Stetsons Resp

-i-
MEMORIAL ON BEHALF OF THE RESPONDENT

STETSON INTERNATIONAL ENVIRONMENTAL MOOT COURT COMPETITION, 2011

Team No. ----------------

IN THE INTERNATIONAL COURT OF JUSTICE
AT THE
PEACE PALACE, THE HAGUE

Case concerning
Nuclear Accident and Sovereign Debt

FEDERAL STATES OF AMUKO
V.
REPUBLIC OF RENTIERS

ON SUBMISSION TO THE INTERNATIONAL COURT OF JUSTICE

MEMORIAL FOR THE RESPONDENT
REPUBLIC OF RENTIERS

-ii-
TABLE OF CONTENTS

Table of Authorities ............................................................................................................ v
Table of Cases:
ICJ Decisions ................................................................................................. v
PCIJ Decisions ............................................................................................. vi
Other Decisions ............................................................................................ vi
Books and Digests .................................................................................................. viii
Articles and Commentaries ....................................................................................... ix
International Instruments .......................................................................................... xi
Statement of Jurisdiction ..................................................................................... xiii
Questions Presented ......................................................................................................... xiv
Statement of Facts ............................................................................................................. xv
Summary of Arguments .................................................................................................. xvii
Arguments ........................................................................................................................... 1
Conclusion ......................................................................................................................... 18

-iii-
MERITS
I. REPUBLIC OF RENTIERS IS NOT LIABLE TO REIMBURSE/ COMPENSATE AMUKO FOR
ANY OF THE EXPENSES INCURRED ...................................................................................... 1
[I.A]. RENTIERS IS NOT OBLIGATED TO COMPENSATE AMUKO UNDER THE
ASSISTANCE CONVENTION ........................................................................................ 1
I.A.1. ANY RESPONSIBILITY FOR COMPENSATION IS LIMITED TO DAMAGES
SUFFERED WITHIN THE TERRITORY OF THE REQUESTING STATE. ........................ 1
I.A.2. THE INTERPRETATION GIVEN BY RENTIERS DOES NOT DEFEAT THE OBJECT
AND PURPOSE OF THE CONVENTION. ................................................................ 2
[I.B]. ARGUENDO, RENTIERS IS PRECLUDED FROM ASSUMING ANY RESPONSIBILITY
BECAUSE OF THE CONDUCT OF AMUKO CONGRESS .................................................... 4
I.B.1. THE ACTIONS OF AMUKO CONGRESS AMOUNT TO WAIVER OF ITS RIGHT
TO ASK FOR COMPENSATION.. ......................................................................... 4
I.B.2. AMUKO IS PRECLUDED FROM CLAIMING COMPENSATION UNDER THE
DOCTRINES OF ESTOPPLE AND ACQUIESCENCE. .................................................. 4
[I.C]. UNDER CUSTOMARY INTERNATIONAL LAW, AMUKO IS NOT ENTITLED TO ANY
COMPENSATION FROM RENTIERS ............................................................................. 5
I.C.1 CONDUCT OF AME EMPLOYEES CANNOT BE ATTRIBUTABLE TO RENTIERS
...................................................................................................................... 5
I.C.2 THE ACTS OF AME IS ATTRIBUTABLE TO AMUKO.................................... 6
(I.C.2.a)ACCIDENT TOOK PLACE IN THE TERRITORY OF AMUKO ................ 7
II. RESTRUCTURING OF SOVEREIGN BONDS BY RENTIERS DOES NOT ENTAIL ANY
RESPONSIBILITY UNDER INTERNATIONAL LAW ................................................................... 9
[II.A]. DEFAULT ON SOVEREIGN BONDS DOES NOT VIOLATE THE PROVISIONS OF
RABBIT .................................................................................................................. 9
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II.A.1. SOVEREIGN BONDS ARE NOT COVERED BY THE BILATERAL INVESTMENT
TREAT - RABBIT .......................................................................................... 9
II.A.2. DEFAULT ON SOVEREIGN BONDS DOES NOT ENTAIL THE INTERNATIONAL
RESPONSIBILITY OF A STATE .......................................................................... 11
II.A.3. ARGUENDO, RENTIERS ACTION DOES NOT AMOUNT TO EXPROPRIATION
IN CONTRAVENTION OF RABBIT ................................................................... 12
[II.B].RENTIERS IS NOT PRECLUDED FROM APPLYING PRECAUTIONARY PRINCIPLE
................................................................................................................................ 13
[II.C]. RENTIERS MAY INVOKE FORCE MAJEURE TO PRECLUDE THE ALLEGED
WRONGFULNESS OF ANY ACTION .......................................................................... 15
[II.D]. RENTIERS CAN TAKE THE DEFENCE OF NECESSITY .................................. 16

-v-
TABLE OF AUTHORITIES
Table of Cases

ICJ Decisions
1. Ambatielos, Merits, Judgment, (1953) I.C.J. Reports 10 ............................................ 6
2. Anglo-Norwegian Fisheries Case, (1951) ICJ Reports 116......................................... 5
3. Application of the Convention of 1902 Governing the Guardianship of Infants,
Judgment, (1958) I.C.J. Reports 55, 67 ...................................................................... 7
4. Asylum Case (Peru v. Columbia), (1950) ICJ Reports 226 ......................................... 2
5. Cameroon v. Nigeria, (1998) ICJ Reports 275 ........................................................... 5
6. Certain Phosphate Lands in Nauru (Nauru v. Australia), Preliminary Objections,
Judgment, (1992) I.C.J. Reports 240 .......................................................................... 4
7. Construction of a Wall advisory opinion, (2004) ICJ Reports 136 .............................. 3
8. Elettronica Sicula S.p.A. (ELSI) (1989) I.C.J. Reports 15 .......................................... 6
9. Frontier Dispute, (1986) ICJ Reports 597 .................................................................. 5
10. Gabcikovo-Nagymaros Project Case, (1997) ICJ Reports 7 ................................. 13,16
11. Genocide Convention (Bosnia v. Serbia) case, (2007) ICJ Reports 213 ...................... 2
12. Gulf of Maine Case (1984) ICJ Reports 246 .............................................................. 5
13. ICAO Council case, (1972) ICJ Reports, 46 ............................................................... 5
14. Indonesia/Malaysia case, (2002) ICJ Reports 625 ...................................................... 2
15. La Grand case, (2001) ICJ Reports 466 ................................................................... 2,3
16. Libya/Chad case, (1994) ICJ Reports 6 ...................................................................... 3
17. Military and Paramilitary Activities in and against Nicaragua (1986) I.C.J. Report 14
................................................................................................................................. .6
18. North Sea Continental Shelf Case, (1969) ICJ Reports 3 .......................................... 10
-vi-
19. Nuclear Test Cases (New Zealand v. France), (1974) ICJ Reports 473 ...................2,13
20. Qatar v. Bahrain case, (1995) ICJ Reports 6............................................................... 3
21. Reservations to Convention on Prevention and Punishment of Crime of Genocide, . 23
Advisory Opinion, (1951) I.C.J. Reports 15 ............................................................... 2
22. Right of Passage case (1957) ICJ Reports 125 ........................................................... 5
23. Rights of Nationals of the United States of America in Morocco, (1952) I.C.J. Reports
176 ............................................................................................................................ 6
24. Temple of Preah Vihear case (1962) ICJ Reports 6 ................................................5,10
25. The Botswana/Namibia case, (1999) ICJ Reports 1045 .............................................. 2
26. Western Sahara Case, (1975) I.C.J. Reports 12 .......................................................... 7

