The Role of “Effect” and “Intention” of State’s Measure in Determining an Indirect Expropriation

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Department of Law

Spring Term 2017

Master Programme in Investment Treaty Arbitration

Master’s Thesis 15 ECTS

The Role of “Effect” and “Intention”

of State’s Measure in Determining

an Indirect Expropriation

With a Focus on State’s Liability for Compensation

Author: Shuanghui Wu

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BIT Bilateral Investment Treaty ECHR European Court of Human Rights ECT Energy Charter Treaty

EURATOM European Atomic Energy Community FDI Foreign Direct Investment

FTA Free Trade Agreement

IIA International Investment Agreement ISDS Investor-State Dispute Settlement MIT Multilateral Investment Treaty

NAFTA North American Free Trade Agreement

New York Convention The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958

OECD Organization for Economic Co-operation and Development UN United Nations

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1. INTRODUCTION………...1

1.1 PURPOSE, AIM AND STRUCTURE……….…….…..1

1.2 THE METHODOLOGY……….….2

1.2.1 Illustrative investment treaties selection approach…………..………….…...2

1.2.2 Illustrative arbitral cases selection approach………..……….3

2. TWO-STEP APPROACH IN DETERMINING AN INDIRECT EXPROPRIATION CLAIM……….…..3

2.1 FEATURE OF AN INDIRECT EXPROPRIATION…….……….4

2.2 TWO-STEP APPROACH IN DETERMINING AN INDIRECT EXPROPRIATION……….………..……..4

3. THE ROLE OF “EFFECT” AND “INTENTION” IN FINDING AN INDIRECT EXPROPRIATION……….…………..….6

3.1 THE SOLE-EFFECT APPROACH IN TREATIES……….……….6

3.2 THE SOLE-EFFECT APPROACH IN ARBITRAL PRACTICES……….…..9

3.2.1 The role of effect in finding an indirect expropriation………..…..9

3.2.2 The role of effect in denying an indirect expropriation……….……10

3.3 ASSESSMENT OF “EFFECT”: DEGREE OFFECT AND DURATION OF EFFECT………11

3.3.1 The degree of effect………..………12

3.3.2 the duration of effect……….………...15

4. THE ROLE OF “INTENTIN” IN DETERMINING WETHER AN EXPROPRIATION IS LAWFUL AND STATE’S LIABILITY FOR COMPENSATION………..………..16

4.1 COMPENSATION IS ONE OF THE INDISPENSIBLE REQUIREMENTS OF LEGAL EXPROPRIATION UNDER INTERNATIONAL LAW and TREATIES...17

4.1.1 A Textual reading of treaties’ provisions………..18

4.1.1.1 The ECT and BITs………..………….………..18

4.1.1.2 NAFTA……….19

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4.1.2.2 The Restatement………..………20

4.1.3 The exception……….………..……….….21

4.1.3.1 An overview……….21

4.1.3.2 An understanding of Article 24 of the ECT………..……….21

4.2 ILLUSTRATIVE ARBITRAL PRACTICES………..………..22

4.2.1 Illustrative MITs arbitral practices………..………..22

4.2.2 Illustrative BITs arbitral practices………..……….………..23

4.2.3 New development of recent new BITs cases……….……….25

5. THE RATIONALE OF THE SOLE-EFFECT APPROACH IN DETERMINING AN INDIRECT EXPROPRIATION CLAIM……..…..26

5.1 SEARCHING FOR THE “REAL” INTENTION OF THE STATE’S ACTION IS CHIMERICAL AND DIFFICULT………..….…………...26

5.2 STATE’S RIGHT TO REGULATE SHALL HAVE BOUNDRIES………...29

5.3 AS A NON-NATIONAL OF THE HOST STATE, ALIEN INVESTOR HAS DISADVANTAGE IN THE REGULATORY DECISION- MAKINGS AFFECT HIS INVESTMENT……….31

6. BALANCE THE STATE’S REGULATORY RIGHT AND INVESTMEN PROTECTION: THE MORE BENEVOLENT THE INTENTION, THE WIDER THE RIGHT TO REGULATE………31

6.1 TRIBUNAL’S DISCRETIONARY POWER FORMS A SIGNIFICANT SOURECE OF THE BALANCE: TAKING INTO ACCOUNT THE INTENTION WHEN DETERMINING THE SCOPE OF RIGHT TO REGULATE………...32

6.2 BALANCE BY THE TEXT OF PROPORTIONALITY IN FINDING AN INDIRECT EXPROPRIATION………....33

6.3 RE-BALANCE BY NEW ROUNDS OF TREATIES NEGOTIATION…….36

7. CONCLUSION: PUBLIC PURPOSE INTENTION IS A REQUIREMENT OF LEGALITY OF EXPROPRIATION, NOT AN EXEMPTION………….37

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1. Introduction

1.1 Purpose, aim and structure

In recent decades, the expropriation has been dominated by indirect expropriation, often in the form of regulatory taking, which leads to the conflict between the State’s regulatory right with public purpose intention and the private alien investors’ rights over their investment protection under the international investment treaties and customary international law. Therefore, the questions of whether a State’s regulatory measure constitutes an indirect expropriation and whether the State remains the liability to compensate the affected alien investor, have gained increasing importance and controversy. The legal issue concerning indirect expropriation and the pertinent State’s liability for compensation has become object of considerable debates. The State parties, as Respondents in international investment arbitrations often argue that they should have the rights to regulate for the public interests protection without compensation liability, even though their regulatory measures might have adverse effects on foreign investments. In international investor-State dispute settlement regime, the debates centred on the roles of “effect” and “public purpose intention” in finding indirect expropriation and in deciding the States’ liability for compensation. The debates and controversies also are mirrored in a wide rage of the international investment treaties and arbitral practices.

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the pertinent treaties’ provisions and illustrative arbitral practices. The main conclusion of this chapter lies on that even there is public purpose intention, State’s liability to compensate affected alien investor remains. The fifth chapter considers the rationale of the sole-effect approach in determining an indirect expropriation claim. The sixth chapter provides some suggestions and views on the balance of the State’s regulatory rights and alien investment protection. The seventh chapter ends with a conclusion.

1.2 The methodology

The approach for addressing the legal issues and questions in this thesis, base on both the pertinent provisions in the international investment treaties and illustrative arbitral cases from international arbitration practices, in the meantime, shed more lights on the analysis of illustrative arbitral cases.

