13R PDF

Team Code: 13R
INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES
In the Proceeding between
BURRACO.
(CLAIMANT)
REPUBLIC OF NAPPERTANIA
(RESPONDENT)
(ICSID Case No. ARB/1947)
MEMORIAL for RESPONDENT
2018
TABLE OF CONTENTS
TABLE OF CONTENTS ------------------------------------------------------------------------------ I
TABLE OF ABBREVIATIONS ------------------------------------------------------------------- IV
INDEX OF AUTHORITIES ------------------------------------------------------------------------ VI
STATEMENT OF JURISDICTION ----------------------------------------------------------XXVI
STATEMENT OF FACTS -------------------------------------------------------------------- XXVII
ISSUES RAISED ----------------------------------------------------------------------------------- XXX
SUMMARY OF ARGUMENTS ---------------------------------------------------------------XXXI
ARGUMENTS ADVANCED ------------------------------------------------------------------------- 1

I. THE CHALLENGE AGAINST MS. ANNIE SHOULD BE HEARD BY THE
TRIBUNAL AND NOT THE CHAIRMAN ----------------------------------------------------- 1
A. That the majority of the Tribunal is not being challenged ------------------------------ 1
B. That the claim for disqualification is based on a rumour ------------------------------- 1
C. Alternatively, the alleged relationship is de minimis in nature ------------------------- 2
II. MS. ANNIE SHOULD NOT BE REMOVED FROM THE ARBITRAL
TRIBUNAL -------------------------------------------------------------------------------------------- 3
A. Ms. Annie does not manifestly lack qualities provided in Article 14 ------------------ 4
i. That multiple appointments by a party do not attribute bias to an arbitrator ------ 5
a) Appointments have been made by different entities ------------------------------- 5
b) The subject matter of the arbitration is not same ----------------------------------- 5
c) There is an absence of aggravating facts -------------------------------------------- 6
ii. There is no substantial connection between the challenged arbitrator and
Respondent --------------------------------------------------------------------------------------- 7
iii. That public opinion and publication do not impute impartiality to an arbitrator -- 8
B. Ms. Annie satisfies the criteria provided under Section 2 Chapter IV----------------- 9
C. That non-disclosure is not a ground for disqualification------------------------------ 10
III. CLAIMANT’S ASSETS IN NAPPERTANIA WERE NOT AN “INVESTMENT”
FOR THE PURPOSES OF ARTICLE 1(2) OF THE BIT DUE TO THE
ILLEGALITIES UNDERLYING ITS INVESTMENT ------------------------------------ 12
-MEMORIAL ON BEHALF OF RESPONDENT- Page I

A. Compliance with the Law is a Jurisdictional Prerequisite under the BIT ---------- 12
B. Claimant’s investment was tainted with Corruption ----------------------------------- 13
i. Corruption involves a reallocation of the “actori incumbit probatio” principle and
needs to be proven through “Red Flags” --------------------------------------------------- 13
ii. “Red Flags” exist during the entirety of the investment ---------------------------- 13
a) Lack of Qualifications --------------------------------------------------------------- 13
b) Size of Payments allocated as ‘Consultancy Fees’ ------------------------------- 13
c) Ayna’s connection to Public Officials --------------------------------------------- 14
iii. Claimant’s assets were not invested “in accordance with the law” --------------- 14
a) Host State’s Laws --------------------------------------------------------------------- 14
b) International Public Policy ---------------------------------------------------------- 15
c) Doctrine of Clean Hands------------------------------------------------------------- 15
d) Principle of Good Faith -------------------------------------------------------------- 15
iv. The Burden of Proof is on Claimant to prove legality of its alleged investment 15
C. The principle of estoppel is inapplicable as against the Host State ----------------- 16
i. Claimant’s knowledge of the illegality renders the principle of estoppel
inapplicable ------------------------------------------------------------------------------------- 16
ii. Acceptance of bribe by a public official is not attributable to the host state----- 16
D. Claimant’s Assets in Nappertania do not fulfill the ratione materiae requirement for
jurisdiction under Art. 25 of the ICSID Convention.----------------------------------------- 16
i. The present transaction fails to fulfill the qualitative test of minimum duration 17
ii. Claimant’s investment did not contribute to the development of the Host State 17
iii. The element of ‘risk’ was eliminated through corruption -------------------------- 18
IV. RESPONDENT’S REGULATORY ACTIONS AGAINST THE CLAIMANT DO
NOT CONSTITUTE A VIOLATION OF FAIR AND EQUITABLE TREATMENT
STANDARDS UNDER THE BIT. -------------------------------------------------------------- 18
A. Respondent has not Violated Claimant’s Legitimate Expectation ------------------- 19
i. No legitimate expectation exists in the present case -------------------------------- 19
a) An assessment of legitimacy must take into account all the circumstances
present in the Host state -------------------------------------------------------------------- 19
b) No legitimate expectation can arise out of an investment that has been acquired
and subsequently performed illegally ---------------------------------------------------- 20
c) Legitimate expectation does not exist in the absence of specific commitments
made by host state -------------------------------------------------------------------------- 20
-MEMORIAL ON BEHALF OF RESPONDENT- Page II

ii. Alternatively, Respondent did not violate investor’s legitimate expectation while
altering its regulatory framework ------------------------------------------------------------ 21
a) Host State is entitled to exercise its sovereign powers in harmony with
investor’s expectations --------------------------------------------------------------------- 21
b) Host State was facing an economic and political crisis -------------------------- 21
B. Respondent did not act in a discriminatory manner ----------------------------------- 22
C. Regulatory Actions in furtherance of the Universally Accepted Goal of Sustainable
Development do not breach the FET Standard ----------------------------------------------- 22
D. Respondent has not violated the Procedural Elements of FET ----------------------- 23
i. Respondent acted in transparent manner --------------------------------------------- 23
ii. Respondent accorded due process to Claimant and acted in a non-arbitrary
manner- ----------------------------------------------------------------------------------------- 24
PRAYER ------------------------------------------------------------------------------------------------ 25
-MEMORIAL ON BEHALF OF RESPONDENT- Page III

TABLE OF ABBREVIATIONS
& And
Art(s). Article(s)
BIT Bilateral Investment Treaty
Co. Company
CIL Customary International Law
FET Fair and Equitable Treatment
FCPA Foreign Corrupt Practices Act
Id. Ibid
Inc. Incorporated
IBA International Bar Association
ICSID International Centre for Settlement of
Investment Disputes
ILC International Law commission
LLC Limited Liability Company
MST Minimal Standard of Treatment
Ms. Miss
OGM Oil and Gas ministry
OECD Organisation for Economic Co-operation
and Development
p./pp. Page(s)
¶/¶¶ Paragraph(s)
% Per Cent
PCA Permanent Court of Arbitration
PO Procedural Order
Q. Question
SCC Stockholm Chamber of Commerce
i.e. That is
UK United Kingdom
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UNCAC United Nation Convention Against
Corruption
UNCITRAL United Nations Commission on
International Trade Law
UN United Nations
UNDESA United Nations Department of Economic
and Social Affairs
USD United State Dollar
VCLT Vienna Convention on the Law of Treaties
w.r.t. With respect to
-MEMORIAL ON BEHALF OF RESPONDENT- Page V

INDEX OF AUTHORITIES
RULES AND REGULATIONS
CITED AS FULL CITATION PAGE NO.
FCPA United States Foreign Corrupt Practices Act, 1977 15

IBA IBA Guidelines on Conflicts of Interest in International 3, 8
Guidelines Arbitration
ICSID Convention on the Settlement of Investment Disputes 3, 4, 16
Convention between States and Nationals of other States, 1966
ILC Draft International Law Commission Draft articles on 16
Articles Responsibility of States for Internationally Wrongful Acts,
with commentaries, 2001
OECD Convention on Combating Bribery of Foreign Public 15
Convention Officials in International Business Transactions, 1997
UNCAC United Nations Convention against Corruption, 2005 15
VCLT Vienna Convention on the Law of Treaties, 1980 15, 16, 17
ICISD CASES
Abaclat I Abaclat and others v. Argentine Republic 6

ICSID Case No. ARB/07/5, 21 DEC 2011, Rejection of Request
for Disqualification of Professor Pierre Tercier and Professor
Albert Jan van den Berg
Abaclat II Abaclat and Others v. Argentine Republic 4
ICSID Case No. ARB/07/5, 19 DEC 2011, Recommendation
Pursuant to The Request by ICSID on The Respondent’s
Proposal for The Disqualification of Professor Pierre Tercier
and Professor Albert Jan Van Den Berg Dated September 15,
2011
-MEMORIAL ON BEHALF OF RESPONDENT- Page VI

ADF ADF Group Inc. v. United States of America 19
ICSID Case No. ARB (AF)/00/1, 9 JAN 2003, Award
AES Summit AES Summit Generation Limited and AES-Tisza EromuKft v. 19
Republic of Hungary
ICSID Case No. ARB/07/22, 23 SEP 2010, Award
Alpha Alpha Projektholding GmbH v. Ukraine 2, 3,
Projektholding ICSID Case No. ARB/07/16, 19 Mar 2010, Decision on 10, 11
Respondent’s Proposal to Disqualify Arbitrator Dr. Yoram
Turbowicz
Amco Asia Amco Asia Corp. v. Republic of Indonesia 1, 3, 4,
ICSID Case No. ARB/81/1, 24 Jun 1982. Decision on the 10, 11
Proposal To Disqualify an Arbitrator (unreported)
Archer Daniels Archer Daniels Midland and Tate & Lyle Ingredients 12
Americas, Inc. v. United Mexican States
ICSID Case No. ARB(AF)/04/5, 21 NOV 2007, Award
Azinian Robert Azinian, Kenneth Davitian, & Ellen Baca v. The United 23
Mexican States
ICSID Case No. ARB (AF)/97/2, 1 NOV 1999, Award
Azurix Corp Azurix Corp. v. The Argentine Republic 6, 10,
ICSID Case No. ARB/01/12 11
Bayindir Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic 17, 22
Republic of Pakistan
ICSID Case No. ARB/03/29, 14 NOV 2005, Decision on
Jurisdiction
Biwater Gauff Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania 19, 22
ICSID Case No. ARB/05/22, 24 JUL 2008, Award
Caratube Caratube International Oil Company LLP and Devincci Salah 3, 6, 8
International Hourani v. Republic of Kazakhstan
ICSID Case No. ARB/13/13, 20 MAR 2014, Decision on the
Proposal for Disqualification of Bruno Boesch
Champion Champion Trading Company, Ameritrade International, Inc. v. 23
Trading Arab Republic of Egypt
ICSID Case No. ARB/02/9, 27 OCT 2006, Award
-MEMORIAL ON BEHALF OF RESPONDENT- Page VII

CME CME Czech Republic B.V. v. The Czech Republic 20
UNCITRAL, 14 MAR 2003, Award
CMS CMS Gas Transmission Company v. The Republic of 20
Argentina
ICSID Case No. ARB/01/8, 12MAY 2005, Award
Conoco I ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V. 4, 7
and ConocoPhillips Gulf of Paria B.V. v. Bolivarian Republic
of Venezuela
ICSID Case No. ARB/07/30, 27 FEB 2012, Decision on the
Proposal to Disqualify L. Yves Fortier, Q.C., Arbitrator
Conoco IV ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V. 4, 7
of Venezuela
ICSID Case No. ARB/07/30, 15 DEC 2015, Decision on the
Conoco V ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V. 4, 7
of Venezuela
Proposal for Disqualification of Arbitrator L. Yves Fortier, Q.C.
Conoco VI ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V. 4, 7
of Venezuela
ICSID Case No. ARB/07/30, 26 JUL 2016, Decision on the
Consortium Consortium RFCC v. Royaume du Maroc 17
ICSID Case No. ARB/00/6, 16 JUL 2001, Decision on
Jurisdiction
Duke Energy Duke Energy Electroquil Partners &Electroquil S.A. v. 19, 20,
Republic of Ecuador 22
ICSID Case No. ARB/04/19, 18 AUG 2008, Award
EDF EDF International S.A., SAUR International S.A. and León 2, 3, 4,
Participaciones Argentinas S.A. v. Argentine Republic 10, 11
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ICSID Case No. ARB/03/23, 25 Jun 2008, Challenge Decision
Regarding Professor Gabrielle Kaufmann-Kohler
EDF Services EDF (Services) Limited v. Romania 21
El Paso El Paso Energy International Company v. The Argentine 19
Republic
Electrabel S A Electrabel S.A. v. Republic of Hungary 4, 6
ICSID Case No. ARB/07/19, 25 FEB 2008, Decision on the
Proposal to Disqualify a Member of the Tribunal
Eureko B V Eureko B.V. v. Republic of Poland 1
ICSID Case No. R.G. 2006/1542/A, 22 Dec 2006, Judgment of
Court of First Instance of Brussels: Challenge to Arbitrator
Favianca II Fábrica de Vidrios Los Andes, C.A. and Owens-Illinois de 4, 7
Venezuela, C.A. v. Bolivarian Republic
of Venezuela
Proposal toDisqualify L. Yves Fortier, Q.C.
Favianca III Fábrica de Vidrios Los Andes, C.A. and Owens-Illinois de 4, 7
Venezuela, C.A. v. Bolivarian Republic of Venezuela
ICSID Case No. ARB/12/21, 12 SEP 2016, Decision on the
Proposalto Disqualify L. Yves Fortier, Q.C.
Fedax Fedax N.V. v. The Republic of Venezuela 17
ICSID Case No. ARB/96/3, 11 JUL 1997, Decision of the
Tribunal on Objections to Jurisdiction
Feldman Marvin Roy Feldman Karpa v. United Mexican States 9, 23,
24
ICSID Case No. ARB(AF)/99/1, 16 DEC 2002, Award
Fraport Fraport AG Frankfurt Airport Services Worldwide v. The 12, 14,