PCIJ Decisions
1. Lotus (1927) P.C.I.J.,Series A, No. 10, 24 .............................................................. 6
2. Brazilian Loans, Judgment No. 15, 1929, P.C.I.J., Series A, No. 21 ......................... 15
3. Factory at Chorzw, Jurisdiction, Judgment No. 8, (1927) P.C.I.J., Series A, No. 9,
21, 31 ........................................................................................................................ 7
4. Jurisdiction of the Courts of Danzig, Advisory Opinion, (1928) P.C.I.J., Series B, No.
15, ............................................................................................................................ 6
5. Phosphates in Morocco (1938) P.C.I.J., Series A/B, No. 74, 10, 2526 ...................... 6
6. Serbian Loans Case (Serbia v. France), (1929) PCIJ. (Ser. A) Nos. 20/21 ................ 15
7. Treatment of Polish Nationals (1932) P.C.I.J., Series A/B, No. 44, 2425.................. 6

Other Decisions
1. Canevaro Claim (Italy/Peru), (1912) 11 RIAA 397 .................................................... 5
2. Chattin case, UNRIAA, vol. IV (Sales No. 1951.V.1), 282, 285286 (1927) ............. 7
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3. Compania NavieraVascongado v. Cristina SS [1938] AC 485, 496 ............................ 8
4. Consorzio Groupement L.E.S.I.DIPENTA v. Peoples Democratic Republic of
Algeria, ICSID Case No. ARB/03/8, Award, 72 ( Jan. 10, 2005) ............................. 9
5. Council of Europe, European Commission of Human Rights, Decisions and Reports,
vol. 9, 57 ................................................................................................................... 6
6. Difference Relating to Immunity from Legal Process of a Special Rapporteur of the
Commission on Human Rights (1999) I.C.J. Reports 62 ............................................ 6
7. Dispute concerning the interpretation of article 79 of the Treaty of Peace, ibid., vol.
XIII (Sales No. 64.V.3), 389, 438 (1955) .................................................................. 7
8. European Court of Human Rights, Series A,No. 102, 75 ILR 438 ..........................3,12
9. German External Debts Arbitration, (1980) ILM 19, 1357 ......................................... 2
10. ImpregiloS.p.A. v. Islamic Republic of Pakistan, (2005) ICSID Case No. ARB/03/3
11. Island of Palmas Case 22 AJIL (1928) 875 ................................................................ 7
12. Jalapa Railroad & Power Co. (U.S. v. Mex.), (1948) Am.-Mex. Cl. Rep. 538, 540... 11
13. Joy Mining Machinery Ltd. v. Arab Republic of Egypt, Jurisdiction, ICSID Case No.
ARB/03/11 43, 48, (Aug. 6, 2004) ........................................................................ 9
14. Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992) ................................ 11
15. Russian Indemnity case, UNRIAA, vol. XI (Sales No. 61.V.4), p. 421, at p. 446
(1912) ....................................................................................................................... 4
16. Salvador Commercial Company, UNRIAA, vol. XV (Sales No. 66.V.3), 455, 477
(1902) .................................................................................................................... 6,7
17. Societe Generale de Surveillance S.A. v. Pakistan, ICSID Case No.ARB/01/13 . 11
18. Southern Blue Fin Tuna (N.Z. & Australia v. Japan), 38 I.L.M. 1634 ...................... 13
19. Telstra Corporation Ltd v. Hornsby Shire Council [2006] NSWLEC 133 ................ 14
-viii-
20. The case concerning the Auditing of Accounts between the Netherlands and France,
arbitral award of 12 March 2004 ................................................................................ 3
21. The Iron Rhine (Belgium/Netherlands), arbitral award of 24 May 2005 ..................... 3
22. The M/V "SAIGA" (No. 2) Case (Saint Vincent and the Grenadines v. Guinea),
(1999) 120 ILR 143, 191 ......................................................................................... 16
23. X and Y v. Switzerland, application Nos. 7289/75 and 7349/76, 14 July 1977 ........... 6
24. Xhavara and Others v. Italy and Albania, application No. 39473/98, Eur. Court H.R.,
decision of 11 January 2001....................................................................................... 6

Books and Digests

1. BROWNLIE, PRINCIPLES OF PUBLIC INTERNATIONAL LAW (2003) ...........................2,12
2. CHERNOBYL AND THE SUPPLY OF NUCLEAR REACTORS IN OECD COUNTRIES (June,
1987) ........................................................................................................................ 3
3. CHRISTOPH H. SCHREUER, THE ICSID CONVENTION: A COMMENTARY (2001) .......9,10
4. EDWIN BORCHARD & WILLIAM H. WYNNE, STATE INSOLVENCY AND FOREIGN
BONDHOLDERS (1951) ............................................................................................. 11
5. FREDERICK POLLOCK & FREDERIC WILLIAMMAITLAND, THE HISTORY OF ENGLISH
LAW BEFORE THE TIME OF EDWARD I 207 (1899) ................................................... 11
6. I.A. SHEARER, STARKES INTERNATIONAL LAW (1994) ............................................ 12
7. J.P. COT, COUR INTERNATIONALE DE JUSTICE: AFFAIRE DU TEMPLE DE PRAH VIHAR,
ANNUAIRE FRANCAIS DE DROIT INTERNATIONAL 217 (1962) ................................... 5
8. JG STARKE, INTRODUCTION TO INTERNATIONAL LAW 202 (2005) ............................... 8
9. M. SORNARAJAH, THE INTERNATIONAL LAW ON FOREIGN INVESTMENT (2004) .... 10,12
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10. MALCOLM SHAW, INTERNATIONAL LAW 85 (5
th
ed. 2003) ......................................... 5
11. OPPENHEIMS INTERNATIONAL LAW 1271 (2008) ...................................................... 3
12. PARRY AND GRANT, ENCYCLOPAEDIC DICTIONARY OF INTERNATIONAL LAW 154
(2004) ....................................................................................................................... 5
13. ROLAND TIMERBAEV AND ABRAM IOIRYSH, INTERNATIONAL CO-OPERATION IN
NUCLEAR SAFETY, IN YEARBOOK OF INTERNATIONAL CO-OPERATION ON
ENVIRONMENT AND DEVELOPMENT 4953 (1999) ..................................................... 3
14. RUDOLF DOLZER AND CHRISTOPH H. SCHREUER, PRINCIPLES OF INTERNATIONAL
INVESTMENT LAW (2008) ........................................................................................ 10
15. SINCLAIR, VIENNA CONVENTION (2001) .................................................................... 3
16. ULF LINDERFALK, ON THE INTERPRETATION OF TREATIES: THE MODERN
INTERNATIONAL LAW AS EXPRESSED IN THE 1969 VIENNA CONVENTION ON THE LAW
OF TREATIES, ch. 7, 1 (2007) .................................................................................. 2
17. YEARBOOK OF THE ILC, vol. II, 223 (1966) .............................................................. 3

Articles and Commentaries

1. A.Fabra, The LOSC and the implementation of the Precautionary Principle, 10
YEARBOOK OF INTERNATIONAL ENVIRONMENTAL LAW 25(1999) ............................ 13
2. Brendan Moyles, Making the Precautionary Principle Work for Biodiversity:
Avoiding Perverse Outcomes in Decision-making Under Uncertainty, in
BIODIVERSITY AND THE PRECAUTIONARY PRINCIPLE 159, 172 (Rosie Cooney &
Barney Dickson eds., 2005) .................................................................................... 14
3. Brown, A Comparative and Critical Assessment of Estoppel in International Law, 50
UNIVERSITY OF MIAMI LAW REVIEW 369 (1996) ....................................................... 5
-x-
4. D.H. Johnson, The Case Concerning the Temple of PreahVihear, 11 INTERNATIONAL
AND COMPARATIVE LAW QUARTERLY 1183 (1962) ................................................... 5
5. David Freestone & Robin Churchill, The Precautionary Principle, in INTERNATIONAL
LAW AND GLOBAL CLIMATE CHANGE 21 (1991) ..................................................... 14
6. David Hunter, Principles and Concepts of International Environmental Law, in
INTERNATIONAL ENVIRONMENTAL LAW AND POLICY 463, (2007) ........................... 14
7. E.Hey, The Precautionary Concept in Environment Policy and Law :
Institutionalising Caution, 4 GEORGETOWN INTERNATIONAL ENVIRONMENTAL LAW
REVIEW 303(1992) .................................................................................................. 13
8. Gundling, The Status in International Law of the Principle of Precautionary Action, 5
INTERNATIONAL JOURNAL OF ESTUARINE AND COASTAL LAW 23 (1990)
................................................................................................................................ 14
9. Hans Wehberg, Pacta Sunt Servanda 53 AMERICAN JOURNAL OF INTERNATIONAL
LAW 775 (1959) ........................................................................................................ 2
10. Josef L. Kunz, The Meaning and The Range of The Norm PactaSuntServanda, 39
AMERICAN JOURNAL OF INTERNATIONAL LAW 180 (1945) ......................................... 2
11. Kelson, State Responsibility and the Abnormally Dangerous Activity, 13 HARVARD
INTERNATIONAL LAW JOURNAL 197 (1972) .................................................. 10
12. MacGibbon, Customary International Law and Acquiescence, 32 BRITISH YEARBOOK
OF INTERNATIONAL LAW115 (1957) .......................................................................... 5
13. Michael Waibel, Opening Pandoras Box: Sovereign Bonds in International
Arbitration, 101 AM. J. INTL L. 711 (2007) .............................................................. 9
14. O.Schachter, Recent Trends in International Law-Making, 12 AUSTRALIAN
YEARBOOK INTERNATIONAL LAW (1992) ................................................................. 10
15. Philip J. Power, Sovereign Debt: The Rise of the Secondary Market and Its
Implications for Future Restructurings,64 FORDHAM L. REV. 2701 (1996) .............. 10
-xi-
International Instruments

