independence


movement had emerged in the Viceroyalty of Aspatria under the command of Colonel
Alejandro Diaz. Colonel Diaz and his supporters signed a Declaration of Independence.
In 1820, a Constitutional Convention was held establishing a federal system of
government and the inclusion of the Islands as part of the territory of the new Republic
of Aspatria. In 1827, Rydal recognized the independence of Aspatria and with the treaty
of Woodside in 1841, Plumbland recognized both the independence of Aspatria and
Aspatria’s continued claims over the Islands.

Aspatria and Rydal Relations


By 1821, Plumbland losing the war with Rydal, signed the Treaty of Great Corby by
which it acknowledged Rydal’s sovereignty over the Islands and transferred any
Plumbland sovereignty over the Islands to Rydal. In 1845, Aspatria established a
permanent diplomatic mission in Rydal. Aspatria’s Ambassador continued to assert
Aspatria’s sovereignty over the Islands which the Rydalian Foreign Ministry
categorically dismissed.

Between 1880 and 1910, Aspatria experienced a serious political and economic crisis,
which Aspatria recalled all its ambassadors. Upon the restoration of civil government,
the new President continued to assert Aspatria’s claim. In 1949, Aspatria joined the
United Nations, and sent a diplomatic note, through its Ambassador Francisco Hotton,
asserting its sovereignty over the Islands to the Secretary-General.

In the 1970s and 1980s, trade steadily increased between Rydal and Aspatria although
the two States continued to disagree over the sovereignty of the Islands. In 1985,
Aspatria and Rydal negotiated and signed a Treaty Concerning the Encouragement and

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Reciprocal Protection of Investment (the Aspatria-Rydal BIT), which entered into force
in the same year. The relevant provisions of the Aspatria-Rydal BIT are as follows:

XXX

"Investment" means every asset of an investor that has the characteristics of an


investment, including such characteristics as the commitment of capital or other
resources, the expectation of gain or profit, or the assumption of risk. Forms that
an investment may take include: (a) an enterprise; (b) shares, stock, and other
forms of equity participation in an enterprise; (c) licenses, authorisations, permits,
and similar rights conferred pursuant to applicable domestic law.

"Investor of a Party" means a Party or state enterprise thereof, or a national or an


enterprise of a Party, that attempts to make, is making, or has made an
investment in the territory of the other Party.

***

Article IV

Each Party shall accord investments and investors of the other Party treatment
no less favourable than that it accords, in like circumstances, to its own investors
and to investors of any non-Party.

Article V

Each Party shall accord to investments treatment in accordance with customary


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

Article VI

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(a) Neither Party may expropriate or nationalise an investment either directly or
indirectly through measures equivalent to expropriation or nationalisation
("expropriation"), except for a public purpose; in accordance with due process
of law; in a non-discriminatory manner; and on prompt, adequate, and
effective compensation.

(b) With the exception of measures so severe in light of their purpose that they
cannot be reasonably viewed as having been adopted and applied in good
faith, non-discriminatory measures of a Party that are designed and
applied to protect legitimate public welfare objectives do not constitute indirect
expropriation.

***

Article XIII

In the event of a dispute arising with respect to the rights conferred by this Treaty,
in addition to any arbitration proceeding to which an Investor of a Party may be
entitled under this Treaty or by contract, the Party of said Investor’s nationality
may bring the claim before the International Court of Justice, and the other Party
shall accept the personal and subject matter jurisdiction of that Court.

XXX

Status of the Islanders

Under a succession of Rydalian governors, the main activities on the Island were fishing
and farming. Rydal’s navy used it as a strategic harbour. Geographical proximity
facilitated the establishment of regular trade between the Islands and Aspatria. Aspatria
levied no import duties on goods from the Islands and treated persons born on the
Islands as Aspatrians.

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Rydal restricted foreign commercial activity on the Islands, which remained poor by
international standards with no self-sustainable economy. The Islanders do not possess
full Rydalian citizenship.

In 1945, Rydal joined the United Nations and designated the Islands a non-self-
governing Territory and it gave the Islanders a Constitution in 1947, granting them
control over day-to-day administration subject to the Governor’s approval.

Discovery of Oil
In 1997, oil was discovered in the basin around the Islands. The discovery of oil excites
a growing independence movement within the Islands. News of oil in the Islands also
reinvigorated calls in the Aspatrian media and Aspatrian Parliament for a more
aggressive assertion of Aspatrian sovereignty over the Islands which resulted to the
numerous proposals of bills declaring Aspatria’s legal right to the Islands.

In 2003, MDR Limited, owned by Felix Monte de Rosa, an Aspatrian company engaged
in extracting and processing oil, coal and other fuel sources.

In December 2006, assembly plan for the bidding was initiated by the leader of the
Assembly of Islands, First Minister Nigel Craven. The bidding process was said to be
“open, transparent and competitive”. Bidding companies had to be incorporated or have
a registered office in Rydal to qualify. The Assembly would select the winning bid,
subject to Rydal’s approval.