Republic of the Philippines 16
ICSID Case No. ARB/03/25, 16 AUG 2007, Award
Generation Generation Ukraine, Inc. v. Ukraine 3, 5,
Ukraine ICSID Case No. ARB/00/9, 16 SEP 2003, Award 20, 22
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Genin Alex Genin, Eastern Credit Limited, Inc. and A.S. Baltoil v. 19, 23
The Republic of Estonia
ICSID Case No. ARB/99/2, 25 JUN 2001, Award
Getma Getma International and others v Republic of Guinea 4
International ICSID Case No. ARB/11/29, 28 JUN 2012, Decision on
Proposal to Disqualify Mr. Bernardo Cremades, Arbitrator
Gustav Gustav F W Hamester GmbH & Co KG v. Republic of Ghana 14, 15
ICSID Case No. ARB/07/24, 18JUN 2010, Award
Hussien Hussein Nuaman Soufraki v. The United Arab Emirates 9
Soufraki ICSID Case No. ARB/02/7, 5 JUN 2007, Decision of the ad hoc
Committee on the Application for Annulment of Mr. Soufraki
Inceysa Inceysa Vallisoletana S.L. v. Republic of El Salvador 12, 13,
ICSID Case No. ARB/03/26, 2 AUG 2006, Award 15
Joy Mining Joy Mining Machinery Limited v. Arab Republic of Egypt 12, 17
ICSID Case No. ARB/03/11, 6 AUG 2004 , Award on
Jurisdiction
Lemire Joseph Charles Lemire v. Ukraine 21
ICSID Case No. ARB/06/18, 28 MAR 2011, Final Award
LESI- Consortium Groupement L.E.S.I.- DIPENTA v. République 17
DIPENTA algérienne démocratique et populaire
ICSID Case No. ARB/03/08, 10 JAN 2005, Award
LG&E LG&E Energy Corp., LG&E Capital Corp., and LG&E 19
International, Inc. v. Argentine Republic
ICSID Case No. ARB/02/1, 3 OCT 2006, Decision on Liability
Maffezini Emilio Agustín Maffezini v. The Kingdom of Spain 23
ICSID Case No. ARB/97/7, 13 NOV 2000, Award
Malaysian Malaysian Historical Salvors, SDN, BHD v. The Government 16, 17,
Salvors of Malaysia 18
ICSID Case No. ARB/05/10, 17MAY 2007, Award on
Jurisdiction
Metal-Tech Metal-Tech Ltd. v. Republic of Uzbekistan 12, 13,
ICSID Case No. ARB/10/3, 4 OCT 2013, Award 14, 15
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Metalclad Metalclad Corporation v. The United Mexican States 23
ICSID Case No. ARB(AF)/97/1, 30 AUG 2000, Award
Middle East Southern Pacific Properties (Middle East) and Southern Pacific 19, 20
Properties Ltd v. The Arab Republic of Egypt
ICSID Case No. ARB/84/3, 20 MAY 1992, Award
Mondev Mondev International Ltd. v. United States of America 23
ICSID Case No. ARB(AF)/99/2, 11 OCT 2002, Award
Nations Nations Energy Corporation, Electric Machinery Enterprises 4, 10,
Energy Inc., and Jamie Jurado v The Republic of Panama 11,
ICSID Case No. ARB/06/19, 7 SEP 2011, Challenge to Dr.
Stanimir A. Alexandrov (on the Annulment Committee)
Niko Niko Resources (Bangladesh) Ltd. v. Bangladesh Petroleum 15
Resources Exploration & Production Company Limited ("Bapex") and
Bangladesh Oil Gas and Mineral Corporation ("Petrobangla")
ICSID Case No. ARB/10/18, 19AUG 2013, Decision on
Jurisdiction
Occidental Occidental Petroleum Corporation and Occidental Exploration 19, 23
and Production Company v. The Republic of Ecuador
OPIC OPIC Karimum Corporation v. The Bolivarian Republic of 4, 6, 10
Karimum Venezuela
ICSID Case No. ARB/10/14, 5 MAY 2011, Decision on the
Proposal to Disqualify Professor Philippe Sands, Arbitrator
Parkerings- Parkerings-Compagniet AS v. Republic of Lithuania 21, 22,
Compagniet ICSID Case No. ARB/05/8, 11 SEP 2007, Award 23
Participaciones Participaciones Inversiones Portuarias SARL v. Gabonese 4, 7
Inversiones Republic
ICSID Case No. ARB/08/17, 12 Nov 2009, Decision on the
Proposal to Disqualify an Arbitrator
Patrick Mr. Patrick Mitchell v. Democratic Republic of the Congo 17
Mitchell ICSID Case No. ARB/99/7, 9FEB 2004, Award
Phoenix Phoenix Action, Ltd. v. The Czech Republic 18
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ICSID Case No. ARB/06/5, 15APR 2009, Award
Repsol Repsol, S.A. and Repsol Butano, S.A. v. Argentine Republic 6
(Repsol), ICSID Case No. ARB/12/38, 13 DEC 2013, Decision
on the Proposal for the Disqualification of a Majority of the
Tribunal
Rusoro Mining Rusoro Mining Ltd. v. Bolivarian Republic of Venezuela 6
ICSID Case No. ARB(AF)/12/5, 14 JUN 2013, Challenge to
Arbitrator Francisco Orrego Vicuña
Saba Fakes Saba Fakes v. Republic of Turkey 6
ICSID Case No. ARB/07/20, 26 APR 2008, Decision on
Disqualification of an Arbitrator
Saint Gobain Saint-Gobain Performance Plastics Europe v. Bolivarian 2, 9
Republic of Venezuela
ICSID Case No. ARB/12/13, 27 Feb 2013, Decision on
Claimant’s Proposal to Disqualify Mr Gabriel Bottini from the
Tribunal under Art. 57 of the ICSID Convention
Saipem Saipem S.p.A. v. The People's Republic of Bangladesh 8, 17
ICSID Case No. ARB/05/07, 30 JUN 2009, Award
Salini Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of 12, 17
Morocco
ICSID Case No. ARB/00/4, 31 JUL 2001, Decision on
Jurisdiction
SGS v. SGS Société Générale de Surveillance SA v. Islamic Republic 3, 5, 8,
Pakistan I of Pakistan
ICSID Case No. ARB/01/13, 19 Dec 2002, Decision on
Claimants’ Proposal to Disqualify Arbitrator
SGS v. SGS Société Générale de Surveillance S.A. v. Islamic Republic 17
Pakistan II of Pakistan
ICSID Case No. ARB/01/13, 6 AUG 2003, Decision of the
Tribunal on Objections to Jurisdiction
Siemens Siemens A.G. v. The Argentine Republic 3, 6, 19
ICSID Case No. ARB/02/8, 17 JAN 2007, Award
Spentex Spentex Netherlands, B.V. v. Republic of Uzbekistan 16
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ICSID Case No. ARB/13/26, 27 DEC 2016, Award
Suez I Suez, Sociedad General de Aguas de Barcelona, S.A. and 2, 4,
Vivendi Universal, S.A. v. Argentine Republic 11,
ICSID Case No. ARB/03/19, 22 Oct 2007, Decision on the
Proposal for the Disqualification of a Member of the Arbitral
Tribunal
Suez II Suez, Sociedad General de Aguas de Barcelona S.A., and Inter 4, 7,
Aguas Servicios Integrales del Agua S.A. v. The Argentine 10, 11
Republic
ICSID Case No. ARB/03/17, 12 May 2008, Decision on a
Second Proposal for the Disqualification of a Member of the
Arbitral Tribunal
Tecmed Técnicas Medioambientales Tecmed, S.A. v. The United 19, 20,
Mexican States 23
ICSID Case No. ARB (AF)/00/2, 29 MAR 2003, Award
Tidewater Inc Tidewater Inc., Tidewater Investment SRL, Tidewater Caribe, 4, 6,
C.A., et al. v. The Bolivarian Republic of Venezuela 10, 11
ICSID Case No. ARB/10/5, 23 DEC 2010, Decision on
Claimants' Proposal to Disqualify Professor Brigitte Stern,
Arbitrator
Total S A Total S.A. v. The Argentine Republic 4
ICSID Case No. ARB/04/01, 26 AUG 2015, Decision on the
Proposal to Disqualify Teresa Cheng
Universal Universal Compression International Holdings, S.L.U. v. The 4, 6
Compression Bolivarian Republic of Venezuela
ICSID Case No. Arb/10/9, 20 MAY 2011, Decision on the
Proposal to Disqualify Prof. Brigitte Stern and Prof. Guido
Santiago Tawil, Arbitrators
Urbaser S A Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao 8
Bizkaia ur Partzuergoa v.
Argentine Republic
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ICSID Case No. ARB/07/26, 12 AUG 2010, Decision on
Claimant’s Proposal to Disqualify Professor Campbell
McLachlan, Arbitrator
Victor Pey Victor Pey Casado and President Allende Foundation v. 9
Republic of Chile
ICSID Case No. ARB/98/2, 21 FEB 2016, Decision of the
Chairman of the ICSID Administrative Council on the
Disqualification of Prof. Lalive and Judge Bedjaoui
Vivendi Compañía de Aguasdel Aconquija S.A. and Vivendi Universal 2, 3, 7,
Universal S.A. v Argentine Republic 10, 11
ICSID Case No. ARB/97/3, 20 AUG 2007, Decision on the
Argentine Republic’s Request for Annulment of the Award
rendered on 20 August 2007
Waste Waste Management, Inc. v. United Mexican States 23
Management
ICSID Case No. ARB(AF)/98/2, 2 JUN 2000, Arbitral Award
WDF World Duty Free Company v Republic of Kenya 13, 14,

ICSID Case No. Arb/00/7, 4OCT 2006, Award 15, 16
Zhinvali Zhinvali Development Ltd. v. Republic of Georgia 2, 5, 7
Development ICSID Case No. ARB/00/1, 19 Jan 2001, Decision on
Respondent Proposal to Disqualify Arbitrator (not public)
UNCITRAL CASES
Jan Jan Oostergetel and Theodora Laurentius v. The Slovak 13

Oostergetel Republic
UNCITRAL, 23 APR 2012, Final Award
Methanex Methanex Corporation v. United States of America 13, 22
UNCITRAL, 3 AUG 2005, Final Award of the Tribunal on
Jurisdiction and Merits
National Grid National Grid plc v. The Argentine Republic 22
UNCITRAL, 3 NOV 2008, Award
-MEMORIAL ON BEHALF OF RESPONDENT- Page XIV

Saluka Saluka Investments B.V. v. The Czech Republic 19, 22,
UNCITRAL, 17 MAR 2006, Partial Award 23
SD Myers S.D. Myers, Inc. v. Government of Canada 23, 24
UNCITRAL, 13 NOV 2000, Award
Thunderbird International Thunderbird Gaming Corporation v. The United 23
Gaming Mexican States
UNCITRAL, 26 JUN 2006, Arbitral Award
Thunderbird- International Thunderbird Gaming Corporation v. The United 13
Walde Mexican States
UNCITRAL, 1 DEC 2005, Separate Opinion of Thomas
Wälde
White White Industries Australia Limited v. The Republic of India 24
Industries
UNCITRAL, 30 NOV 2011, Final Award
OTHER CASES
Applied Applied Industrial Materials v. Ovalar Makine Ticaret Ve 7, 10