1. Agreement Between the Republic of Korea and Japan for the Liberalization,
Promotion and Protection of Investment, March 22, 2002, Treaty No. 17, Ministry of
Foreign Affairs Notification No. 430 (Japan)
2. Charter of the United Nations (1945)
3. Convention on Assistance in the Case of Nuclear Accident or Radiological
Emergency, (1986) INFCIRC/336
4. Convention on Early Notification of a Nuclear Accident, (1986) INFCIRC/335.
5. Draft Articles on Responsibility of States for Internationally Wrongful Acts, in Report
of the International Law Commission on Work of its Fifty-Third Session, UN General
Assembly Official Records, 56
th
session, Supplement No 10, December 12, 2001, UN
Doc. A/56/10.
6. European Convention of Human Rights, 213 UNTS 221
7. Guidelines for Mutual Emergency Assistance Arrangements in Connection With a
Nuclear Accident or Radiological Emergency, (1984) INFCRC/310
8. Harvard Draft Convention on the International Responsibility of States for Injuries to
Aliens
9. North American Free Trade Agreement, Dec. 17, 1992, Can.-Mex.-U.S., 32 ILM 289
(1993)
10. The Multilateral Agreement on Investment DAFFE/MAI (98) 17
11. United Nations Conference on the Law of Treaties, First and second sessions, Vienna,
26 March24 May 1968 and 9 April22 May 1969
12. Vienna Convention for the Protection of the Ozone Layer, Preamble, Mar. 22, 1985,
26 I.L.M. 1516 (1987) Document A/CONF.39/14
-xii-
13. Vienna Convention on the Law of Treaties, (27 January 1980), UN Doc A/Conf.
39/27,1155 UNTS 331
14. WTO, Report of the Panel, Turkey: Restrictions on Imports of Textile and Clothing
Products (WT/DS34/R), 31 May 1999
15. Year book of the European Convention on Human Rights, 1977, vol. 20 (1978), 372

-xiii-
STATEMENT OF JURISDICTION

The Federal States of Amuko and The Republic of Rentiers submit the following
dispute to the International Court of Justice (ICJ). The International Court of Justice
has contentious jurisdiction over this case based on the Special Agreement of the
parties dated June 6, 2011 and in accordance with Articles 36 and 40 of the Statute of
the International Court of Justice.
Article 36 provides jurisdiction over matters referred by parties to the Court. Further
pursuant to Article 40, paragraph 1 of the Statute of the ICJ, States may bring cases
before the Court either by the notification of the special agreement or by a written
application addressed to the Registrar. [Statute of the International Court of Justice,
arts. 36 & 40(1), T.S. No. 933 (1945).]
The parties signed a special agreement to submit their dispute to the Registrar of the
Court [See Special Agreement Between The Federal States of Amuko and The
Republic of Rentiers for Submission to the International Court of Justice, signed at
Granada, Spain, on 6 June 2011]. The Registrar acknowledged receipt of the joint
notification on 20 June 2011.

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QUESTIONS PRESENTED

1. WHETHER REPUBLIC OF RENTIERS IS LIABLE TO REIMBURSE/ COMPENSATE AMUKO
FOR ANY OF THE EXPENSES INCURRED.
2. WHETHER RESTRUCTURING OF SOVEREIGN BONDS BY RENTIERS ENTAIL ANY
RESPONSIBILITY UNDER INTERNATIONAL LAW.

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STATEMENT OF FACTS
The Federal States of Amuko and the Republic of Rentiers, both industrialized nations, are
neighbouring states. Nuclear energy constitutes 25% of Amukos electricity production and
75% of Rentiers electricity production. The Diablo canyon fault line runs through the centre
of Rentiers around which some of the nuclear power plants are built. Investment companies
in Amuko had purchased approximately 3 billion tenge worth of sovereign bonds issued by
Rentiers, the maturity date for the bonds being 30
th
November,2010.
Amuko and Rentiers are Members of the United Nations, IAEA; parties to the Statute of the
ICJ, VCLT, IAEA, CENNA, CACNARE, Joint Convention and CBD. Amuko and Rentiers
are also parties to RABBIT, a bilateral treaty on investment dealing with issues like
expropriation among other things.
On 5 February 2010, a catastrophic earthquake struck the territory of Rentiers along the
Diablo Canyon fault damage to many nuclear reactors among other losses. Due to a rupture in
the spent fuel pool in the nuclear plant, the fuel rods had to be removed thus Rentiers
requested assistance from Amuko to remove such fuel rods and transport them to a safer
facility.
On 12 February 2010, the AME removed the fuel rods and were transporting them to Amuko,
when due to the negligence of the driver one of the trucks met with an accident near
Robelynch. The driver and one security guard, both AME employees, were killed due to the
trauma of the accident. As a result of the accident, the fuel rod casings burnt, releasing
radioactive gases and particles into the environment forcing the authorities to evacuate
Robelynch. On 26 February 2010, the Amuko Congress established a compensation fund for
people affected by the accident.
-xvi-
Amuko requested Rentiers to fully reimburse Amuko for the compensation program.
Rentiers rejected the claim and subsequent negotiations failed.
On 17 September 2010, the RNRA ordered a rapid closure of 5 power plants along the Diablo
canyon which resulted in the economy of Rentiers taking a major hit. On 24 November 2010,
Rentiers President Niall Ferguson stated that Rentiers might default on its sovereign bonds.
On 1 December 2010, Rentiers enacted the Fresh Start Act, a debt restructuring law. The Act
provided that investors would receive 10% of what they would otherwise be entitled to. The
law applied equally to all bondholders, domestic or foreign. Dispute between both parties led
to an agreement being signed to submit the present matter before ICJ.

-xvii-
SUMMARY OF ARGUMENTS
I. Rentiers is not liable to compensate Amuko for any of the expenses incurred
because Firstly, Rentiers doesnt have any obligation to compensate Amuko under
the assistance convention, article 10 of which restricts liability to any damage
suffered within its territory. Thus the literal interpretation given by Rentiers
doesnt defeat the object and purpose of the convention. Secondly, the actions of
the Amuko congress amount to waiver of its right to ask for compensation. Thus,
amuko is precluded under the doctrines of estopples and acquiescence from
demanding compensation. Thirdly, under the customary international law Amuko
is not entitled for any compensation from Rentiers as conduct of AME employees
is not attributable to Rentiers as there was no direction and control of the
requesting state. Thus the act of AME is attributable to Amuko. Lastly, the
accident took place in the territory of Amuko thus wrongfulness cannot be
attributed to Rentiers.
II. Rentiers is not liable to pay compensation because Firstly, Sovereign Bonds are
not covered by the Bilateral Investment Treat - RABBIT. Secondly, a default on
Sovereign Bonds does not entail the international responsibility of a state. Thirdly,
the debt restructuring does not amount to expropriation. Fourthly, the fault lines
always existed, the fact that they were active came to light only after the
earthquake. Thus Rentiers is not precluded from applying Precautionary Principle.
Further, the closing of power plants, which led to the default and restructuring
was necessary for Rentiers to safeguard an essential interest from a grave and
imminent peril. Lastly, Rentiers can invoke force majeure to preclude the alleged
wrongfulness of any action and hence Rentiers is not liable to pay compensation.

