6th Dr. PARAS DIWAN MEMORIAL INTERNATIONAL ‘ENERGY LAW’ MOOT COURT COMPETITION, 2016

PROVISIONAL REGISTRATION NO: "PR17"

IN THE INTERNATIONAL COURT OF JUSTICE

AT THE PEACE PALACE THE HAGUE, THE NETHERLANDS

THE CASE CONCERNING THE COOPERATION AGREEMENT ON THE DEVELOPMENT OF THE PEACEFUL USES OF NUCLEAR ENERGY _____________________________________________________________________________

THE REPUBLIC OF ALBROSA & OTHERS, APPLICANTS

v. THE PEOPLE’S DEMOCRACY OF BRISSELANTA, RESPONDENT

MEMORIAL FOR THE APPLICANTS 6th Dr. PARAS DIWAN MEMORIAL INTERNATIONAL ‘ENERGY LAW’ MOOT COURT COMPETITION, 2016

MEMORANDUM ON BEHALF OF THE APPLICANTS

TABLE OF CONTENTS A.

TABLE OF CONTENTS……………………………………………………………….............. i

B.

LIST OF ABBREVIATIONS…………………………………………………………………... ii

C.

INDEX OF AUTHORITIES…………………………………………………………………… iii

D.

STATEMENT OF JURISDICTION…………………………………………………………... ix

E.

STATEMENT OF FACTS……………………………………………………………………... x

F.

ISSUES RAISED………………………………………………………………………………... xii

G.

SUMMARY OF ARGUMENTS……………………………………………………….............. xii

H.

ARGUMENTS ADVANCED…………………………………………………………………... 1

1.

The ICJ has jurisdiction to hear the present case…………………………………….................... 1

2.

The Respondent, being a supplier of nuclear equipment and material is liable to compensate the Applicants for the nuclear disaster.………………………………...........................................

2.1. Albrosa

has

right

to

recourse

against

Brisselanta

under

Section

23(c)

of

5

the

CLNDA…………………………………………………………………………………………... 5 2.2. There

was

latent

defect

in

the

materials

and

equipments

supplied

by

Brisselanta…………............................................................................................................

6

2.3. The SC of Albrosa held BPPEC liable for the nuclear incident………………………………….. 8 3.

The Respondent is liable to Compensate the Applicants for the pollution of their Marine Environment that gravely dented their economic interests………………………………………

10

3.1. Respondent disregarded their duty under VCLT…………….......…………………...…………... 10 3.2. The

Respondent

failed

to

comply

with

the

provisions

of

the

Aarhus

Convention………………………………………………………………………………………... 12 3.3. The

Respondent

failed

to

fulfil

the

obligations

under

UNCLOS……………………………………………………......................................................... 13

MEMORANDUM ON BEHALF OF THE APPLICANTS i

3.4. The Respondent disregarded their duty under CBD………………................................................ 14 3.5 Brisselanta violated its obligations under customary international law………………………….. 15 3.6 Respondent is liable to compensate for degradation of the environment which harmed the economic interests of the Applicants……………………………………………………………... 16 4.

Albrosa’s indefinite moratorium on uranium imports from Brisselanta is not violative of the 123 Agreement……………………………………………………………………...…………..... 17

4.1. Albrosa’s indefinite moratorium on uranium imports from Brisselanta does not violate Article XV of the 123 Agreement………………………………….……………………………...……... 17 4.2. Albrosa’s indefinite moratorium falls under the General Exceptions provided in Article XXX of the 123 Agreement………………………………………………………………………………... 19 4.3. The indefinite moratorium is authorised under the Essential Security Clause of the 123 Agreement………………………………………………………………....................................... 23 I.

SUBMISSIONS TO THE COURT…………………………………………………….............. 26

LIST OF ABBREVIATIONS ¶

Pragraph

123

Agreement Cooperation Agreement between the Government of the Republic of Albrosa and the Government of Peoples Democracy of Brisselanta on the Development of Peaceful Energy, 2010

Albrosa

The Republic of Albrosa

Art.

Article

BPPEC

Brisselanta Power for Power Electrical Company

Brisselanta

The People’s Democracy of Brisselanta

CBD

Convention on Biological Diversity

CLNDA

Civil Liability for Nuclear Disaster Act, 2010

CSC

Convention on Supplementary Compensation for Nuclear Damage,1997

Doc.

Document

MEMORANDUM ON BEHALF OF THE APPLICANTS ii

Eg.

Example

EIA

Environmental Impact Assessment

FNPP

Floating Nuclear Power Plant

GATT

General Agreement on tariff and trade

IAEA

International Atomic Energy Agency

ICJ

International Court of Justice

ICSID

International Centre for Settlement of Investment Disputes

IMF

International Monetary Fund

no.

Number

OECD

Organisation for Economic Co-operation and Development

PCIJ

Permanent Court of International Justice

SC

Supreme Court

SDR

Special Drawing Right

SIA

Social Impact Assessment

UN

United Nations

UNC

Charter of the United Nations

UNCLOS

United Nations Convention on the Law of Sea

v.

Versus

VCLT

Vienna Convention on the Law of Treaties

INDEX OF AUTHORITIES  Cases, Advisory Opinion and Administrative Rulings -

INTERNATIONAL COURT OF JUSTICE-

1. Gabcikovo Nagymaros Project (Hungary. v. Slovakia.), 1997 I.C.J. 7 2. Military and Paramilitary Activities case (Nicaragua v US) [1986] I.C.J. Rep 14 -ICSID RULINGS1. Decision of the Tribunal on Objection to Jurisdiction, 17 October 2006; Saipem S.P.A. v. The People’s Republic of Bangladesh, ICSID Case No. Arb/05/07 2. Decision on Jurisdiction, 14 November 2005; Helnan International Hotel A/S v. The Arab Republic of Egypt, ICSID Case No. ARB/05/19,

MEMORANDUM ON BEHALF OF THE APPLICANTS iii

3. Decision on Jurisdiction, 16 June 2006; Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan ICSID Case No. ARB/03/29, 4. Jan de Nul N.V. Dredging International N.V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, 5. S.p.A. v. Republique Algerienne Democratique at Populaire, Decision on Jurisdiction, ICSID Case No. ARB/05/3, 12 July 2006; 6. Salini v.Morraco 6 ICSID Rep. 400 (2004) -OTHER JUDGEMENTS AND ARBITRAL AWARDS 3. Amco v. Indonesia, Award, 20 November 1984. 1. Case C-183/91Commission v Greece [1996] ECR I-1513 2. Grady v United Kingdom (App. No) (2000)29EHRR 493; 3. Ireland v United Kingdom (App. No. 5310/71) (1980) 2 EHRR 25. 4. M/V Saiga (No. 2) (St. Vincent v. Guinea), 120 I.L.R. 143 5. MacPherson v. Buick Motor Co. 217 N.Y. 382 (1916). 6.

MOX Plant Case, Ireland v United Kingdom, (2003) 126 ILR 310, (ICGJ 366 (PCA 2003).

7. Rodriguez v Bethlehem Steel Corp., 525 P2d 669, 680 (Cal. 1974). 8. The Schooner Betsey, 44 Ct. Cl. 506, 514 (1909) 9. Trendtex Trading Corp v Central Bank of Nigeria (1977) Q.B 529 10. Ultramares Corporation v Touche 174 NE 441 (1931). 11. United States v Carroll Towing Co., 159 F. 2d 169 (2d. Circ. 1947). -GATT/WTO PANEL BODY REPORT1. WTO, Dominican Republic — Measures Affecting the Importation and Internal Sale of Cigarettes, Panel Report, (19 May 2005)DS302 2. WTO, European Communities – Measures Affecting Asbestos And AsbestosContaining Products, Report of the Panel, (12 March 2001), WT/DS135/AB/R 3. WTO, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services ,Panel Report, (10 November 2004) WT/DS285/R

MEMORANDUM ON BEHALF OF THE APPLICANTS iv

4. WTO, United States – Import Prohibition Of Certain Shrimp And Shrimp Products, Report of the Panel, (15 June 2001), WT/DS58/RW 5. WTO, Thailand — Customs and Fiscal Measures on Cigarettes from the Philippines, (28 January 2013 ) DS371 -