Industrial Sanayi
Docket No. 06-3297-cv, 9 JUL 2007
Arbitration SCC Case No. Arbitration 120/2001 1
120/2001 2001
Charanne Charanne and Construction Investments v. Spain 21
SCC Case No. V062/2012, 21 JAN 2016, Award
Chevron Chevron Corporation (USA) and Texaco Petroleum Company 24
(USA) v. The Republic of Ecuador
PCA Case No. 34877, 30 MAR 2010, Partial Award on the
Merits
ELSI Elettronica Sicula S.p.A. (ELSI) (United States of America v 24
Republic of Italy)
ICJ Reports, 20 JUL 1989
Eureko Eureko B.V. v. Republic of Poland, 22
19 AUG 2005, Partial Award
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Fremarc ITM Fremarc v ITM Enterprises 6
Cour de Cassation Petition No. 00-10.711, 6 DEC 2001
Hulley Hulley Enterprises Limited (Cyprus) v. 15
Enterprises The Russian Federation
PCA Case No. AA 226, 18 JUL 2014, Final Award
Locabail Locabail (UK) Ltd & Waldorf Investment Corp. & Ors 10
Appeal No.1999 WL 982518, 17 NOV 1999
Metropolitan Metropolitan Properties Co. (FGC) ltd. v. Lannon 2
Properties Court of Appeal (Civil Division), 11 JUL 1968
Nottebohm Liechtenstein v. Guatemala 9
ICJ Reports, 6 APR 1955
Petrolane Petrolane, Inc. v. Government of the Islamic Republic of Iran 16
Iran-United States Claims Tribunal, 14 AUG 1991, Award No
518-131-2
Saudi Cable AT&T Corporation and another v Saudi Cable Company 10, 11
Queen's Bench Division (Commercial Court), 13 OCT 1999
Sussex R v. Sussex Justices, Ex Parte McCarthy 2
Justices King’s Bench Division, 9 NOV 1923
Bath Justices United Breweries Co. v. Bath Justices 2
House of Lords, 7 MAY 1926
Veteran Veteran Petroleum Limited (Cyprus) v. The Russian Federation 15
Petroleum PCA Case No. AA 228, 18 JUL 2014, Final Award
William Nagel William Nagel v. Czech Republic 20
SCC Case No. 049/2002, 9 SEP 2009, Final Award
Yeager Kenneth P. Yeager v The Islamic Republic of Iran 16
Iran-United States Claims Tribunal
Case No. 10199, 2 NOV 1987, AWARD NO 324-10199-1
-MEMORIAL ON BEHALF OF RESPONDENT- Page XVI

TREATISES AND ARTICLES
Amato Anthony D' Amato 20

Good faith
In: Encyclopedia of Public International Law, Vol 2, 1992
Anzola J E Anzola 9
Dual Nationality in Investment Arbitration: The Case of
Venezuela
In: Transnational Dispute Management, APR 2016
Brubaker Joseph R Brubaker 8
The Judge Who Knew Too Much: Issue Conflict in
International Adjudication
In: Berkeley Journal of International Law, Vol 27, Issue 1,
2008
Deyan Deyan Dragiev 15
Dragiev Proving Corruption in Arbitration: Lessons to be Learned from
Metal-Tech v. Republic of Uzbekistan
In: Kluwer Arbitration Blog, FEB, 2014, Kluwer Law
International
Feit Michael Feit 5
Responsibility of the State under International Law for the
Breach of Contract Committed by a State-Owned Entity
In: Berkeley Journal of International Law, Vol 28, Issue 1,
2010
Gallus Nick Gallus 22
The ‘Fair and Equitable Treatment’ Standard and the
Circumstances of the Host State
In: Evolution in Investment Treaty Law and Arbitration, 2011,
Cambridge University Press
García- Omar E. García-Bolívar 17
Bolívar Defining an ICSID Investment: Why Economic Development
Should Be the Core Element
-MEMORIAL ON BEHALF OF RESPONDENT- Page XVII

In: Investment Treaty News, APR, 2012, International Institute
for Sustainable Development
Giorgetti Chiara Giorgetti 7, 8
Who Decides Who in International Investment Arbitration?
In: University of Pennsylvania Journal of International Law,
Vol 35, 2014
Giorgetti C Chiara Giorgetti 8
The Arbitral Tribunal: Selection and Replacement of
Arbitrators
In: Litigating International Investment Disputes: A
Practitioner's Guide, 2014, University of Richmond Law
Faculty Publications
Giraldo Natalia Giraldo-Carrilo 5, 7
The ‘Repeat Arbitrators’ Issue: A Subjective Concept
In: International Law, Revista Colombiana de Derecho
Internacional, Vol 19, 2011
Grabowski Alex Grabowski 17
The Definition of Investment under the ICSID Convention: A
Defense of Salini
In: Chicago Journal of International Law, Vol 15, Issue, 2014
Greenwald B. Greenwald 16
The Viability of Corruption Defences in Investment
Arbitration When the State Does Not Prosecute
In: European Journal of International Law , APR 2015
Heinz Karl-Heinz Bockstiegel 5
Commercial and Investment Arbitration: How Different are
they Today? The Lalive Lecture 2012
In: The Journal of the London Court of International
Arbitration, Vol 28, Number 4, 2012
Horn Peter Horn 2, 4, 8
A Matter of Appearances: Arbitrator Independence and
Impartiality in ICSID Arbitration
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In: New York University Journal of Law & Business, Vol 11,
2014
Hunter Martin Hunter 7
Ethics of the International Arbitrator
In: Arbitration, Vol 53, Issue 4, 1987
Hwang M. Hwang, K. Lim 15
Corruption in Arbitration – Law & Reality
In: Asian International Arbitration Journal, Vol 8, Issue 1,
2012
Jo-Mie Ma Winnie Jo-Mie Ma 3
Procedures for Challenging Arbitrators: Lessons for and from
Taiwan
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Dueling Nationalities: Dual Citizenship, Dominant &
Effective Nationality, and the Case of Anwar Al-Aulaqi
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Kapeliuk Daphna Kapeliuk 7
The Repeat Appointment Factor: Exploring Decision Patterns
of Elite Investment Treaty Arbitrations
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Kessler H. Raeschke Kessler, D. Gottwald 13
Corruption in Foreign Investment – Contract and Dispute
Settlement between Investors, States and Agents
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2008, Oxford University Press
Matthew Joseph Matthew 2
Identifying and Overcoming Arbitrator Bias - Advocacy in
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‘Caveat Investor’? The Relevance of the Conduct of the
Investor Under the Fair and Equitable Treatment Standard
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Nappert Sophie Nappert 13, 15
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Houtte, 2012, Hart Publishing
Nwakoby & Greg C. Nwakoby, Charles Emenogha Aduaka 5
Aduaka Challenge of Arbitrator under ICSID
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Park William W. Park 2, 5, 7
Arbitrator Integrity: The Transient and the Permanent
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Ethics, Elitism, Eligibility
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Peter Peter T Muchlinski, 22
Corporate Social Responsibility
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Peterson L.E. Peterson 12
Argentina and Siemens Ask Annulment Committee to
Suspend Proceedings
In: Investment Arb. Rep. No. 6, July 2008
Rahim Moloo Rahim Moloo 14
The Compliance with the Law Requirement in International
Investment Law
In: Fordham International Law Journal , Vol 34, Issue 6, 2010
Redfern Alan Redfern 3
The Importance of Being Independent: Laws of Arbitration,
Rules, Guidelines – and a Disastrous Award
-MEMORIAL ON BEHALF OF RESPONDENT- Page XX

In: International Journal of Arbitration Law, Vol 6, Issue 1,
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Regulating International Arbitrators: A Functional Approach
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Circumstantial evidence in corruption before international
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Illegal Investments in Investment Treaty Arbitration
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BOOKS
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Proving Bribery, Fraud and Money Laundering in International
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Fair and Equitable Treatment in International Investment Law 23
Llamzon Aloysius P. Llamzon 15, 18
Corruption in International Investment Arbitration
Lutrell Sam Lutrell 2, 5, 11
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Need for a “Real Danger” Test
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Administrative Law
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-MEMORIAL ON BEHALF OF RESPONDENT- Page XXIII

Nicole Maria Nicole Cleis 2, 5, 7,
The Independence and Impartiality of ICSID Arbitrators – 8, 10
Current Case Law, Alternative Approaches, and Improvement
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2017, Brill Nijhoff
Schreuer I Christoph H. Schreuer 4, 9, 17
The ICSID Convention - A Commentary
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Tudor Ioana Tudor 19
The Fair and Equitable Treatment Standard in the International
Law of Foreign Investment
Yannaca- Katia Yannaca-Small 21
Small Arbitration Under International Investment Agreements: A
Guide to the Key Issues
1 ed., APR 2010, Oxford University Press
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Alizamini Yaser Esmaeilpour Alizamini 9, 10

Concept of Nationality in International Law A Critical Study
2012, Osmania University
Bernasconi Nathalie Bernasconi Osterwalder, Lise Johnson, Fiona Marshall 2, 3, 5
Arbitrator Independence and Impartiality: Examining the dual
role of arbitrator and counsel
October 2010
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Annual Forum for Developing Country Investment Negotiators
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International Institute for Sustainable Development
Report of the Report of the Executive Directors on the Convention on 16
ICSID Settlement of Investment Disputes between States and Nationals
Executive of other States, 1965
Directors
Sacerdoti Giorgio Sacerdoti 8
Is the party-appointed arbitrator a "pernicious institution"? A
reply to Professor Hans Smit
2011
Columbia FDI Perspectives
No. 35, April 15, 2011
UN Report of the UN Johannesburg Declaration on Sustainable 22
Johannesburg Development, 2002
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UNDESA United Nations Department of Economic and Social Affairs 22
Resport (UNDESA) Report of the World Commission on Environment
and Development, 1987
Woolf Woolf Committee Report on Business Ethics 13
Committee In: Global Companies and the Defence Industry: Ethical
Business Conduct in Bae Systems Plc , 2008
-MEMORIAL ON BEHALF OF RESPONDENT- Page XXV

STATEMENT OF JURISDICTION
Republic of Nappertania, the Respondent in the instant case has the honour to submit this
Memorial before the Arbitral Tribunal constituted under the International Centre for Settlement
of Investment Disputes, in pursuance of Article 25 of ICSID Convention read with the dispute
settlement clause of the BIT between the Government of the Republic of Nappertania and the
Government of the Plurinational State of Vasaniland. However, the Respondent has expressed
reservations to the jurisdiction of this Tribunal.
-MEMORIAL ON BEHALF OF RESPONDENT- Page XXVI

STATEMENT OF FACTS
I. The Parties
BurraCo. (“Claimant”), is a holding company incorporated in Netherlands by Mr. Carsten
and nine other investors, who are nationals of Vasaniland, a developed Western European
State. BurraCo. has been created to use the expertise of these investors for investing in mining
concessions in underdeveloped markets with the aim of making them profitable and selling
them on as a consolidated holding. The Republic of Nappertania (“Respondent”/ “Host
state”) is a least developed country in the East with low local expertise in the mining and
extractive industries. Both Nappertania and Vasaniland are signatories to the International
Centre for Settlement of Investment Disputes (“ICSID”).
II. Claimant’s Investment

In March 2003, Carsten was surreptitiously informed of the public auctioning of two oil wells
in an ecologically vulnerable region of Nappertania while the official announcement was made
in April 2003 by the Nappertanian Oil and Gas Ministry (“OGM”). Claimant having already
prepared a highly competitive bid with USD 4m allocated towards local consultants and
entertainment fees, won the auction and incorporated Melgiri LLC (“Melgiri”) to carry out its
investment operations in Nappertania. Ayna, the Nappertanian President’s niece was appointed
as a consultant and she helped Claimant in establishing many crucial contracts.
III. Ecological Damage, Consolidation of Investment and Bribery

By 2007, the value of the wells had risen tenfold; however, the volume of oil spilled had also
increased by 10% as a consequence of which the area surrounding the wells suffered severe
ecological damage. The investors were earning handsome profits and in early 2008 they
decided to execute their plan of consolidating the investment by purchasing a controlling
stake in the local refining and distribution unit. To this end, they managed to procure a very
favourable unsecured loan of USD 40m from the national bank of Nappertania. Carsten even
bribed State auditors for getting audit approvals and created local shell companies to
circumvent the regulations that restricted foreign ownership of public utilities.
-MEMORIAL ON BEHALF OF RESPONDENT- Page XXVII

IV. Economic Crash and Regime Change
In 2008 Nappertania was faced with a severe economic crisis coupled with political discontent
in the region where Claimant’s investment was situated. The crash made Claimant’s
restructuring project uneconomical, severely dampening Carsten’s plans of exiting the
market. The new government adopted the motto of “Corruption-Free Nappertania”, in order
to promote transparency, directing all government offices to fix the problem of corruption
and address all environmental concerns with immediate effect.
V. Regulatory Actions in Furtherance of “Corruption-Free Nappertania”

A snap audit of Melgiri was conducted and the new head of the OGM declared that Melgiri
was financially unsound to purchase the refinery and distribution unit. While, Melgiri filed
suits in the local courts challenging the audit, in November, 2008, the bank declared Melgiri’s
loan account as a ‘Non-Performing Asset’ and accelerated the loan. Consequently, a local court
ordered Melgiri to transfer 40% of its shares to repay its loan on the grounds that the money
belonged to Nappertanian citizens. In 2009, several allegations ranging from routine violations
to wide-spread corruption were made against Carsten, BurraCo. and Melgiri. Meanwhile, local
activists, tired of the environmental degradation, took to the streets and damaged one of the oil
wells. Melgiri was prosecuted for violating the environmental laws and 60% shares were
demanded by the government as compensation. The judiciary granted a transfer of 20% shares
to fund remediation work in the damaged area.
VI. Institution of Arbitral Proceedings and Appointment of Arbitrators