1.2.1 Illustrative investment treaties selection approach

According to United Nations Conference on Trade and Development (UNCTAD) review on investor-State Dispute Settlement (ISDS) development in 2015, even as recent as the year of 2015, the majority of new cases invoked bilateral investment treaties (BITs), most of them dating back to the 1990s.1 There are statistic data showed as followed by the end of year of 2015: As far as the applicable investment treaties are concerned, among a total of 444 ISDS proceedings which have been concluded, looking at the overall trend, the ECT is by far the most frequently invoked treaties (87 cases), followed by NAFTA (56 cases); among Bilateral Investment Treaties (BITs), the Argentina-United States BIT (20 cases) remains the BIT most frequently relied upon in investment arbitrations.2 Moreover, according to this review,

1_{UNCTAD, ‘Investment-State Dispute Settlement: Review of Development in 2015’ (2016) 5.}

http://unctad.org/en/PublicationsLibrary/webdiaepcb2016d4_en.pdf accessed 12 May 2017.

2 _{See
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UNCTAD, ‘Investment-State Dispute Settlement: Review of Development in 2016’ (2017) 3.“The IIAs}

most frequently invoked in 2016 were the ECT (with 10 cases), NAFTA and the Russian Federatin-Ukraine BIT (3 cases each). Looking at the overall trend…about 20 per cent of all known cases invoked the ECT (99 cases) or NAFTA (59 cases)” http://unctad.org/en/PublicationsLibrary/diaepcb2017d1_en.pdf accessed 25 May 2017. (ii) UNCTAD, ‘Investment-State Dispute Settlement: Review of Development in 2015’ (2016) 5. “Whereas the majority of investment arbitrations in 2015 were brought under BITs – most of them dating back to the 1990s -, the ECT was invoked in about one third of the new cases. Looking at the overall trend, the ECT is by far the most frequently invoked IIA (87 cases), followed by the NAFTA (56 cases).

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the sequence of the most frequent home states of claimants (investors) from the year of 1987 to 2015 shows: United States and Canada (NAFTA contracting parties), major EU member states (Netherlands, UK, Germany, France, Spain) are the major home states for the investors.3 The sequence of the most frequent host states of investment (respondent) from the year of 1987 to 2015 follows as: Argentina (59 cases), Venezuela (36 cases), Czech Republic (33 cases), Spain (29 cases), Egypt (26 cases), Canada (25 cases), Mexico (23 cases), Ecuador (22 cases), Russia (21 cases) Poland (20 cases), Ukraine (19 cases), India (17 cases). Therefore, the investment treaties applicable for the arbitrations cases and the expropriation pertinent provisions in this thesis would mainly focus on the ECT, NAFTA, and the BITs with the parties are ranked on the most frequent home states of claimants and/or respondents.

1.2.2 Illustrative arbitral cases selection approach

The selection of the illustrative arbitral cases of the pertinent legal issues addressed in this thesis mainly base on the typical cases which have been cited repeatedly in the arbitral decisions and scholar literatures. Moreover, there are also new illustrative arbitral cases cited in this thesis. The main resource of these new arbitral cases come from the UNCTAD reports, including the IIA Issues Note: Investor-State Disputed Settlement Review of Developments in 2014 and 2015, Recent Developments in Investor-State Dispute Settlement 2013 and 2012, Latest Developments in Investor-State Dispute Settlement 2008-2011. Although a wide range of new cases raised the expropriation claim, a considerable number of these new cases were dismissed due to the lack of jurisdiction decided by Tribunals, also some arbitral cases are still pending. Moreover, some of these available expropriation-related cases only address the compensation disputes since the existence of expropriation was not in dispute in these cases. Therefore, there are limited numbers of the new arbitral cases cited in this thesis.

2. Two-step approach in determining an indirect expropriation claim

3_{UNCTAD, ‘Investment-State Dispute Settlement: Review of Development in 2015’ (2016) 3.}

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2.1 Feature of an indirect expropriation

An indirect expropriation might occur in the case of any "unreasonable interference with the use, enjoyment, or disposal of property as to justify an inference that the owner thereof will not be able to use, enjoy, or dispose of the property within a reasonable period of time after the inception of such interference.”4_{The 1967 OECD}

Draft Convention deals with indirect expropriation as indirect deprivation of property and defines in such a way: “ to deprive ultimately the alien of the enjoyment or value of his property, without any specific act being identifiable as outright deprivation. As instances may be quoted excessive or arbitrary taxation; prohibition of dividend distribution coupled with compulsory loans; imposition of administrators; prohibition of dismissal of staff; refusal of access to raw materials or of essential export or import licenses”.5_{An indirect expropriation leaves the investor’s title untouched but deprives}

him of the possibility of utilizing the investment in a meaningful way. A typical feature of an indirect expropriation is that the state will deny the existence of an expropriation and will not contemplate the payment of compensation.6

2. 2 Two-step approach in determining an indirect expropriation claim

As far as an indirect expropriation claim is concerned, the Tribunals have often held that they have to first determine if an indirect expropriation has occurred; if the answer is positive, it will analyze if the expropriation is legitimate or lawful.7 For example, The Tribunal in Tidewater v Venezuela pointed out that the expropriation claim analyses steps include assessing whether, and if so to what extent, State’s measures did in fact have an expropriateory effect; and considering whether, if so, such expropriation was lawful or unlawful.8 It is often held by Tribunals that the “public purpose intention” factor should be taken into account only in the second step viz., whether an expropriation is legal, because the “both public purpose intention” and “compensation” are the indispensible elements of legality of expropriation.

4_{Article
10(3)(a)
of
the
Harvard
Draft
Convention
on
the
International
Responsibility
of
States
for
Injuries}

to Aliens., see Louis B. Sohn and R.R. Baxter, ‘Responsibility of States for Injuries to the Economic Interests of Aliens’, Vol. 55, No. 3, American Journal of International Law (1961) 553.

5_{OECD
Draft
Convention
on
the
Protection
of
Foreign
Property,
Vol.
2,
No.2,
The
International
Lawyer}

(1968) 338.

6_{Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law, (2}nd_{edn, OUP, Oxford 2012)}

101.