GATT/WTO APPELLATE BODY REPORT-

1. WTO, Turkey: Restriction on Imports of Textile and Clothing Products-Report of the Appellate Body (22 October 1999) WT/DS34/AB/R. 2. WTO, US – Gasoline, Appellate Body Report, (20 May 1996) WT/DS2/9 3. WTO, Korea – Beef, Appellate Body Report, (10 January 2001) DS161, 169 4. WTO, Brazil – Retreaded Tyres, Appellate Body Report. (17 December 2007) DS332  Treaties, Agreements & Conventions 1. Aarhus Convention, 1998, June 25, 1998, 38 I.L.M. 517. 2. Civil Liability in the Field of Maritime Carriage of Nuclear Material, 1971 3. Convention for Supplementary Compensation for Nuclear Damage, 1997, IAEA Doc. INFCIRC/567 (Sept. 12, 1997). 4. Convention on Biological diversity, 1992, 1992, 31 I.L.M. 818.13 5. Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 1965, 17 U.S.T. 1270, T.I.A.S. No. 6090, 575 U.N.T.S. 159 6. Paris Convention on Third Party Liability in the Field of Nuclear Energy, 1960 7. Protocols to the Paris and Brussels Convention, 2004 8. Statute of the International Court of Justice, T.S. No. 993 (1945). 9. The Brussels Convention on the Liability of Operators of Nuclear Ships, 1962 and the Joint Protocol, 10. United Nations Convention on Jurisdictional Immunities of States and Their Property, 2004 11. United Nations Convention on the Law of Sea, 1984, 1833 UNTS 3 / [1994] ATS 31 / 21 ILM 1261 (1982) 12. United Nations Framework Convention on Climate Change, May 9, 1992, 1771 U.N.T.S. 107 13. Vienna convention on Civil Liability for Nuclear Damage, May 21, 1963, 1963, 1063 U.N.T.S. 265, 2 I.L.M. 727

MEMORANDUM ON BEHALF OF THE APPLICANTS v

14. Vienna Convention on the Law of Treaties, May 23, 1969, 1155 U.N.T.S. 331.  Books, Reports and Articles -BOOKS1. A.R.Biswas, International Law, Kamal Law House, 1999. 2. Alina Kaczorowska, Textbook On Public International Law, Old Bailey Press, 2002 3. Anthony Aust, Handbook of International Law, Cambridge University Press. 4. Baris Soyer & Andrew Tettenborn, Pollution at Sea: Law and Liability, Informa Law from Raouledge (2013) 5. Bernard M. Hoekman And Michel M. Kostecki, The Political Economy Of The World Trading System, The Wto And Beyond, 3rd ed., The Oxford University Press, 2009 6. D.W. Greig, International Law, 2nd ed., London Bitterworths, 1976 7. Francesco Francioni, Environment, Human Rights and International Trade, Hart Publishing 8. James

Crawford,

The

International

Law

Commission's

Articles

on

State

Responsibility, Cambridge University Press 9. John H. Steele, Steve A. Thorpe, Karl K. Turekian, Marine Policy & Economics: A Derivative of the Encyclopedia of Ocean Sciences (2nded.) Elsevier Ltd., 2009 10. Linda A. Malone, Environmental Law (2nd ed.) Aspen Publishers 11. Louis B. Sohn, John E. Noyes, Cases and Materials on the Law of the Sea, Transnational Publishers, 2004 12. Nagendra Singh, The Role and Record of the International Court of Justice, Martinus Nijhoff Publishers 13. Philippe J. Sands, Chernobyl: Law and Communication: Transboundary Nuclear Air Pollution- The Legal Materials 14. Philippe Sands, Principles of International Environmental Law, (2nd ed.) Cambridge University Press 15. Ram Prakash Anand, Compulsory Jurisdication of the International Court of Justice, Asia Publishing House (1961) 16. Robin Rolf Churchill, Alan Vaughan Lowe, The Law of the Sea, (2nd ed.) Manchester University Press 17. S A Alexandrov, The Compulsory Jurisdiction of the International Court of Justice. How Compulsory is it?‘(OUP, Oxford 2006)

MEMORANDUM ON BEHALF OF THE APPLICANTS vi

18. S Charnovitz, The Moral Exception in Trade Policy‘(1998) 38 Va. J.Int‘l L. 689 19. Xue Hanqin, Transboundary Damage in International Law (2003). -REPORTS1. Case Concerning Armed Activities on the Territory of the Congo (New Application, 2002) (Democratic Republic of the Congo v. Rwanda), Judgement on Jurisdiction and Admissibility, 3 February 2006, I.C.J. Reports 2006. 2. Christoph H. Schreuer, The ICSID Convention: A Commentary, Cambridge University Press 3. International Law Commission, First Report on the Legal Regime for Allocation of Loss in Case of tansboundary Harm Arising Out of Hazardous Activities, , U.N. GAOR, 55th Sess., U.N. Doc. A/CN.4/531 (Mar. 21, 2003). 4. Report of the Executive Directors on The Convention on the Settlement of Investment Disputes Between States and Nationals Of Other States adopted on March 18, 1965. 5. Reports Of International Arbitral Awards , Trail smelter case (United States, Canada) 16 April 1938 and 11 March 1941 , Volume III , pp. 1905-1982 6. Riccardo P. Mazzeschi, Forms of International Responsibility for Environmental Harm, in International Responsibility for Environmental Harm (Francesco Francioni & Tullio Scovazzi eds, 2001). 7. Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean Sea (Nicaragua v. Honduras), Judgment, I.C.J. Reports 2007, p. 659 8. Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean Sea (Nicaragua v. Honduras), Judgment, I.C.J. Reports 2007.

-ARTICLES1. B Cheng, General Principles of Law as applied by International Courts and Tribunals 125 (Stevens and Sons, Ltd., 1953) 2. Christoph H. Schreuer, The ICSID Convention: A Commentary, (2nd ed.) Cambridge University Press 3. Eugenia Levine, Amicus Curiae in International Investment Arbitration: The implications of an Increase in Third-Party Participation, 29 Berkeley J.Int’l Law. 200(2001)

MEMORANDUM ON BEHALF OF THE APPLICANTS vii

4. H Steinberger, ‘Sovereignty’, in Max Planck Institute for Comparative Public Law and International Law, Encyclopedia for Public International Law, vol 10 (North Holland, 1987) 414 5. Lew, J., Mistelis, L., and Kroll, S., Comparative International Commercial Arbitration (The HagueLondon-New York : Kluwer Law International), 2003 6. Philippe Sands, Principles Of International Environmental Law 236 (2d ed. 2003). 7. Stoiber, C., A. Baer, N. Pelzer and W. Tonhauser, “Handbook on Nuclear Law”, (2003) IAEA Doc. STI/PUB/1160, IAEA, Vienna, Austria. - Dictionaries8. BA Garner, Black‟s Law Dictionary (7th edn West Group St. Paul, Minn., 1999) 9. Shorter Oxford English Dictionary (5th edn OUP, oxford 2003) -Miscellaneous1. Analytical Index: Guide to GATT Law and Practices (Vol 1 World Trade Organization, Geneva 1995) 2. Harvard Research in International Law, Law of Treaties, 29 A.J.I.L. Supp 653 at 937 (1925). 3. Law of Treaties, Third report by J.L. Brierly, Special Rapporteur, DOCUMENT A/CN.4/54 4. Nuclear Law Bulletin No. 93/VOL. 2014/1, NEA No. 7181, OECD 2014

MEMORANDUM ON BEHALF OF THE APPLICANTS viii

STATEMENT OF JURISDICTION

The Republic of Albrosa, Island States of Bong-Bong and Kolra and the People’s Democracy of Brisselanta have accepted compulsory jurisdiction of the International Court of Justice. Further, The Republic of Albrosa and the People’s Democracy of Brisselanta have entered into a Special agreement to submit the disputes to the International Court of Justice. This Court’s jurisdiction is invoked under Article 36(1) and Article 36(2) read with Article 40(1) of the Statute of the International Court of Justice, 1950.