-1-
ARGUMENTS

I. REPUBLIC OF RENTIERS IS NOT LIABLE TO REIMBURSE/ COMPENSATE AMUKO FOR
ANY OF THE EXPENSES INCURRED.
It is most humbly submitted that the Republic of Rentiers has performed its obligations in
good faith
1
by notifying other countries of the imminent danger posed by the earthquake in
accordance with the Early Notification Convention
2
. Additionally, Rentiers is not responsible
for any damage that ensues outside its territory. Thus, Rentiers cannot be held liable for
damage caused to Amuko and is hence not liable to bear compensation.

[I.A] RENTIERS IS NOT OBLIGATED TO COMPENSATE AMUKO UNDER THE
ASSISTANCE CONVENTION
The Assistance Convention obligates the requesting party to compensate the assisting party
for losses in the course of providing assistance only when such damage has incurred within
its territory.
3
In the instant case, as this requirement stands unfulfilled Rentiers is not
obligated to compensate Amuko.
I.A.1. ANY RESPONSIBILITY FOR COMPENSATION IS LIMITED TO DAMAGES
SUFFERED WITHIN THE TERRITORY OF THE REQUESTING STATE.

1
Charter of the United Nations art 2(2) (1945); Nuclear Test Cases (Newzealand v. France), (1974) ICJ Reports
473, 488; Hans Wehberg, PactaSuntServanda 53 AMERICAN JOURNAL OF INTERNATIONAL LAW 775 (1959);
Josef L. Kunz, The Meaning and The Range of The Norm PactaSuntServanda, 39 AMERICAN JOURNAL OF
INTERNATIONAL LAW 180 (1945); Josef L. Kunz, The Nature of Customary Law, 47 AMERICAN JOURNAL OF
INTERNATIONAL LAW 662 (1953).
2
Convention on Early Notification of a Nuclear Accident, art 2, 5, (1986) INFCIRC/335.

3
Convention on Assistance in the Case of Nuclear Accident or Radiological Emergency, art 10, (1986)
INFCIRC/336.

-2-
It is submitted that the requesting state bears no responsibility for any death or injury or loss
caused outside its territory.
4
Additionally, the responsibility entailing overall direction and
control of such assistance of the requesting state is further limited to within its territory.
5
A
literal interpretation of a treaty in the context of what it should ordinarily mean is in absolute
compliance with the object and purpose of a convention.
6
In the present case, Rentiers relied
on a literal interpretation of Article 10 which is in accordance with Article 31 of the Vienna
Convention,
7
and hence the interpretation is not restrictive or in violation of the object and
purpose of the Assistance Convention. Hence, Rentiers cannot be held liable according to the
provisions of the Assistance Convention.

I.A.2.THE INTERPRETATION GIVEN BY RENTIERS DOES NOT DEFEAT THE OBJECT
AND PURPOSE OF THE CONVENTION.
It is submitted that the general rule of treaty interpretation highlights three sources in which
practitioners may seek the meaning of a treaty;
8
the treatys terms, the context of those terms,
and the treatys object and purpose.
9
Further, Object and purpose appears to be a unitary
concept referring to the goals that the drafters of the treaty hoped to achieve.
10
Judicial

4
Convention on Assistance in the Case of Nuclear Accident or Radiological Emergency, art 10, (1986)
INFCIRC/336.

5
Ibid.

6
LaGrand Case (F.R.G. v. U.S.), (2001) I.C.J. 466 (June 21) (The Court will therefore now consider the object
and purpose of the Statute together withthe context of Article 41.); Reservations to Convention on Prevention
and Punishment of Crime of Genocide, Advisory Opinion, (1951) I.C.J. Reports 15 (May 28) (discussing the
object and purpose of the Genocide Convention).

7
Vienna Convention on the Law of Treaties, (27 January 1980), art. 31, UN Doc A/Conf. 39/27,1155 UNTS 331

8
BROWNLIE, PRINCIPLES OF PUBLIC INTERNATIONAL LAW 604-07 (1966); ULF LINDERFALK, ON THE
INTERPRETATION OF TREATIES: THE MODERN INTERNATIONAL LAW AS EXPRESSED IN THE 1969 VIENNA
CONVENTION ON THE LAW OF TREATIES, ch. 7, 1 (2007).

9
Supra note 7.

10
Supra note 8.

-3-
decisions have given due importance to the object and purpose while interpreting various
treaties.
11
It may be further appreciated that in order to completely understand the object and
purpose behind a treaty and draw a better understanding of the terms of the treaty it is
essential to look at the travaux preparatoires of the said treaty.
12

It is submitted that though the assistance convention was established to provide prompt
assistance in the case of a nuclear emergency, the liability of any accident that took place
outside the territory of the requesting state still rests on the assisting state.
13
The preparatory
material to the assistance convention,
14
clearly state that the liability of the requesting state
arising out of any accident is restricted to within its territory.
15
This clearly goes to show that
the intention of the parties while drafting the treaty was to restrict the liability of the
requesting state to any accident arising within its territory only.

11
Asylum Case (Peru v. Columbia), (1950) ICJ Reports 226, 275, 282; Rights of Nationals of the USA in
Morocco, (1952) ICJ Reports 176, 196; La Grand case, (2001) ICJ Reports 466; German External Debts
Arbitration, (1980) ILM 19, 1357, 1377; Genocide Convention (Bosnia v. Serbia) case, (2007) ICJ Reports 213,
160; Indonesia/Malaysia case, (2002) ICJ Reports 625, 645; The Botswana/Namibia case, (1999) ICJ Reports
1045; The Libya/Chad case, (1994) ICJ Reports 6, 212; Qatar v. Bahrain case, (1995) ICJ Reports 6, 18; The
case concerning the Auditing of Accounts between the Netherlands and France, arbitral award of 12 March
2004, 59; The Iron Rhine (Belgium/Netherlands), arbitral award of 24 May 2005, 45; OPPENHEIMS
INTERNATIONAL LAW 1271 (2008).

12
La Grand case, (2001) ICJ Reports 466; River Oder case, PCIJ, Series A, No. 23, 1929; that the
travauxpreparatoires of certain provisions of theTreatyofVersailles could not be taken into account since three
of the states before the Court had not participated in the preparatory conference; Young Loan case, 1959 ILR
495, 5445; SINCLAIR, VIENNA CONVENTION 1417 (2001); Lithgow case, European Court of Human Rights,
Series A, No. 102, 117; Libya/Chad case, (1994) ICJ Reports 6, 27; Qatar v. Bahrain case, (1995) ICJ Reports
6, 2, the International Court held that while it was not necessary to have recourse to the travaux preparatoires to
elucidate the content of the instruments in question, it could turn to them to confirm its reading of the text;
Construction of a Wall advisory opinion, (2004) ICJ Reports 136, 174.

13
ROLAND TIMERBAEV AND ABRAM IOIRYSH, INTERNATIONAL CO-OPERATION IN NUCLEAR SAFETY, IN YEARBOOK
OF INTERNATIONAL CO-OPERATION ON ENVIRONMENT AND DEVELOPMENT 4953 (1999); CHERNOBYL AND
THE SUPPLY OF NUCLEAR REACTORS IN OECD COUNTRIES (June, 1987).