Although several companies expressed interest in the project, only two bids were made,
one from Rydalian Oil Company (ROCO) and one from MDR Limited. ROCO’s bid
promised 45% of the net proceeds to the Islands and listed the existing equipment,
personnel, and assets of ALEC located in Aspatria as resources that would be used to
extract and process the oil.

MDR’s bid, which was submitted by its local registered office in Rydal, included an up-
front payment of US$500 million upon the signing of a final license agreement and a

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promise to pay 50% of the net proceeds to the Islands. MDR’s strategic plan included a
customer list, projected sales, and proposed transportation routes. At first, President
Lavin has acknowledged that Monte de Rosa have the exclusive license to extract oil in
Windscale Islands but because of the prejudicial opinion raised by the Prime Minister of
Rydal, Agnes Abbot, raising the most nonsensical comment that the grant of authority to
Aspatria to exploit natural resources over which it alleged to have no sovereignty over
the Islands complicates the fragile relations between two States, the grant was
withdrawn despite the bid being more economically attractive to the people in the
Islands.

Despite the attractive and beneficial bid by the MDR, the Assembly approved the ROCO
bid. Islanders Longing for Sovereignty and Autonomy (ILSA) members then issued a
joint press release, announcing that they vote in favor of the bid on its merits, but
expressed grave concerns about the high-handed manner in which this matter has been
treated. Nevertheless, Governor Black, the Governor of the Islands signed the
recommendation and announced to immediately initiate negotiations with ROCO
towards a final contract.

Repercussions
On December 3, 2007, Monte de Rosa filed a judicial challenge in the courts of Rydal
against the results of Rydalian bidding process but the case was dismissed for lack of
standing to sue. His expedited appeals from that dismissal failed to overturn it, and
Supreme Court denied its discretionary review.

The controversy surrounding Governor Black’s rejection of the Assembly’s acceptance


of MDR’s bid sparked non-violent protests across the Islands. A plebiscite called by the
Assembly resulted in 76% of the Islanders voting for independence, 18% for remaining
with Rydal, and 6% for prospective unification with Aspatria. The plebiscite was
endorsed by Rydal but rejected by Aspatria as illegal. President Lavin herself
condemned the plebiscite illegal and stated that she would do all in her power to ensure
that the Islands were “returned to Aspatria’s rightful control”. The President said, “Rydal

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cannot grant what it does not possess; it cannot grant independence where it does not
itself have lawful sovereignty. The Rydalian endorsement of plebiscite exacerbates the
illegal occupation of the Islands in violation of Aspatria’s historic title.”

On 16 September 2009, the parties agreed to submit their dispute to this Court.

SUMMARY OF PLEADINGS

Aspatria‘s current claim to the Windscale Islands dates from 1778, when the
Viceroy of Aspatria, a colonial possession of Plumbland, established Plumbland‘s legal
title to the Islands. Plumbland had both the intention and will to establish sovereignty
and exercised that sovereignty through effective occupation of the entire archipelago.

As part of Aspatria the Islands have already been decolonised, and as a minority
of Aspatria the Islanders do not have the right to independence based on any
application of the principle of self-determination. Though the Islands are listed as a
Non-Self-Governing Territory, the inclusion in that list does not guarantee a right to
independence. They would continue to exercise their right to self-determination under
the rightful administration of the lawful sovereign Aspatria. Thus, administration should
be ceded to Aspatria.

Rydal’s de facto administration of the Islands cannot establish sovereignty by


acquisitive prescription without Aspatria’s acquiescence. Aspatria has consistently
protested Rydal’s unlawful administration, both to Rydal and to the United Nations.

MDR’s license from the Aspatrian government should have been sufficient to grant it
access to the Islands’ oil reserves. Rydal’s tender process was an unlawful exercise of
sovereignty over Aspatrian territory. By reason of physical control over the territory,
including its obligations under the Aspatria-Rydal BIT, Rydal owes obligations under
international law with regard to its acts in the Islands because of its

MDR was an investor attempting to make an investment within the Islands. Rydal’s
rejection of MDR’s bid violated the obligation under Article IV to accord MDR no less
favourable treatment than it accorded to ROCO and obligations under the Aspatria-

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Rydal BIT, a Rydalian investor. It discriminated on the basis of nationality and cannot be
justified by any rational government policy. Rydal’s rejection violated the obligation
under Article V to accord fair and equitable treatment to the bid. Rydal’s specific
representations during the bidding process raised the legitimate expectation that
economic competitiveness, and not nationality, would be the basis of selection.

Rydal does not have standing to invoke the Aspatria-Rydal BIT to protect the assets of
ALEC, an Aspatrian company. The measure taken against ALEC was in accordance
with Aspatria’s criminal law, a matter within Aspatria’s domestic jurisdiction. Tthe
sequestration of ALEC’s assets did not constitute indirect expropriation as defined by
Article VI(b) of the Aspatria-Rydal BIT. It was a non-discriminatory measure designed
and applied to protect legitimate public welfare objectives: the legitimate exercise of
police powers and the protection of Aspatria’s permanent sovereignty over its natural
resources. Further, it was a temporary measure that left intact ALEC’s most essential
asset in Aspatria: its license to exploit oil in Aspatria’s northeast province. Therefore, it
was not so severe in light of its purpose that it cannot be reasonably viewed as having
been adopted and applied in good faith.