MEMORANDUM ON BEHALF OF THE APPLICANTS ix

STATEMENT OF FACTS The Republic of Albrosa (“Albrosa”), a developing archipelagic island nation is located in a high-risk seismic zone with a history of cataclysmic natural disasters. The People’s Democracy of Brisselanta (“Brisselanta”) is a developed and technologically advanced nation which announced plans to build FNPP comprising of small nuclear reactors which are mounted on barges and are floated in the territorial waters of the installing State. Albrosa also showed interest in starting the FNPP project. Both the countries appointed experts and carried out all requisite compliances as per IAEA Nuclear safeguards. In furtherance of the installation of the FNPPs, both the countries entered into 123 Agreement on 1st February, 2010 wherein it was agreed that BPPEC would supply the equipment for establishing 12 FNPPs in Albrosa in phases and provide 8,000 tons of uranium over the period of next 10 years. Art. V of 123 Agreement which is the liability cause, provided no fault and exclusive liability of the operator. The parliament of Albrosa objected to this clause and under article V (3) of the Agreement enacted the CLNDA, 2010 which provided the operator for a right to recourse against the supplier under sec. 23 of the Act. The BPPEC refused to supply any nuclear material or equipment to Albrosa as they may be vulnerable to inflated liability claims, In order to overcome the impasse and to make the 123 Agreement operational, Brisselanta and Albrosa amended Art. V of the 123 Agreement, taking away the operator’s right of recourse against the supplier and made it mandatory for the parties to ratify the three international conventions. The new Socialist Government which was sworn in denied the validity of the amendment via an official notification. Nevertheless, both the parties went ahead with the project and the first FNPP was installed at Morsin-kkkuyu site after receiving provisional approval from IAEA, approval from clean alive foundation and the licence from Electricity Market License Regulation of Albrosa.

MEMORANDUM ON BEHALF OF THE APPLICANTS x

The neighbouring island of Albrosa, the island state of Bong Bong, raised concerns regarding the Morsin-kkkuyu site as it apprehended that the site posed an imminent danger to them. Bong Bong asserted that under the Aarhus Convention, public opinion and consultation before operationalizing a nuclear power which is required, was not complied with. The concerns were not considered by BPPEC as it was understood that the Bong Bong island has no authority to intervene in a matter of solemn bilateral Agreement. On 21st June, 2014, the Bong-Bong Island was hit by an underwater earthquake which lead to the collision of an aircraft super-carrier with the FNPP at the Morsin-kkkuyu site, which in turn led to the release of radioactive material into the territorial waters of Bong-Bong, Kolra and Albrosa, causing deaths, cancer cases and also affecting the marine environment. Albrosa retorted that the nuclear reactor coolants and generators were not seismically robust. The BPPEC contended that Albrosa was negligent in not maintaining them which led to equipment failure. A petition was filed before the SC of Albrosa under section 23 (c )of the CLNDA and an ex parte judgement was passed against the BPPEC which was asserted to be void on the grounds of natural justice. A compensation package arising out of the nuclear insurance pool was apportioned between the three states on a pro-rata basis and an outstanding compensation under the Right of Recourse (Section 23 (c) CLNDA) was asked by the states from Brisselanta. The Government of Albrosa placed an indefinite moratorium on the import of uranium from Brisselanta under Article XXX of the 123 Agreement which was condemned by Brisselanta for violating Article XV of the 123 Agreement. Albrosa, along with the island States of Bong Bong and Kolra, brings a claim before the International Court of Justice, claiming the outstanding compensation from the Brisselanta for the nuclear disaster and the pollution of their marine environment.

MEMORANDUM ON BEHALF OF THE APPLICANTS xi

ISSUES RAISED I.

Whether the ICJ has the jurisdiction to hear the present case?

II.

Whether the Respondent is liable to compensate the Applicants for the pollution of their marine environment that gravely dented their economic interests?

III.

Whether the Respondent, being a supplier of nuclear equipment and material, can be held liable to compensate the Applicants for the nuclear disaster?

IV.

Is Albrosa’s indefinite moratorium on uranium imports from Brisselanta violative of the 123 Agreement?

SUMMARY OF ARGUMENTS I.

Whether the ICJ has the jurisdiction to hear the present case?

The ICJ has jurisdiction to hear the present case pursuant to the consent given by Albrosa and Brisselanta in the 123 Agreement to submit the dispute to ICJ. Also, all the parties to the dispute have accepted compulsory ipso facto jurisdiction of the ICJ. The current dispute cannot be submitted to the ICSID as it fails to comply with the conditions stipulated in the ICSID convention namely, ratione personae, ratione materiae and ratione voluntatis. Therefore, as provided for in the 123 Agreement, ICJ has the jurisdiction to hear the present case.

II.

Whether the Respondent is liable to compensate the Applicants for the pollution of their marine environment that gravely dented their economic interests?

Albrosa has a right to recourse against Brisselanta under Section 23(c) of the CLNDA which provides for legal recourse if in the opinion of the Supreme Court of Albrosa, the nuclear incident has resulted as a consequence of an act of the supplier including latent defect in the

MEMORANDUM ON BEHALF OF THE APPLICANTS xii

material supplied. Since, nuclear reactor coolant and generators supplied by the respondent had latent defect, there was snag in coolant supply that consequently caused the nuclear accident. Hence, the Respondent being the supplier of nuclear equipment, is liable to compensate the Applicants for the nuclear disaster.

III.

Whether the Respondent, being a supplier of nuclear equipment and material, can be held liable to compensate the Applicants for the nuclear disaster?

The respondent failed to grant Bong Bong their right of public opinion and consultation and also did not notify them inspite of imminent harm to them. The Respondent caused pollution of the marine environment and violated the general obligation of protecting the Marine environment as laid down under UNCLOS. The defective nuclear reactor coolants and generators supplied by the Respondent led to a disaster. For environmental damage, the main form of reparation is restitution and in calculating the environmental damage, the loss to the environment is often measured by cost of measure of restoration. Thus, the Respondent is liable to compensate for damage to the environment which dented economic interests.

IV.

Is Albrosa’s indefinite moratorium on uranium imports from Brisselanta violative of the 123 Agreement?

The indefinite moratorium does not violate Article XV as it does not fall within the purview of ‘prohibition’ or ‘restriction’ as provided for in the Article but is a mere indeterminate delay in the import. Further, the indefinite moratorium is undertaken with the objective of safeguarding human, animal and plant life in Albrosa, and is thus, covered by the exceptions as provided for in Article XXX. Further, Albrosa considers the measure necessary for protection of its own interests and therefore, justified under the Essential Security Clause.

MEMORANDUM ON BEHALF OF THE APPLICANTS xiii

ARGUMENTS ADVANCED 1. The ICJ has jurisdiction to hear the present case. The ICJ has jurisdiction to hear the present case under Article 36(1) of the ICJ Statute 1. The basis for jurisdiction is the consent of the States parties to a dispute and one of the ways of expressing consent is through the inclusion of a jurisdictional clause in a treaty.2 Therefore, it can be said that the ICJ has jurisdiction to hear the present case pursuant to the Dispute Settlement Clause in the 123 Agreement between Albrosa and Brisselanta.3 Further, the jurisdiction of the ICJ also exists by virtue of the declarations made by Albrosa, Bong Bong, Kolra and Brisselanta, that they recognize compulsory jurisdiction of the ICJ in all legal disputes concerning the matters specified in Article 36(2) of the ICJ Statute.4 The 123 Agreement provides that the parties must satisfy the requirements of Chapter II of the ICSID Convention5 in order to submit the claim to arbitrate before the ICSID. 6 The ICSID Tribunal has jurisdiction over the present dispute if the following conditions are met: A. A condition ratione personae; B. A condition ratione materiae; C. A condition ratione voluntatis.7

1

Statute of the International Court of Justice, T.S. No. 993 (1945), Article 36(1).

2

Nagendra Singh, The Role and Record of the International Court of Justice, Martinus Nijhoff Publishers

3

See, Dispute Settlement, 123 Agreement, Ch. 7.

4

Clarifications to the Compromis, 5

5

Convention on the Settlement of Investment Disputes between States and Nationals of Other States, opened for

signature Mar. 18, 1965, 17 U.S.T. 1270, T.I.A.S. No. 6090, 575 U.N.T.S. 159 (hereinafter cited as the ICSID Convention). 6

Supra note 3, Dispute Settlement (3).

7

Christoph H. Schreuer, The ICSID Convention: A Commentary, Cambridge University Press.

