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Lawyers, other representatives, expert(s), tribunal’s secretary

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I. GLOSSARY OF DEFINED TERMS

ABBREVIATION DEFINITION
Submissions
Notice of Intent Notice of Intent to Submit a Claim to Arbitration under Chapter Ten Of The United States-Oman Free Trade Agreement dated 19 April 2011.
Request Request for Arbitration dated 5 December 2011.
Claimant's Memorial Claimant's Memorial dated 16 November 2012.
Oman's Counter-Memorial Oman's Counter-Memorial dated 5 June 2013.
Claimant's Reply Claimant's Reply Memorial dated 1 November 2013.
Oman's Rejoinder Oman's Rejoinder dated 11 March 2014.
Claimant's Pre-Hearing Skeleton Claimant's Pre-Hearing Skeleton of Argument dated 14 April 2014.
Oman's Pre-Hearing Skeleton Oman's Pre-Hearing Skeleton dated 14 April 2014.
Claimant's Post-Hearing Answers Claimant's Post-Hearing Answers to the Tribunal's Questions dated 30 June 2014.
Oman's Post-Hearing Answers Oman's Response to the Tribunal's Post-Hearing Questions dated 30 June 2014.
US Submission Submission of the United States of America dated 22 September 2014.
Claimant's Response to US Submission Claimant's Response to the Submission of the United States of America dated 31 October 2014.
Oman's Response to US Submission Oman's Memoranda [sic] in Response to the Submission of the United States of America dated 31 October 2014.
Claimant's (Corrected) Submission on Costs Claimant's Submission on Costs dated 6 March 2015 (as corrected by Claimant's Submission on Costs dated 9 March 2015).
Oman's Submission on Costs Oman's Costs Submission (by letter dated 6 March 2015, including Respondent's Statement of Costs).
Claimant's Reply on Costs Claimant's Reply to Respondent's Costs Submission dated 16 March 2015.
Oman's Reply on Costs Oman's Reply to the Claimant's Submission on Costs (by letter dated 16 March 2015).
Claimant's Updated Submission on Costs Claimant's Updated Submission on Costs dated 22 September 2015
Dramatis personae
Al Azri, Dr Dr Hilal Al Azri, Chairman of OMCO until late 2008; also former Director-General of Minerals, Ministry of Commerce and Industry (MOCI).
Al Bulushi, Mr Yasser Al Bulushi, Head of Government Affairs, Emrock.
Al Busaidi, H E H E Hamoud Al Busaidi, former Minister of Environment and Climate Affairs (MECA).
Al Dheeb, H E H E Ahmed Al Dheeb, Chairman of OMCO from late 2008; also Under-Secretary, MOCI.
Al Hinai, H E Dr H E Dr Abdullah Bin Ali Al Hinai, Director-General of Industry, MOCI.
Al Maimani, H E H E Al Maimani, Undersecretary for Administrative & Financial and Region Affairs at MOCI.
Al Muharrami, Mr Mohammed Al Muharrami, Director-General of Environmental Affairs, MECA.
Al Rushdi, Dr Dr Ghaleb Al Rushdi, Director of Legal Department, MECA.
Al Tamimi, Mr Adel A Hamadi Al Tamimi, otherwise known as "the Claimant".
Al Waily, Mr Ali Al Waily, General Manager, OMCO.
Emrock Emrock Aggregate & Mining LLC, a company incorporated in the UAE of which 49% of the shares are owned by the Claimant.
GEO-Resources GEO-Resources LLC, environmental consultants who assisted the Claimant with the obtaining of environmental approvals from MECA.
Gupta, Mr Subodh Gupta, Manager of Mining and Director of Operations, Emrock.
Guzman, Mr Jaime Guzman, Business Development Manager, OMCO.
Ibrahim, Mr Saad Ibrahim, Chief Engineer and Manager of Rock Procurement, Nakheel Properties.
Maqbool Bin Ali Sultan, H E H E Maqbool Bin Ali Sultan, former Minister of Commerce and Industry.
MECA Omani Ministry of Environment and Climate Affairs (also used for convenience herein to refer to the Ministry's predecessor, the Ministry of Regional Municipalities, Environment and Water Resources - see also entry for MRMEWR.
MOH Omani Ministry of Housing, Electricity and Water.
MOCI Omani Ministry of Commerce and Industry.
MRMEWR Ministry of Regional Municipalities, Environment and Water Resources (predecessor before September 2007 to the Ministry of Environment and Climate Affairs, MECA).
Nakheel Properties Nakheel Company LLC, a real estate development company wholly owned by the Dubai government.
Oman Sultanate of Oman, otherwise known as "the Respondent".
OMCO Oman Mining Company LLC, an Omani state-owned enterprise.
Rahman, Mr Mamoun Al-Zubair Abdul Rahman, a survey engineer from MOH.
Ralutin, Mr Francisco Pine Ralutin, scale bridge operator and assistant accountant, Emrock, and later Site Office Manager, Emrock.
Royal Oman Police State police force of Oman.
SFOH SFOH Limited, a company incorporated in the UAE of which the Claimant owns a 100% stake.
Van der Wiele, Mr Adriaan Hendrick Van der Wiele, Principal, GEOResources.
Witness Statements
Al Dheeb Witness Statement Witness Statement of His Excellency Ahmed Al Dheeb dated 11 March 2014.
First Al Rushdi Witness Statement Witness Statement of Dr Ghalib bin Abdullah Al Rushdi dated 4 June 2013.
Second Al Rushdi Witness Statement Supplemental Witness Statement of Dr Ghalib bin Abdullah Al Rushdi dated 11 March 2014.
First Al Tamimi Witness Statement Witness Statement of Adel A Hamadi Al Tamimi dated 15 November 2012.
Second Al Tamimi Witness Statement Second Witness Statement of Adel Al Tamimi dated 1 November 2013.
First Al Waily Witness Statement Witness Statement of Ali Al Waily dated 5 June 2013.