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PLEADINGS

I. SOVEREIGNTY OVER THE WINDSCALE ISLANDS AND


THEREFORE CAN GIVE INDEPENDENCE TO THE
ISLANDERS BASED ON THE PRINCIPLE OF SELF-
DETERMINATION

A. Aspatria has sovereignty over the island. Plumbland and


its Viceroyalty of Aspatria established and exercise of
Sovereignty over the entire Windscale Islands.
Under customary international law, territorial integrity of a state is a peremptory
norm of jus cogens. The exclusive authority of a state within its territory is a cornerstone
of the international system. 1 The Windscale Islands were encountered by a naval
vessel of Plumbland, and lieutenant Ricoy was given clear instructions from the Viceroy
of Aspatria to “settle and claim the Island on behalf of the king of Plumblan.” 2 The action
of Plumbland in 1778 fulfilled both conditions cited in the case of Eastern Greenland:

“To acquire sovereignty there must be both the “intention and will to act as
sovereign and some actual exercise or display of authority.” 3

1
Declaration on Principles of International Law Concerning Friendly Relations and CoOperation among States in
Accordance with the Charter of the UN (1970) GA Res 2625 A/8028 [hereinafter Friendly Relations Declaration];
Jennings and Watts (eds) Oppenheim’s International Law (Oxford, 1992) 564; Jennings, The Acquisition of Territory
in International Law (New York, 1963); Island of Palmas Case (Netherlands, USA) (1928) 2 RIAA 829, 838-9
[hereinafter Island of Palmas]; The Case of the SS “Lotus” (France v Turkey) (Judgment) [1927] PCIJ Series A. No 10,
18.
2
Compromis
3
Legal Status of Eastern Greenland (Judgment) [1933] PCIJ Rep Series A/B No 53, 45-46. [hereinafter Eastern
Greenland].

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For nearly twenty years without protest, Plumbland had exercise and demonstrated its
sovereign rights to the island. In the case of Islas Palmas:

“To establish effective sovereign control, occupation of the territory must


be continuous, prolonged, and peaceful. For uninhabited islands, even very little
exercise of sovereign authority has been adjudged sufficient to confirm title.” 4

The Windscale Islands from discovery was previously uninhabited and for twenty
years Plumbland had occupied and exercised its sovereignty over the Islands without
protest. Thus it had established effective sovereign control over the Island.

Plumbland‘s acts were sufficient to establish sovereignty over the entire group of
Islands. In the absence of any competing claim, a group of uninhabited and remote
islands can be regarded in law as a unit, rendering it unnecessary to adduce evidence
of manifestations of sovereignty over the whole territory.5 Moreover, official documents
and maps of the time produced by Plumbland referred to “the Islands” as a unified
mass.6 Thus, Aspatria has sovereignty over entire Islands

C. THE ISLANDERS ARE NOT ENTITLED TO INDEPENDENCE


BASED ON THE PRINCIPLE OF SELF-DETERMINATION.
Self-determination denotes the legal right of people to decide their own destiny in
the international order. Self-determination is a core principle of international law, arising
from customary international law, but also recognized as a general principle of law, and
enshrined in a number of international treaties. A possible conflicting principle of self-
determination is uti possidetis juris.

In the case of Burkina Faso/ Mali: “Uti possidetis, principle, which is logically
connected with the phenomenon of the obtaining of independence, wherever it occurs.
It's obvious purpose is to prevent the independence and stability of new States being
endangered by fratricidal struggles provoked by the challenging of frontiers following the
withdrawal of the administering power…Its purpose, at the time of the achievement of
independence by the former Spanish colonies of America, was to scotch any designs
which non-American colonizing powers might have on regions which had been assigned
by the former metropolitan State to one division or another, but which were still
uninhabited or unexplored.” In this case, This Court has acknowledged that the

4
Island of Palmas,
5
Island Palmas, 857
6
Compromis, ¶6,7,9.

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importance of maintaining stable national frontiers after decolonisation through
application of uti possidetis prevails over other claims to self-determination.7

The principle of territorial integrity informs and explicitly qualifies UN declarations


recognizing self-determination and considerations of territorial integrity have
consistently prevailed over self-determination in international legal judgments. As the
Supreme Court of Canada in the Quebec Secession Case stated, ―the international
law principle of self-determination evolved within a framework of respect for the
territorial integrity of existing states.8 Aspatria‘s territorial integrity must prevail over any
possible right to independence based on the principle of self-determination. Thus the
Islanders’ minority may not be entitled to independence under the principle of self-
determination.

The Windscale Islanders represent a minority of Aspatria by virtue of their unique


history, culture and values. The Islanders‘ rights as members of a minority are protected
by the International Covenant on Civil and Political Rights (ICCPR), ratified by both
Parties.9 The United Nations provides that minorities have the right to cultural, religious
and linguistic freedom, within their respective territories but not a general right to
independence based on self-determination. Though the right to self-determination is
generally accepted, it does not imply a right of ethnic minority groups existing within
territorial states to secede. Aspatria having sovereignty over the Windscale Islands only
Aspatria may grant independence.