MEMORANDUM ON BEHALF OF THE APPLICANTS 1

The condition ratione personae requires the Claimants to be investors of one Contracting Party and another Contracting Party. In this case, all parties to the dispute i.e. Albrosa, Bong Bong, Kolra and Brisselanta are Contracting Parties as provided under the definition of the ICSID Convention. But Bong Bong and Kolra, who are the relevant parties to the dispute, are not covered by the definition of investor as provided under the 123 Agreement and also they are not parties to the 123 Agreement. The condition ratione personae is not complied with. The condition ratione materiae requires that the dispute must be a legal dispute arising directly out of an investment made by the Claimants in the territory of the other Contracting Party.8 Therefore, ICSID subject-matter jurisdiction has three components: Firstly, the requirement of a legal dispute; Secondly, the requirement that the legal dispute arise directly out of the underlying transaction; and Lastly, that such underlying transaction qualify as an investment. There is no objection to the fact that there exists a legal dispute between the parties and the dispute has arisen out of 123 Agreement entered into by Albrosa and Brisselanta. But a general obligation of law which is not specially contracted for in the investment agreement does not arise directly out of the investment.9 Brisselanta was under a general obligation of law to provide seismically robust power plants10 and also under an obligation to pay compensation for the damage caused to Albrosa, Bong Bong and Kolra due to its negligence. Therefore, disputes regarding these obligations cannot be regarded as arising out of the investment. Additionally, for the dispute that has arisen out of the underlying transaction to be within the jurisdiction of the ICSID it has to fall within the definition of ‘investment’ as per the ICSID 8

Supra note 6.

9

Amco v. Indonesia, Award, 20 November 1984.

10

Compromis, ¶ 6.

MEMORANDUM ON BEHALF OF THE APPLICANTS 2

Convention. Even though the parties have certain discretion in describing their transaction as an investment, this discretion is not unlimited as the investment must fall within the “outer limits” set by the ICSID Convention.11 The typical features of an investment under the Conventions are12: i.

The project should have a certain duration;

ii.

There should be a certain regularity of profit and return;

iii.

There is typically an element of risk for both sides;

iv.

The commitment involved would have to be substantial;

v.

The operation should be significant for the host state’s development.

The current investment in question does qualify as an investment as per the usual hallmarks of investment, it fails to comply with the additional condition derived from the ICSID Convention’s preamble i.e. the contribution to the economic development of the host state.13 Under the “Salini test”, one of the objective criteria to be satisfied is that the economic activity must contribute positively and significantly to the economic development of the host State.14 Therefore, the “Salini test” logically requires that if the investor’s activities or interests create an overall negative effect on economic development, such as the Claimant’s

11

International Investment Law: Understanding Concepts And Tracking Innovations – ISBN 978-92-64-04202-

5, OECD 2008 at pg. 9 12

Helnan International Hotel A/S v. The Arab Republic of Egypt, ICSID Case No. ARB/05/19, Decision of the

Tribunal on Objection to Jurisdiction, 17 October 2006; Saipem S.P.A. v. The People’s Republic of Bangladesh, ICSID Case No. Arb/05/07, Decision on Jurisdiction & Recommendation on Provisional Measures, 21-03-2007 13

ICSID Convention, supra note 5, Preamble.

14

Salini v.Morraco, 6 ICSID Rep.400(2004).

MEMORANDUM ON BEHALF OF THE APPLICANTS 3

interests, this would not meet the definition of investment as protected by the ICSID Convention.15 Albrosa would be the host State here as the investment activities were undertaken in Albrosa. The nuclear incident which took place at the Morsin-kkkuyu site had a negative impact on the economic development of Albrosa as the fishing industry came to a standstill and loss of ecotourism etc.16 Hence, the investment activities of Albrosa and Brisselanta fail to comply with the ratione materiae requirement of the ICSID Convention. Lastly, the condition ratione voluntatis requires the parties to the dispute have consented that the dispute be settled through ICSID arbitration. The consent given by Albrosa and Brisselanta in the 123 Agreement for settling the dispute through ICSID arbitration is a conditional consent as it is subject to the fulfilment of the requirements of Chapter II of the ICSID Convention.17 As it has been shown above, not all conditions laid down in the Chapter II have been complied with. Therefore, as the conditions to the consent are not complied with, it can be said that Albrosa has not consented to submit the disputes to the ICSID Tribunal for arbitration. Further, as Bong Bong and Kolra, who are parties to the dispute, are not Contracting Parties to the 123 Agreement and therefore, have not consented to submit the disputes to the ICSID Tribunal for arbitration. Hence, it can be seen that the last condition of ratione voluntatis is also not complied by with the parties. In conclusion, it can be said that, as demonstrated

15

Grabowski, Alex (2014) “The Definition of Investment under the ICSID Convention: A Defence of Salini,”

Chicago Journal of International Law: Vol. 15: No. 1, Article 13. 16 17

Compromis, ¶ 15. Lucy Reed, Jan Paulsson, Nigel Blackaby, Lucy Reed, Jan Paulsson, Nigel Blackaby, Kluwer Law

International (2006).

MEMORANDUM ON BEHALF OF THE APPLICANTS 4

above all the requirements of Chapter II of the ICSID Convention have not been fulfilled and therefore, as provided in the Dispute Settlement Clause of the 123 Agreement, the ICJ has jurisdiction to hear the present case. 2. The Respondent, being a supplier of nuclear equipment and material is liable to compensate the Applicants for the nuclear disaster 2.1 Albrosa has right to recourse against Brisselanta under Section 23(c) of the CLNDA. The domestic legislation of Albrosa, CLNDA, 2010 under section 23 (c) expressly provides for right to recourse against the supplier if in the opinion of the SC of the country, the nuclear incident has resulted as a consequence of an act of the supplier which includes supply of equipment or material with patent or latent defects or sub-standard services. The Supreme Court of Albrosa, on 28th September, 2014 held BPPEC liable for the latent defect in the equipment supplied18. Consequently, Albrosa gets an undisputed right of recourse against the supplier. It is humbly submitted that Albrosa cannot be governed by the amended 123 Agreement, since it was invalid on the ground that it was in disregard to their domestic law, CLNDA. The amendment to the 123 Agreement was entered into by the preceding government in bad faith. Public Officials are presumed to act in good faith unless proved otherwise, and this presumption extends to public officials’ conduct in the execution and performance of treaty19. The preamble of VCLT also recognizes the principles of free consent and of good faith universally. Amendment to the treaty made in bad faith by the preceding government cannot be said to be binding upon Albrosa.

18

Compromis, ¶ 17.

19

The Schooner Betsey, 44 Ct. Cl. 506, 514 (1909).

MEMORANDUM ON BEHALF OF THE APPLICANTS 5

It is further submitted that one of the principles enshrined in the preamble of VCLT and also in UN Charter is non-interference in the domestic affairs of State. The Amendment to 123 Agreement was made invalid by the Socialist Government of Albrosa vide a notification dated 2nd February, 201120. This notification issued by the new government to make the amendment by the preceding government of Albrosa null and void, which is exclusively a domestic affair of Albrosa and thus, the Respondent cannot interfere or claim any rights under the amended Agreement. 2.2. There was latent defect in the materials and equipments supplied by Brisselanta. Suppliers are by all means obligated to provide for safety and quality guarantees for the reactor or equipment for a particular period (product liability/guarantee period), ideally concurrent with the contractual timeline or license period, which Brisselanta failed to do. In MacPherson v. Buick Motor Co.,21 the court held that "If the nature of a thing is such that it is reasonably certain to place life or limb in peril when negligently made, it is then a thing of danger"' and the supplier should be held liable without the need for privity of contract. In the present case, nuclear reactor coolant and generators that are supplied by Brisselanta are “the thigs of danger” which caused catastrophe due to the latent defect in the nuclear reactor coolant and generators supplied by BPPEC. Brisselanta, accordingly, should be held liable for placing the life of the people of Albrosa and neighbouring islands in peril. It is further submitted that the suppliers owed a duty of care to the operators. This can be proved by satisfying the test of ‘proximate cause’ introduced in the case of Ultramares

20

Compromis, ¶ 12.

21

217 N.Y. 382 (1916).

MEMORANDUM ON BEHALF OF THE APPLICANTS 6

Corporation v Touche,22 wherein, it laid out factors to be considered in determining if the Respondent’s breach of duty was a major cause of the Applicants’ injury. The first factor that injury is a reasonably foreseeable consequence of the Respondent’s breach of duty is evident in the present case as the damage to the life and property from the nuclear accident (‘the injury’) primarily happened due to the covert defect in the coolants and generators supplied by Brisselanta. (‘breach of duty of care by the suppliers’) Secondly, Albrosa was a reasonably foreseeable victim of the Respondent’s breach of duty as the Respondent’s conduct directly affected the Albrosa and the neighbouring islands. Thus, the causation can be made out through the ‘proximate cause’ test. It is humbly submitted that Brisselanta owed duty of care to the Applicants which was breached. The standard of care is that which would be exercised by a reasonably prudent person acting under similar circumstances23. Defendant owes a duty of care ‘to all persons who are foreseeably endangered by his conduct, with respect to all risks which make the conduct unreasonably dangerous24. In these circumstances, BPPEC, a professional and qualified company since it is dealing in the nuclear coolants and generators and the standard of care that should be exercised, is very high in the instant case. Applicants are foreseeably endangered by the supplier’s conduct and the duty of care to the operators, under no circumstances, can be waived off by Brisselanta.