7_{See e.g., Parkerings Company AS v. Republic of Lithuania, Award, September 11 2007, para 442.}

8_{Tidewater Investment SRL and Tidewater Caribe, C.A. v The Bolivarian Republic of Venezuela, Award, March}

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Nevertheless, certain Tribunals did not follow this approach. First of all, they mixed up the two steps into single step and took “public purpose intention” as one of the decisive factors in analyzing the first step of question of whether the State’s regulatory measure amounted to an expropriation. Their findings of an expropriation reached in the approach generally read such as “because the measure is for public purpose, non-discriminatory, with due process, thus there is no expropriation”, or “because there is discrimination, or there is not for public purpose, thus there is an expropriation”. The critical defect of this approach lies in that it do not make a distinction between the first step of finding whether the State’s measure amounted indirect expropriation and the following second step of determining whether and expropriation need to compensate investor, if the answer of the finding of first step is positive.

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payment of prompt compensation, the question as to what amounts to expropriation will for the future assume importance in the interpretation of these treaties.9 Moreover, Prof. Christie also pointed out that the question of what constitutes a taking amounting to expropriation may be of great importance in the short run, yet it may often become less and less important as events take their course.10_{After decades’}

treaties developments by States’ parties and arbitral practices by international tribunals, the question of what constitutes a taking amounting to indirect expropriation is better handled, but still remains considerable divergence.

3. The role of “effect” and “intention” in finding an indirect

expropriation

The starting point of determining an indirect expropriation claim is the question of whether an indirect expropriation has occurred, more specifically, what are the factors for determining State’s regulatory measure constituted an expropriation. The first step towards determining what sort of interference will render property rights so useless that they will be deemed to have been expropriated.11As Dolzer pointed out that no one will seriously doubt that the severity of the impact upon the legal status, and the practical impact on the owner’s ability to use the enjoy his property, will be a central factor in determining whether a regulatory measure effects a taking.12 What is more controversial, however, is the question of whether the focus on the effect will be the only and exclusive relevant criterion (“sole effect doctrine”), or whether the purpose and the context of the governmental measure may also enter into the takings analysis.13 The sole-effect approach can be found in majority applicable investment treaties and arbitral practices.

3.1 The sole-effect approach in treaties

The vast majority of applicable international investment treaties since 1990s, typically have very similar context of provisions refer to general concept and criteria for finding whether an indirect expropriation has occurred, viz., “having effect equivalent

9_{G.C.
Christie,
‘What
Constitutes
A
taking
of
Property
under
International
Law?’
38
Brit.
Y.B
Int’l
L.
307}

1962 309.

10_Ibid. 11_{Ibid
312.}

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to expropriation” or “ measure tantamount to expropriation”, with the common point resting only on the “effect” of State’s measures, referring nothing about “intention” of State’s measures. The textual readings show that the vast majority of applicable investment treaties support the “sole effect doctrine” through their context and terms of the pertinent provisions.

- The ECT: “subjected to a measure or measures having effect equivalent to nationalization or expropriation”.

- NAFTA: “take a measure tantamount to nationalization or expropriation”.14

- Argentina-US BIT: “indirectly through measures tantamount to expropriation or nationalization”.15

- Czech-UK BIT: “subjected to measure having effect equivalent to nationalization or expropriation”.16

- Germany-Poland BIT: “subjected to any other measure the effects of which would be tantamount to expropriation or nationalization”.17

- France-Argentina BIT: “other equivalent measure having a similar effect of dispossession”.18

According to Article 31(1) of the Vienne Convention on the Law of Treaties (VCLT), “a treaty shall 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 an purpose”. Firstly, it can be found that when examining the indirect expropriation clauses in light of the “context” and “the ordinary meaning” of the terms of the treaties, the “effect” of the measure is the only factor mentioned in those typical contexts of the indirect expropriation provisions and terms. The public purpose “intention” of the measure does not have a role in the context of provisions with pertain to assessing the first step of question of whether the indirect expropriation has taken place, it only appears as one of the criteria of a legal expropriation which is the question of second step of determination of an indirect expropriation. In other words, Only “effect” factor is required to valuate whether a State’s measure constitute an

14_{Article 13 (1) of the ECT.}

15_{Article IV 1 of Argentina-United States BIT (Signed on November 14 1991; Entered into Force on October 20,}

1994).

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indirect expropriation. As long as the State’s measure having “effect” equivalent to expropriation, or tantamount to expropriation, then an indirect expropriation has occurred. Secondly, from the perspective of the “good faith” and “the objects and purpose” of the treaties, it is undisputed that “foreign investment protection” is the most important objective and purpose of the international investment treaties, and to accord the alien investors full protection and right to be compensate in the case of expropriation is one of the significant expressions of good faith.

The scholars’ views provide further supports. It is understood that the term “equivalent to expropriation” or “tantamount to expropriation” included in the international treaties related to the protection of foreign investors refers to the so-called “indirect expropriation” or “creeping expropriation”, as well as to the de facto expropriation.19 Although these forms of expropriation do not have a clear or unequivocal definition, it is generally understood that they materialize through actions or conduct, which do not explicitly express the purpose of depriving one of rights or assets, but actually have that effect.20 In determining whether a taking constitutes an indirect expropriation, it is particularly important to examine the effect that such taking may have had on the investor’s rights. Where the effect is similar to what might have occurred under an outright expropriation, the investor could in all likelihood be covered under most BIT provisions.21

It is noteworthy, having addressed the pertinent expropriation provisions in the applicable MITs and BITs which signed in 1990s but still valid and applicable in the arbitral cases till the present and might remain applicable in a considerable time period in the future, as aforementioned, it was concluded that only “effect” factor is required in assessment of whether a State’s measure amounted an indirect expropriation. Nevertheless, as addressed in following section 6.3, there certain new Model BITs change this situation by the requirement of taking into account a list of factors, including the factors of “effect”, “reasonable expectation”, “the character of the government action”. Since this new factors requirement is mainly in the model

19_{Giorgio. Sacerdoti and Hague Academy of International Law (Den Haag), Bilateral Treaties and Multilateral} Instruments on Investment Protection (Recueil des cours de l’Académie de droit international de La Haye 1997)

385-386.

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BITs or proposal of change of the Model BITs, it should considered that these new development mainly just reached by the model BIT, not the applicable BIT which signed by all parties and came into force. There is still great difficulty for reaching the agreement on this new type of investment treaties. It is reasonable to say that the current scenario reflected in applicable investment treaties will remain unchanged at present and at least foreseeable future.