The Aaland Islands Question established that dismemberment of national territory on


the basis of self-determination can only be ―a last resort when the State lacks either
the will or the power to enact and apply just and effective guarantees [of minority
rights]10

Aspatria is a democratic state that recognizes the Islanders as full citizens of Aspatria
and accords them rights of travel, education, commerce, and trade. There is no
indication that Aspatria would not continue to wholly respect the rights of the Islanders
when administration is ceded to Aspatria. The Windscale Islanders are not and have
never been under threat of gross human rights abuses; they are not in the position of
last-resort and cannot therefore claim independence as a minority based on self-
determination

7
Burkina Faso/Mali, 17 ¶25-26; Shaw ‗The Heritage of States: The Principle of Uti Possidetis Juris Today‘ 67 BYIL
(1996) 75, 81; Opinion No. 2 International Conference on the Former Yugoslavia Arbitration Commission 1992.
8
Advisory Opinion upon the Legal Aspects of the Aaland Islands Question (1920) League of Nations Official Journal;
Western Sahara ¶58 and Construction of a Wall
9
Compromis, ¶69.
10
Aaland Islands Question: Report submitted to the Council of the League of Nations by the Commission of
Rapporteurs, League of Nations Doc. B7/21/68/106 1921, 28.

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II. RYDAL’S REJECTION OF MDR’S BID VIOLATED ITS
OBLIGATIONS UNDER THE ASPATRIA-RYDAL BIT.

A. The claim of Aspatria is admissible because all local


remedies have been exhausted.

Under customary international law, all local remedies must be pursued within the
State allegedly responsible before an international claim is admissible 11 . Aspatria’s
claim is admissible for the reson that MDR had pursued all administrative and judicial
remedies possible under Rydalian law12.

B. Rydal’s rejection of the bid of MDR violated its obligations


under Article V of the Aspatria-Rydal BIT.

Under the Aspatrian-Rydal Bilateral Investment Treaty (BIT), the bid of MDR is
an investment. The MDR bid involved an exposure to the obligation of an upfront
payment of USD 500 million which ripened into an asset of economic value once the
Assembly has reached the initial consensus to select the MDR Bid. The approved bid
became a protected investment and Rydal was bound to treat it equitably at that stage
of the bidding process. The ICSID Tribunals have found that pre-contractual
development costs constitute protected investment provided that (1) they fulfill the
requisite conditions laid down within the investment treaty; and (2) such an
interpretation is consistent with the intentions of the State parties13.

11
ELSI, id., at para.59; Draft Articles on Diplomatic Protection, art. 14(1), International Law Commission, U.N. GAOR,
61st Sess., Supp. No. 10, U.N. Doc. A/61/10 [Draft Articles on Diplomatic Protection]; Draft Articles on State
Responsibility, supra n.85, art. 44(b).
12
Compromis, para.61
13
MCLACHLAN, supra n.94 at 178-179; Zhinvali Development Limited v. Georgia, 10 ICSID (W. Bank) 6, para.415
(2003); Mihaly International Corporation v Sri Lanka, 41 I.L.M. 867, para.48, 49, 60 (Award) (ICSID, 2002).

20 | P a g e
Such a finding is consistent or in accordant with the intentions of the parties
under the Aspatria-Rydal BIT. In Mihaly v. Sri Lanka, the investment treaty both defined
the conditions of an investment and further provided for “the Parties’ prerogative in this
respect”. Since the host State explicitly represented that it did not consider there to be
an investment until a contract was signed, the Tribunal found that the development
costs did not constitute an investment. The Aspatria-Rydal BIT does not make reference
to the intentions of the parties apart from providing the requisite conditions for an
investment. Therefore, the MDR bid constituted an investment since it fulfilled the
necessary conditions. Indeed, Rydal expressed no contrary intention during its
intercourse with the bidders.

C. Rydal owes obligations under the Aspatria-Rydal bit to


Aspatrian investors and investments in the islands.

Interpreted in accordance with international law, the Aspatria-Rydal BIT imposes


obligations on Rydal to protect Aspatrian investors and investments within the Islands,
not because of Rydalian sovereignty, but because of Rydal’s physical control over the
Islands, . This is consistent with the object and purpose of the Aspatria-Rydal BIT to
promote and reciprocally protect investments irrespective of the sovereignty dispute
over the Islands14.

Since the Aspatria-Rydal BIT is an instrument of international law, a court “should


have recourse to the rules of general international law to supplement those of the treaty”.
The Legal Consequences advisory opinion concerning Namibia states that “[p]hysical
control of a territory, and not sovereignty or legitimacy of title, is the basis of State
liability for acts affecting other States”. This Court held that South Africa owed
obligations to other States under a League of Nations Mandate, “an international
agreement having the character of a treaty or convention”, in relation to the exercise of

14
VCLT, supra n.71, art. 31(3)(c); Antonio Parra, Applicable Substantive Law in ICSID Arbitrations Initiated Under
Investment Treaties, 16 ICSID REV. FOREIGN INV. L.J. 20, 21 (2001).