Under the ordinary rules of civil liability, should an incident occur due to defect in services, material or equipment supplied, the supplier is held liable for the compensation. Such liability may arise from the concept called product liability. Products liability law allow for suppliers

22

174 NE 441 (1931).

23

United States v Carroll Towing Co., 159 F. 2d 169 (2d. Circ. 1947).

24

Rodriguez v Bethlehem Steel Corp., 525 P2d 669, 680 (Cal. 1974).

MEMORANDUM ON BEHALF OF THE APPLICANTS 7

to be “liable for product liability, faulty design, faulty manufacture, negligence, etc 25.” In such circumstance of gross negligence on the part of the suppliers, propriety would demand that suppliers be held liable to compensate the applicants for the nuclear disaster. 2.3. The Supreme court of Albrosa held BPPEC liable for the nuclear incident. Article 13 (a) of Convention on Third Party Liability in the Field of Nuclear Energy, 1960 expressly provides that jurisdiction over nuclear damage claims lies only with the courts of the state in which the accident has occurred, and in the instant case, accident happened at the Albrosa coast. SC of Albrosa was competent to try the claims relating to pecuniary compensation for death or injury to the person, or damage to or loss of tangible property in Albrosa and neighbouring islands, caused by the negligence attributable to Brisselanta and since the accident occurred on the territory of Albrosa, Brisselanta cannot invoke immunity from jurisdiction before SC of Albrosa26 refraining from the liability of personal injuries and damage to the property. The judgement of SC is binding on Brisselanta, by the application of ‘principle of comity’ which provides for the recognition of the validity and effect of the executive, legislative, and judicial acts of the other countries27. Article XIII.5 and XIII.6. of the CSC provides that foreign judgements are recognised and enforceable in any other member country as if it were a judgment of a court of such country. This puts an embargo on the state of Brisselanta from claiming any jurisdictional immunity.

25

International Product Law Manual, Arundel McDougall, Kluwer Law International BV, 2010.

26

Article 12 of United Nations Convention on Jurisdictional Immunities of States and Their Property, 2004.

27

The Transformation Of International Comity, Joel R. Paul, [Vol. 71:19 ].

MEMORANDUM ON BEHALF OF THE APPLICANTS 8

It is humbly pleaded that Brisselanta cannot escape the liability imposed by the SC of Albrosa by claiming sovereign immunity. With increased State participation in international business transactions, absolute sovereign immunity has been gradually limited and doctrine of restrictive immunity has been created. Restrictive immunity restricts immunity in cases where the dispute is purely commercial in nature28. Trendtex Trading Corp v Central Bank of Nigeria29 held that sovereign immunity should not apply to commercial transactions as is now generally accepted by international law. Commercial Transaction means any commercial contract or transaction for the sale of goods or supply of services30; it should be understood in the broadest possible sense, so as to include not only trade transactions for the supply or exchange of goods or services, but also other types of economic transactions.31 In this regard, 123 Agreement is commercial in nature as it deals with the supply of equipment and uranium for over 10 year period and thus sovereign immunity cannot be claimed. Albrosa and Brisselanta were engaged in commercial transaction and differences relating to the transaction under 123 agreement falls within the jurisdiction of Albrosa, chiefly because the nuclear accident had happened in the country of Albrosa due to the defective equipment supplied by Brisselanta, the latter cannot invoke immunity from that jurisdiction in a proceeding arising out of that commercial transaction32. Further, the SC of Albrosa in applying the national law of Albrosa to arrive at the decision is licit and justified. Article 14 of Convention on Third Party Liability in the Field of Nuclear Energy, 1960, contemplates 28

Sornarajah, M, The Pursuit of Nationalized Property (Dordrecht-Boston-Lancaster: Martinus Nijhoff ,1986)

Pg.253. 29

(1977) Q.B 529.

30

United Nations Convention on Jurisdictional Immunities of States and Their Property, Article 2(1)(c)(i).

31

Principles Of International Commercial Contracts, Unidroit, Principles Art. 1.6(2).

32

Article 10 of United Nations Convention on Jurisdictional Immunities of States and Their Property, 2004 .

MEMORANDUM ON BEHALF OF THE APPLICANTS 9

that the courts having jurisdiction will apply the relevant convention and their own national law over claims arising out of a nuclear accident and the national law of Albrosa, CLNDA, provides for Right to recourse under section 23(c)33 and thus, the SC of Albrosa has full authority to apply this national law. The Applicants humbly plead that the Brisselanta is bound by the decision of SC of Albrosa that justly and precisely held the nuclear incident was caused by a latent defect in the equipment supplied by BPPEC and that the State of Albrosa had a right of recourse against the BPPEC under Section 23(c) of the CLNDA. 3. The Respondent is liable to compensate the Applicants for the pollution of their marine environment that gravely dented their economic interests. 3.1.Respondent disregarded their duty under VCLT It is well settled that signing a convention does not have a binding effect on the prospective Party concerned if the convention requires ratification. However, in accordance with the Vienna Convention on the Law of Treaties34, after a country signs a convention, it is obliged to refrain from acts which could defeat the object and purpose of the convention. 3.1.1. The object of Aarhus Convention was breached The Preamble helps to denote the objective and purpose of the treaty.35 Aarhus Convention’s preamble sets out the fundamental right to “freedom, equality and adequate conditions of life, in an environment of a quality that permits a life of dignity and well-being” by referring to principle 1 of the Stockholm Declaration. It also brings in the aspect of public participation in

33

Compromis, ¶ 8.

34

Vienna Convention on the Law of Treaties, entered into force Jan.27,1980, art.18, 25,1155 U.N.T.S. 331

(‘V.C.L.T.’). 35

Hans-Dietrich Treviranus, “Preamble”, in Encyclopedia of Public International Law, Vol. III, R. Bernhardt

ed., (Amsterdam, Elsevier, 1997), p.1097.

MEMORANDUM ON BEHALF OF THE APPLICANTS 10

environmental issues by recalling principle 10 of Rio Declaration. Principle 10 of the Rio Declaration summarizes the basic three rights granted by the Aarhus Convention. The Preamble to the Aarhus Convention recognizes that public participation, as laid down in the Aarhus Convention, is a critical tool in guaranteeing the right to a healthy environment. Along with the Preamble, Article 1 of the Aarhus convention also brings out the object and purpose of the treaty. In the present case, the Respondent failed to fulfil the obligations under the Aarhus convention and also violated the object and purpose of the Aarhus Convention by failing to consider public opinion of States who were in imminent danger. 3.1.2. The object of UNCLOS was breached UNCLOS aims to establish a legal order for the seas and oceans to facilitate international communication and peaceful uses of the seas and oceans, the equitable and efficient use of resources, conservation of the living resources and protection and preservation of the marine environment.36 It requires States to follow two vital environmental objectives: prevent, reduce and control marine pollution; and to conserve and manage marine living resources. Contrary to the initial assurances made by the Respondent, FNPP were not seismically robust. Albrosa being an archipelagic island nation and history of catastrophic disaster was prone to nuclear disaster. Even after a reminder of risk by a professor from Brisselanta, the respondent acted negligently by supplying defective nuclear reactor coolant and generator. 37 UNCLOS also desires that interest and needs of mankind as a whole should be taken in to consideration.38 Bong Bong Island was exposed to immediate threat and raised its concerns about the same which were disregarded by the Respondent. Thus, it is humbly prayed that, the Respondent breached the object and essence of the UNCLOS.

36

United Nations Convention on the Law of the Sea, Preamble , Dec. 10, 1982, 1833 U.N.T.S. 397

37

Compromis, ¶ 1, ¶3, ¶4.

38

Philippe Sands, Principles of International Environmental Law, (2nd ed.) Cambridge University Press.