Second Al Waily Witness Statement Supplemental Witness Statement of Ali Al Waily dated 11 March 2014.
First Gupta Witness Statement Witness Statement of Subodh Gupta dated 16 November 2012.
Second Gupta Witness Statement Second Witness Statement of Subodh Gupta dated 1 November 2013.
Maqbool Bin Ali Sultan Witness Statement Witness Statement of His Excellency Maqbool bin Ali Sultan dated 5 June 2013.
Rahman Witness Statement Witness Statement of Mahmoun Al-Zubair Abdul Rahman dated 11 March 2014.
Ralutin Witness Statement Witness Statement of Francisco Pine Ralutin dated 24 August 2012.
First Van der Wiele Witness Statement Witness Statement of Adriaan Hendrik Van der Wiele dated 5 June 2013.
Second Van der Wiele Witness Statement Supplemental Witness Statement of Adriaan Hendrik Van der Wiele dated 6 March 2014.
Expert Reports
Archibald Expert Report Expert Report of Robert D Archibald, dated 1 November 2013.
First Boyd Expert Report John T Boyd Company, Independent Review, dated November 2012.
Second Boyd Expert Report John T Boyd Company, Independent Review, dated November 2013.
Elite Media Expert Report Elite Media, Expert Report: Economic and construction industry conditions in the UAE as of June 1, 2009, dated March 2014.
MEED Expert Report MEED Insight, Limestone Market Study as of June 1, 2009, dated 1 November 2013.
First Navigant Consulting Expert Report Expert Report of Brent C Kaczmarek, CFA, Navigant Consulting, dated 5 June 2013.
Second Navigant Consulting Expert Report Second Expert Report of Brent C Kaczmarek, CFA, Navigant Consulting, dated 11 March 2014.
First RPM Expert Report Expert Report of RPM (RungePincockMinarco) dated 5 June 2013.
Second RPM Expert Report Supplemental Expert Report of RPM (RungePincockMinarco) dated 11 March 2014.
Relevant Law
CCL Commercial Companies Law (Oman), Royal Decree No 4/1974 (RLA-052).
CRL Commercial Register Law (Oman), Royal Decree No 3/1974 (RLA-049).
CRLA Commercial Register Amendment Law (Oman), Royal Decree No 88/1896 (RLA-048).
FCIL Foreign Capital Investments Law (Oman), Royal Decree No 102/1994 (CLA-049).
Immigration and Nationality Act Immigration and Nationality Act, 8 USC § 1101 (2010) (RFA-CLA-005; CLA-045).
Law on Conservation of the Environment and Prevention of Pollution Law on Conservation of the Environment and Prevention of Pollution (Oman), Royal Decree No 114/2011 (RLA-055).
Regulations for Crushers, Quarries and Transport of Sand from Coasts, Beaches and Wadi s Ministerial Decision No 200/2000, Issuing Regulations for Crushers, Quarries and Transport of Sand from Coasts, Beaches and Wadi s (RLA-050).
Royal Decree 6/89 Royal Decree 6/89, Regulating the Relationship between Landlords and Tenants of Dwellings, Commercial and Industrial Premises and the Registration of Lease Agreements relating thereto, dated 5 January 1989 (CLA-003).
Royal Decree 11/81 Royal Decree 11/1981 (establishing OMCO) (CLA-002).
UAE Law Concerning Nationality, Passports and Amendments thereof Federal Law No 17 for 1972 Concerning Nationality, Passports and Amendments thereof (UAE) (Exhibit J-003).
US-Oman FTA Agreement between the Government of the United States of America and the Government of the Sultanate of Oman on the Establishment of a Free Trade Area, which entered into force on 1 January 2009 (Exhibit J-001).
General
AEP Application for an Environmental Permit, in this context referring to the Application for an Environmental Permit submitted by the Claimant/OMCO to MECA in November 2006 (Exhibit J-077).
Certificate of Quarry Operation Certificate for the Issuance of License No 1/1/39/2007 to establish (quarry for rock extraction), dated 4 June 2007 (Exhibit J-103).
DCF Discounted cash flow, a valuation methodology.
EIA Environmental Impact Assessment, in this context referring to the Environmental Impact Assessment (version 6) prepared by the Claimant/OMCO in September 2006 (Exhibit J-074).
EMP Environmental Management Plan, in this context referring to the Environmental Management Plan (version 2) prepared by the Claimant/OMCO in August 2006 (Exhibit J-070).
ICSID International Centre for Settlement of Investment Disputes.
ICSID Convention Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which entered into force on 14 October 1966.
ICSID Rules ICSID Rules of Procedure for Arbitration Proceedings, which entered into force on 10 April 2006.
ILC Articles International Law Commission, Responsibility of States for Internationally Wrongful Acts, 2001 (CLA-005).
Jebel Wasa A mountain range located in the municipality of Mahda, Oman.
Joint Production Agreement Agreement for Production of Limestone Quarrying and Crushing Project between SFOH and Emrock dated 15 January 2007 (Exhibit J-087).
krooki Omani term for a site plan or plat issued by MOH relating to land in Oman.
MoU Memorandum of Understanding.
OMCO-Emrock Lease Agreement Agreement of Lease for Limestone Quarrying Project between OMCO and Emrock dated 8 April 2006 (Exhibit J-048).
OMCO-SFOH Lease Agreement Agreement of Lease for Limestone Quarrying Project between OMCO and SFOH dated 25 May 2006 (Exhibit J-058).
UAE United Arab Emirates.
WACC Weighted average cost of capital.
wadi Arabic term referring to a dry riverbed containing water only during times of heavy rain, in this context referring to the Wadi Sumayni, a riverbed plain adjacent to the Jebel Wasa range.