14
Vienna Convention on the Law of Treaties, (27 January 1980), art. 32, UN Doc A/Conf. 39/27,1155 UNTS
331, travauxpreparatoires serve as a supplementary means of interpretation; Qatar v. Bahrain, (1995) ICJ
Reports 6, 21; Lithgow case, European Court of Human Rights, Series A,No. 102, 75 ILR 438, 484; Libya/Chad
case, (1994) ICJ Reports 6, 27; Construction of a Wall advisory opinion, (2004) ICJ Reports 136, 174;
YEARBOOK OF THE ILC, vol. II, 223 (1966).

15
Guidelines for Mutual Emergency Assistance Arrangements in Connection With a Nuclear Accident or
Radiological Emergency, (1984) INFCRC/310.

-4-
[I.B] ARGUENDO, RENTIERS IS PRECLUDED FROM ASSUMING ANY RESPONSIBILITY
BECAUSE OF THE CONDUCT OF AMUKO CONGRESS.

I.B.1. THE ACTIONS OF AMUKO CONGRESS AMOUNT TO WAIVER OF ITS RIGHT
TO ASK FOR COMPENSATION.
It is submitted that it is the duty of the requesting State to assume responsibility for dealing
with legal proceedings and claims brought by third parties against the assisting party.
16

However, according to Article 45 of ILC Draft Articles on State Responsibility
17
a valid
waiver or settlement of the responsibility between the responsible State and the injured State
precludes any claim for reparation.
18
Waiver may be inferred from the conduct of the States
concerned or from a unilateral statement
19
, provided the conduct or statement must be
unequivocal.
20
By enacting the legislation for providing compensation to persons affected in
the accident, Amuko assumed responsibility, establishing a waiver of its right to seek
compensation from Rentiers.

16
Ibid, art 10.

17
Draft Articles on Responsibility of States for Internationally Wrongful Acts, in Report of the International
Law Commission on Work of its Fifty-Third Session, UN General Assembly Official Records, 56
th
session,
Supplement No 10, art 45, December 12, 2001, UN Doc. A/56/10.

18
Russian Indemnity case, UNRIAA, vol. XI (Sales No. 61.V.4), p. 421, at p. 446 (1912); Ibid.

19
Certain Phosphate Lands in Nauru (Nauru v. Australia), Preliminary Objections, Judgment, (1992) I.C.J.
Reports 240, 253255, 3136.

20
Ibid.

-5-
I.B.2.AMUKO IS PRECLUDED FROM CLAIMING COMPENSATION UNDER THE
DOCTRINES OF ESTOPPLE AND ACQUIESCENCE.
The principle of estoppel holds that a party that has acquiesced in a particular situation cannot
then proceed to challenge it.
21
Further, Acquiescence,
22
has been defined as silence or absence
of protest in circumstances generally calling for a positive reaction of objection.
23
When
States acquiesce to the conduct of other states, the assumption is that such behaviour is
accepted, and such State cannot subsequently claim against such conduct.
24
Under Article 10
of the Assistance Convention it was the responsibility of Rentiers and not Amuko, to deal
with the claims of the third parties. Under such a circumstance Amuko should have asked for
compensation from Rentiers and is now precluded from claiming re-imbursement.

[I.C] UNDER CUSTOMARY INTERNATIONAL LAW, AMUKO IS NOT ENTITLED TO ANY
COMPENSATION FROM RENTIERS.

I.C.1 CONDUCT OF AME EMPLOYEES CAN NOT BE ATTRIBUTABLE TO RENTIERS

21
Temple of PreahVihear case (1962) ICJ Reports 6; Right of Passage case (1957) ICJ Reports 125, 141-142;
Cameroon v. Nigeria, (1998) ICJ Reports 275, 303; ICAO Council case, (1972) ICJ Reports, 46; D.H. Johnson,
The Case Concerning the Temple of PreahVihear, 11 INTERNATIONAL AND COMPARATIVE LAW QUARTERLY
1183 (1962); J.P. COT, COURINTERNATIONALE DE JUSTICE: AFFAIRE DU TEMPLE DE PRAHVIHAR,
ANNUAIREFRANCAIS DE DROIT INTERNATIONAL 217 (1962); Brown, A Comparative and Critical Assessment of
Estoppel in International Law, 50 UNIVERSITY OF MIAMI LAW REVIEW 369 (1996); PARRY AND GRANT,
ENCYCLOPAEDIC DICTIONARY OF INTERNATIONAL LAW 154 (2004); Canevaro Claim (Italy/Peru), (1912) 11
RIAA 397.

22
MacGibbon, Customary International Law and Acquiescence, 32 BRITISH YEARBOOK OF INTERNATIONAL
LAW115 (1957);

23
Delimitation of the Maritime Boundary in the Gulf of Maine Area, (Gulf of Maine Case), (1984) ICJ Reports
305; Frontier Dispute, (1986) ICJ Reports 597.

24
Gulf of Maine Case (1984) ICJ Reports 246; Anglo-Norwegian Fisheries Case, (1951) ICJ Reports 116;
MALCOLM SHAW, INTERNATIONAL LAW 85 (5
th
ed. 2003).

-6-
It is the most humble submission that Article 6
25
envisages a situation in which an organ of a
State is put in effective control of another State for its temporary benefit. The notion of an
organ placed at the disposal of another State excludes the case of State organs, sent to
another State for the purposes of the former State or even for shared purposes, which retain
their own autonomy and status including cultural missions, diplomatic or consular missions,
foreign relief or aid organizations.
26

It is submitted that the conduct of such an organ must involve the exercise of elements of the
governmental authority of the receiving State.
27
Additionally, such organ placed at the
disposal of a State must be acting in the exercise of elements of the governmental authority
of the receiving State.
28

Therefore as was no direction or control over AME by Rentiers at the time of removal of
fuel rods, there was no exercise of governmental authority by Rentiers over AME.
29
Thus the
conduct of AME employees cannot be attributed to Rentiers.

I.C.2 THE ACTS OF AME IS ATTRIBUTABLE TO AMUKO.
It may be noted that by virtue of Article 4
30
the principle of the unity of the State entails that
the acts or omissions of all its organs should be regarded as acts or omissions of the State for

25
Supra note 17.

26
Supra note 17; The conduct of Italy in policing illegal immigration at sea pursuant to an agreement with
Albania was not attributable to Albania: Xhavara and Others v. Italy and Albania, application No. 39473/98,
Eur. Court H.R., decision of 11 January 2001. Conversely, the conduct of Turkey taken in the context of the
Turkey-European Communities customs union was still attributable to Turkey; WTO, Report of the Panel,
Turkey: Restrictions on Imports of Textile and Clothing Products (WT/DS34/R), 31 May 1999, 9.339.44.

27
Ibid.

28
X and Y v. Switzerland, application Nos. 7289/75 and 7349/76, 14 July 1977; Council of Europe, European
Commission of Human Rights, Decisions and Reports, vol. 9, 57; Year book of the European Convention on
Human Rights, 1977, vol. 20 (1978), 372, 402406.

29
Ibid.

30
Supra note 17.

-7-
the purposes of international responsibility.
31
Elaborating, in Salvador Commercial Company
case, the tribunal held that; a State is responsible for the acts of its rulers, whether they
belong to the legislative, executive, or judicial department of the Government, so far as the
acts are done in their official capacity.
32

Thus, it is lucid that the accident which took place because of the negligent act can only be
solely attributed to Amuko, as it was done by an AME employee.
33
Also the doctrine of clean
hands provides that a State may not benefit itself from its own wrongful act.
34

Further, Article 20 of draft articles
35
provides for consent by a State to particular conduct by
another State precludes the wrongfulness of that act in relation to the consenting State,
provided the consent is valid.
36
Therefore consent given by Rentiers though as a matter of
request to Amuko for removal of nuclear fuel rods was a valid consent and any wrongful act
committed during the removal of fuel rods thereby cannot be imputed to Rentiers.

I.C.3 THERE WAS NO DIRECTION AND CONTROL IN AMUKOS TERRITORY.
(I.C.3.a)ACCIDENT TOOK PLACE IN THE TERRITORY OF AMUKO.