Thereafter, an investment treaty claim was instituted by Claimant against Nappertania under
the Bilateral Investment Treaty between the Government of the Republic of Nappertania and
the Government of the Plurinational State of Vasaniland (“BIT”). BurraCo. and Nappertania
nominated Ángela Acuña Braun, a German national and Annie Ruth Jiagge, a citizen of the
United Kingdom as an arbitrator, respectively. Both parties consented to Cornelia Sorabjie,
a Swiss national, as the President of the Tribunal.
VII. Proposal for Disqualification of Ms. Annie

Ms. Annie, a celebrated arbitrator, although born in Nappertania, voluntarily gave up her
Nappertanian citizenship and is currently a citizen and resident of UK. She visits Nappertania
only once a year. She has been nominated as an arbitrator in two commercial arbitrations in
-MEMORIAL ON BEHALF OF RESPONDENT- Page XXVIII

2014 and 2017, by a government enterprise of Nappertania, out of which she only derives 12%
of income.
VIII. Adjudication of the proposal of Disqualification

It is also rumoured that Annie and Cornelia used to study in the same university in England
at the same time, due to which the claimants request that the ICSID Chairman should hear
the challenge against Annie and not the Arbitral Tribunal comprising of Ms. Cornelia.
In July 2011, the Tribunal issued Procedural Order No. 1 (“PO 1”), dealing with the challenge
to the appointment of Annie and bifurcating the proceedings into two phases.
-MEMORIAL ON BEHALF OF RESPONDENT- Page XXIX

ISSUES RAISED
I.
Whether the Tribunal should hear the challenge against Ms. Annie or should it be heard by
the Chairman?
II.
Should Ms. Annie be removed from the Arbitral Tribunal?
III.
Whether the Claimant’s assets in Nappertania were an “investment” for the purposes of
Article 1(2) of the BIT in light of the allegations of illegality directed against Claimants by
Respondent?
IV.
Whether the Respondent’s regulatory actions against the Claimant constituted a violation of
Fair and Equitable Treatment standards under the BIT?
-MEMORIAL ON BEHALF OF RESPONDENT- Page XXX

SUMMARY OF ARGUMENTS
PART ONE: CHALLENGE TO ARBITRATOR’S APPOINTMENT (PROPOSAL)

1. Claimant asserts that the question of disqualification of Ms. Annie should be heard by
the Chairman instead of the tribunal comprising of Ms. Cornelia by basing its arguments on a
mere rumour that the two arbitrators studied in the same university at the same time. The
Chairman cannot be mandated to hear the question since the majority of the arbitrators in the
tribunal has not been challenged. Alternatively, the relationship between the two arbitrators is
de minimis. Therefore, the challenge to Ms. Annie should be adjudicated by the tribunal.
2. Claimant deliberately challenges Ms. Annie on trivial qualms to her independence and
impartiality. It has based its claim on imprudent arguments of multiple appointments, remote
relations with Respondent, the arbitrator’s public opinion, nationality of the arbitrator and the
non-disclosure of any such information. However, the multiple appointments cannot lead to
disqualification due to the varied nature of the appointments by separate parties. Claimant fails
to understand the irrelevance of remote relations. The arbitrator’s public opinion and
publications do not raise any significant link with Respondent. The arbitrator’s nationality
creates no connection with Respondent. Further, non-disclosure of remote links is not required
and such non-disclosure in itself is not a ground of disqualification. Therefore, Ms. Annie
should not be disqualified on such capricious grounds.
PART TWO: JURISDICTION AND ADMISSIBILITY

3. Respondent submits that compliance with law is a precondition to benefitting from the
BIT’s protection. Multiple suspicious circumstances throughout Claimant’s investment
including prior knowledge of an undisclosed public auction and consultant’s lack of
qualifications, coupled with disproportionate payment made to them, in light of their personal
connections with high ranking government officials, prove the existence of corruption. This is
in clear violation of domestic regulations, international policies and the legal principles of good
faith and clean hands. The presence of these circumstances shifts the burden on Claimant to
prove legality of its alleged investment. Moreover, the host state cannot be estopped from using
corruption as a defence since Claimant has consciously committed the illegality. Additionally,
Claimant’s assets do not qualify as an “investment” since they lack the essential characteristics
-MEMORIAL ON BEHALF OF RESPONDENT- Page XXXI

of minimum duration, contribution to host state’s development and risk. Hence, this Tribunal
should deny jurisdiction over the present claim.
PART THREE: MERITS

4. Claimant argues that Respondent’s regulatory actions against its investment violate the
Fair and Equitable Treatment (“FET”) Standard embodied in the BIT. However, Respondent
contends that it has not violated any element of the FET Standard. Firstly, no legitimate
expectation can exist on part of Claimant as it made a conscious choice to invest in such volatile
circumstances without any specific assurances given to it by Respondent. Further, Claimant
made cannot legitimately expect the host state to protect an investment that has been acquired
and performed illegally. Assuming arguendo that legitimate expectation did exist, Respondent
has a right to alter its regulatory framework in times of an economic crisis in furtherance of its
sovereign duties. Secondly, Respondent did not act in a manner that discriminates against
Claimant’s investment. Thirdly, Respondent’s regulatory actions do not breach the FET
Standard since they were in furtherance of the universally accepted goal of sustainable
development. Lastly, Respondent has not violated any of the procedural elements of the FET
Standard and has followed due process and proportionality. None of its actions were without a
justified cause; therefore, Respondent was well within its right to take regulatory measures
against Claimant’s investment and has not breached the FET Standard while doing so.
-MEMORIAL ON BEHALF OF RESPONDENT- Page XXXII

ARGUMENTS ADVANCED
PART ONE: CHALLENGE TO ARBITRATOR’S APPOINTMENT (PROPOSAL)
I. THE CHALLENGE AGAINST MS. ANNIE SHOULD BE HEARD BY THE

TRIBUNAL AND NOT THE CHAIRMAN
1. It is rumoured that the arbitrators Ms. Annie Ruth Jiagge and Ms. Cornelia Sorabjie
used to study in the same university at the same time. Claimant’s request that the challenge
against Ms. Annie should be heard by the Chairman and not the Tribunal consisting of Ms.
Cornelia on mere rumour, is unwarranted and not in conformity with the provisions of
International Centre for Settlement of Investment Disputes (“ICSID”).
2. In the light of this, it is submitted that the challenge against Ms. Annie should be heard
by the tribunal and not the Chairman as: the majority of the tribunal is not being challenged for
disqualification(A); the claim for disqualification is based on a rumour (B); and assuming
arguendo, the speculated relationship is de minimis(C).
A. THAT THE MAJORITY OF THE TRIBUNAL IS NOT BEING CHALLENGED
3. Article 58 of the ICSID Convention mandates the Chairman to hear the question of
disqualification only when the majority of arbitrators in the tribunal are being challenged or
when the remaining arbitrators are divided on the issue of disqualification of the challenged
arbitrator and a decision cannot be reached. It is submitted that Ms. Cornelia along with Ms.
Ángela should be allowed to adjudicate on the question of Ms. Annie’s disqualification since
only the said arbitrator, and not the majority, is being challenged.
B. THAT THE CLAIM FOR DISQUALIFICATION IS BASED ON A RUMOUR
4. Claimants have based their claim for disqualification on a mere rumour that Ms. Annie
and Ms. Cornelia studied in the same university at the same time. 1 Arbitrators cannot be
disqualified only for the reason that some relationship, personal or professional, existed
between the arbitrators in question. 2 The facts should indicate something more, 3 i.e. a
significant relationship.4 The allegations of perceived bias in favour of Ms. Annie against the
arbitrator, in the present case, are based on a rumour that they might have studied together, let
1
Case study, p.8, ¶37.
2
Amco Asia, quoted in Nicole Cleis, p.32.
3
Arbitration 120/2001,595, quoted in Nicole Cleis, p.114.
4
Amco Asia, quoted in Nicole Cleis, p. 32; Eureko B V, quoted in Nicole Cleis, p.123.
-MEMORIAL ON BEHALF OF RESPONDENT- Page 1

alone that any kind of relationship existed between them at that time. The inference of bias in
an arbitrator should be anchored on facts and not on speculations.5 If the conjecture behind the
bias proves to be erroneous but it is allowed to function as though it is accurate, the outcome
will be a sort of illogical bias or discrimination and bias will thus become interchangeable with
ignorance and will lead to serious injustice and poor decisions.6
5. Further, the principle of nemo in propria causa judex, esse debet is not being
undermined as there is no “reasonable suspicion of bias” 7 or a “real likelihood of bias” 8
essential to prove personal bias.9
C. ALTERNATIVELY, THE ALLEGED RELATIONSHIP IS DE MINIMIS IN NATURE
6. Assuming arguendo, that the rumour is true, the relationship between the two arbitrators
is de minimis in nature. Previous tribunals have accepted de minimis to be “an insignificant
interest that could not raise a reasonable question regarding the judge’s impartiality.”10
7. There are no facts indicating that Ms. Annie and Ms. Cornelia were actually acquainted
each with other and that this connection was more than a mere acquaintance. Moreover, even
if any relationship existed, it ended several years before the commencement of the arbitration
proceeding, as there are no facts contradicting the same.11 Analysis of bias does not end with
the detection of a remote link between a dispute and an arbitrator.12 “If a dispute resolution
system aims to be useful in a professionally and economically interdependent world, some
principles of proportionality and reasonable nexus must operate to triage between genuine and
spurious challenges.”13 There is neither an economical or personal interest14 nor a business or
professional relationship between Ms. Cornelia and Ms. Annie.15 In the absence of any further
facts, a mere occasional personal contact cannot manifestly affect the judgment of an
arbitrator.16 Further, a shared educational experience is not a ground for disqualification of an
arbitrator17 and is also not required to be disclosed.18
5
Zhinvali Development, quoted in Vivendi Universal, ¶23; Saint Gobain, ¶60; Horn, p.21; Bernasconi, p.12;
Luttrell, pp.3, 124; Nicole, p.33.
6
Matthew, p.1.
7
Sussex Justices, p.259.
8
Bath Justices, p.586; Metropolitan Properties, quoted in Lutrell, p.37
9
IP Massey, p.194.
10
EDF, ¶118; Alpha Projektholding, ¶64.
11
Tupman, p.45.
12
Park, p.54.
13
Park, p.54.
14
Suez I, ¶32.
15
Zhinvali Development, quoted in Vivendi Universal, ¶23.
16
Sheppard, p.139; Lutrell, p.226.
17
Alpha Projektholding, ¶45.
18
Alpha Projektholding, ¶47.

8. Connections culminating through memberships of social organisations can never be
significant enough to warrant either a disclosure or disqualification as this would make
arbitrator disqualification easy to be misused.19 Furthermore, arbitrators are a part of a close
knit circle where the “community of active arbitrators and the community of active litigators”
is “small” and “not infrequently” overlapping.20 Due to this, most arbitrators are generally
acquainted with each other, but this acquaintance would not mean that the challenge to the
arbitrator will never be upheld.21 Relationships that are de minimis in nature, do not require
disclosure and cannot be ground for disqualification.22
9. It is further submitted, in the interest of fair proceedings, that the Tribunal should hear
the proposal as it is obliged to give reasons for the decision when it decides the challenge
against other members 23 unlike the Chairman. 24 Moreover, the unchallenged arbitrators,
because of a similar working environment are in a better position to evaluate the reliability and
competence of the challenged arbitrator.25
10. In the light of the arguments presented and issue raised, it is submitted that the Tribunal
comprising of Ms. Cornelia Sorabjie and Ms Ángela Acuña Braun should hear the
disqualification proposal against Ms. Annie Ruth Jiagge.
II. MS. ANNIE SHOULD NOT BE REMOVED FROM THE ARBITRAL

TRIBUNAL
11. Article 57 26 provides for two grounds on the basis of which a proposal for
disqualification of an arbitrator can be made. An arbitrator can be disqualified when there is a
manifest lack of qualities provided in Article 1427 or if the appointment was made disregarding
Section 2 Chapter IV. 28 Respondent contends that Ms. Annie is a person of high moral
character, recognised competence and is independent and impartial in compliance with Article
1429 of the Convention (A). In addition, the arbitrator is not a national of the host state and
hence, satisfies the criteria provided under Section 2 Chapter IV (B). Moreover, non-disclosure
of information is not a ground for disqualification (C).
19
Redfern, p.16; IBA Guidelines, Green List, ¶4.3.1.
20
SGS v. Pakistan I, ¶404; Bernasconi, pp.4, 13.
21
Caratube International, ¶110.
22
EDF, ¶112; Alpha Projekting, ¶64; Amco Asia, quoted in Nicole Cleis, p.32; Vivendi Universal, ¶27.
23
ICSID Convention, Art. 48(3); Tupman, p.34.
24
Generation Ukraine, quoted in Nicole, p.61; Siemens, quoted in Nicole Cleis, p.64.
25
Jo-Mei Ma, p.8.
26
ICSID Convention, Art. 57.
27
28
ICSID Convention, Section 2, Chapter IV.
29