II. THE PARTIES AND THEIR REPRESENTATIVES

Representing Adel A Hamadi Al Tamimi: Representing the Sultanate of Oman :
Mr David W Rivkin Mr. Stanley McDermott III
Mr Mark W Friedman Ms. Kiera Gans
Mr Carl Micarelli DLA Piper LLP (US)
Ms Floriane Lavaud 1251 Avenue of the Americas
Mr Clay H Kaminsky New York, NY 10020
Ms Raafia M Lari USA
Ms Corina Gugler Debevoise & Plimpton LLP 919 Third Avenue New York, NY 10022 USA Mr. Bruce Mullins Ms. Sarah Al-Moosa DLA Piper Oman LLP Penthouse, Al Manahil Building Al Sarooj Street Shatti Al Qurum P.O. Box 200
Mr Peter Mansour
Hamad Al Sharji, Peter Mansour & Co. Standard Chartered Bank Building 3rd Floor, CBD Postal Code 134, Jewel Beach Muscat, Oman
PO Box 959 Abdullah Al Nofli & Mohammed Al-Tayed Co.
114 Jibroo, Muscat 503, Pent House
Sultanate of Oman Fahad Plaza P.O Box 1643, Postal Code 112, Muscat, Oman

III. PROCEDURAL HISTORY

A. ARBITRAL PROCEDURE

1.
On 5 December 2011, Adel A Hamadi Al Tamimi (" Al Tamimi " or " the Claimant ") submitted a Request for Arbitration dated 5 December 2011 (the " Request ") against the Sultanate of Oman (" Oman " or " the Respondent ").
2.
The Request for Arbitration was submitted to the International Centre for Settlement of Investment Disputes (" ICSID ") on the basis of the Agreement between the Government of the United States of America and the Government of the Sultanate of Oman on the Establishment of a Free Trade Area (the " US-Oman FTA "), which entered into force on 1 January 2009, and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the " ICSID Convention "), which entered into force on 14 October 1966.
3.
The Request, as supplemented by the Claimant's letter dated 20 December 2011, was registered by the Secretary-General of ICSID pursuant to Article 36 of the ICSID Convention and Rules 6 and 7 of the ICSID Institution Rules on 23 December 2011. The Secretary-General notified the Parties of the registration on the same day. In the Notice of Registration, the Secretary-General invited the Parties to proceed to constitute an Arbitral Tribunal as soon as possible in accordance with Articles 37 to 40 of the ICSID Convention.
4.
On 26 March 2012, the Claimant informed ICSID that Claimant's counsel had moved from the law firm of Crowell & Moring LLP to the law firm of Weil, Gotshal & Manges LLP. The Claimant informed ICSID on 21 November 2012 that Mr Peter Mansour of Hamad Al Sharji, Peter Mansour & Co. would also be acting for the Claimant in this arbitration. On 5 June 2013, the Claimant informed ICSID that the law firm of Debevoise & Plimpton LLP had been appointed to replace the law firm of Weil, Gotshal & Manges LLP as counsel for the Claimant in the arbitration.
5.
Pursuant to Article 37(2)(a) of the ICSID Convention, the Claimant appointed Judge Charles N Brower, a US national, and the Respondent appointed Mr J Christopher Thomas QC, a Canadian national, as arbitrators. The Parties agreed on the appointment of Professor David A R Williams QC, a national of New Zealand, as the third and presiding arbitrator. The Tribunal was constituted on 25 April 2012 in accordance with ICSID Arbitration Rule 6.
6.
Ms Aïssatou Diop, ICSID Legal Counsel, was designated to serve as the Secretary of the Tribunal. The Parties were subsequently informed on 27 September 2012 that Ms Diop would be replaced as Secretary of the Tribunal by Ms Frauke Nitschke, ICSID Legal Counsel. The Parties were informed on 6 August 2013 that Ms Nitschke would be replaced as Secretary of the Tribunal by Mr Monty Taylor, also ICSID Legal Counsel. On 24 March 2015, the Parties were informed that Ms. Diop would return as Secretary of the Tribunal.
7.
The Tribunal held a First Session with the Parties via telephone conference on 18 June 2012. The Parties confirmed that the Tribunal was properly constituted and that no Party, as of that date, had any objection to the appointment of any Member of the Tribunal. It was agreed (inter alia) that the applicable ICSID Arbitration Rules would be those in effect as of April 2006 and that the procedural language would be English. The Parties also confirmed their agreement that the legal place of the arbitration is the seat of ICSID in Washington DC. The agreement of the Parties was embodied in Procedural Order No 1 signed by the President of the Tribunal on 13 July 2012 and circulated to the Parties.
