MEMORIAL FOR CLAIMANT - .Loewen Jurisdiction Loewen Group, Inc. and Raymond L. Loewen v USA – Award,

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  • TEAM HSU

    FOREIGN DIRECT INVESTMENT MOOT COMPETITION

    Boston, 25 November 2017

    IN THE MATTER OF AN ARBITRATION UNDER THE 2012 ARBITRATION

    RULES OF THE PERMANENT COURT OF ARBITRATION

    - between -

    ATTON BORO LIMITED

    Claimant

    - and -

    THE REPUBLIC OF MERCURIA

    Respondent

    MEMORIAL FOR CLAIMANT

    PCA Case No. 2016-74

    Registry

    The Permanent Court of Arbitration

  • ii

    TABLE OF CONTENTS

    TABLE OF CONTENTS .................................................................................................................. II

    INDEX OF ABBREVIATIONS .................................................................................................... XVI

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

    STATEMENT OF ARGUMENTS ................................................................................................... 4

    PART ONE: JURISDICTION AND ADMISSIBILITY ........................................................................ 5

    THE TRIBUNAL HAS JURISDICTION OVER CLAIMANTS CLAIMS ............................................. 5

    A. CLAIMANTS OPERATION IN MERCURIA CONSTITUTES AN INVESTMENT UNDER THE BIT ... 5

    1. Claimants assets individually qualify as protected investments under Article 1(1) BIT 5

    2. Even considered collectively, Claimants assets in Mercuria fall within the ordinary

    meaning of investment ................................................................................................................. 7

    a) The LTA is a core element of Atton Boros overall investment operation ........................ 7

    b) The Award crystallizes Claimants rights under the LTA ............................................... 11

    B. CLAIMANTS CLAIM UNDER ARTICLE 3(3) BIT FALLS WITHIN THE SCOPE OF THIS

    TRIBUNALS JURISDICTION .............................................................................................................. 12

    1. Mercuria undertook to observe contractual obligations pursuant to Article 3(3)

    BIT 12

    2. Mercuria, acting through NHA, entered into the LTA with Atton Boro .................... 13

    a) Article 3(3) encompasses entities, such as NHA, whose acts are attributable to

    Respondent .................................................................................................................................... 14

    b) The conclusion of the LTA is attributed to Respondent under the ILC Articles ........... 15

    3. LTAs dispute resolution clause does not preclude this Tribunal from exercising

    jurisdiction over the claims arising thereof ................................................................................ 19

    a) The LTAs forum selection clause does not amount to a waiver of the right to arbitrate

    under the Treaty ........................................................................................................................... 19

    b) The present claims are admissible since Claimant already resorted to the contractually

    agreed forum ................................................................................................................................. 20

    MERCURIA CANNOT DENY THE BENEFITS OF THE BIT TO CLAIMANT WHOSE CLAIMS ARE

    THEREFORE ADMISSIBLE .................................................................................................................. 20

    A. RESPONDENTS ATTEMPT TO DENY THE BENEFITS TO CLAIMANT LEAVES THE PRESENT

    CLAIMS UNAFFECTED ........................................................................................................................ 21

    1. Denial of benefits can only apply prospectively ................................................................. 21

    2. Respondent is not entitled to deny the benefits of the BIT to Claimant after the initiation

    of the arbitration .......................................................................................................................... 22

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    B. IN ANY EVENT, THE SUBSTANTIAL REQUIREMENTS PROVIDED UNDER ARTICLE 2(1) BIT ARE

    NOT MET IN THE PRESENT CASE ....................................................................................................... 23

    1. Atton Boro has substantial business activities in Basheera .............................................. 23

    2. Atton Boro is not owned and controlled by nationals of a third State............................. 25

    3. In any event, Respondent manifestly failed to discharge its burden of proof ................. 26

    PART TWO: MERITS ........................................................................................................................... 28