3.2 The sole-effect approach in arbitral practices

When assessing the evidence of an expropriation, international tribunals have generally applied the sole effects test and focused on substantial deprivation.22 The importance of the effect in deciding whether an expropriation has occurred was highlighted by Reisman and Sloane: “Tribunals have increasingly accepted that expropriation must be analyzed in consequential rather than in formal terms. What matters is the effect of governmental conduct—whether malfeasance, misfeasance, or nonfeasance, or some combination of the three—on foreign property rights or control over an investment, not whether the state promulgates a formal decree or otherwise expressly proclaims its intent to expropriate.”23 As regard to an indirect expropriation claim, the Tribunal has to first determine if State’s measure amounted to an indirect expropriation, and the arbitral decisions’ answers on this issue in question would be either positive or negative, but both answers are concluded by adopting the sole-effect approach, or at least the “effect-decisive” approach.

3.2.1 The role of effect in finding an indirect expropriation

It is beyond doubt, that the more recent jurisprudence of arbitral tribunals reveals a remarkable tendency to shift the focus of the analysis away from the context and the purpose and focus more heavily on the effects on the owner.24 The Tribunal in

Inmaris v Ukraine held that the indirect expropriation has occurred and pointed out

that improper motive or intent of the State’s measure is not a prerequisite to finding of expropriation.25 In Siemens v Argentina, the Tribunal found support in the applicable

22_{Burlington Resources Inc. v. Republic of Ecuador, Decision on Liability, December 14 2012, para 396.} 23_{Reisman, W. Michael and Sloane, Robert D, ‘Indirect Expropriation and its Valuation in the BIT Generation’}

(2004) Faculty Scholarship Series. Paper 1002, 121.

< http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=2043&context=fss_papers> accessed 15 May 2017.

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BIT for its finding that what mattered for the existence of an expropriation was the effect of the measures and not the government’s intention. The applicable BIT in this case-Argentina-Germany BIT, like many other BITs, refers to indirect expropriation in terms of a “measure the effects of which would be tantamount to expropriation’. The Tribunal held: “The Treaty refers to measures that have the effect of an expropriation; it does not refer to the intent of the State to expropriate.” The Tribunal in Tecmed v Mexico rightly pointed out that: “The government’s intention is less important than the effects of the measures on the owner of the assets or on the benefits arising from such assets affected by the measures; and the form of the deprivation measure is less important than its actual effects.”26_{An example went}

further in the approach of focus on the effect instead of government’s intention is

Biloune v. Ghana case. In that case, the Tribunal noted that the motivations for the

actions and omissions of Ghanaian governmental authorities are not clear. But the Tribunal need not establish those motivations to come to a conclusion in the case.27

3.2.2 The role of effect in denying an indirect expropriation

Some Tribunals found that State’s measures did not constitute an indirect expropriation, but the findings were also base on that the effect of State’s measure were not significant enough to amount an indirect expropriation, rather than because the Tribunal took into account the public purpose intention of the intention of State’s measure. In Nycomb v Latvia case, the first known arbitral award rendered under the ECT, the Tribunal concluded that “the withholding of payment at the double tariff does not qualify as an expropriation or the equivalent of an expropriation under the ECT, but the Tribunal also held that “ ‘regulatory takings’ may under the circumstances amount to expropriation or the equivalent of an expropriation. The decisive factor for drawing the border line towards expropriation must primarily be the degree of possession taking or control over the enterprise the disputed measures entail”.28 Similar approach applied by the Tribunal in AES v Hungary concludes that the effects of the reintroduction of the Price Decrees do not amount to an para 304.

26_{Tecnicas Medioambientales Tecmed S.A. v The United Mexican States, Award, 29 May 2003, para 116.} 27_{Rudolf Dolzer, ‘ Indirect Expropriations: New Developments?’ (2002-2003) Vol. 11 N.Y.U. Envtl L.J. 64, 87.} 28_{Nykomb Synergetics Technology Holding AB v. The Republic of Latvia, Arbitral Award, December 16 2003,}

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expropriation of Claimants’ investment.29 There are more pertinent illustrative arbitral decisions in the following section 3.3.

3.3 Assessment of “effect”: degree of effect and duration of effect

The key points of the assessment or valuation of “effect” are the degree of the effect and the duration of the effect. A state’s measure that has a negative effect on an investment cannot automatically be considered an expropriation. For an expropriation to occur, it is necessary for the investor to be deprived, in whole or significant part, of the property in or effective control of its investment: or for its investment to be deprived, in whole or significant part, of its value.30 The effect of measure upon the economic benefit and value as well as upon the control over the investment is the key question when it comes to deciding whether an indirect expropriation has taken place.31 Whenever this effect is substantial and lasts for a significant period of time, it will be assumed prima facie that a taking of the property has occurred.32 Most arbitral decisions support that the degree of the effect of State’s measure on the investment has to be severe, or substantial and maintain for a significant period of time. Tribunal in Plama v Bulgaria considered that the degree and the duration of the effect as decisive elements in the evaluation of State’s conduct: (i) substantially complete deprivation of the economic use and enjoyment of the rights to the investment, or of identifiable, distinct parts thereof (i.e., approaching total impairment); (ii) the irreversibility and permanence of the contested measures (i.e., not ephemeral or temporary); and (iii) the extent of the loss of economic value experienced by the investor.33

It also should be noted that one of the decisive factors in assessing whether there is a substantial deprivation, is the loss of the economic value or economic viability of the investment and the capacity to earn a commercial return, because after all the investors make investments to earn a return, if they lose this possibility of earning a return as a result of a State measure, then they have lost the economic use of their

29_{AES Summit Generation Limited and AES-Tisza Eromu KFT v. The Republic of Hungary, Award, September 23}

2010, para14.3.3.

30_{Ibid para 14.3.1.}

31_{Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law, (2}nd_{edn, OUP, Oxford}

2012) 112.

32_Ibid.

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investment.34 In other words, the measure is expropriatory, whether it affects the entire investment or only part of it, as long as the operation of the investment cannot generate a commercial return.35 This perspective approach for valuating the “effect” of State’s measure requires taking into account both the degree of effect and duration of effect in a comprehensive way.