A. MS. ANNIE DOES NOT MANIFESTLY LACK QUALITIES PROVIDED IN ARTICLE 14
12. Article 14 of the ICSID convention requires an arbitrator to be independent and
impartial, amongst other things.30 The term independence refers to a “lack of relations with a
party that might influence an arbitrator’s decision.”31 Impartiality on the other hand concerns
“the absence of a bias or predisposition toward one of the parties.”32 The term impartiality,
though not mentioned in the English Convention, is borrowed from the Spanish Convention,
all the versions being equally authentic. For the disqualification of an arbitrator, these qualities
need to be proven “manifestly”.33
13. Only a manifest lack of conditions required by Article 14 can serve as a basis for
disqualification of an arbitrator.34 Manifest lack of qualities need to be established by objective
evidence.35 It can be established only if the lack of impartiality and independence is obvious,
evident and far beyond reasonable doubt.36 This standard for disqualification is said to impose
“a relatively heavy burden of proof” or “strict proof” 37 on the party submitting a
disqualification proposal.38 Accordingly, Claimant needs to prove actual lack of independence,
instead of an appearance of bias,39 which is obvious or highly probable.40
14. Moreover, ‘manifest’ has been interpreted to mean the ease with which lack of qualities
under Article 14 can be detected,41 which does not require “elaborate interpretations”42 and can
be understood by the court without the assistance of the counsel or without employing great
effort or deep analysis.43
15. Reliance on the standard of justifiable doubt is not applicable while interpreting the
term ‘manifest’ as provided in the ICSID convention.44
30
31
Tidewater Inc., ¶37; Suez II, ¶29.
32
Id.
33
34
35
Suez II, ¶40; Suez I, ¶38; Universal Compression, ¶¶72, 77.
36
Suez II, ¶34; Suez I, ¶39; Nations Energy, ¶56; Getma International, ¶58.
37
OPIC Karimum, ¶44; Total S A, ¶105; Abaclat II, ¶48.
38
Schreuer I, ¶348.
39
Suez I, ¶29; OPIC Karimum, ¶45; Horn, p.36.
40
Amco Asia, quoted in Nicole Cleis, p.32; Participaciones Inversiones, ¶23; Conoco I, ¶56; Conoco IV, ¶40;
Conoco V, ¶25; Conoco VI, ¶33.
41
Schreuer I, p.1201; EDF, ¶30; Tidewater Inc, ¶36; Favianca II, ¶40; Favianca III, ¶45; Electrabel S A, ¶36.
42
Electrabel S A, ¶36.
43
Schreuer I, p.498.
44
Tidewater Inc, ¶39; Amco Asia, quoted in Nicole Cleis, p.32; Vasani & Palmer, p.20.

16. Further, a patent connection should be present between the facts and circumstances
relied upon by Claimant and the contentions of Ms. Annie’s lack of independence and
impartiality.45 These facts should not be simply “supposed or inferred”.46
17. In light of this, Respondent submits that the arbitrator does not lack independence and
impartiality as: multiple appointment does not attribute bias to an arbitrator (i); Moreover, there
is no substantial connection between the challenged arbitrator and the host state (ii); and
finally, an arbitrator’s public opinion and publication do not impute bias (iii).
i. That multiple appointments by a party do not attribute bias to an arbitrator
18. A broad notion of ‘repeat appointments’ is that an arbitrator has been, in the past,
appointed on several instances by the same party, counsel or a company 47 for distinct but
similar cases.48 Respondent submits that the multiple appointments in the present case do not
qualify as a ground for disqualification of Ms. Annie.
a) Appointments have been made by different entities
19. The present case does not fall within the category of ‘repeat appointments’ and cannot
be a ground for disqualification of host nation’s appointed arbitrator. Ms. Annie has been
nominated as an arbitrator twice by a government enterprise of Nappertania.49 The enterprise
is a separate legal entity, distinct from Respondent in the present case,50 which has appointed
Ms. Annie for the first time. A separate legal entity is created for a number of purposes inter
alia, limiting liability of the parent entity. Thus, both the entities cannot be termed as the same
party for the purposes of repeat appointments. Since claimant cannot sufficiently provide facts
to prove them as a single entity, this ground should be rejected.
b) The subject matter of the arbitration is not same
20. Moreover, Ms. Annie has been appointed as an arbitrator in two commercial
arbitrations in 2014 and 2017 51 and not in an investment arbitration. 52 The two types of
arbitrations differ widely.53 It is therefore submitted, that the arbitrator is not a ‘factual repeat
arbitrator’ or ‘legal repeat arbitrator’.54 The risk of bias in such appointments develops from
45
SGS v. Pakistan I, quoted in Nicole, p.34; Nwakoby & Aduaka, p.7; Lutrell, p.89.
46
SGS v. Pakistan I, quoted in Nicole, p.34; Zhinavali Development, quoted in Vivendi, ¶23; Generation Ukraine,
quoted in Nicole, p.61; Bernasconi, p.12.
47
Park, p.26; Giraldo, p.81.
48
Giraldo, p.81.
49
50
Feit, p.163.
51
Clarification 2, p.3, Q.28.
52
53
Heinz, p.577.
54
Giraldo, pp.93, 97.

the fact that certain issues raise like questions of fact or law which may grant the arbitrator who
has worked with such facts or law, in the past, a benefit over his colleagues that would
rationalize the arbitrator´s challenge.55 In the present case, the law applicable to determine the
rights and liabilities of the parties is the BIT, and not the laws applicable to the commercial
disputes for which Ms. Annie was appointed. Thus, she was appointed in cases having different
laws, different facts and in different time periods because of which manifest lack of
independence cannot be proven.56 The present ICSID proceeding does not bear a "significant
overlap in the underlying facts” with the two previous commercial arbitration appointments.57
Even parallel nomination by the same party and counsel,58 in a case pertaining to the same
agreements and the same governmental action, similar circumstances59, in the same treaty, have
been considered harmless, if the cases arose from different factual circumstances.60 The facts
of the present case do not prove manifest lack of bias through repeat appointments.61 Moreover,
the decision of Ms. Annie in one of the two commercial arbitrations, in favour of the
government enterprise does not impute bias.62
21. Repeat appointments as an arbitrator by the same party, in cases that are not related, are
neutral, as the arbitrator exercises the same autonomous arbitral function in each case.63 The
view, that an arbitrator who has previously been occupied in earlier related proceedings is
essentially biased since he has already formed an opinion on the matter, cannot be taken.64
c) There is an absence of aggravating facts
22. The appointments, in absence of aggravating circumstances, do not establish a manifest
lack of independence or impartiality.65 The rationale behind challenging an arbitrator on the
ground of multiple appointments by the same party, is a possible conflict of interest which
could create either the relationship of dependency and control over the arbitrator’s judgment
for the prospect of continuous and regular appointments incentivized with economic benefits;
or the hazard that an arbitrator would be prejudiced by the knowledge derived from the former
cases.66 Ms. Annie’s celebrated status as an arbitrator for her outstanding achievement in the
55
Nicole, p.243.
56
Electrabel S A, ¶23.
57
Clarification 2, p.5, Q.45; Caratube International, ¶38.
58
Azurix Corp, quoted in Sheppard, p.145-146; Siemens A G, quoted in Sheppard, p.145-146.
59
Saba Fakes, quoted in Nicole Cleiss, p.72.
60
Rusoro Mining, quoted in Repsol, ¶23; Electrabel S A, ¶25.
61
OPIC Karimum, ¶44.
62
Abaclat I, ¶80.
63
Tidewater Inc., ¶60; Universal Compression, ¶79.
64
Fremarc ITM, quoted in Daele, p.237.
65
Caratube International, ¶92; OPIC Karimum, ¶52.
66
Tidewater Inc., ¶61.

field of international arbitration67 makes her an obvious choice for subsequent arbitrations. It
also shows that she has the capability and the opportunity to get at least equal incentives in
other endeavours and is not completely dependent on a single party.68 Biased decision making
would be an odd way of receiving economic benefits.69 Ms. Annie only derived 12% of the
income from the two commercial arbitrations70 which is not a substantial amount and fails to
show the economic dependency of Ms. Annie on the government. She is also a partner at a law
firm71 which means that she is not economically depended on Respondent. It is not manifest72
that the reappointment of the arbitrator fosters any relationship 73 w.r.t the Government of
Nappertania. Since the facts of the previous cases are different from the case at hand, the
knowledge acquired by Ms. Annie in the former would not create an issue conflict.
23. The strongest reason for an arbitrator to abstain from compromising her impartiality
and independence, when the arbitrator is regularly appointed by a party, could be the
apprehension of putting her reputation, and in turn any further appointments, at risk.74
ii. There is no substantial connection between the challenged arbitrator and Respondent
24. For a challenge of disqualification to be successful on the basis of relationship between
arbitrator and the parties, the said relationship between the arbitrator and the party should be
significant and direct. 75 The relationship between Ms. Annie and her brother cannot be a
ground for the arbitrator’s disqualification as the relationship is remote and does not exceed
the de minimis threshold.76 Although, Ms. Annie’s brother is known to have a clout in the
government of Nappertania,77 he does not hold any official position. Thus, Ms. Annie’s link
with the government is not direct.78 The argument, that an occasional personal contact of the
arbitrator with the party will manifestly affect the judgment of the arbitrator without any further
facts, is purely speculative.79
25. Party-appointed arbitrators are appointed with the belief that they recognize the party’s
67
68
Paulsson, p.14.
69
Park, p.31.
70
71
72
Participaciones Inversiones, ¶26.
73
Giraldo, p.88.
74
Kapeliuk, p.49.
75
Suez II, ¶28; Conoco I, ¶21; Conoco IV, ¶35; Conoco V, ¶5; Conoco VI, ¶12; Favianca II, ¶7; Favianca III, ¶9.
76
Nicole Cleis, p.20; Applied Industrial, quoted in Daele, p.38; Suez II, ¶27.
77
78
79
Zhinavali Development, quoted in Vivendi Universal, ¶23.

situation and are well acquainted with it.80 This does not equate to bias.81 Choosing a known
but impartial arbitrator cannot attract disqualification. 82 An arbitrator does not decide in a
certain way due to the particular nomination by the party, but because the party and the
arbitrator share the same ideology.83 An arbitrator cannot be expected to maintain a “Chinese
wall” in his mind.84 The requirement, although is that while rendering the award merits should
be evaluated and extraneous factors should not be relied on.85 Experienced arbitrators evaluate
the merits of each case while disregarding other factors that do not have any bearing with the
substance of the case.86
iii. That public opinion and publication do not impute impartiality to an arbitrator
26. Under the ICSID Convention, an analysis of general legal issues by an arbitrator, does
not affect her impartiality.87 In the case of SGS v. Pakistan,88 the arbitrator was not disqualified
even when he disclosed that he was about to publish an article on a legal issue related to one
of the claims advanced by the SGS. This reflects how academic and legal writings are not a
cause of concern w.r.t arbitrator’s impartiality and independence.89
27. For an opinion to impute manifest lack of impartiality and independence, the expressed
opinion has to be specific and clear enough for a reasonable and informed third party to find
that the arbitrator would rely on such opinions without giving proper consideration to the facts
and arguments of the case.90
28. Allowing a challenge for lack of independence and impartiality on the mere fact of
having made an opinion on an issue relevant to the arbitration is incompatible with the proper
functioning of the arbitral system under the ICSID Convention.91 There must be a direct or
indirect interest of the arbitrator in the outcome of the dispute along with such an opinion, for
a challenge to succeed under the Convention.92
29. Ms. Annie is a celebrated international arbitrator. It is submitted that the opinions
expressed by Ms. Annie were general statements based on her moral and cultural experiences
80
Hunter, p.223.
81
Rogers, p.64.
82
Salomon, quoted in Giorgetti C, p.8.
83
Giorgetti, p.466.
84
Horn, p.35; Caratube International, ¶75.
85
Urbaser S A, ¶40.
86
Sacerdoti, p.2.
87
Saipem, quoted in Daele, p.66; Urbaser S A, ¶31.
88
SGS v. Pakistan I, quoted in Daele, p.124.
89
IBA Guidelines, p.18.
90
Urbaser S A, ¶40.
91
Brubaker, p.111.
92
Nicole Cleis, p.73.

and her professional education. Her statements on corruption and on empowering her fellow
countrymen through education only serve to reinforce the qualities of the high moral character
required of an ICSID arbitrator. These statements do not affect her ability to consider and
evaluate the merits of the case as they do not have any relation to the present dispute.
30. Further, it is assumed that an arbitrator “is a legal professional with the ability to keep
a professional distance” unless it is proved otherwise.93
B. MS. ANNIE SATISFIES THE CRITERIA PROVIDED UNDER SECTION 2 CHAPTER IV
31. The term “nationality” is not defined in the ICSID Convention. 94 In international
arbitrations, citizenship is considered to deliver the relevant connection.95 Ms. Annie gave up
her Nappertanian citizenship 27 years ago96 and has been a British citizen for 30 years.97 She
is a resident of London.98 In the present case, there was no superficial or artificial bestowal of
citizenship, rather, the citizenship was bestowed under regular conditions in the first place
which was not tainted by an “overall breach of relationship” later.99
32. In cases of dual nationality, there is a requirement to determine the dominant and
effective nationality of the individual.100 If the arbitrator has more than one nationality, the
non-dominant nationality maybe overlooked at the time of the constitution of the tribunal.101
Nationality must match with the factual situation and if a person has severed all links with a
country due to prolonged absence, that country is reduced to the mere status of a nominal
country.102 The dominant nationality of Ms. Annie is that of the UK as her place of residence103
and work are both in the UK. Ms. Annie’s centre of interest,104 participation in public life105
and economic activities, all lie in the UK. This proves her relation of dependency with UK.106
The arbitrator voluntarily severed her ties with the host nation 27 years ago after being a British
citizen for three years. Such voluntary renunciation of nationality can occur and is valid if the
individual has dual nationality.107 A substantial time has elapsed since Ms. Annie gave up her
93
Saint Gobain, ¶61.
94
Alizamini, p.21.
95
Feldman, ¶48.
96
97
98
99
Feldman, ¶47; See also: Nottebohm, p.2.
100
Kannof, p.1387; Nottebohm, p.20; Alizamini, p.9.
101
Schreuer I, p.675.
102
Nottebohm, p.21.
103
104
Nottebohm, p.25.
105
Anzola, p.10, 11.
106
Shirpour, p.3.
107
Victor Pey, quoted in Daele, p.99.