21 | P a g e
its powers within Namibia 15 . South Africa’s lack of sovereignty did not preclude the
imposition of these treaty obligations because it had physical control over Namibia.

The rejection of the MDR bid by Rydal violated its obligation to accord it “fair and
equitable treatment”. The standard of “fair and equitable treatment” encompassed in
Article V provides “an autonomous standard that is additional to general international
law” 16 . This requires treatment “that does not affect the basic expectations [of] the
foreign investor”17. ICSID Tribunals have ruled that clear and unambiguous conduct by
the host State “creates reasonable and justifiable expectations on the part of an investor
(or investment) to act in reliance on said conduct”18. In Metalclad v. Mexico, Mexican
federal officials assured the investor that a federal permit was “all that was needed to
undertake the landfill project”. The refusal of the investor’s operations for lack of a
municipal permit breached the investor’s legitimate expectation19.

Rydal treated MDR less favourably than it did ROCO when the two were in “like
circumstances”. The term “like circumstances” in Article IV encompasses investors
within the same business or economic sector20. MDR and ROCO fulfill this requirement
since they both operate in the oil exploitation industry. Indeed, the likeness goes further
since they are in direct competition for the same concession. In consequence, the
national treatment principle demands that MDR and ROCO “be subject to the same
competitive conditions” during the Rydalian bidding process21. The bidding process was
promised to be “open, transparent and competitive”. The MDR bid was superior to the
ROCO bid. It provided an upfront payment of USD 500 million, and 50 percent of the net

15
Legal Consequences for States of the Continued Presence of South Africa in Namibia (SouthWest Africa)
Notwithstanding Security Council Resolution 276 (1970), Advisory Opinion, 1971 I.C.J. 16, para.118 (June 21).
16
RUDOLF DOLZER & CHRISTOPH SCHREUER, PRINCIPLES OF INTERNATIONAL INVESTMENT LAW, 124 (2008);
Azurix Corp. v. Argentina, I.I.C. 24, para.361 (Award) (ICSID, 2004); MTD Equity v. Chile, 44 I.L.M. 91, para.109-115
(Award) (ICSID, 2004).
17
Técnicas Medioambientales Tecmed S.A. v Mexico, 43 I.L.M. 133, para.154 (Award) (ICSID, 2003).
18
International Thunderbird Gaming Corp. v. Mexico, para.147 (NAFTA/UNCITRAL) (Award) (Jan. 25, 2006),
available at http://ita.law.uvic.ca/documents/ThunderbirdAward.pdf. See also GAMI Investments Inc. v. Mexico, at
para. 76 (NAFTA/UNCITRAL) (Final Award) (Nov. 15, 2004), available at http://ita.law.uvic.ca/documents/Gami.pdf.
19
Metalclad Corp v. Mexico, 5 ICSID (W. Bank.) 209, 228 (Award) (ICSID, 2000)
20
Pope and Talbot Interim Award at para.78; S.D. Myers, Inc. v. Canada, 40 I.L.M. 1408, 1437 (Partial Award) (ICSID,
Nov. 13, 2000); Organization for Economic Cooperation and Development [OECD], National Treatment for Foreign-
Controlled Enterprises at 16-17 (1985).
21
United Nations Conference on Trade and Development, National Treatment, 8, UNCTAD Series on Issues in
International Investment Agreements, UNCTAD/ITE/IIT/11(Vol. IV) (2000).

22 | P a g e
proceeds. The ROCO bid only promised 45 percent of the net proceeds, an amount
realizable only after the realization period that can extend to 50 years, according to
studies within the oil production industry. Industry practice further reveals that the 5
percent difference in net proceeds between the two bids translates to a difference of
USD 1 billion in absolute terms 22 . Additionally, the MDR bid provided infrastructure
development on the Islands and guaranteed local employment of the Islanders. As First
Minister Craven himself admitted, “the MDR bid was without question the more
economically attractive to the people of the Islands”23.

Rydal cannot invoke its government policies to justify its differential treatment,
unless the policies were not intentionally discriminatory nor discriminatory in effect24.
The circumstances surrounding the rejection of the MDR bid reveal Rydal’s prejudice on
the basis of nationality. The ILSA members voting against the MDR bid asserted that
they had to “be wary of Aspatrians bearing gifts”, and Black also declared that “the
future of the Windscale Islands lies with that community of States, led by Rydal” 25. This
intentional discrimination is fatal to any justification by Rydal for its differential treatment.

III. RYDAL OWES OBLIGATIONS UNDER THE ASPATRIA-


RYDAL BIT TO ASPATRIAN INVESTORS AND
INVESTMENTS IN THE ISLANDS.