3.3.1 The degree of effect

Not all alien investments which be adversely affected by a State’s regulatory measure amounted indirect expropriation. In addressing the question whether regulation may be considered expropriation, under international law, requires a “substantial deprivation”, which includes the degree to with the government action deprives the investor of effective control over the enterprise and whether the government has made it impossible for the investment to operate at a profit.36 In arbitral practices, it is widely accepted that the effect of the interference from State’s measure has to be substantial in order to find an indirect expropriation, mere restriction on foreign investment do not constitute an expropriatory taking. On the one hand, arbitral Tribunals have constantly found that State’s measure may amount to an expropriation when it impairs the investment rights, ownership, use, enjoyment or management of business in a significant way or rendering them without value; on the other hand, arbitral Tribunals also often refused to hold that an indirect expropriations had occurred when the effects of the State’s measures did not significant enough or did not deprive all or most of the investments’ value. Arbitral Tribunals in a number of arbitral decisions, further held that a distinction is to be drawn between a partial deprivation of value, which is not an expropriation, and a “complete or near complete deprivation of value”, which can constitute an expropriation.37

This determination of the effect of State’s regulatory measure is important because it is one of the main elements to distinguish, from the point of view of an international tribunals, between a regulatory measure, which is an ordinary expression of the exercise of the state’s police power that entails a decrease in assets or rights, and a de

34_{Burlington Resources Inc. v. Republic of Ecuador, Decision on Liability, December 14 2012, para 397.} 35_{Ibid para 398.}

36_{Pope & Talbot Inc. v. The Government of Canada, Interim Award, 26 June 2000, para 102 and n 80.} 37_{Perenco Ecuador Limited. v. The Republic of Ecuador, Decision on Remaining Issues of Jurisdiction and}

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facto expropriation that deprives those assets and rights of any real substance.38 Upon determining the degree to which the investor is deprived of its goods or rights, whether such deprivation should be compensated and whether it amounts or not to a de facto expropriation is also determined.39

Tribunals have held that the international law recognizes that an indirect expropriation require significant degree of the effect which deprive the value of the investment. In the first Iran-United States Claims Tribunal case Satrrett Housing, the Tribunal pointed out that “it is recognized by international law that measures taken by a State can interfere with property rights to such an extent that these rights are rendered so useless that they must be deemed to have been expropriated, even thought the State does not purport to have expropriated them and the legal title to the property formally remains with the original owner”.40 The tribunal in Mobil v. Venezuela pointed out that “under international law, a measure which does not have all the features of a formal expropriation may be equivalent to an expropriation if it gives rise to an effective deprivation of the investment as a whole. Such a deprivation requires either a total loss of the investment’s value or a total loss of control by the investor of its investment, both of a permanent nature.”41

Tribunals have held in a number of cases that the indirect expropriation had occurred when the effects of State’s measures significantly deprive the value of the investments or severe interfered the investors’ rights. In Biloune, et al. v. Ghana Investment

Centre, et al. case, the investor was renovating and expanding a resort restaurant in

Ghana, a stop work order was issued after a substantial amount of work had been completed, also a building permit was denied. The Tribunal found that an indirect expropriation had taken place, because the totality of the circumstances had the effect of causing the irreparable cessation of work on the project.42 In Matalclad v. Mexico, although Mexico claimed that the denial of construction permit in part because of the

38_{Tecnicas Medioambientales Tecmed S.A. v. The United Mexican States, Award, May 29 2003. Para 115.} 39_{Ibid Para 115.}

40_{American Society of International Law, ‘Iran-United States Claims Tribunal: Case Concerning Starrett Housing}

Corporation, ET Al. and The Government of the Islamic Republic of Iran’, (1984) Vol. 23 International Legal

Materials 1115.

41_{Venezuela Holdings, B.V. Mobil Cerro Negro Holding, Ltd. Mobil Venezolana De Petroleos Holdings, Inc.} Mobil Cerro Negro, Ltd. And Mobil Venezolana De Petroleos, Inc. v. The Bolivarian Republic of Venezuela,

Award, October 9 2014, para 286.

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local government’s perception of the adverse environmental effects of the hazardous waster landfill and the geological unsuitability of the landfill site. Also the measure taken was in accordance with the Ecological Decree.43 Notwithstanding, the Tribunal found that the denial of construction permit base on the Ecological Decree has constituted an indirect expropriation, since this Decree had the effect of barring forever the operation of the landfill.44 It is worth noting that the Tribunal stressed that it “need no decide or consider the motivation or intent of the adoption of the Ecological Decree”.45 The Tribunal in Tecmed v Mexico recognized that “equivalent to expropriation” or “tantamount to expropriation (so called indirect or creeping expropriation), do not have a clear or unequivocal definition…it is generally understood that they materialize through actions or conduct, which do not explicitly express the purpose of depriving one of rights or assets, but actually have that effect.”46 In SPP v Egypt, the Tribunal found that Egyptian government’s cancellation of the project had the effect of taking certain important rights and interests of the investor and the effect had been irrevocable.47

Arbitral Tribunals also have often dismissed the indirect expropriation claims when State’s measures did not deprive essentially or significantly all or most of the value of investment. According to the Tribunal’s view in Grand River v United States, the language of Article 1110 of NAFTA and the reasoning of numerous tribunals show that an expropriation must involve the deprivation of all, or a very great measure, of claimant’s property interests.48 The Tribunal found that the State’s measure has not amounted an indirect expropriation and the effect of State’s expropriatory measure requires a “complete or very substantial deprivation of owners rights in the totality of the investment”.49 In Pope & Talbot v Canada, the Tribunal found while the interference just has resulted in reduced profits for the investment and the investor continues its export business to earn substantial profits, thus the Tribunal concludes that the degree of the interference with the Investment’s operations due to the Export

43_{Ibid paras106-110.} 44_Ibid.

45_{Ibid para111.}

46_{Tecnicas Medioambientales Tecmed S.A. v. The United Mexican States, Award, May 29 2003, para 114.} 47_{Southern Pacific Rroperties (Middle East) Limited v. Arab Republic of Egypt, Award On The Merits, May 20}

1992, para 164.

48_{Grand River Enterprises Six Nations, Ltd., et al. v. United States of America, Award, January 12 2011, para}

154.