31
Difference Relating to Immunity from Legal Process of a Special Rapporteur of the Commission on Human
Rights (1999) I.C.J. Reports 62, 87, 62; Treatment of Polish Nationals (1932) P.C.I.J., Series A/B, No. 44, 24
25; Phosphates in Morocco (1938) P.C.I.J., Series A/B, No. 74, 10, 2526; Rights of Nationals of the United
States of Americain Morocco, (1952) I.C.J. Reports 176, 193194; As to executive acts: Military and
Paramilitary Activities in and against Nicaragua (1986) I.C.J. Report 14; Elettronica Sicula S.p.A. (ELSI)
(1989) I.C.J. Reports 15; As to judicial acts: Lotus (1927) P.C.I.J.,Series A, No. 10, 24; Jurisdiction of the
Courts of Danzig, Advisory Opinion, (1928) P.C.I.J., Series B, No. 15, 2627; Ambatielos,Merits, Judgment,
(1953) I.C.J. Reports 10, 2122; Application of the Convention of 1902 Governing the Guardianship of Infants,
Judgment, (1958) I.C.J. Reports 55, 67.

32
Salvador Commercial Company, UNRIAA, vol. XV (Sales No. 66.V.3), 455, 477 (1902); Chattin case,
UNRIAA, vol. IV (Sales No. 1951.V.1), 282, 285286 (1927); Dispute concerning the interpretation of article
79 of the Treaty of Peace, ibid., vol. XIII (Sales No. 64.V.3), 389, 438 (1955).

33
Record 21.

34
Factory at Chorzw, Jurisdiction, Judgment No. 8, (1927) P.C.I.J., Series A, No. 9, 21, 31; Gabkovo-
Nagymaros Project case, (Hung. v. Slovk.) (1997) ICJ Reports 7.

35
Supra note 17.

36
Official Records of the Security Council, Fifteenth Year, 873rd meeting, 1314 July 1960.
-8-
It is hereby submitted, that sovereignty is the right to exercise therein, to the exclusion of any
other state, the functions of a state.
37
A state has jurisdiction over property, persons, acts or
events occurring within its territory.
38

Hence, a state has no jurisdiction over any person or property in the territory of another state,
when such person or property associated with a particular conduct that has the authority of
government of the other state.
39

Article 3(b) of assistance convention
40
provides for the protection of personnel, equipment
and materials brought into its territory by or on behalf of the assisting party for such purpose
by the requesting state.
41
However from the language of the article brought into its
territory; such protection of personnel, equipment or material is restricted only to the
territory of the requesting state
42
and once it enters into the territory of the assisting state
43
, it
becomes the duty of the assisting state to protect the personnel and materials.
Therefore for an accident which took place within the territory of the Amuko due to the
negligent act of AME employees, wrongfulness cannot be attributed to Rentiers.

37
Western Sahara Case, (1975) I.C.J. 12; Island of Palmas Case 22 AJIL (1928) 875.

38
JG STARKE, INTRODUCTION TO INTERNATIONAL LAW 202 (2005); Compania NavieraVascongado v. Cristina
SS [1938] AC 485, 496.

39
JG STARKE, ibid.

40
Supra note 3, art 3.

41
Ibid.

42
Ibid.

43
Record 21.
-9-
II. RESTRUCTURING OF SOVEREIGN BONDS BY RENTIERS DOES NOT ENTAIL ANY
RESPONSIBILITY UNDER INTERNATIONAL LAW.
It is most humbly submitted that Amuko and Rentiers being parties to Rentiers-Amuko
Bilateral Business Investment Treaty (hereinafter referred to as RABBIT)
44
are under
obligation not to take any measure of expropriation, nationalization, or other measures so
equivalent without just compensation.
45
Rentiers submit that its actions do not amount to a
violation of its obligation under RABBIT.

[II.A] DEFAULT ON SOVEREIGN BONDS DOES NOT VIOLATE THE PROVISIONS OF
RABBIT.
II.A.1.SOVEREIGN BONDS ARE NOT COVERED BY THE BILATERAL INVESTMENT
TREAT - RABBIT
It is most humbly submitted that a fine line of distinction exists between a sovereign bond
and an investment given the fact that there is no sharing of commercial risk as sovereign
bonds are tied to the general macroeconomic condition of the county,
46
an absence of
territorial link with the host country in the form of physical assets
47
and the lack of
association with a commercial undertaking.
48
Additionally, sovereign bonds are bought on

44
Record 12.
45
Record 13; RABBIT Art 10.
46
Joy Mining Machinery Ltd. v. Arab Republic of Egypt, Jurisdiction, ICSID Case No. ARB/03/11 43, 48,
(Aug. 6, 2004)

47
Consorzio Groupement L.E.S.I.DIPENTA v. Peoples Democratic Republic of Algeria, ICSID Case No.
ARB/03/8, Award, 72 ( Jan. 10, 2005).

48
Michael Waibel, Opening Pandoras Box: Sovereign Bonds in International Arbitration, 101 AM. J. INTL L.
711, 744, 746 (2007).

-10-
the secondary market without formal or other specific relationship with the debtor
government.
49

In this regard it may be noted that the definition of Investment lacks a universally accepted
meaning.
50
Investment Treaties themselves define their scope rationemateriae.
51
BITs may
use various definitions of investments, which are independent of the any pre-determined
criteria.
52
Some BITs include sovereign bonds,
53
while others explicitly exclude sovereign
bonds,
54
with party freedom being the foremost obligation.
55

It is submitted that the Sovereign Bonds are beyond the scope of the definition of
investment under RABBIT as they are merely country debt instruments acknowledging

49
In the secondary market for sovereign debt, loans and bonds are exchanged between buyer and seller, often at
substantial discounts from their face value. These discounts reect the likelihood of eventual repayment. The
rise of secondary markets since 1980 has provided incentives to buy below par and pursue litigation for full
principal and interest, Philip J. Power, Sovereign Debt: The Rise of the Secondary Marketand Its Implications
for Future Restructurings,64 FORDHAM L. REV. 2701, 271519 (1996).
50
M. SORNARAJAH, THE INTERNATIONAL LAW ON FOREIGN INVESTMENT 918 (2004); CHRISTOPH H.
SCHREUER, THE ICSID CONVENTION: A COMMENTARY, 80, 89 (2001); RUDOLF DOLZER AND CHRISTOPH H.
SCHREUER, PRINCIPLES OF INTERNATIONAL INVESTMENT LAW 60 (2008).
51
RUDOLF DOLZER AND CHRISTOPH SCHREUER, Ibid.
52
M. SORNARAJAH, supra note 50.
53
The 2004 U.S. Model BIT, http://www.ustr.gov/assets/Trade_Sectors/Investment/Model_BIT/
asset_upload_file847_6897.pdf (last accessed on July 21, 2011), covers, among others, bonds, debentures,
other debt instruments, and loans; JapanSouth Korea BIT, Every kind of asset . . including . . . bonds,
debentures, loans, and other forms of debt as well as rights under contracts; Agreement Between the Republic
of Korea and Japan for the Liberalisation, Promotion and Protection of Investment, art. 1(2), March 22, 2002,
Treaty No. 17, Ministry of Foreign Affairs Notification No. 430 (Japan).
54
Treaty between the United States of America and Bahrain Concerning the Encouragement and Reciprocal
Protection of Investment, with Annex, art. 1(d)(2), Sept. 29, 1999, S. TREATY DOC.NO. 106-25 (2000). The
North American Free Trade Agreement includes debt securities and loans of enterprises. Public issuers are
explicitly excluded; North American Free Trade Agreement, art. 11.39, Dec. 17, 1992, Can.-Mex.-U.S., 32 ILM
289 & 605 (1993); The Canadian Model BIT, athttp://ita.law.uvic.ca/documents/Canadian2004-FIPA-model-
en.pdf (last accessed on Aug 23, 2011), excludes debt instruments issued by public entities.
55
North Sea Continental Shelf Case, (1969) ICJ Reports 3; Kelson, State Responsibility and the Abnormally
Dangerous Activity, 13 HARVARD INTERNATIONAL LAW JOURNAL 197 (1972); O. Schachter, Recent Trends in
International Law-Making, 12 AUSTRALIAN YEARBOOK INTERNATIONAL LAW (1992).
-11-
indebtedness and promising repayment of principal and interest on an earlier advance of
money.
56

RABBIT being signed with the objective of regulating investments, will not be applicable on
any form of transaction but investments.
57
Therefore, Sovereign Bonds do not fall within the
scope of RABBIT.