22
BRITISH PETROLEUM, ANNUAL REPORT AND ACCOUNTS, 7 (2007), available at
http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/set_branch/STAGING/
common_assets/downloads/pdf/ara_2007_annual_report_and_accounts.pdf
23
Compromis, para.49, 50, 51, 52.
24
KENNETH VANDEVELDE, UNITED STATES INVESTMENT TREATIES: POLICY AND PRACTICE AT 77 (1992); Loewen v.
The United States of America, 7 ICSID (W. Bank) 421, para.132 (Award) (2003); Antoine Goetz v. Burundi, 6 ICSID
(W. Bank) 5, para.121 (Award) (2004).
25
Compromis, para.52, 53.

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Since the Aspatria-Rydal BIT is an instrument of international law, a court “should
have recourse to the rules of general international law to supplement those of the
treaty” 26 . The Legal Consequences advisory opinion concerning Namibia states that
“[p]hysical control of a territory, and not sovereignty or legitimacy of title, is the basis of
State liability for acts affecting other States”27. This Court held that South Africa owed
obligations to other States under a League of Nations Mandate, “an international
agreement having the character of a treaty or convention”, in relation to the exercise of
its powers within Namibia. South Africa’s lack of sovereignty did not preclude the
imposition of these treaty obligations because it had physical control over Namibia. 28

Interpreted in accordance with international law, the Aspatria-Rydal BIT imposes


obligations on Rydal to protect Aspatrian investors and investments within the Islands
because of Rydal’s physical control over the Islands, not because of Rydalian
sovereignty. This is consistent with the object and purpose of the Aspatria-Rydal BIT to
promote and reciprocally protect investments irrespective of the sovereignty dispute
over the Islands.29

A. Rydal’s rejection of the MDR bid violated its obligation


under Article IV of the Aspatira-Rydal BIT.

MDR is an “investor” under the Aspatrian-Rydal BIT as an Aspatrian national


“attempting to make…an investment” in the Islands by submitting a bid for the
concession to exploit the oil reserves.

26
VCLT, supra n.71, art. 31(3)(c); Antonio Parra, Applicable Substantive Law in ICSID Arbitrations Initiated Under
Investment Treaties, 16 ICSID REV. FOREIGN INV. L.J. 20, 21 (2001).
27
Legal Consequences for States of the Continued Presence of South Africa in Namibia (SouthWest Africa)
Notwithstanding Security Council Resolution 276 (1970), Advisory Opinion, 1971 I.C.J. 16, para.118 (June 21).
28
VCLT, supra n.71, art. 31(1).
29
VCLT, supra n.71, art. 31(1).

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Decisions of the Iran-U.S. Claims Tribunal and International Centre for Settlement of
Investment Disputes (“ICSID”) form “subsidiary means”30 for determining the content of
the national treatment principle in Article IV, a term found in most modern investment
treaties.

The Tribunal in Pope & Talbot held that a host State violates the national treatment
requirement when it: (1) accords different treatment to foreign and domestic investors in
“like circumstances”; and (2) cannot prove that the differentiation bears a reasonable
nexus to a rational government policy which is not discriminatory, either on its face or de
facto.31

B. Rydal treated MDR less favourably than it did ROCO when


the two were in “like circumstances”.

The term “like circumstances” in Article IV encompasses investors within the


same business or economic sector. MDR and ROCO fulfill this requirement since they
both operate in the oil exploitation industry. Indeed, the likeness goes further since they
are in direct competition for the same concession.

In consequence, the national treatment principle demands that MDR and ROCO
“be subject to the same competitive conditions” during the Rydalian bidding process.32
The bidding process was promised to be “open, transparent and competitive”. The MDR
bid was superior to the ROCO bid. It provided an upfront payment of USD 500 million,
and 50 percent of the net proceeds. The ROCO bid only promised 45 percent of the net
proceeds, an amount realizable only after the realization period that can extend to 50
years, according to studies within the oil production industry.33 Industry practice further

30
I.C.J. Statute, art. 38(1)(d).
31
Pope & Talbot Inc. v. Canada, 7 ICSID (W. Bank) 43, at para.78-79 (Award on the Merits of Phase 2) (Apr. 10,
2000); Marvin Feldman v. Mexico, 42 I.L.M. 625, 662 (Award) (ICSID, Dec. 16, 2002).
32
United Nations Conference on Trade and Development, National Treatment, 8, UNCTAD Series on Issues in
International Investment Agreements, UNCTAD/ITE/IIT/11(Vol. IV) (2000).
33
ROGER BLANCHARD, THE FUTURE OF GLOBAL OIL PRODUCTION: FACTS, FIGURES, TRENDS AND PROJECTIONS,
BY REGION 20 – 21 (2005).

25 | P a g e
reveals that the 5 percent difference in net proceeds between the two bids translates to
a difference of USD 1 billion in absolute terms.

Additionally, the MDR bid provided infrastructure development on the Islands and
guaranteed local employment of the Islanders. As First Minister Craven himself
admitted, “the MDR bid was without question the more economically attractive to the
people of the Islands”34

The first vote of the Assembly was clearly in favour of the MDR bid. As ILSA
stated, Governor Black’s refusal to assent was a denial of the freely will of the Islanders.
It is telling that Black herself admitted that the MDR proposal was appealing in the short
term.

C. The rejection of the MDR bid bore no reasonable nexus to a


rational government policy that does not discriminate
against investors.