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Control Regime does not rise to an expropriation (creeping or otherwise) within the meaning of Article 1110 (of the NAFTA).50 The Tribunal in LG&E v Argentina also pointed out that “in the circumstance of this case, although the State adopted severe measures that had a certain impact on Claimants’ investment, especially regarding the earnings that the Claimants expected, such measures did not deprive the investors of the right to enjoy their investment”.51 The tribunal in Perenco v Ecuador found that neither the respondent’s windfall profit tax at 50% nor the windfall profit tax at 99% constituted an indirect expropriation, and “an expropriation requires very great loss or impairment of all of a claimant’s investment.”52

It is worth noting that in creeping expropriation, the effect of measures are considered as cumulative way, which individually might not be deemed constituting an indirect expropriation. For instance, the Tribunal in Biloune v Ghana held that when viewed in conjunction, the issuance of the stop work order, the partial demolition of the construction, the arrest and detention of investor, the requirement of filing assets declaration forms, and the deportation of investor without possibility of reentry had the effect of causing irreparable cessation of work on the project, these actions constituted constructive expropriation.53 Nonetheless, the evidence of the effect of an creeping expropriation might followed the individualized approach which is examined measure-by-measure, while under a collective approach all measures are considered together. In the view of the Tribunal in Burlinton v Ecuador, when the investor puts forward both an individualized and a collective case of expropriation, one should begin the analysis with the measure-by-measure approach; the reason being that a collective or creeping approach is typically employed only when no single measure is in itself expropriatory.54

3.3.2 The duration of effect

The duration of the effect State’s measure could be another consideration in assessing

50_{Pope & Talbot Inc. v. The Government of Canada, Interim Award, 26 June 2000, paras 101-102.}

51_{LG&E Energy Corp. and LG&E Capital Corp. and LG&E International Inc. v Argentina, Decision on Liability,}

3 October 2006, para 198.

52_{Perenco Ecuador Limited v. The Republic of Ecuador, Decision on Remaining Issues of Jurisdiction and}

Liability, September 12 2014, paras 682-683, 693.

53_{Biloune and Marine Drive Complex Ltd v. Ghana Investments Centre and the Government of Ghana, Case}

Summary, 1989-1990, p. 4.

https://www.biicl.org/files/3935_1990_biloune_v_ghana.pdf accessed 12 May 2017.

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whether an indirect expropriation had occurred. Generally, the effect of State’s measure with a temporary duration cannot amount of an indirect expropriation. Unless the investment’s successful development depends on the realization of certain activities at specific moments that may not endure variations. Some legal instruments require that effect of the State’s measure has to be “irreversible”, otherwise there will be no “deprivation” of the property.55 The Tribunal in LG&G v Argentina concludes that one of the reasons that the State’s measures do not constitute expropriation is because “the effect of Argentine State’s actions has not been permanent on the value of the Claimants’ share”.56 The Tribunal S.D.Myers v Canada concluded that the Canadian government’s measure of sixteen months of closure of the border (export ban) was temporary measure, thus the measure should not be characterized as an expropriation within the terms of Article 1110 of the NAFTA.57_{The reasonable}

deduction from this conclusion would be that if the Canadian measure of export had been permanent, it would be constituted an indirect expropriation.

It should also be noted that what matters is the duration of the effect rather than the duration of the State’s measure. In Inmaris v Ukraine, the Tribunal found that due to the Ukrainian travel ban, an entire sailing season was canceled, Claimant’s business suffered substantial harm such than they could not reasonably have been expected to resume operations as if nothing had happened. 58The Tribunal then rejected Respondent assertion that the deprivation of the investment was merely temporary because the travel ban was lifted after one year, and emphasized on the duration of deprivation of the investment was permanent, instead of the duration of the Ukrainian government’s measure was temporary.59

4. The role of “intention” in determining whether an expropriation is

lawful and State’s liability for compensation

The second step of determination of an indirect expropriation claim refers to the

55_{For example, the Article 1, Protocol 1 of the European Convention of Human Rights.}

56_{LG&E Energy Corp. and LG&E Capital Corp. and LG&E International Inc. v Argentina, Decision on Liability,}

3 October 2006, para 200.

57_{S.D.Myers Inc. v. Government of Canada, Partial Award, November 13 2000, para 284.}

58_{Inmaris Perestroika Sailing Maritime Services GmbH and Others v. Ukraine, Excerpts of Award, March 1 2012,}

para 300.

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question of whether an expropriation is lawful and the State’s liability to compensate. This step of question causes less controversy, compare to the first step which regards to the question of the assessment of whether an indirect expropriation has occurred. It is commonly accepted that for an indirect expropriation claim, the difficult part of question is the question of whether State’s measure has constituted an expropriation, rather than whether an expropriation was lawful or unlawful, because it is generally accepted that the existence of an expropriation alone causes the liability to compensate. If State’s measure constituted expropriation, State need to pay compensation to the affected alien investors, even the intention of State’s measure is for public purpose. As the Harvard Draft Convention on the International Responsibility of the States for Injuries to Aliens points out that “the taking, under the authority of the State, of any property of an alien, or of use thereof, for a public purpose clearly recognized as such by a law of general application in effect at the time of the taking is wrongful if it is not accompanied by prompt payment of compensation”.60 If public purpose automatically immunizes the measure from being found to be expropriatory, then there would never be a compensable taking for a public purpose.”61_{The public purpose intention cannot be reconciled with State’s}

treaty obligations to compensate. As an international Tribunal pointed out that “Expropriatory environmental measures—no matter how laudable and beneficial to society as a whole—are, in this respect, similar to any other expropriatory measures that a state may take in order to implement its policies: where property is expropriated, even for environmental purposes, whether domestic or international, the state’s obligation to pay compensation remains.”62

4.1 Compensation is one of the indispensible requirements of legal expropriation under general international law and investment treaties

A wide range of international legal documents and international investment treaties have codified, in general terms, the conditions and requirements under which a State may legally expropriate an alien investor’s property and investment. Customary

60_{Article
10(2)
of
the
Harvard
Draft
Convention
on
the
International
Responsibility
of
States
for
Injuries
to}

Aliens., see Louis B. Sohn and R.R. Baxter, ‘Responsibility of States for Injuries to the Economic Interests of Aliens’, Vol. 55, No. 3, American Journal of International Law (1961) 553.

61_{Compania De Aguas Del Aconquija S.A. and Vivendi Universal S.A v. Argentine Republic, Award, August 20}

2007, para 7.5.21.