Nappertanian citizenship.108 She only visits Nappertania once a year because of familial ties.109
Further, she wrote the blog posts regarding Nappertania during her secondary education when
she was a Nappertanian citizen.
33. Nationality in international law is referred to the connection that links a person to a
particular state and does not depend on that individual’s ethnic background, identity or
origin.110 National origin cannot be a ground of disqualification.111
34. Further, in arguendo, if a relationship of nationality exists, the connection is de minimis
as Ms. Annie has left the citizenship of Nappertania 27 years ago and holds the nationality of
UK since 30 years.112 Such de minimis factors cannot disqualify an arbitrator.113
C. THAT NON-DISCLOSURE IS NOT A GROUND FOR DISQUALIFICATION
35. It is submitted that non-disclosure of information by the arbitrator is not a ground for
disqualification in itself.114 Non-disclosure of information leads to disqualification only if there
are significant and severe facts or circumstances which, either alone or combined with other
issues, question the independence and impartiality of the arbitrator.115
36. In the present case, no such fact exists, that may alone or in combination with other
factors, lead to the conclusion that Ms. Annie manifestly lacked independence or impartiality.
It is submitted that the non-disclosure by Ms. Annie was “inadvertent”, “the result of an honest
exercise of discretion” and at most was “an aberration on the part of the conscientious
arbitrator”.116
37. ICSID Arbitration Rule 6 is reasonably interpreted to mean that the arbitrator should
only disclose information that she reasonably believes would create a doubt of lack of
independence of the arbitrator in the mind of a reasonable person.117 If an arbitrator has no
reasons to conjecture that a possible compromising situation exists, it would not be reasonable
to impose on her the duty to disclose, since the question of disclosure is a matter of the
arbitrator’s discretion.118
108
Anzola, p.7; Soufraki, ¶34.
109
Case study, p.8, ¶.36.
110
Alizamini, p.24.
111
Locabail, ¶25.
112
Clarification 2, p.1, Q.4; Clarification 2, p.2, Q.16.
113
Nicole Cleis, p.42; Applied Industrial, quoted in Daele, p.38; Suez II, ¶28.
114
EDF, ¶19; Alpha Projekting, ¶31.
115
Suez II, ¶20; Tidewater Inc, ¶39.
116
Id.
117
Suez II, ¶40.
118
Suez II, ¶47.

38. It is submitted that the non-disclosed information was in common knowledge and in
public domain as Mr. Carsten came to know about it through Mr. Inzhu.119 She is a famous
arbitrator and was quite well known in Nappertania. It can be reasonably concluded that the
status of her citizenship was also known. She had given up her Nappertanian citizenship 27
years ago and is currently a resident and citizen of the UK. She considers herself to be an
independent arbitrator and believed that these facts need not be disclosed. 120 The non-
disclosure of facts was unintentional and an honest mistake on part of the arbitrator. In any
case, non-disclosed information, if in public domain, should not have any bearing on the
disqualification proposal of Ms. Annie.121
39. The aforesaid arguments on nationality, multiple appointments and publication and
opinion show that failure to disclose does not “raise obvious questions about impartiality” and
is not “part of a pattern of circumstances raising doubts as to impartiality”.122 It has also been
proved that, even if any connection exists between the arbitrator and Respondent, it is de
minimis in nature. 123 Non-disclosure must relate to facts that would create a reasonable
likelihood of bias; however, it is not so in the present case.124
40. Diverse arguments of challenge against an arbitrator’s independence, unless
interrelated, have been discarded to be considered cumulatively.125 These arguments can only
be raised later in the proceedings in case of serious misconduct or blunder on part of the
arbitrator. 126 Otherwise, Claimant’s arguments on disqualification are unmeritorious and
cannot be measured cumulatively.
41. For all the above mentioned reasons, it is stated that Ms. Annie does not fall in the four
criteria of proximity, intensity, dependence and materiality for the qualitative evaluation of the
connection with the disputing party to establish a lack of independence.127 The arbitrator does
not have frequent interactions with the Government of Nappertania and is also not closely
connected to it. 128 And thus, it is submitted that Ms. Annie should not be disqualified from the
arbitral tribunal.
119
Case Study, p.8, para 37.
120
Case Study, p.11, ¶4.
121
Suez II, ¶28; Tidewater Inc, ¶39; Nations Energy, ¶33.
122
Suez II, ¶30; TidewaterInc., ¶40.
123
EDF, ¶34; Alpha Projekting, ¶35; Amco Asia, quoted in Nicole Cleis, p.32; Vivendi Universal, ¶26.
124
Id; Daele, ¶1-031.
125
Azurix Corp, quoted in Nicole Cleis, p.63; OPIC Karimum, ¶28.
126
Saudi Cable, p.54.
127
Suez I, ¶20.
128
Lutrell, p.142.

PART TWO: JURISDICTION AND ADMISSIBILITY
III. CLAIMANT’S ASSETS IN NAPPERTANIA WERE NOT AN “INVESTMENT”

FOR THE PURPOSES OF ARTICLE 1(2) OF THE BIT DUE TO THE ILLEGALITIES
UNDERLYING ITS INVESTMENT
42. Respondent submits that the Tribunal does not have the jurisdiction to decide the
present claim since the ratione materiae requirement for the purposes of Art. 1(2) of the BIT
has not been fulfilled. Tribunals129 have employed a double-barreled test which mandates an
investment to satisfy both, the definition provided under the relevant BIT as well as the
objective criteria of an “investment” under Art. 25(1) of the ICSID Convention. Accordingly,
this Tribunal should deny jurisdiction because: Compliance with the law is a jurisdictional
prerequisite as the protections afforded by the BIT do not extend to illegal investments. [A];
In the present case, existence of ‘red flags’ prove that Claimant’s investment was tainted with
corruption, therefore, not made “in accordance with the law.” [B]; Moreover, Claimant’s
knowledge of the illegality renders the principle of estoppel inapplicable as against the host
state [C]; and finally, Claimant’s assets in Nappertania do not fulfill the ratione materiae
requirement for jurisdiction under Art. 25 of the ICSID Convention [D].
A. COMPLIANCE WITH THE LAW IS A JURISDICTIONAL PREREQUISITE UNDER THE BIT
43. Art. 1(2) of the BIT defines “investment” as any assets or associated rights “invested
in accordance with law”.130
44. The tribunal in Fraport,131while deciding on the issue of jurisdiction, observed that in
BITs which contain the option of ICSID arbitrations, the meaning of the word “investment”
has to be determined by the language of the pertinent BIT which serves as a lex specialis132
w.r.t Art. 25 of the ICSID Convention. Therefore, compliance of investments with the law is a
precondition to benefit from the BIT’s protection.133
45. In the present case, Claimant’s claims arise out of investments obtained through bribery
and corruption.134 Thus the investment falls squarely outside the expressly limited scope of the
BIT.135 Consequently, Respondent’s consent to arbitration stands vitiated.
129
Salini, ¶36; Joy Mining, ¶50.
130
Case Study, p.15, Art. 1(2) of BIT.
131
Fraport, ¶305.
132
Archer Daniels, ¶117.
133
Salini, ¶46; Metal-Tech, ¶193; Inceysa, ¶¶192-196; Peterson.
134
Refer ¶¶46-56, Memorial on behalf of Respondent.
135
Schill, p.281-323.

B. CLAIMANT’S INVESTMENT WAS TAINTED WITH CORRUPTION
i. Corruption involves a reallocation of the “actori incumbit probatio” principle and

needs to be proven through “Red Flags”
46. It is generally accepted by authors136 and tribunals137 that transnational corruption has
a clandestine and highly complex nature, proving which, requires an adjustment of the
evidentiary principle of actori incumbit probatio i.e. one who relies on a fact must prove it.138
In light of this, Lord Woolf139 suggests demonstrating existence of ‘red flags’ which are in the
nature of suspicious circumstances.140 If the circumstances as established are sufficient to raise
a presumption that there has been corruption, the Tribunal has to deny jurisdiction.141
ii. “Red Flags” exist during the entirety of the investment

47. Respondent submits that the Tribunal in Inceysa142 denied jurisdiction to the investor’s
claims since it rigged the fair bidding process. Similarly, Mr. Carsten, the principal investor in
the present case, had prior knowledge of the public auctioning of the oil wells143 due to which,
Claimant was able to prepare a highly detailed and competitive bid144 which placed it at an
advantageous position defying the principle of level playing field.
48. Further, the ‘red flags’ listed by Lord Woolf including inter alia: an adviser’s lack of
experience in the sector (a); unusually high commissions to an adviser (b); and an adviser’s
close personal relationship with the government that could influence the government’s decision
(c) are present in this case.145 Even the ruling of the Tribunal in Metal-Tech146 was not based
on any direct proof of facts rather on the presence of similar ‘red flags’.
a) Lack of Qualifications
49. Respondent submits that Claimant appointed Ms. Ayna as a consultant for their
investment despite her lack of experience in the oil industry.147
b) Size of Payments allocated as ‘Consultancy Fees’
136
Nappert, p.163; Kessler, p.20.
137
Methanex, ¶5; Thunderbird-Walde, ¶112.
138
Scherer, p.29.
139
Woolf Committee, p. 25-26; Metal-Tech, ¶293.
140
Metal-Tech, ¶¶243, 293; WDF, ¶136; Jan Oostergetel, ¶303.
141
Thunderbird-Walde, ¶112; Metal-Tech, ¶ 243.
142
Inceysa, ¶¶123-127.
143
144
145
Metal-Tech, ¶293; Woolf Committee; Betz, ¶117.
146
Metal-Tech, ¶¶213-218.
147
Case Study, p.3, ¶13; See also: Metal-Tech, ¶¶208-212.

50. It is submitted that Ayna was being paid a hefty sum of USD 1m per annum, her
contract being renewed every two years.148 Further, USD 4m was allocated as ‘consultancy
fees’ that included entertainment costs. 149 These were used towards inducing government
officials to approve Claimant’s investment.150 Such handsome payments, which account for
10% of the total investment cost, are disproportionate given the conditions of an
underdeveloped country.151
c) Ayna’s connection to Public Officials
51. It is Respondent’s submission that the investors appointed Ayna as she was the niece
of the President of Nappertania152 and was chiefly responsible for connecting Claimant with
key government officials - her ‘diligent efforts’ made the investment possible. 153 These
connections were crucial in “closing red tapes”154 and are reflective of existence of corruption.
iii. Claimant’s assets were not invested “in accordance with the law”
52. Since the BIT does not expressly require compliance with “host state’s law”, an
evaluation of international legal principles for making such investments is equally important
as compliance with the former.155 Thus, an investment cannot be accorded the protections of
the BIT156 if it is made in violation of national or international public policy or if its creation
itself constitutes an abuse of international investment protection under the ICSID
Convention.157 It is submitted that the alleged investment was in violation of the Host state’s
Laws (a); International Public Policy (b); Doctrine of Clean Hands (c) and Principle of Good
Faith (d).
a) Host State’s Laws
53. The Tribunal in Fraport158 denied jurisdiction to the investor for covertly employing
devices to evade the Philippines Anti-Dummy Law which regulated and limited foreign control
and ownership over certain sectors. In the same vein, Claimant created local shell companies
to evade the regulations that limited investors from buying a majority stake in refining and
distribution assets,159 thereby violating the host state’s laws.
148
149
150
151
152
153
154
155
Rahim Moloo, p.1493.
156
Gustav, ¶123; WDF, ¶157.
157
WDF, ¶157.
158
Fraport, ¶287.
159