8.
On 25 September 2012, the Claimant requested that the Tribunal issue an order directing the Respondent to grant Claimant's industry and damages experts immediate access to the former quarry site (such site being the subject of this arbitration). The Claimant sought this access so as to allow its experts to inspect the site in connection with the completion of their expert reports.
9.
On 27 September 2012, the Respondent filed observations on the Claimant's request. The Claimant filed a response to those observations on 28 September 2012.
10.
On 28 September 2012, the Tribunal issued Procedural Order No 2 concerning the Claimant's application for access to conduct a site inspection. Relevantly, the Tribunal allowed the Claimant's application for a site visit (in general terms), and made directions with a view to the Parties arranging a site visit as soon as possible after 8 October 2012.
11.
The following day, on 29 September 2012, the Claimant filed a request for the Tribunal to reconsider the timing aspects of Procedural Order No 2. On 29 September 2012, the Tribunal rejected the Claimant's request and confirmed the directions contained in that order.
12.
On 10 October 2012, the Tribunal issued its Procedural Order No 3 concerning the procedural calendar. This order revised sections of the Tribunal's earlier Procedural Order No 1 relating to the schedule for submission of the Parties' pleadings, and to the dates of the final Hearing.
13.
The Claimant filed its Memorial on jurisdiction and the merits on 16 November 2012. With its Memorial, the Claimant also filed (relevantly): (a) a Witness Statement of Mr Adel A Hamadi Al Tamimi dated 15 November 2012; (b) a Witness Statement of Mr Subodh Gupta dated 16 November 2012; (c) a Witness Statement of Mr Francisco Pine Ralutin dated 24 August 2012; and (d) an Expert Report of John T. Boyd Company dated 15 November 2012.
14.
Following exchanges between the Parties, on 8 January 2013 the Respondent submitted a request for the Tribunal to decide on the production of certain document categories disputed between the Parties. The Tribunal ruled upon the Respondent's request in its Procedural Order No 4, Rulings on the Respondent's First Request for Production of Documents, dated 5 February 2013.
15.
Although the Tribunal ruled upon certain document requests in its Procedural Order No 4, it also deferred its ruling with respect to certain categories of requested documents. Such categories appeared to relate to a possible ratione personae objection not yet articulated by the Respondent. As such, in order to rule on those specific categories, and in particular, to determine whether those requests were relevant and material to the outcome of the case, the Tribunal directed the Respondent to file a brief memorandum indicating (among other things) the precise nature of its ratione personae challenge, should it intend to make such a challenge in its CounterMemorial. The order also directed the Claimant to file a short memorandum in response to the Respondent's note.
16.
In accordance with Procedural Order No 4, on 15 February 2013 the Respondent filed its memorandum, and on 22 February 2013 the Claimant filed its reply observations.
17.
The Tribunal ruled upon the outstanding document requests made by the Respondent in its Procedural Order No 5 dated 15 March 2013. Those requests were denied, although certain reservations were made to this rejection, including that the Tribunal was prepared to revisit the Respondent's requests on better information as to relevant facts and law if such became available at an appropriate stage of the proceeding. The Tribunal also ordered the Claimant to disclose certain official travel documents.
18.
On 18 March 2013, the Tribunal issued its Procedural Order No 6 concerning the procedural calendar for the arbitration.
19.