Rydal cannot invoke its government policies to justify its differential treatment,
unless the policies were not intentionally discriminatory nor discriminatory in effect. The
circumstances surrounding the rejection of the MDR bid reveal Rydal’s prejudice on the
basis of nationality. The ILSA members voting against the MDR bid asserted that they
had to “be wary of Aspatrians bearing gifts”, and Black also declared that “the future of
the Windscale Islands lies with that community of States, led by Rydal” 35 . This
intentional discrimination is fatal to any justification by Rydal for its differential treatment.

D. Rydal lacks standing to invoke Aspatria’s responsibility for


measures taken against an Aspatrian company.

34
Compromis, para.49, 50, 51, 52.
35
Compromis, para.52, 53.

26 | P a g e
1. The sequestration of ALEC’s assets is a matter essentially
within Aspatria’s domestic jurisdiction.

As anchored in Article 2(7) of the UN Charter, the provision prohibits the organs
of the UN, including this Court, from superseding in “matters which are essentially within
the domestic jurisdiction of any State”.36

It has been an accepted State practice that absent any human rights violations,
domestic criminal justice is customarily a matter in which this Court cannot intervene. 37
The appropriation of the assets of ALEC, was a valid exercise of the jurisdiction of the
Aspatrian courts, in accordance with the Aspatrian Criminal Code and the NRA.

E. Rydal cannot exercise diplomatic protection on behalf of


ROCO for measures taken against ALEC.

1. The national State of shareholders cannot exercise


diplomatic protection on behalf of the shareholders for an
injury to their company.

The doctrine of separate legal personality is a general principle of international


law, follows that the rights and duties of a corporation are not the rights and duties of its
directors or members who are, most of the time, obscured by a corporate veil
surrounding the company. 38 Consequently, the national State of shareholders in a
company is not authorized to exercise diplomatic defense on behalf of the shareholders
for an injury to the corporation. As this Court stated in Barcelona Traction, “an act
directed against and infringing only the company’s rights does not involve responsibility

36
U.N. Charter, supra n.65, art. 2, para.7.
37
United Nations General Assembly, Note verbale from States addressed to the Secretary General, 3, U.N. Doc.
A/62/658 (Feb. 2, 2008).
38
GRAZHDANSKII KODEKS RF [GK] [CIVIL CODE] art. 48(1) (Russ.), 中国人民共和国公司法 [COMPANY LAW] art. 3
(promulgated by the Standing Comm. Nat’l People’s Cong., Oct. 7, 2005, effective Jan. 1, 2006) (P.R.C.); Salomon v.
Salomon & Co Ltd, [1897] A.C. 22 (H.L.) (U.K.).

27 | P a g e
towards the shareholders, even if their interests are affected”39. Rydal cannot exercise
diplomatic protection on behalf of ROCO, a shareholder of ALEC, for an alleged injury
to ALEC alone.

F. Nothing in the Aspatria-Rydal BIT permits Rydal to deviate


from the general rule.

Settled is the rule that express and unambiguous treaty provision modifies
diplomatic protection of companies. 40 The inclusion of “shares, stock and equity
participation in an enterprise” in the definition of “investment” under the Aspatria-Rydal
BIT does not fall under its exceptions.

With regards to ICSID tribunals, it only allows shareholder claims on the basis of
similar designations of “investment” because of the special exception in Article 25(2)(b)
of the ICSID Convention. The said special exception permits parties to agree to treat a
company of host State incorporation as a national of another State “because of foreign
control”. 41

An investment treaty must expressly provide for obligations owed to a company


incorporated in the host State, as provided in ELSI in order to replicate the ICSID
position and adapt the general rule of diplomatic protection,. This provision does not
exists in the Aspatria-Rydal BIT. As this Court in Barcelona Traction warned, extending
diplomatic protection to shareholders without express treaty provision to that end would
create “confusion and insecurity in international economic relations”.42 This is especially
where “the shares of companies whose activity is international are widely scattered and

39
Barcelona Traction, Light and Power Company, Limited (Belg. v. Spain) 1970 I.C.J. 3, 42, 46 (Second Phase, Feb. 5);
Ahmadou Sadio Diallo (Guinea v. Dem. Rep. Congo.) 46 I.L.M. 712, 727 (I.C.J., Preliminary Objections, May 27,
2007), Draft Articles on Diplomatic Protection.
40
ELSI, supra n.86 at 49 (Judgment), 89 (Judge Oda).
41
Convention on the Settlement of Disputes between States and Nationals of Other States, art. 25(2)(b), Oct. 14,
1966, 575 U.N.T.S. 159 [ICSID Convention]; CHRISTOPH SCHREUER, THE ICSID CONVENTION: A COMMENTARY 292–
293 (2001).
42
Barcelona Traction, supra n.120 at para.96.

28 | P a g e
frequently change hands”, creating the risk of multiple claims. This risk eventuates here
because ALEC’s has more than 5000 shareholders of various nationalities.

G. Rydal’s claim is inadmissible because local remedies were


not exhausted.