MEMORANDUM ON BEHALF OF THE APPLICANTS 11

3.2. The Respondent failed to comply with the provisions of the Aarhus Convention The Aarhus Convention39 grants the public three rights.4041 The Aarhus Convention recognises that the public must have access to “environmental information” These rights are not limited to citizens of the state party; they apply equally to non-citizens and non-residents. If there is an imminent threat to human health or the environment, information held by a public authority which would enable the public to take preventive or mitigation measures against harm must be disseminated.42 The Aarhus Convention grants the public concerned43 the right to participate in environmental decision making on a wide range of activities including the construction, operation of nuclear power plants. Bong Bong and Kolra in the present matter can be construed as public concerned as they are public affected or likely to be affected. Morsinkkkuyu posed an imminent danger to Bong Bong islands44. Where a proposed activity could affect a neighbouring country, members of the public in that country may participate in the decision making process. In the present case, the respondent failed to comply with the obligations provided by the Aarhus Convention as they disregarded the concerns raised by Bong Bong.45

39

Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in

Environmental Matters, June 25, 1998, 38 I.L.M.517. 40

Right to environmental information from public authorities; the right to participate in environmental decision-

making by public authorities; and the right to judicial redress when the two previous rights or national environmental law has been violated, for present and future generations to live in a healthy environment. 41

The Aarhus Convention, supra note 39, Article 1.

42

The Aarhus Convention, supra note 39, Article 5.

43

Article 2(5) of Aarhus Convention defines “The public concerned” as the public affected or likely to be

affected by, or having an interest in, the environmental decision-making; for the purposes of this definition, nongovernmental organizations promoting environmental protection and meeting any requirements under national law shall be deemed to have an interest. 44

Compromis, ¶ 14.

45

supra note 44.

MEMORANDUM ON BEHALF OF THE APPLICANTS 12

3.3.The respondent failed to fulfil the obligations under UNCLOS The nuclear disaster at Morsin-kkkuyu caused release of radio-active material into territorial waters of the Applicants and had a severe impact which caused damage to the Applicants and also posed a threat to their future.46 There has been “pollution of the marine environment”47 because of the respondent’s negligence, as the release of the radioactive material was a result of a latent defect in the reactors supplied by the Respondent and contrary to their initial assurances; the FNPP was not seismically robust.48 The Respondent has violated the general obligation of protecting the Marine environment as laid down under UNCLOS, where States have the obligation to protect and preserve the marine environment.49 The Respondent failed to perform its duty to protect the environment and take steps necessary to prevent, reduce and control pollution of marine environment. The duty of a State to consult includes the duty to notify other affected countries, the duty to exchange information, the duty to listen to the concerns of affected countries, the duty to respond to these concerns, and the duty to negotiate in good faith. When an activity may have a significant transboundary effect on ocean and coastal waters, the UNCLOS requires the exchange of information about the proposed activity and the preparation of an EIA to

46

Compromis, ¶ 15.

47

United Nations Convention on the Law of the Sea, art.1(1)(4), Dec. 10, 1982, 1833 U.N.T.S. 397: "pollution

of the marine environment" means the introduction by man, directly or indirectly, of substances or energy into the marine environment, including estuaries, which results or is likely to result in such deleterious effects as harm to living resources and marine life, hazards to human health, hindrance to marine activities, including fishing and other legitimate uses of the sea, impairment of quality for use of sea water and reduction of amenities. 48

Compromis, ¶ 6, ¶ 16.

49

United Nations Convention on the Law of the Sea, supra note 36, art. 192.

MEMORANDUM ON BEHALF OF THE APPLICANTS 13

disclose the nature of the activity and the attendant risks.50 UNCLOS, while imposing responsibility and liability on the Parties, states that, States shall cooperate in the implementation of existing international law for prompt and adequate compensation for damage caused by pollution of the marine environment.51 3.4. The Respondent disregarded their duty under CBD A general obligation in international law to inform other states exists with respect to imminent and serious harm52. Imminent harm has been defined as acute emergency situations, such as sudden, grave natural events, which would cause great harm towards other states. 53 As per the definition and the facts, it can be understood that there existed imminent harm to Bong Bong54 and therefore, the Respondent were under an obligation.55 The provisions of CBD apply in relation to each Contracting party, not only in case of components of biological diversity within its national jurisdiction as well as beyond the limits of its national jurisdiction, regardless of where the effects occur.56 The convention also imposes an obligation on each Contracting Party to notify the potentially affected States of any danger or damage as well as initiate action to prevent or minimize such danger or damage, in the case of imminent or grave danger, originating under the jurisdiction or control of Contracting Party, to biological diversity within the area under jurisdiction of other States or in areas beyond the limits of national jurisdiction57

50

Law of the Sea Convention, supra note 36, art. 204-06.

51

Law of the Sea Convention, supra note 36, art. 235(1).

52

Corfu Channel (merits), 22; Rio, principle 18; Law of the Sea Convention, supra note 36, art.198; Convention

on Biological diversity, 1992, Art.14(1)(d), 31 I.L.M. 818.13. 53

Corfu Channel (merits), 22; UNEP 1978, principle 9. See also Art. XXIX Helsinki.

54

Compromis, ¶ 14.

55

Compromis, ¶ 1, ¶ 4 and ¶ 14.

56

Convention on Biological diversity, supra note 52, Article 4.

57

Convention on Biological diversity, supra note 52, Article 14.

MEMORANDUM ON BEHALF OF THE APPLICANTS 14

It is humbly submitted that, the respondent refused to consider any of the concerns raised by Bong Bong about the threat of setting up the FNPP being an imminent danger to them. It was understood that Bong Bong Island can have no authority to intervene in that matter.58 This obligation mentioned in the Convention was disregarded by the Respondent. 3.5. Brisselanta violated its obligations under customary international law The precautionary principle, confirmed in Principle 15 of the Rio Declaration, constitutes “an obligation of diligent prevention and control.”59 Some of the vital elements of the precautionary principle are that Developments and initiatives affecting the environment should be thoroughly assessed before action is taken, the burden is on the developer or initiator to establish that the new program is safe, whenever serious or irreversible damage is anticipated, the action should be postponed or cancelled etc. A State interested in undertaking or continuing a particular activity has to prove that such activities will not result in any harm, rather than the other side having to prove that it will result in harm.”60 Cooperation in matters is essential to effectively control, prevent, reduce and eliminate adverse environmental effects resulting from activities conducted in all spheres; also sovereignty and interests of all States has to be taken into account.61 In the MOX Plant Case, the Tribunal ruled that the duty to cooperate required the two countries to exchange information concerning the risks created by the plant, to monitor the effects of the plant on

58

Supra note 44.

59

Patricia W. Birnie And Alan E. Boyle, International Law & The Environment, 111 (2d ed. 2002).

60

MOX Plant Case, Ireland v United Kingdom, Order No 3, (2003) 126 ILR 310, (2003) 42 ILM 1187, ICGJ

366 (PCA 2003), 24th June 2003, Permanent Court of Arbitration [PCA] (Int'l Trib. L. of the Sea 2001) (opinion of Judge Wolfrum). 61

Stockholm Declaration, supra note 12, at Principle 24.

MEMORANDUM ON BEHALF OF THE APPLICANTS 15

the marine environment, and to work together to reduce those risks.62 3.6.Respondent is liable to Compensate for degradation of the environment which harmed the economic interests of the Applicants For environmental damage, the main form of reparation is restitution, that it, to restore the area to the condition it would have been had the disaster not occurred.63 In case of damage with respect to marine areas, damage can be measured in economic units as suffered by other States, for example loss of tourism or damage to the fishing industry, or in terms of the costs of removal and restoration. Environmental values are considered in each particular context using a criterion based on the nature and extent of human use as well as on the availability of the natural resource to human society with the currently available and feasible technology. In calculating the environmental damage, the loss to the environment is often measured by cost of measure of restoration. The costs incurred to restore the environment from the injuries suffered are compensable under the 1997 Supplementary Compensation Convention if they are “reasonable,” “have been approved by the competent authorities of the State,” and are designed to “reinstate or restore damaged or destroyed components of the environment, or to introduce, where reasonable, the equivalent of these components in the environment.”64 In the present case, fishing industry of the Applicants had come to a halt, the eco-tourism of Bong Bong and Kolra islands had largely suffered. 65 The ICJ recognizing the polluter pays principle stated that, it is an established rule of international law that an injured State is entitled to obtain compensation from the State which

62

MOX Plant Case, supra note 60.

63

Xue Hanqin, Transboundary Damage In International Law, 163 (2003).

64

International Law Commission, First Report on the Legal Regime for Allocation of Loss in Case of

tansboundary Harm Arising Out of Hazardous Activities, ¶ 88, U.N. GAOR, 55th Sess., U.N. Doc. A/CN.4/531 (Mar. 21, 2003) (prepared by Pemmaraju Sreenivasa Rao, Special Rapporteur). 65

Compromis, ¶ 15.