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international law does not preclude host states from expropriating foreign investments provided certain conditions are met. These conditions are: the taking of the investment for a public purpose, as provided by law, in a non-discriminatory manner and with compensation.63 These conditions and elements of a legal expropriation are respectively independence from each other. The element of liability for compensation is also independence from the public purpose element, viz. both compensation and public purpose intention are needed and indispensable for a legal expropriation.

4.1.1 A textual reading of treaties’ provisions 4.1.1.1 The ECT and BITs

The right to fair compensation is uncontested and is recognized by most investment treaties. The ECT’s investment protection mechanism does not entirely prohibit expropriation, which may occasionally be an essential tool under the relevant circumstances for various public policy concerns.64 Nonetheless, it is obvious that there is a need to lay down clear rules under which a decision for expropriation can be taken. The right to fair compensation is reflected in Article 13 of the ECT. Article 13 stipulates four elements for the legality of an expropriation: “ (a) for a purpose which is in the public interest; (b) not discriminatory; (c) carried out under due process of law; and (d) accompanied by the payment of prompt, adequate and effective compensation”. Under the typical formulation of the expropriation provision, as set out in Article 13 of the ECT, expropriation is not forbidden per se.65 In fact, it is permissible provided four conditions are met.66 More importantly, the Treaty’s legal protection regime ensures that expropriation is accompanied by the payment of prompt, adequate and effective compensation to the foreign investors concerned.67 Article 13 of the ECT is a form commonly found in most investment treaties.

- Argentina-US BIT: “…for a public purpose; in a non-discriminatory manner; upon payment of prompt, adequate and effective compensation; and in accordance

63_{OECD (2004), “Indirect Expropriation” and the “Right to Regulate” in International Investment Law, OECD} Working Papers on International Investment, 2004/04, OECD Publishing, p 3.

64_{Energy Charter Secretariat, Expropriation Regime under the Energy Charter Treaty, 2012, 3.}

http://www.energycharter.org/fileadmin/DocumentsMedia/Thematic/Expropriation_2012_en.pdf accessed 12 May 2017.

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with due process of law…”68

- Czech-UK BIT: “…for a public purpose related to the internal needs of that Party on a non-discriminatory basis and against prompt, adequate and effective compensation.”69

- Germany-Poland BIT: “…for the public benefit and against compensation.”70

This reflects the position under customary international law, which does not preclude host states from expropriating foreign investments, provided certain conditions are met. These conditions are: the taking of the investment for a public purpose, as provided by law, in a non-discriminatory manner and with compensation.71

4.1.1.2 NAFTA

Article 1110(1) of the NAFTA stipulates: “ No Party may directly or indirectly nationalize or expropriate an investment of an investor or another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment (“expropriation”), except: (a) For a public purpose; (b) On a non-discriminatory basis; (c) In accordance with due process of law and Article 1105(1); and (d) On payment of compensation in accordance with paragraphs 2 through 6”. In accordance with Article 31 of the Vienna Convention on the Law of Treaties, the plain and ordinary meaning of the words of NAFTA Article 1110, taken in the context of an investment promotion chapter in a multilateral FTA with objectives such as substantially increasing investment opportunities, indicates that in all cases compensation must be paid.72 NAFTA Article 1110 requires compensation to be paid for all measures that have the effect of substantially interfering with an investment, it does not matter if the NAFTA government claims to be exercising its sovereign authority to regulate (sometimes referred to as the “police power”).73

4.1.2 The legal instruments other than investment treaties

68_{Article IV 1 of Argentina-United States BIT (Signed on November 14, 1991; Entered into Force on October 20,}

1994).

69_{Article 5 (1) of Czech Republic – United Kingdom BIT (10 July 1990).} 70_{Article 4 (2) of Germany-Poland (Signed on 10 November 1989)}

71_{Energy Charter Secretariat, Expropriation Regime under the Energy Charter Treaty, 2012, 10.}

http://www.energycharter.org/fileadmin/DocumentsMedia/Thematic/Expropriation_2012_en.pdf accessed 13 May 2017

72_{Todd Weiler, A First Look at the Interim Merits Award in S.D. Myers, Inc. v. Canada: It Is Possible to Balance} Legitimate Environmental Concerns with Investment Protection, 24 Hastings Int’l & Comp. L. Rev. 173

2000-2001, 187.

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4.1.2.1 The UNGE resolution

The United Nations General Assembly Resolution on Permanent Sovereignty over Natural Resource (1962), on the one hand, recognizes the permanent sovereignty of peoples and nations over their natural wealth and resources and the inalienable right of all States freely to dispose of their natural wealth and resources in accordance with their national interests and on respect for the economic independence of States; on the other hand, the Resolution emphasizes that in the case of nationalization, expropriation or requisitioning shall be accompanied with appropriate compensation and base on the public purpose.74 This recognition of States’ rights to expropriate and liability to compensate is also reiterated by The 1973 UNGE on Permanent Sovereignty on Natural Resource75 and the1975 Charter of Economic Rights and Duties of States.76_{(d) UNCTAD: In 2000, United Nations Conference on Trade and}

Development (UNCTAD) study, uses different language and considers that “measure short of physical takings may amount to takings in that they result in the effective loss of management, use or control, or a significant depreciation of the value, of the assets of a foreign investor”.77

4.1.2.2 The Restatement

According to the Restatement (Third) of the Foreign relations Law of the United States, the public purpose requirement has not figured prominently in international claims practice, perhaps because the concept of public purpose is broad and not subject to effective reexamination by other states.78 Section 712 of the Restatement provides “A State is response under international law for injury resulting from: (1) a taking by the state of the property of a national of another state that: (a) is not for a public purpose, or (b) is discriminatory, or (c) is not accompanied by provision for

74_{United Nation, the General Assembly Seventeenth Session, “Permanent Sovereignty Over Natural Resources’,}

14 December 1962.

http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/1803(XVII)&referer=http://legal.un.org/avl/ha/ga_18 03/ga_1803.html&Lang=E, accessed 14 May 2017

75_{United Nation, the General Assembly Seventeenth Session, ‘Permanent Sovereignty Over Natural Resources’,}

17 December 1973.

https://documents-dds-ny.un.org/doc/RESOLUTION/GEN/NR0/282/43/IMG/NR028243.pdf?OpenElement

accessed 14 May 2017

76_{United Nation, the General Assembly Twenty-ninth Session, ‘Charter of Economic Rights and Duties of States’,}

12 December 1974. http://www.un-documents.net/a29r3281.htm, accessed 14 May 2017

77_{UNCTAD, Series on Issues international investment agreements: Taking of Property, 2000, 2.}

http://unctad.org/en/docs/psiteiitd15.en.pdf accessed 14 May 2017.