It is clearly stated under customary international law that an international claim is


not permissible unless the principle of the claim has been trailed as far as allowed by
the local law of the responsible State which includes all judicial and administrative
remedies.43

ALEC must avail all local remedies because there was no undue delay in the
Aspatrian remedial process.44 In light of “the volume of the work involved by a thorough
examination of the case”, which concerns a multi-billion-dollar tender bid and USD 80
million worth of ALEC’s assets, the period of four to six years for a first instance
decision is permissible.45

V. THE REPUBLIC OF ASPATRIA DID NOT VIOLATE ARTICLE VI


OF THE ASPATRIA-RYDAL BIT

The Kingdom of Rydal alleges that the 1985 Treaty Concerning the
Encouragement Reciprocal Protection of Investment (referred to as the Treaty) between
the Kingdom of Rydal and the Republic of Aspatria was violated when Aspatria
subjected ALEC into investigation and prosecution. The case stands on no valid
grounds.

43
Commentaries on Draft Articles on Diplomatic Protection.
44
Draft Articles on Diplomatic Protection, supra n.87, art. 15(b).
45
Compromis, para.57, 59.

29 | P a g e
A. The actions of the Republic of Aspatria against ALEC does
not fall within the definition of “Expropriation” as enunciated
by Article VI of the treaty.

Article VI(a) of the Treaty states that “Neither party may expropriate or
nationalise an investment either directly or indirectly through measures
equivalent to expropriation or nationalisation (expropriation), except for a public
purpose, in accordance with due process of law, in a non-discriminatory manner,
and on prompt, adequate, and effective compensation.

Direct expropriation means a mandatory legal transfer of the title to the property
or its outright physical seizure. In cases of direct expropriation, there is an open,
deliberate and unequivocal intent, as reflected in a formal law or decree or physical act,
to deprive the owner of his or her property through the transfer of title or outright seizure.
46

Based on Article VI(b), the actions of either parties cannot be considered as


indirect expropriation of when (a) it is not so severe in light of its purpose that it cannot
be reasonably viewed as having been applied in good faith; (b) non-discriminatory
measures; and (c) when such actions are applied to protect legitimate public welfare
objectives.47

1. The actions of Aspatria does not amount to direct


expropriation

The actions initiated by the Republic of Aspatria does not amount to direct
expropriation since the company, ALEC, was not deprived of their total rights over their

46
UNCTAD Series on Issues in International Investment Agreements II, page 22.
47
Compromis, par. 57

30 | P a g e
properties. 48 The actions of the Republic of Aspatria is a mere product of a legitimate
government action against violators, as prescribed by their national laws.

2. The actions of Aspatria does not amount indirect


expropriation as cited under Article VI of the Treaty

Where a measure taken by a State is taken in the exercise of that State’s police
power, the State will not be liable for any claim of expropriation as a result of that
measure. 49 The case of Sedco provided the doctrine that ‘an accepted principle of
international law that a State is not liable for economic injury which is a consequence of
bona fide “regulation” within the accepted police power of states. 50 The actions of
Aspatria were clearly based on their domestic laws, particularly those of the NRA and
their Criminal Code, which protects their national and public welfare interests. Such is
also clearly enunciated in the Treaty.

Under the NRA laws, the agency disallows ‘any action inconsistent with an
exclusive government license or patent concerning natural resources.’51 The law intends
to protect the rights of Aspatria and its people, hence a legitimate public welfare
purpose.

As decided in ADC vs. Hungary, the Court agreed that “in order for a
discrimination to exist, particularly in an expropriation scenario, there must be different
treatments to different parties”.52 Although, there may be side issues that are between
Aspatria and Rydal, clearly the acts of the government of Aspatria were non-
discriminatory. There was no sign of different treatments to similar cases.

48
Compromis, supra par. 57
49
Mostafa, Ben. The Sole Effects Doctrine, Police Powers and Indirect Expropriation under International Law.
50
Sedco Inc v National Iranian Oil Co (1985)
51
Compromis, par. 41
52
ADC v. Hungary (2006). ICSID Case No. ARB 03/16

31 | P a g e
Lastly, the measures of Aspatria against ALEC are temporary pending the final
resolution of the case of violating the nation’s domestic laws. Newcomb and Paradelle
(2009) states that “although regulatory measures designed to protect the environment,
health and safety or ensure fair competition frequently impose regulatory and
compliance costs on an investment, these will not normally reach the threshold of a
substantial deprivation”.53

PRAYER FOR RELIEF


WHEREFORE, premises conisdered, The Republic of Aspatria respectfully
requests this Honorable Court to:
1. DECLARE that Rydal must cede administration over the Islands to Aspatria
because:
(a) sovereignty over the Islands belongs to Aspatria; and
(b) the Islanders are not entitled to independence under the principle of
self-determination;
2. DECLARE that the rejection by Rydal of the MDR bid violated the Aspatria-
Rydal BIT; and

53
UNCTAD, supra.

32 | P a g e
3. DECLARE that Rydal lacks standing to invoke the Aspatria-Rydal BIT to
protect the assets of ALEC.

Respectfully submitted,

________________________

Agent for Aspatria

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