b) International Public Policy
54. Legal rules160 and authorities161 strongly condemn corruption and are of the view that
there exists an international public policy against it.162 In furtherance of the same, the WDF
tribunal disregarded the cultural tolerance towards corruption in Kenya (Harambe culture).163
Likewise, Claimant’s reliance on Nappertanian custom of rewarding officials to show how its
actions were not violative of the host state’s laws should be held untenable.
c) Doctrine of Clean Hands
55. Respondent submits that the Doctrine of Clean Hands acts as a jurisdictional bar164 to
the investor’s claims since it “ensure(s) the promotion of the rule of law, which entails that a
court or tribunal cannot grant assistance to a party that has engaged in a corrupt act.”165
Claimant has committed a globally condemned offence of bribery and corruption 166 and
therefore, cannot claim any protection of the BIT with unclean hands.
d) Principle of Good Faith
56. It is Respondent’s submission that Claimant’s investment was made in bad faith as
Claimant knew of the illegality at the time of making the investment. Mr. Carsten could only
win the bid and consequently, make the investment owing to one month advance information167
procured through explicit bribery. He was aware that the bid was not public168 and had borne
all the expenses of Mr. Inzhu and his wife in exchange of the information supplied.169 He even
disclaimed any responsibility of such advance information when asked during an investigation
conducted by OGM170 which indicates mala fide intention on his part.
iv. The Burden of Proof is on Claimant to prove legality of its alleged investment
57. The Tribunal in Metal-Tech171 held that once sufficient explanation for existence of
suspicious circumstances is provided, the burden is transferred onto Claimant to provide
reasonable explanations for the same, failing which it shall be deprived of jurisdiction. 172
Moreover, the tribunal should adopt a “connecting the dots method” as the appropriate standard
160
UNCAC; OECD Convention, 1997; VCLT, Art. 49, 50; FCPA.
161
Llamzon, p.299; Nappert, p.161; See also: Metal-Tech, ¶86.
162
Nappert, p. 161; Hwang; WDF, ¶157; Inceysa, ¶252; Niko, ¶433.
163
WDF, ¶172.
164
Gustav, ¶123; Hulley Enterprises, ¶435; Veteran Petroleum, ¶492; WDF, ¶148; Metal-Tech, ¶373.
165
Metal-Tech, ¶389.
166
167
168
169
170
171
Metal-Tech, ¶243.
172
Deyan Dragiev, ¶13.

of proof rather than the “clear and convincing evidence” standard.173
58. Presently, the arguments iterated above174 establish circumstances sufficient to prove
existence of corruption. Thus, the burden now shifts on Claimant to justify its probing
connections with Nappertanian officials and disproportionate payments made to them.
C. THE PRINCIPLE OF ESTOPPEL IS INAPPLICABLE AS AGAINST THE HOST STATE
i. Claimant’s knowledge of the illegality renders the principle of estoppel inapplicable

59. It is submitted that a host state cannot be said to be consciously overlooking violations
of its laws if the investor has deliberately concealed its illegal conduct.175 In our case, OGM
had conducted an investigation post the exposé of Mr. Inzhu’s meeting with Mr. Carsten,
during which Carsten had deliberately concealed the fact that he had prior knowledge of the
auction.176 A State cannot be estopped from raising corruption as a defense when the investor
knows of the alleged illegality and has made the investment in bad faith.177
ii. Acceptance of bribe by a public official is not attributable to the host state
60. Moreover, since law is always above officials178 an unlawful conduct of public officials
can only be attributed to the State where it is “cloaked with governmental authority”, but not
“where the conduct is so removed from the scope of their official functions that it should be
assimilated to that of private individuals.”179 Indeed, acceptance of a bribe by a public official
cannot be attributed to the State since it implies subversion of the government’s interests for
the personal benefit of the bribe-giver and the public official.180
61. Thus, the host state should not be estopped from raising corruption as a jurisdictional
defense in the present case.
D. CLAIMANT’S ASSETS IN NAPPERTANIA DO NOT FULFILL THE RATIONE MATERIAE
REQUIREMENT FOR JURISDICTION UNDER ART. 25 OF THE ICSID CONVENTION.
62. The overarching purpose of the present BIT is to promote and protect investments in
the host state for mutual benefit of both the contracting parties.181 Schreuer has identified five
173
Spentex Netherlands, quoted in Shmatenko, p.163.
174
175
Fraport, ¶387; Greenwald.
176
177
ILC Draft Articles, Art. 7; Refer ¶56, Memorial on behalf of Respondent.
178
WDF, ¶185.
179
Id.
180
Yeager, ¶137-139; Petrolane, ¶92.
181
Case Study, p.14, Preamble of BIT; Malaysian Salvors, ¶66; VCLT, Art. 31; ICSID Convention, Preamble;
Report of the ICSID Executive Directors, ¶9.

inherent characteristics of an “investment”,182 collectively known as the Salini Test,183 to check
the ratione materiae requirement under Art. 25(1) of the ICSID Convention. 184 The Test
includes an assessment of inter alia: duration of investment (i); development of the Host state
(ii); and an element of risk (iii). It is submitted that these requirements are in absentia in the
present transaction.
i. The present transaction fails to fulfill the qualitative test of minimum duration
63. Even though Respondent concedes that Claimant’s investment fulfills the minimum
time period of two years,185 it is submitted that this factor has only been satisfied quantitatively.
Duration of operation is a paramount feature of investments since it distinguishes them from
ordinary commercial transactions. 186 Moreover, the BIT in question protects only those
investments that are made on “a long-term basis.” 187 In the present case, Claimant had
purchased the oil wells only with the intention of making underperforming assets profitable to
sell them as a consolidated holding.188 Since Claimant’s only aim was to earn profit189 and
leave Nappertania as soon as possible, its investment cannot be said to be fulfilling the
qualitative test of minimum duration viz. whether the investment operated in furtherance of
promoting the economy and development of the host state.190
ii. Claimant’s investment did not contribute to the development of the Host State
64. Art. 31(1) of the Vienna Convention on the Law of Treaties (“VCLT”) warrants
interpretation of the BIT in light of its object and purpose as mentioned in its Preamble,191
which is “sustainable and economic development for the healthy and peaceful future of people”
as well as promotion of “local development through maximum utilization of resources.”192
Thus, Respondent submits that the requirement of contribution to host state’s development was
not intended to be a mere characteristic, but a jurisdictional prerequisite.193
182
Schreuer I, Article 25, ¶153.
183
Grabowski, p.290.
184
Salini, ¶¶53-58; Fedax, ¶43; Malaysian Salvors, ¶108; Saipem, ¶¶99-102; Patrick Mitchell, ¶¶23-48; Joy
Mining, ¶¶53-63; Consortium, ¶61; SGS v. Pakistan II, ¶133.
185
Salini, ¶56; See also: Schreuer II, p.318-492.
186
Bayindir, ¶73.
187
Case Study, p.14, Preamble of BIT.
188
189
Id.
190
Malaysian Salvors, ¶111; LESI-DIPENTA, part I, ¶14(ii); Bayindir, ¶137.
191
VCLT, Art. 31; Salini, ¶52.
192
Case Study, p.14, Preamble of BIT.
193
Patrick MitchelI, ¶¶39, 73; García-Bolívar, ¶7.

65. In the present case, the economic benefits enjoyed by the investors194 did not reach the
local community who were left with the negative externalities of the wells.195 The volume of
spilled oil increased from 10 to 15% and sustainable development practices were non-
existent.196 It is evident from the above that Claimant’s investment only degraded the living
conditions in Nappertania, and therefore, should be denied the protections of the BIT.
iii. The element of ‘risk’ was eliminated through corruption

66. It is submitted that ‘risk’ is an essential feature of an “investment”.197 For an investment
to be protected under a BIT, there must be more than just a superficial satisfaction198 of the
presence of ‘risk’. Investments made through corruption are insulated from economic risks and
are thus, placed outside the class of treaty-defined protected investments.199
67. In our case, Claimant had eliminated the risk associated with its investment by bribing
officials on numerous instances, including both at the time of procuring the investment200 and
during subsequent performance,201 thus, increasing certainty of returns on its investment.
68. For all the above mentioned reasons, both separately and taken together, Respondent
requests this tribunal to deny jurisdiction to the investor’s claims.
PART THREE: MERITS
IV. RESPONDENT’S REGULATORY ACTIONS AGAINST THE CLAIMANT DO

NOT CONSTITUTE A VIOLATION OF FAIR AND EQUITABLE TREATMENT
STANDARDS UNDER THE BIT
69. Claimant professes that the regulatory actions by the Government of Nappertania
violates the Fair and Equitable Treatment (“FET”) standard under the BIT. Even if this
Tribunal considers that it has the power to adjudicate upon the present dispute, Respondent
argues that it violated neither the substantive nor the procedural elements of FET standard.
70. Even though the present BIT makes no specific reference to Customary International
Law (“CIL”), the FET standard, as enumerated under Art. 3(1) of the BIT202 is equivalent to
194
195
196
197
Phoenix, ¶85.
198
Malaysian Salvors, ¶112.
199
Llamzon, p.300.
200
Case Study, p.2, ¶6; See also: Case Study, p.3, ¶13.
201
Case Study, p.5, ¶21, 22; See also: Case Study, p.6, ¶27.
202

the Minimum Standard of Treatment (“MST”) in CIL.203 In that context, the standard demands
a higher degree of inappropriateness for its violation since it only offers “minimal” protection
to the investments made by the foreign investor. 204 This view, therefore, endorses the
application of the unified theory of FET that warrants an assessment 205 of the legitimate
expectations of the investor [A]; non-discriminatory treatment of the investor [B]; character of
the regulatory action [C]; and lastly, observance of procedural fairness [D].
A. RESPONDENT HAS NOT VIOLATED CLAIMANT’S LEGITIMATE EXPECTATION
71. It is submitted that Claimant bears the burden of proving infringement of its legitimate
expectation.206 Nonetheless, Respondent contends that no legitimate expectation existed in this
case (i); Alternatively, a state has the right to regulate its legal framework in times of crisis (ii).
i. No legitimate expectation exists in the present case

72. The present fact situation cannot warrant existence of justified legitimate expectation
since:
a) An assessment of legitimacy must take into account all the circumstances present
in the Host state
73. Several investment tribunals207 have observed that while assessing the legitimacy of
Claimant’s expectation, the circumstances prevailing in the host state at the time when the
investment was made must be taken into account. 208 Claimant must evaluate not only the
circumstances surrounding its investment, but also the cultural, historical, political and socio-
economic conditions prevailing in the host state.209 It is the investor’s duty to evaluate the true
extent of risk in light of the prevailing circumstances before making the investment so as to
have “realistic expectations.”210
74. In the same vein, Respondent argues that Claimant was aware that the oil wells were
situated in an ecologically vulnerable area211 and that the local populace was dissatisfied with
the ecological damages caused in the past thirty years.212 Claimant had consciously chosen to
invest in such volatile circumstances, being fully aware of the risks. In such a situation, it
203
Biwater Gauff, ¶592; Genin, ¶367; Siemens, ¶291; Saluka, ¶291; Occidental, ¶190; El Paso, ¶336.
204
Saluka, ¶292.
205
Saluka, ¶284; Vandevelde, pp.53-101.
206
ADF, ¶157; Tudor, p.138.
207
Duke Energy, ¶340; See also: Tecmed, ¶154; Occidental, ¶185; LG&E, ¶127.
208
AES Summit, ¶9.3.30.
209
Middle East, ¶82; LG&E, ¶¶127-130; Tecmed, ¶154.
210
Muchlinski, p.527, 542.
211
212

cannot legitimately expect213 the host state to not take any regulatory measures to resolve the
environmental and political problems in the area.
b) No legitimate expectation can arise out of an investment that has been acquired
and subsequently performed illegally
75. A commitment to FET is an expression of the principle of good faith.214 Moreover, Art.
2 of the BIT which obliges the host state to refrain from exercising arbitrary control measures
is qualified by the phrase, “within the scope of the laws of the State.”215 In a scenario where
there is sufficient evidence of improper contract vitiating the investment, termination of further
performance by the host state cannot be impugned as unfair or inequitable.216
76. Moreover, measures taken by a State to prevent and control corrupt business practices
and promote accountability and transparency in its dealings with foreign investors, are in
accordance with the World Bank Guidelines on International Investment.217
77. In our case, Claimant had circumvented the auditing process by treating state auditors
to fancy meals,218 breached regulations to purchase refining and distribution assets by creating
shell companies 219 and violated the local laws pertaining to production of kerosene and
environment protection.220 Claimant engaged in bribery and corruption at every stage,221 which
proves its unconscionable conduct and therefore, cannot argue that its expectation of getting
protection for such an investment was legitimate.
c) Legitimate expectation does not exist in the absence of specific commitments made
by host state
78. It is submitted that for legitimate expectations to be created, state conduct has to be
specific and unambiguous.222 Claimant must rely on particular representations made by the
host state223 and not on mere conduct or remarks from government officials that impliedly
encourage an investor.224 In the absence of specific commitments, international investment law
does not require a State to freeze its regulatory framework.225
213
Generation Ukraine, p.92, ¶20.37.
214
Tecmed, ¶153; Amato, p.599; Dolzer, p.122; Crawford, p. 19.
215
216
Middle East, ¶¶127-149; Snodgrass, p.53; CMS, ¶244; Tecmed, ¶153; Duke Energy, ¶340.
217
Shihata, p.160.
218
219
220
221
222
Klager, p.165.
223
CME, ¶155.
224
William Nagel, ¶326.
225
Charanne, ¶489; EDF Services, ¶217; Newcombe, pp.278-79.