MEMORANDUM ON BEHALF OF THE APPLICANTS 16

has committed an internationally wrongful act for the damage caused by it.”66 This rule was reaffirmed by the International Tribunal for the Law of the Sea in The M/V Saiga Case.67 This principle is also codified as Principle 17 of the 1992 Rio Declaration. Thus, it is humbly submitted that the Respondent is liable to compensate the Applicants for pollution of the marine environment which harmed the economic interests of the Applicants. 4. Albrosa’s indefinite moratorium on uranium imports from Brisselanta is not violative of the 123 Agreement. Article 31 of VCLT provides that “any relevant rules of international law applicable in relations between the parties” shall also be taken into account68. In the instant case, the relevant rule of international law applicable in relations between the parties is GATT since the Applicants and Respondent, both are members of the WTO69 and therefore, 123 Agreement should be interpreted in the light of provisions of GATT. Further, Article XV and Article XXX of the 123 Agreement are in pari materia with Article XI and Article XX of the GATT respectively and therefore reliance can be placed on the aforementioned articles of GATT for the interpretation of the 123 Agreement. 4.1. Albrosa’s indefinite moratorium does not violate Article XV of the 123 Agreement. 4.1.1 In order to invoke Article XV of the 123 Agreement, the criteria of either an institution or maintenance of a ‘prohibition’ or ‘restriction’ made effective through quotas, import or export licences or other measures must be satisfied70.

66

Gabcikovo Nagymaros Project (Hung. v. Slovk.), 1997 I.C.J. 7, ¶ 53 (Sept. 25).

67

M/V Saiga (No. 2) (St. Vincent v. Guinea), 120 I.L.R. 143, ¶ 170 (Int’l Trib. L. of the Sea

1999). 68

Vienna Convention on the Law of Treaties, entered into force Jan.27,1980, art.31.3(c), 25,1155 U.N.T.S. 331.

69

Clarifications to the Compromis, 3.

70

Article XV of 123 Agreement.

MEMORANDUM ON BEHALF OF THE APPLICANTS 17

Firstly, it is humbly submitted that the ‘indefinite moratorium’ does not qualify as a ‘prohibition or restriction’ within the meaning of Art. XV of the Agreement. It is submitted that no moratorium has been instituted but, arguendo an indefinite moratorium by its nature is at best a temporary suspension. Therefore, an “indefinite moratorium” does not qualify as a “prohibition” or “restriction”. It is the principle of International law that a treaty should be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose71. Going by the ordinary meaning of the term “indefinite72”, it refers to an action “having no clearly determined being or character, i.e. indeterminate, vague, or undefined”. “Moratorium73” is defined as “an authorized postponement usually a lengthy one”. Therefore, an “indefinite moratorium” implies an indeterminate delay. Furthermore, “prohibition74” means “the action or an act of forbidding a thing by command or the legal ban on trade or importation of specified commodity‟. “Restriction75” is “a thing which restricts someone or something, a limitation on action”; and as per the interpretation of the international tribunals it amounts to imposing “absolute limitations”76. Thus, in the instant case, the import of uranium has been indeterminately or indefinitely delayed, but there is no legal ban, limitation or an imposition of a particular condition to be fulfilled on the imports. Therefore, it does not qualify as a “prohibition” or “restriction” and is not contrary to Art. XV (1). Secondly, It is an undeniable fact that there were no quotas, 71

Vienna Convention on the Law of Treaties, entered into force Jan.27,1980, art.31.1, 25,1155 U.N.T.S. 331.

72

Shorter Oxford English Dictionary (5th edn OUP, Oxford 2003)1353.

73

Black‟s Law Dictionary (n 7) 1026.

74

Shorter Oxford English Dictionary (n 11) 2362.

75

Id. at 2554.

76

WTO, Turkey: Restriction on Imports of Textile and Clothing Products-Report of the Appellate Body (22

October 1999) WT/DS34/AB/R.

MEMORANDUM ON BEHALF OF THE APPLICANTS 18

import or export licences in any way, form or manner through which any prohibition’ or ‘restriction’ has been imposed by the Applicants. Albrosa has not taken any step that constitutes a “measure” putting a restriction or prohibition on the import of Uranium from Brisselanta. The Panel in Dominican Republic — Import and Sale of Cigarettes77 found that “not every measure affecting the opportunities for entering the market would be covered by Article XI of GATT, but only those measures that constitute a prohibition or restriction on the importation of products. The official notification which has not been acted upon or in respect of which no step has been taken or law has been made to that effect, cannot be construed as a measure imposing restriction or prohibition. 4.2. Albrosa’s indefinite moratorium falls under the General Exceptions as provided under Article XXX of the 123 Agreement. In order to be justified under Article XXX, the inconsistent measure must go through a twotier test: Firstly, the measure at issue must fall under one of the exceptions – sub-paragraphs (a) to (j) – listed under Article XXX; and, Secondly, the measure must be applied in a manner that satisfies the requirements of the Chapeau of Article XX.78 The assessment of an Article XXX claim always starts with the analysis with the particular exceptions invoked by a party and only after the measure at issue has been found to be falling within the scope of the claimed exceptions, should it be considered whether the application of the measure satisfies the conditions of the Chapeau.79 The measure of indefinite moratorium taken by Albrosa is to facilitate the protection of human, animal, or plant life or health therefore, falls under Article XXX(b). The measure 77

Panel Report, Dominican Republic — Import and Sale of Cigarettes, ¶ 7.261.

78

US – Gasoline, Appellate Body Report, p. 22.

79

EC – Asbestos, Panel Report, ¶ 6.20; US – Shrimp, Panel Report, ¶ 5.27-5.28.

MEMORANDUM ON BEHALF OF THE APPLICANTS 19

must meet two elements to fall under the scope of the Article XXX(b) exception: Firstly, the policy in respect of the measure for which the provision is invoked must fall within the range of policies designed to protect human, animal, or plant life or health; and Secondly, the inconsistent measure for which the exception is invoked must be necessary to fulfil the policy objective. In order to determine whether a measure pursues a policy objective of protecting human and animal life and health, it should first be considered whether a risk to human and animal life and health exists. Albrosa is an archipelagic island nation, in a high-risk seismic zone, further, Albrosa, due to the nuclear disaster, has already witnessed the damage caused to the human, animal and plant life by exposure to radio-active material.80 Hence, it can be seen, that uranium, which is a radio-active material, does pose a threat to human, animal and plant life in Albrosa. The purpose for which the uranium was being imported into Albrosa was to construct FNPPs in Albrosa and the FNPPs81, as can be concluded from the nuclear disaster, pose a threat to the human, animal and plant life in Albrosa. If a risk is found to exist, it should further be determined as to whether the policy objective underlying the measure is to reduce that risk. Since, the FNPPs pose an environmental threat to Albrosa, the further construction of FNPPs, itself is an issue. Therefore, till the time the issue is not resolved by both the countries, the import of a dangerous material like uranium in Albrosa should be halted. Hence, the measure of indefinite moratorium on the import of uranium is in pursuance of fulfilment of the policy objective, of protection of the environment of Albrosa.

80

Compromis, ¶ 1.

81

Compromis, ¶ 6.

MEMORANDUM ON BEHALF OF THE APPLICANTS 20

In order to determine, whether a measure is “necessary” within the meaning of Article XXX, it should be understood as being “inevitable”, “indispensable” or “of absolute necessity”. 82 In Brazil – Tyres83, the panel noted “the objective of protecting human health and life against life-threatening diseases….is both vital and important in the highest degree.” It can therefore be seen that, it is absolutely necessary for Albrosa to impose an indefinite moratorium on the import of uranium, as protection of the environment is of utmost importance. A GATT Panel acknowledged that: “smoking constitutes a serious risk to human health and that consequently measures designed to reduce the consumption of cigarettes fall within the scope of Article XX (B)”.84 In US – Gasoline85, the Panel and the parties agreed that: “the policy to reduce air pollution resulting from the consumption of gasoline was a policy within the range of those concerning the protection of human, animal and plant life or health mentioned in Article XX(b)” In EC – Asbestos86, the Panel found and subsequently the Appellate Body confirmed that: “chrysotile-cement products pose a risk to human life or health” and thus “the EU policy of prohibiting chrysotile asbestos falls within the range of policies designed to protect human life or health” In Brazil – Retreaded Tyre87, the Panel found and subsequently the Appellate Body confirmed that: “the Brazilian policy of reducing exposure of the risks to human, animal, and plant life and health arising from the accumulation of waste tyres falls within the range of policies covered by Article XX(b)” The “necessity test” involves a process of “weighing and balancing” a series of relevant factors, in particular: The contribution made by the measure to the achievement of its 82

Korea – Beef, Appellate Body Report, ¶ 161.