78_{American Law Institute, Restatement of the Law Third, the Foreign Relations of the United States, American}

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just compensation.”79

4.1.3 The exception 4.1.3.1. An overview

The majority of the multilateral and bilateral treaties include certain provisions with title of “exception”, environmental related subject,80 or a separate item with exception content under the title of “expropriation”, entitle State’s sovereign right to regulate for the public purpose and interest. However, these provisions merely repeat what is already declared by aforesaid UN resolutions and other sources of customary international law, and do not relieve State’s liability to compensate in the even that the effect of State’s regulatory measure amounted an expropriation.

4. 1.3.2 An understanding of Article 24 of the ECT

Article 24 of the ECT reinforces the public purpose of the State’s measure should not be took into consideration when deciding the expropriation claim under the ECT. Under the heading of “Exceptions”, Article 24 of the ECT is designed to preserve State’s regulatory rights for public interest, and includes both security and public health exceptions from the State’s liability. Nevertheless, none of these exceptions applies the expropriation claim, since Article 24 (1) specifically excludes these exceptions under Article 24 from the expropriation claim (Article 13); in other words, the expropriation claim related provisions are carved out from the exceptions under Article 24. The expropriation clause is not covered by the “regulatory exceptions” in Article 24 of the ECT, and therefore must be interpreted independently.81 Therefore, the State should not be able to justify its regulatory measures for public interest protection in light of expropriation claim, and the intended scope for State’s regulatory rights for protecting the public interest is considerable narrower under the ECT than under other treaties and BITs. Furthermore, The exclusion of the

79_{American Law Institute, Restatement of the Law Third, the Foreign Relations of the United States, American}

Law Institute Publishers, Vol. l, 1987, Section 712.

80_{For example, Article 1114(1) of NAFTA reads: “Nothing in this Chapter shall be construed to prevent a Party} from adopting, maintaining or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns”.

81_{Energy Charter Secretariat, Expropriation Regime under the Energy Charter Treaty, 2012, p.11.}

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application of Article 24 to the expropriation provisions, provides another significant legal ground to the conclusion that: the public purpose of the State’s measure should not be took into consideration when deciding the expropriation claim under the ECT.

4.2 Illustrative arbitral practices

The actual value of the above mentioned pertinent provisions in investment treaties and other legal instruments would achieved only such texts are properly interpreted and applied by arbitral tribunals. There is extensive authority for the proposition that the state’s intent, or its subjective motives are at most a secondary consideration.82_In

other words, under general arbitral and other judicial practice, even there is a public purpose intention, the State’s liability to compensate affected alien investor still remains. Nonetheless, while the principle and text of the treaties’ provisions might be clear, its application to particular situations of fact is not.

4.2.1 Illustrative MITs arbitral practices

In Ioannis v Georgia, the Tribunal turned to the criteria for a lawful expropriation set forth in Article 13(1) of the ECT and concluded that Georgian Government never compensate Claimant for the taking of rights had violate the treaty obligation.83 The Tribunal in Yukos v Russia held: “As to condition (d)84, what in any event is incontestable is Respondent’s failure to meet its prescription, because the effective expropriation of Yukos was not “accompanied by the payment of prompt, adequate and effective compensation”, or, in point of fact, any compensation whatsoever.”85 In

Feldman v Mexico, in the Tribunal’s view, “the essential determination is whether the

actions of the Mexican government constitute an expropriation or nationalization”, “if there is a finding of expropriation, compensation is required, even if the taking is for a public purpose, non-discriminatory and in accordance with due process of law and Article 1105(1)”.86 In Metalclad v. Mexico, it is held that “the Tribunal need not decide or consider the motivation or intent of the adoption of the Ecological Decree”, and “Mexico has indirectly expropriated Metalclad’s investment without providing

2007, para 7.5.20.

83_{Ioannis Kardassopoulos v. The Republic of Georgia, Award, March 3, 2010, para 389.}

84_{The fourth condition of an legal expropriation included in Article 13(1) (d) of the ECT, viz, (d) accompanied by}

the payment of prompt, adequate and effective compensation.”

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compensation to Metalclad for the expropriation. Mexico has violated Article 1110 of the NAFTA”.87

4.2.2 Illustrative BITs arbitral practices

In Vivendi II, the Tribunal held that the “sole effect” approach in finding of indirect expropriation and intent is not a requirement at all, and concluded: “While intent will weigh in favor of showing a measure to be expropriatory, it is not a requirement, because the effect of the measure on the investor, not the state’s intent, is the critical factor.”88_{The Tribunal went on to say that “If we conclude that the challenged}

measures are expropriatory, there will be violation of Article 5(2) of the Treaty, even if the measures might be for a public purpose and non-discriminatory, because no compensation has been paid.”89 The Tribunal in Inmaris v Ukraine endorsed the Vivendi II’s Tribunal’s approach and held that once a State’s measure has been found to be expropriatory, a State must pay compensation, even if the measure is taken for a public purpose, and whether a government act is taken for a public purpose does not change the fact that compensation is owed90In Parkerings-Comagniet AS v Lithuania, the Tribunal held that “an expropriation does not necessarily amount to violation of the Treaty (Lithuania-Norway BIT); Pursuant to Article VI of the Treaty, the expropriation is legitimate if done for public interest and under domestic legal procedures; if not discriminatory; and if done against compensation.91 The Tribunal in Tecmed v Mexico did not exclude this legitimate regulatory measure from liability for compensation and stated: “…no principle stating that regulatory administrative actions are per se excluded from the scope of the [applicable BIT], even if they are beneficial to society as a whole - such as environmental protection, particularly if the negative economic impact of such actions on the financial position of the investor is sufficient to neutralise in full the value, or economic or commercial use of its

87_{Metalclad Corporation v. The United Mexican States, Award, August 30 2000, paras 111-112.}

2007, para 7.5.20.

89_{Ibid para 7.5.21.}

90_{Inmaris Perestroika Sailing Maritime Services GmbH and Others v. Ukraine, Excerpts of Award, March 1 2012,}

para 305.

91_{Parkerings-Comagniet AS v. Republic of Lithuania, Award, September 11 2007, para 441.}