79. In the present case, Claimant cannot rely on the reports of bribed state auditors, the
ignorance of corrupt police officials226 and the knowledge of banking regulators regarding
creation of shell companies in violation of local laws227 to argue that it was given specific
assurances. This coupled with the absence of a stabilization clause in the BIT cannot give rise
to any legitimate expectations for the protection of Claimant’s investment.
ii. Alternatively, Respondent did not violate investor’s legitimate expectation while
altering its regulatory framework
80. Assuming, arguendo, that legitimate expectation existed in the present case,
Respondent contends that it has the right to alter its legal framework without treating investor’s
expectations unfairly (a); alternatively, in light of the crisis faced by Nappertania, the state is
entitled to take measures not meeting Claimant’s reasonable expectations (b).
a) Host State is entitled to exercise its sovereign powers in harmony with investor’s
expectations
81. Even in the presence of Claimant’s legitimate expectation, it is submitted that the State
as a sovereign has the authority to balance the preferential treatment of foreign investors against
its legitimate right to adopt regulatory measures for the protection of public interest.228 The
burden on the state is only limited to not acting in an “unfair, unreasonable or inequitable”229
manner while exercising its sovereign power.
82. In our case, even though the Nappertanian government demanded 60% shares of
Claimant’s company to compensate for the grave environmental crimes it committed, the court
ordered the transfer of only 20% shares. 230 This testifies the fairness of the Nappertanian
judiciary as even in the time of a national crisis, it undertook to strike a balance between
investor’s legitimate expectations and host state’s responsibility to create a sustainable industry
in the area damaged by Claimant’s investment. Such a decision is not unforeseeable, unfair,
unreasonable or inequitable by any standards considering the duties of Respondent as a
sovereign. Thus, Respondent has not breached Claimant’s legitimate expectation.
b) Host State was facing an economic and political crisis
83. A majority of investment tribunals have taken into account the circumstances prevailing
226
227
228
Lemire, ¶273; Parkerings-Compagniet, ¶332; Yannaca-Small, p.385.
229
Id, Parkerings-Compagniet.
230

in the host state while deciding if there has been a failure to protect legitimate expectations.231
An investor cannot simply ignore the volatility of the political and economic conditions of the
host state at the time when regulatory framework was altered.232
84. In light of the above legal background, Respondent submits that the economic crash of
2008 left the Nappertanian economy in shambles; the government was in crisis, tax revenues
had fallen and debt was piling up. Coupled with this, the rising political discontent near the oil
wells where Claimant’s investment was situated compelled the government to overhaul the
corruption-ridden environment and strengthen the rule of law in Nappertania. 233 In such a
situation, violation of investor’s legitimate expectation regarding continuance of corrupt
practices will not amount to breach of protections afforded under the BIT.234
B. RESPONDENT DID NOT ACT IN A DISCRIMINATORY MANNER
85. Art. 3(1) of the BIT requires Respondent to provide FET no less favourable than the
treatment accorded to other investors either domestic or belonging to a third state. 235
Discriminatory treatment is proven when similar cases are treated differently without
reasonable justification.236
86. In our case, there is no evidence to suggest that Claimant was treated in a discriminatory
or arbitrary manner. The fact that all government offices were directed to evaluate and address
environmental as well as corruption concerns with immediate effect 237 signifies that
Respondent’s fight against corruption applied to all investors, without any discrimination
whatsoever.
C. REGULATORY ACTIONS IN FURTHERANCE OF THE UNIVERSALLY ACCEPTED GOAL

OF SUSTAINABLE DEVELOPMENT DO NOT BREACH THE FET STANDARD
87. The concept of sustainable development has emerged as a collective term including
ideas of environmental, economic and social development.238 Scholars have opined239 that the
integrative concept of FET and its close affinity to equity demands that the social and
environmental implications arising from an investor’s conduct should also be brought under its
231
Saluka, ¶308; Parkerings-Compagniet, ¶¶278, 306, 335; Generation Ukraine, ¶20.37; Duke Energy, ¶347;
Biwater Gauff, ¶601; Bayindir, ¶192; Gallus, p.223.
232
National Grid, ¶180.
233
234
Eureko, ¶233.
235
236
Saluka, ¶313; Methanex, part iv, p.2, ¶4.
237
238
UNDESA Report, ¶2; UN Johannesburg Declaration, ¶5.
239
Peter, p. 637; Klager, p.205.

purview. The tribunals in Emilio Maffezini 240 and S.D. Myers 241 rejected the investor’s
allegations of violation of FET Standard on the grounds that the regulatory actions imposed by
the host state were in furtherance of its environmental obligations to its people.
88. In the case at hand, practices relating to sustainable development were non-existent in
Claimant’s investment; rather it further degraded the ecology and augmented the problems
suffered by the local community.242 Given this backdrop, and also the fact that the Preamble to
the BIT places central importance on sustainable development,243 Claimant’s arguments about
the amendment in environmental rules,244 ought to be rejected by this Tribunal as a state has
the right to impose regulatory measures to attain its goal of sustainable development.245
D. RESPONDENT HAS NOT VIOLATED THE PROCEDURAL ELEMENTS OF FET
89. It is submitted that the host state has protected the procedural rights of the investor246
by affording a certain degree of transparency247 (i); as well as a basic standard of fairness in
judicial and administrative procedures248 (ii) in its legal system.
i. Respondent acted in transparent manner

90. The understanding of transparency requirement under investment law does not require
a host state to act “totally transparently”249 since it imposes “inappropriate and unrealistic”250
obligations on the host state. Therefore, a treaty-specific interpretation of the standard should
be adopted. In the present BIT, since there is no explicit reference to transparency requirement,
therefore, the tribunal should not find it as an essential component for assessment of violation
of FET standard.
91. Regardless, Respondent’s actions satisfy the standard of transparency. Claimant’s
arguments against the arcane regulations that limited the purchase of majority stakes in the
distribution unit251 are erroneous since tribunals have observed that complex regulations do not
imply that the government has breached its obligation w.r.t the transparency requirement.252
240
Maffezini, ¶39.
241
SD Myers, ¶255.
242
Refer ¶65, Memorial on behalf of Respondent.
243
244
245
Parkerings-Compagniet, ¶914; SD Myers, ¶255; Maffezini, ¶39.
246
Klager, p.213.
247
Metalclad, ¶¶99-100; Maffezini, ¶83; Tecmed, ¶154; Occidental, ¶183; Champion Trading, ¶157.
248
Azinian, ¶¶97-103; Genin, ¶¶364, 371; Mondev, ¶¶126-127; Feldman, ¶138; Waste Management, ¶¶95-99;
Thunderbird Gaming, ¶¶197-201.
249
Tecmed, ¶154.
250
Saluka, ¶304.
251
252
Feldman, ¶177.

ii. Respondent accorded due process to Claimant and acted in a non-arbitrary manner
92. Claimant asserts violation of due process by way of arbitrary treatment of its investment
by the host state. It is Respondent’s submission that an arbitrary measure is one for which there
is a complete lack of justification.253 However, none of Respondent's regulatory measures are
without justified cause.
93. Claimant had obtained approval for its investment by treating State auditors to fancy
meals.254 This was reason enough to conduct a snap audit which revealed the true state of
finances of Melgiri. 255 The discovery of Melgiri’s financial unsoundness coupled with
Claimant’s violation of local laws,256 justified acceleration of the loan257 and denial to purchase
the refinery and distribution unit.258
94. Moreover, denial of due process is a high standard demanding “particularly serious
shortcoming and egregious conduct that shocks, or at least surprises, a sense of judicial
propriety.”259 Claimant’s argument of denial of fair hearing is misguided since it was given a
fair opportunity of presenting its case before the appellate courts of the host state.260
95. It is submitted that Claimant lobbied the national bank, chaired by the President’s
brother into giving him a staggering USD 40m unsecured loan.261 Claimant’s corrupt practices
in light of the existing economic crisis explain why the court ordered a transfer of 40% shares
of Melgiri as repayment of the loan.262 Additionally, the transfer of only 20% of Claimant’s
shares by local courts, when 60% was claimed by the government, shows application of judicial
mind on part of the host state’s judiciary. Respondent submits that it treated Claimant and other
investors as fairly as possible in light of the existing urgency. The present tribunal must have
“due deference” to host state’s decisions and therefore, it should not have “an open-ended
mandate to second-guess” local administrative and judicial decision-making.263
253
ELSI, ¶124.
254
255
256
257
258
259
Chevron, ¶¶242-243; White Industries, ¶10.4.7.
260
261
262
263
SD Myers, ¶281.

PRAYER
In light of the above submissions, counsel for RESPONDENT respectfully requests that:
I. The Arbitral Tribunal has authority to decide on the challenge of Ms. Annie and
that the decision should be taken by the Tribunal instead of Chairman;
II. Ms. Annie should not be removed from the Arbitral Tribunal;
III. The Tribunal has no jurisdiction to hear the present dispute; in case the arbitral
Tribunal finds authority to decide on the challenge; and
IV. Respondent’s regulatory actions do not constitute a violation of the FET standards
under the BIT.
Respectfully submitted on 10thApril 2018.
-------
On Behalf of RESPONDENT,
Republic of Nappertania.

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INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES

In the Proceeding between

(ICSID Case No. ARB/1947)

MEMORIAL for RESPONDENT

TABLE OF CONTENTS ------------------------------------------------------------------------------ I

TABLE OF ABBREVIATIONS ------------------------------------------------------------------- IV

INDEX OF AUTHORITIES ------------------------------------------------------------------------ VI

STATEMENT OF JURISDICTION ----------------------------------------------------------XXVI

STATEMENT OF FACTS -------------------------------------------------------------------- XXVII

ISSUES RAISED ----------------------------------------------------------------------------------- XXX

SUMMARY OF ARGUMENTS ---------------------------------------------------------------XXXI

ARGUMENTS ADVANCED ------------------------------------------------------------------------- 1

-MEMORIAL ON BEHALF OF RESPONDENT- Page I

-MEMORIAL ON BEHALF OF RESPONDENT- Page II

-MEMORIAL ON BEHALF OF RESPONDENT- Page III

-MEMORIAL ON BEHALF OF RESPONDENT- Page IV

-MEMORIAL ON BEHALF OF RESPONDENT- Page V

RULES AND REGULATIONS

CITED AS FULL CITATION PAGE NO.

FCPA United States Foreign Corrupt Practices Act, 1977 15

Abaclat I Abaclat and others v. Argentine Republic 6

-MEMORIAL ON BEHALF OF RESPONDENT- Page VI

ICSID Case No. ARB/02/9, 27 OCT 2006, Award

-MEMORIAL ON BEHALF OF RESPONDENT- Page VII

-MEMORIAL ON BEHALF OF RESPONDENT- Page VIII

Fraport Fraport AG Frankfurt Airport Services Worldwide v. The 12, 14,

-MEMORIAL ON BEHALF OF RESPONDENT- Page IX

-MEMORIAL ON BEHALF OF RESPONDENT- Page X

ICSID Case No. ARB(AF)/97/1, 30 AUG 2000, Award

-MEMORIAL ON BEHALF OF RESPONDENT- Page XI

-MEMORIAL ON BEHALF OF RESPONDENT- Page XII

-MEMORIAL ON BEHALF OF RESPONDENT- Page XIII

WDF World Duty Free Company v Republic of Kenya 13, 14,

Jan Jan Oostergetel and Theodora Laurentius v. The Slovak 13

-MEMORIAL ON BEHALF OF RESPONDENT- Page XIV

Applied Applied Industrial Materials v. Ovalar Makine Ticaret Ve 7, 10

-MEMORIAL ON BEHALF OF RESPONDENT- Page XV

-MEMORIAL ON BEHALF OF RESPONDENT- Page XVI

Amato Anthony D' Amato 20

-MEMORIAL ON BEHALF OF RESPONDENT- Page XVII

-MEMORIAL ON BEHALF OF RESPONDENT- Page XVIII

-MEMORIAL ON BEHALF OF RESPONDENT- Page XIX

-MEMORIAL ON BEHALF OF RESPONDENT- Page XX

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXI

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXII

Betz Kathrin Betz 13

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXIII

Alizamini Yaser Esmaeilpour Alizamini 9, 10

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXIV

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXV

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXVI

II. Claimant’s Investment

III. Ecological Damage, Consolidation of Investment and Bribery

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXVII

V. Regulatory Actions in Furtherance of “Corruption-Free Nappertania”

VI. Institution of Arbitral Proceedings and Appointment of Arbitrators

VII. Proposal for Disqualification of Ms. Annie

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXVIII

VIII. Adjudication of the proposal of Disqualification

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXIX

-MEMORIAL ON BEHALF OF RESPONDENT- Page XXX

PART ONE: CHALLENGE TO ARBITRATOR’S APPOINTMENT (PROPOSAL)