II.A.2.DEFAULT ON SOVEREIGN BONDS DOES NOT ENTAIL THE INTERNATIONAL
RESPONSIBILITY OF A STATE.
It is hereby submitted that the question of liability should be addressed in the context of the
nature of the act of State,
58
i.e. whether the State has acted in a commercial or sovereign
capacity.
59
A violation of a contract entered into by a State with an investor of another State,
is not, a violation of international law, per se.
60
The issuance of sovereign bonds is a
commercial activity.
61
Consequently, even a restructuring of sovereign bonds is a commercial
activity as this governmental measure is connected to the issuance of such bonds.
62
Thus, the

56
EDWIN BORCHARD& WILLIAM H. WYNNE, STATE INSOLVENCY AND FOREIGN BONDHOLDERS 23 (1951);
FREDERICK POLLOCK & FREDERIC WILLIAMMAITLAND, THE HISTORY OF ENGLISH LAW BEFORE THE TIME OF
EDWARD I 207 (1899).
57
Record 13

58
Ibid.

59
Jalapa Railroad & Power Co. (U.S. v. Mex.), (1948) Am.-Mex. Cl. Rep. 538, 540, a legislative act declaring
a particular clause in a contract null and void could not be interpreted as an ordinary breach of contract; rather,
the government stepped out of its role as contracting party and, by exercising its sovereign powers, sought to
escape its obligations under the contract; ImpregiloS.p.A. v. Islamic Republic of Pakistan, (2005) ICSID Case
No. ARB/03/3, Jurisdiction, 26.

60
Societe Generale de Surveillance S.A. v. Pakistan, ICSID Case No.ARB/01/13, Objections to Jurisdiction,
. 167 (Aug. 6, 2003) [hereinafter SGS-Pakistan Jurisdiction Decision], 18 ICSID REV. 301 (2003)

61
Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992)

62
Ibid; The U.S. Supreme Court held that the issuance of sovereign bonds was commercial activity under the
Foreign Sovereign Immunities Act of 1976. Even a suspension of payments for the purposes of stabilizing
Argentinas economy was commercial activity, Exclusion of sovereign bonds from BIT.

-12-
States act being a purely commercial act; does not entail the International Responsibility of
the State.
63

II.A.3. ARGUENDO, RENTIERS ACTION DOES NOT AMOUNT TO EXPROPRIATION
IN CONTRAVENTION OF RABBIT.
Every deprivation of the property or right of an investor does not amount to expropriation
64
.
A State may lawfully exercise its power of government affecting foreign interests
considerably without amounting to expropriation
65
. Mere effect on the interest of investors
should not be the sole criteria for determining whether expropriation has taken place or not;
the nature of the governmental action should also be seen
66
. It is submitted that where an
economic injury results from a bona fide non-discriminatory regulation within the power of
the State and in the general public interest
67
, compensation is not required
68
. Further, for

63
IA SHEARER, STARKES INTERNATIONAL LAW298 (1994)

64
"INDIRECT EXPROPRIATION AND THE RIGHT TO REGULATE IN INTERNATIONAL INVESTMENT LAW, OECD
DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS WORKING PAPERS ON INTERNATIONAL INVESTMENT
Number 2004/4; I. BROWNLIE, PRINCIPLES OF PUBLIC INTERNATIONAL LAW 509 (2003)

65
M. SORNARAJAH, THE INTERNATIONAL LAW ON FOREIGN INVESTMENT 283 (1994)

66
S.D. Myers case, US-Australia Free Trade Agreement signed on March 1, 2004, [Annex 11-B, Article 4(b)];
The US-Chile Free Trade Agreement was signed on June 6, 2003 (Annex 10-D); US-Central America Free
Trade Agreement (CAFTA) signed on January 28, 2004, (Annex 10-C); The Central American countries are:
Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua; US-Morocco Free Trade Agreement signed on June
15, 2004 (Annex 10-B); US Trade representative Robert Zoellick to Singapore Minister of Trade and Industry,
George Yeo on 6 May, 2003.

67
Article 3 of the OECD Draft Convention on Foreign Property, 12 October 1967 pp. 23-25.; Restatement of
the Law Third, the Foreign Relations of the United States, American Law Institute, Volume 1, 1987, Section
712, Comment g.; The Multilateral Agreement on Investment (Report by the Chairman of the Negotiating
Group) DAFFE/MAI(98)17, 4 May 1998, available at http://www1.oecd.org/daf/mai/pdf/ng/ng9817e.pdf,
Article 3, Interpretative note to Article 5 Expropriation and Compensation; D.J. Harris et al., referring to the
jurisprudence of the European Court of Human Rights in the Law of the European convention on Human
Rights, (1995) at 535;

68
European Convention of Human Rights are included in Article 1 of Protocol 1, concluded in 1952 and entered
into force in 1954

-13-
something to amount to expropriation the act of the State must be unreasonable with an
intention to wrongfully deprive the owner of his rights
69
.
Therefore, devaluation of the sovereign bonds was not in any way unreasonable or a mala
fide use of general State power. The damage caused by the earthquake and closure of nuclear
plants compelled Rentiers to restructure the bonds in the interest of its population. Further, in
Oscar Chinn case the PCIJ States that favourable business conditions are transient
circumstances, subject to inevitable changes
70
. In such circumstances if the investors suffer
any loss, it should not be considered as an expropriatory act.

[II.B.] RENTIERS IS NOT PRECLUDED FROM APPLYING PRECAUTIONARY
PRINCIPLE.
It is hereby submitted that Precautionary Principle being an accepted principles of
International Environmental Law,
71
has been implemented in state practice,
72
judicial
opinions
73
and international instruments
74
satisfying the requirements of qualification for
customary international law.

69
Harvard Draft Convention on the International Responsibility of States for Injuries to Aliens, art.10 (5), 1961.

70
1934 PCIJ (ser. A/B) No. 63 (Dec. 12).

71
, Nuclear Tests Case, Dissenting Opinion of Justice Weeramantry, (1995) ICJ Reports 342-4; Southern
Bluefin Tuna Case, ITLS, 27
TH
August, 1999, ILR 117; Principle 15, 1992 Rio Declaration on Environment and
Development; E.Hey, The Precautionary Concept in Environment Policy and Law : Institutionalising Caution,
4 GEORGETOWN INTERNATIONAL ENVIRONMENTAL LAW REVIEW 303(1992), A.Fabra, The LOSC and the
implementation of the Precautionary Principle, 10 YEARBOOK OF INTERNATIONAL ENVIRONMENTAL LAW
25(1999); WSSD Plan of Implementation, 22 and 103.
72
Gabcikovo-Nagymaros Project Case, (1997) ICJ Reports 7.

73
Southern Blue Fin Tuna (N.Z. & Australia v. Japan), 38 I.L.M. 1634, 77-80 (1999); Nuclear Tests (N.Z. v.
Fr.), (1995) I.C.J. 342, 412.; Beef Hormones, WT/DS26/R/USA, August 18, 1997; Agricultural Products,
36WT/DS76/AB/R 22 February 1999; MOx Plant. Case and Land Reclamation Case (ITLOS, 2003)

74
Vienna Convention for the Protection of the Ozone Layer, Preamble, Mar. 22, 1985, 26 I.L.M. 1516 (1987)

-14-
The Principle is intended to make States take action to avoid harm before it occurs
75
and is
further understood to provide that, the greater the possible harm, the more rigorous the
requirements of alertness, precaution and effort.
76
The precautionary principles primary
goal, is to avoid irreversible environmental harm,
77
is undermined by requiring the state to
wait for proof of a strategys safety.
78
Hence, a state cannot forgo an opportunity to obtain
environmental benefits simply because there are potential harms associated with the
action.
7980

The application of such principle is triggered by two conditions precedent: the threat of
serious harm; and a lack of scientific evidence as to the effects of the methods used to address
the threat. These threats are cumulative in application but once satisfied, the principle may be
applied.
81
Precautionary measures may be adopted when there are reasonable grounds for
concern or when there are valid reasons to consider that there may be a risk.
82

75
David Hunter, Principles and Concepts of International Environmental Law, in INTERNATIONAL
ENVIRONMENTAL LAW AND POLICY 463, 510 (2007).