83

Panel Report, Brazil — Retreaded Tyres.

84

Thailand – Cigarettes, GATT Panel Report, para. 73.

85

US – Gasoline, Appellate Body Report.

86

Panel Report in European Communities – Measures Affecting Asbestos and Asbestos-Containing Products

(WT/DS135/R, 18 September 2000). 87

Supra note 85.

MEMORANDUM ON BEHALF OF THE APPLICANTS 21

objection; the importance of the interests or values at stake; the trade-restrictiveness of the measure.88 The achievement of the objective of the measure and the importance of the interests or values at stake has already been established. In order to determine the trade-restrictiveness of the measure, it has to be compared with possible available alternatives, which may be less trade restrictive while providing an equivalent contribution to the achievement of the objective pursued.89 In order to qualify as an alternative, a measure must be not only less trade restrictive than the measure at issue, but should also preserve for the responding Member its right to achieve its desired level of protection with respect to the objective pursued. 90 In this case, imposing a moratorium on the import of uranium is the only way to protect Albrosa from radio-active exposure and any other restrictive measure will not serve the same purpose. In order to justify a measure under Article XXX, it must also be shown that the measure meets the requirements of Article XXX chapeau. It must be demonstrated that the measure is not a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail; or a disguised restriction on international trade. This, being a bilateral treaty there is no other country where the same conditions prevail, therefore, the first point is not relevant in this case. In order to establish that it is not a disguised restriction on international trade it should be determined that the measure applied would not constitute a misuse or an abuse of the exceptions of Article XXX.91 Therefore, the measure undertaken must be exercised in good faith.92 In this case, if the FNPP would not have led to the nuclear

88

Korea – Beef, Appellate Body Report.

89

Brazil – Retreaded Tyres, Appellate Body Report.

90

United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (the “Panel

Report”) WT/DS285/R, 10 November 2004. 91

US – Shrimp, Appellate Body Report, ¶ 157.

92

US – Shrimp, Appellate Body Report, para. 158; Brazil – Retreaded Tyres, ¶ 224.

MEMORANDUM ON BEHALF OF THE APPLICANTS 22

disaster in Albrosa, then FNPPs would actually have facilitated development of Albrosa. Therefore, had not been for the safety of human, animal and plant life in Albrosa, they had no reason to impose a moratorium on the import of uranium. Hence, it can be concluded that the measure undertaken by Albrosa is in good faith and therefore, complies with the requirements of the chapeau of Article XXX. 4.3.

THE

INDEFINITE

MORATORIUM

IS

AUTHORISED

UNDER

THE

ESSENTIAL SECURITY CLAUSE 4.3.1. The ‘self-judging’ nature of the ‘essential security’ clause It is humbly submitted that the terminology of the “essential security” clause of the 123 Agreement93 suggests that every country is the sole judge on questions relating to its own security94. It is further submitted that since the contracting parties are the members of WTO, Article XXI of GATT can be relied upon for the further interpretation of “essential security” clause of 123 Agreement. Since the “essential security” clause refers to action which the contracting party considers necessary for the protection of its own essential security interests; therefore, the necessity of invoking such a provision is not left to objective but rather the subjective determination of the State in question9596. The GATT Council discussions97 and the 1949, Czechoslovakia-USA case98 noted that “every country must be the judge in the last resort on questions relating to

93

See, Essential Security 123 Agreement, Ch. 7.

94

JH. Jackson, World Trade and Law of GATT (Bobbs-Merrill Company, 1969) 748.

95

Dapo Akande & S Williams, “International Adjudication on National Security Issues: What Role for the

WTO?” (2003) 43 Va. J. Int‟l L. 365. 96

Military and Paramilitary Activities case (Nicaragua v US) [1986] I.C.J.Rep 14, 22 (June 27).

97

Analytical Index:Guide to GATT Law and Practice (Vol 1 World Trade Organisation Geneva, 1995) at 600.

98

Id. (citing GATT Doc. CP.3/33 (May 30,1949)).

MEMORANDUM ON BEHALF OF THE APPLICANTS 23

its own security”. In Commission v Greece99, it was held that the interpretation of the ‘essential security’ clause being a hard fact rather than perception 100 is subjective on account of different geo-political considerations of States. Each member state is better placed than the community institutions or the other member states, to mitigate the threat posed by a third state. The issue of national security is subject to the appraisal of the authorities of the State concerned101. It is also submitted that that the self-judging aspect of the “essential security” clause is simply a reflection of a general principle of international law. Hence, it is contended that, if a test is introduced to determine the reasonableness or necessity of a measure under the “essential security” clause, it would fail to respect the deliberate wording of that provision and the distinction made by the drafters with other provisions. It is humbly submitted that under the tenets of law, the “essential security” clause can be instituted via the subjective satisfaction of Albrosa alone. According to article XXI of GATT, Albrosa may take any action which it considers necessary for the protection of its essential security interests102 yet, in the light of justice and equity, the rationale behind the aforementioned countermeasure, shall be explained in greater detail. There was latent defect in the nuclear reactor coolant and generators supplied by BPPEC. The cooling of the three FNPPs was disabled during the shock caused by the earthquake and the succeeding collision. This was contrary to the initial reassurances of BPPEC of being seismically robust103. Even, the report prepared by the IAEA inspectors pointed out that one

99

Case C-183/91Commission v Greece [1996] ECR I-1513 ¶ ¶ 54-55.

100 101

Peter Lindsay, “The ambiguity of GATT article XXI: Subtle Success or Rampant”(1998) 52 Duke L.J. 1227. Grady v United Kingdom (App. No) (2000)29EHRR 493; Ireland v United Kingdom (App. No.

5310/71)(1980) 2 EHRR 25. 102

Article XXI of GATT.

103

Compromis, ¶ 16.

MEMORANDUM ON BEHALF OF THE APPLICANTS 24

of the ten turbines supplied by BPPEC was not fully compliant with the IAEA standards and needed to be replaced104. Brisselanta’s negligence was a substantial factor in causing the Applicants harm and damages. The Respondent has violated the duty of care it owed to the Applicants. Because of such negligence and the defects in the material supplied, the nuclear catastrophe similar to Chernobyl nuclear disaster of 1986 has occurred on the coast of the Albrosa which caused the death of 18,500 people due to overexposure to radiation. A report by the WHO predicted additional fatalities and cancer cases as a result of accumulated radiation exposure. Further, the fishing industry of Kolra, Albrosa and Bong Bong had come to a standstill. Eco-tourism of Bong Bong and Kolra had also been affected by the nuclear disaster105. It is submitted that the failure of the Respondent to take reasonable care to provide for efficient and non-defective materials has created an apprehension in the mind of the Applicants with respect of the safety and effectiveness of the remaining 11 FNPPs. The Applicants cannot take the menace of continuing the import of Uranium from the Respondent and jeopardize the life of people and animals of its own country and the neighbour islands. It is further submitted that the state of Albrosa is a developing nation and the industrial growth of the country has not been much significant. With no such good socio-economic history106, the Applicants have put an indefinite moratorium in the interest of its own essential security and for no other reason or whatsoever and for that reason the moratorium is totally justified and authorized.

104

Compromis, ¶ 13.

105

Compromis, ¶ 15.

106

Compromis, ¶ 1, ¶ 2.

MEMORANDUM ON BEHALF OF THE APPLICANTS 25

SUBMISSIONS TO THE COURT

For the foregoing reasons, the Republic of Albrosa & Others, respectfully request the Court to adjudge and declare that: 1. This Honourable Court has the jurisdiction to hear the present case; 2. The Respondent is liable to compensate the Applicants for the nuclear disaster; 3. The Respondent is liable to compensate the Applicants for the pollution of their marine environment that gravely dented their economic interests; and 4. Albrosa’s indefinite moratorium on uranium imports from Brisselanta is not violative of the 123 Agreement.

All of which is respectfully submitted Agents for the Applicants __________________________ __________________________ THE REPUBLIC OF ALBROSA ISLAND STATE OF BONG-BONG ISLAND STATE OF KOLRA

MEMORANDUM ON BEHALF OF THE APPLICANTS 26