    RESPONDENT BREACHED ARTICLE 3(3) BIT BY FAILING TO OBSERVE THE OBLIGATION IT

    ENTERED INTO UNDER THE LTA ...................................................................................................... 28

    A. NHAS TERMINATION OF THE LTA IS ATTRIBUTABLE TO MERCURIA ................................. 28

    1. NHA is a State organ ............................................................................................................ 28

    2. In any event, NHA exercised governmental authority in terminating the LTA ............. 29

    3. NHA acted on the instructions of Mercuria when terminating the LTA ........................ 29

    B. MERCURIA FAILED TO OBSERVE ITS OBLIGATIONS TOWARDS CLAIMANT UNDER THE LTA

    IN VIOLATION OF ARTICLE 3(3) BIT ................................................................................................ 30

    1. NHA breached its municipal law obligations under the LTA .......................................... 30

    a) The Tribunal should accept the Awards finding regarding the NHAs wrongful

    termination .................................................................................................................................... 30

    b) In any event, NHA never adduced any evidence of Claimants unsatisfactory

    performance under Clause 6 LTA .............................................................................................. 32

    2. The contractual breach of the LTA by NHA amounts to a violation of Article 3(3) by

    Respondent .................................................................................................................................... 32

    MERCURIA BREACHED ITS OBLIGATION TO ACCORD FAIR AND EQUITABLE TREATMENT TO

    INVESTORS BY DENYING JUSTICE TO CLAIMANT IN THE PROCEEDINGS....................................... 35

    A. MERCURIA BEARS THE OBLIGATION TO TREAT INVESTORS WITH DUE PROCESS ................ 35

    B. MERCURIA UNJUSTIFIABLY FAILED TO TREAT CLAIMANT WITH DUE PROCESS .................. 37

    1. The Court failed to respect due process in the Proceedings ............................................. 37

    a) The 8-year delay in enforcing the Award amounts to a denial of justice ........................ 37

    b) Claimant was denied its right to an impartial justice ....................................................... 41

    2. Claimant was not required to exhaust local remedies....................................................... 42

    MERCURIA BREACHED THE FET STANDARD BY ENACTING THE LAW AND GRANTING THE

    LICENSE TO HG-PHARMA IN VIOLATION OF ARTICLE 3(2) BIT ....................................................... 42

    A. MERCURIA ALTERED CLAIMANTS IP RIGHTS IN A NON-TRANSPARENT MANNER DESPITE

    SPECIFIC ASSURANCES GIVEN TO THE CONTRARY .......................................................................... 43

    1. Mercuria frustrated Claimants legitimate expectations by making specific

    representations regarding its IP regime ..................................................................................... 43

    2. Mercuria acted in a non-predictable and non-transparent manner in changings its IP

    regime ............................................................................................................................................ 45

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    3. Mercurias right to regulate cannot justify the disproportional effects of the changes to

    its IP regime .................................................................................................................................. 47

    B. MERCURIA BREACHED FET STANDARD BY VIOLATING ITS INTERNATIONAL OBLIGATIONS

    ON IP RIGHTS ..................................................................................................................................... 48

    1. Mercuria must respect the international standard of conduct set by TRIPS ................. 48

    2. Mercuria violated the FET standard by according a treatment less-favorable than that

    under TRIPS in granting the License ......................................................................................... 49

    PRAYER FOR RELIEF .................................................................................................................. 52

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    INDEX OF AUTHORITIES

    ARBITRAL DECISIONS

    Alpha

    Al Tamimi

    Alpha Projektholding GmbH v Ukraine Award, 8 November 2010

    Adel A Hamadi Al Tamimi v Oman Award, 3 November 2015

    Alps Finance

    Alps Finance v Slovakia Award, 5 March 2011

    Amto Limited Liability Company Amto v Ukraine Award, 26 March 2008

    Anatolie Anatolie Stati et al. v Kazakhstan Award, 19 December 2013

    Anglia Anglia Auto Accessories Ltd. v Czech Republic Award, 10 March

    20