76
David Freestone & Robin Churchill, The Precautionary Principle, in INTERNATIONAL LAW AND GLOBAL
CLIMATE CHANGE 21, 36 (1991).

77
Brendan Moyles, Making the Precautionary Principle Work for Biodiversity: Avoiding Perverse Outcomes in
Decision-making Under Uncertainty, in BIODIVERSITY AND THE PRECAUTIONARY PRINCIPLE 159, 172 (Rosie
Cooney & Barney Dickson eds., 2005).

78
Ibid.

79
Gundling, The Status in International Law of the Principle of Precautionary Action, 5 INTERNATIONAL
JOURNAL OF ESTUARINE AND COASTAL LAW. 23,26 (1990); The development of the precautionary approach at
international law, the Right Hon Sir Geoffrey Palmer, 2001, Presentation to Environmental Risk Management
Authority Seminar Precaution in Environmental Risk Management: A review of recent policy and practice.

80
European Commission, Communication on the Precautionary Principle, COM 4 (2001).

81
Telstra Corporation Ltd v. Hornsby Shire Council [2006] NSWLEC 133.

82
Supra note 12.

-15-
It is submitted that while the Diablo fault line existed, the fact that it was still active came to
light only after the earthquake, as a consequence to which Rentiers has shut its nuclear plants
depite its grave economic consequences.

[II.C]. RENTIERS MAY INVOKE FORCE MAJEURE TO PRECLUDE THE ALLEGED
WRONGFULNESS OF ANY ACTION.
Article 23 of ILC draft articles
83
provides for a situation where the wrongfulness of an act of
a State not in conformity with an international obligation of that State is precluded if the act
is due to force majeure i.e. the occurrence of an irresistible force or of an unforeseen event,
beyond the control of the State, making it materially impossible to perform the obligation.
84

Force majeure was acknowledged as a general principle of law by PCIJ in the Serbian Loans
and Brazilian Loans cases.
85

A situation of force majeure precluding wrongfulness arises only when three elements are
met: (a) the act in question must be brought by an irresistible force or an unforeseen event;
(b) which is beyond the control of the State concerned; and (c) which makes it materially
impossible in the circumstances to perform an obligation.
86

83
Supra note 17.

84
Ibid; e.g., the cases of accidental intrusion into airspace attributable to weather, and the cases of accidental
bombing of neutral territory attributable to navigational errors during the First World War discussed in the study
prepared by the Secretariat s. 250256; The exchanges of correspondence between the States concerned in the
incidents involving United States military aircraft entering the airspace of Yugoslavia in 1946, United States of
America, Department of State Bulletin (Washington, D.C.), vol. XV, No. 376 (15 September 1946), p. 502,
reproduced in the study prepared by the Secretariat, 144, and the incident provoking the application to ICJ in
1954, I.C.J. Pleadings, Treatment in Hungary of Aircraftand Crew of the United States of America, p. 14 (note
to the Hungarian Government of 17 March 1953). It is not always clear whether these cases are based on
distress or force majeure; the proposal of the representative of Mexico, United Nations Conference on the Law
of Treaties, First and second sessions, Vienna, 26 March24 May 1968 and 9 April22 May 1969, Documents
of the Conference (United Nations publication, Sales No. E.70.V.5), Report of the Committee of the Whole on
its work at the first session of the Conference, document A/CONF.39/14, p. 182, 53

85
Serbian Loans, Judgment No. 14, 1929, P.C.I.J., Series A, No. 20, pp. 3940; Brazilian Loans, Judgment No.
15, 1929, P.C.I.J., Series A, No. 21, p. 120.

86
Supra note 17; The decision of the American-British Claims Commission in the Saint Albans Raid case,
Moore, History and Digest, vol. IV, 4042 (1873); The decisions of the United States-Venezuela Claims
-16-
In the instant case, when an earthquake measuring 9.2 on the Richter scale struck the territory
of Rentiers along the Diablo Canyon fault line,
87
it was beyond the control of Rentiers to
perform any obligation under international law. Therefore Rentiers can invoke the force
majeure to preclude the alleged wrongfulness of any action that Rentiers has taken.

[II.D]. RENTIERS CAN TAKE THE DEFENCE OF NECESSITY
It is submitted that, a State may claim necessity if its response was the only means of
safeguarding an essential interest of the State against a grave and imminent peril.
88
Even
State practice clearly recognises this principle.
89
For the application of this defence, there
should be evidence of grave and imminent peril
90
and the course of action taken must be the
only way available to safeguard that interest.
91
Elaborating in Gabckovo-Nagymaros
Project
92
the court held:
that a peril appearing in the long term might be held to be imminent as soon as it is
established, at the relevant point in time, that the realization of that peril, however far off it
might be, is not thereby any less certain and inevitable.
93

Commission in the Wippermancase, Moore, History and Digest, vol. III, 3039; British- Mexican Claims
Commission in the Gill case, UNRIAA, vol. V (Sales No. 1952.V.3), p. 157 (1931).

87
Record 15.

88
Supra note 17, art 25; Gabcikovo-Nagymaros Project, supra note 72

89
1969 Torrey Canyon Accident, Report of the Home office (London), Cmnd 3246 (1967).

90
The M/V "SAIGA" (No. 2) Case (Saint Vincent and the Grenadines v. Guinea), (1999) 120 ILR 143, 191.

91
P. A. PILLITU, LO STATO DI NECESSITNELDIRITTO INTERNAZIONALE 233 (1981); J. BARBOZA, NECESSITY
(REVISITED) IN INTERNATIONAL LAW, ESSAYS IN INTERNATIONAL LAW IN HONOUR OF JUDGE MANFRED LACHS
27 (1984); R. Boed, State of necessity as a justification for internationally wrongful conduct, 3 YALE
HUMAN RIGHTS AND DEVELOPMENT LAW JOURNAL, 1 (2000).

92
Gabcikovo-Nagymaros Project Case, (1997) ICJ Reports 7.

93
Ibid.

-17-
It may be noted that when an earthquake measuring 9.2 on the Richter scale struck the
territory of Rentiers along the Diablo Canyon fault line,
94
two pressurized-water nuclear
reactors in city of Nihan were affected.
95
Further, the subsequent inspections determined that
five nuclear power plants near the Diablo Canyon fault posed an unreasonable risk to human
health and the environment if another earthquake of a similar magnitude were to occur.
96

Therefore, closing of power plants, which led to the default and restructuring was necessary
for Rentiers to safeguard an essential interest from a grave and imminent peril.

94
Record 15.

95
Record 16.

96
Record 29.
-18-
CONCLUSION

For the foregoing reasons, the Government of the Republic of Rentiers, Respondent
respectfully requests the Court to adjudge and declare that
1. Rentiers has no obligation under International Law to compensate Amuko for
expenses related to :
a. the deaths of two Amuko Ministry of Energy Employees,
b. the property losses suffered by the former residents of Robelynch, and
c. the medical monitoring and related medical expenses of the former
residents of Robelynch;
2. Rentiers is not liable to compensate for the aforesaid expenses incurred by Amuko;
3. Rentiers has not violated International Law by restructuring the investment in the
sovereign bonds and is therefore not liable to pay compensation for the same; and
4. Any other relief as to this Court may seem appropriate.

Respectfully Submitted:

Agents for the Republic Of Rentiers

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