The Respondent filed its Counter-Memorial on 5 June 2013, which included its objections to jurisdiction. With its Counter-Memorial, the Respondent also filed: (a) a Witness Statement of Dr Ghalib bin Abdullah Al Rushdi dated 4 June 2013; (b) a Witness Statement of Mr Ali Al Waily dated 5 June 2013; (c) a Witness Statement of H E Maqbool Bin Ali Sultan dated 5 June 2013; (d) a Witness Statement of Mr Adriaan Hendrick "Henk" Van der Wiele dated 5 June 2013; (e) an Expert Report of Mr Brent Kaczmarek, of Navigant Consulting Inc, dated 5 June 2013; and (f) an Expert Report of RungePincockMinarco dated 5 June 2013.
20.
Following exchanges between the Parties, on 5 August 2013 the Claimant filed a request for the Tribunal to decide on the production of documents. The Tribunal ruled on these requests by order dated 21 August 2013, entitled "Rulings on Claimant's Requests for Production of Documents".
21.
The Claimant filed its Reply on jurisdiction and the merits on 1 November 2013. The Claimant's Reply was filed with the following witness statements and expert reports: (a) a Second Witness Statement of Mr Adel A Hamadi Al Tamimi dated 1 November 2013; (b) a Second Witness Statement of Mr Subodh Gupta dated both 20 October 2013 and 1 November 2013; (c) an Expert Report of Mr Sari Alabdulrazzak, of MEED Insight, dated 1 November 2013; (d) an Expert Report of Mr Robert D Archibald, of Archibald Consulting Group, dated 1 November 2013; and (e) a Second Expert Report of John Boyd Co, dated 1 November 2013.
22.
On 11 February 2014, the Tribunal issued its Procedural Order No 7 concerning the procedural calendar.
23.
The Respondent filed its Rejoinder on 11 March 2014 together with: (a) a Supplemental Witness Statement of Mr Ali Al Waily; (b) a Supplemental Witness Statement of Dr Ghalib bin Abdullah Al Rushdi; (c) a Supplemental Witness Statement of Mr Adriaan Hendrick "Henk" Van der Wiele dated 6 March 2014; (d) a Witness Statement of H E Ahmed Al Dheeb; (e) a Witness Statement of Mr Mamoun al Zubair Abdul Rahman; (f) a Supplemental Expert Report of Mr Brent Kaczmarek, of Navigant Consulting Inc, dated 11 March 2014; (g) a Supplemental Expert Report of RungePincockMinarco dated 11 March 2014; and (h) an Expert Report of Ms Delia Meth-Cohn, of Elite Media Inc, dated 10 March 2014.
24.
In accordance with Procedural Order No 7, on 14 April 2014 both the Claimant and the Respondent filed a Pre-Hearing Skeleton. On 15 April 2014, the Parties filed an agreed chronology. On the same day, each of the Parties also filed with the Tribunal a list of issues.
25.
The Tribunal held a Pre-Hearing Organisational Meeting with the Parties by telephone conference on 16 April 2014.
26.
The Tribunal issued Procedural Order No 8 and Procedural Order No 9 on 18 April 2014. The first issued order (Procedural Order No 8) concerned an expert report of JAJ Consultants LLC dated 10 November 2012. This report, which had been prepared on instructions from the Claimant, was attached to the Expert Report of John T Boyd Company dated 15 November 2012 (filed with the Claimant's Memorial). The Respondent had requested on 15 April 2014 that this report should remain on the record, and in its order, the Tribunal granted the Respondent's application by consent. As to the second order (Procedural Order No 9), this provided the Tribunal's rulings on the Claimant's additional requests for production of documents dated 24 March 2014.
27.
Also on 18 April 2014, the Claimant sought the Tribunal's permission to submit certain specified documents to the record. At the invitation of the Tribunal, on 23 April 2014 the Respondent submitted observations on the Claimant's request. The Tribunal ruled upon the request in its Procedural Order No 10 dated 24 April 2014.
28.
A Hearing on jurisdiction and the merits took place at the International Dispute Resolution Centre in London, United Kingdom, from 28 April to 8 May 2014. In addition to the Members of the Tribunal, the Secretary of the Tribunal, the assistant to Mr J Christopher Thomas QC, Ms Yvette Anthony of the NUS Centre for International Law, the court reporter and the interpreters, present at the Hearing were:

For the Claimant:

Counsel

Mr David W Rivkin Debevoise & Plimpton LLP

Mr Mark W Friedman Debevoise & Plimpton LLP

Mr Carl Micarelli Debevoise & Plimpton LLP

Ms Floriane Lavaud Debevoise & Plimpton LLP

Mr Clay H Kaminsky Debevoise & Plimpton LLP

Ms Raafia M Lari Debevoise & Plimpton LLP

Ms Corina Gugler Debevoise & Plimpton LLP

Support Personnel

Ms Mary Grace McEvoy Debevoise & Plimpton LLP

Mr Malte Ernsting Debevoise & Plimpton LLP

Mr Jeff Isler Infographics Inc

Parties

Mr Adel A Hamadi Al Tamimi Emrock Aggregate & Mining LLC

Ms Alia Fadili Daughter of Adel Al Tamimi

Mr Jeff Karll Associate of Adel Al Tamimi

Ms Merwin (May) Canlas Associate of Adel Al Tamimi

Factual Witnesses (subject to sequestration)

Mr Subodh Gupta Formerly of Emrock Aggregate & Mining LLC

Experts

Mr Sari Alabdulrazzak MEED Insight

Mr Robert D Archibald The Archibald Consulting Group

Mr Michael F Wick John T Boyd Company

Mr Joseph G Jandrasits John T Boyd Company

For the Respondent:

Counsel

Mr Stanley McDermott III DLA Piper LLP (US)

Ms Kiera Gans DLA Piper LLP (US

Mr Bruce Mullins DLA Piper LLP (US)

Ms Sarah Al-Moosa DLA Piper LLP (US)

Support Personnel

Ms Vivian Hoffman DLA Piper LLP (US)

Mr David Webb DLA Piper LLP (US)

Ms Sara Tumey DLA Piper LLP (US)

Parties

Mr Khalid Saeed Al Shuaibi Director General International Organisations & Committees, Ministry of Commerce and Industry

Mr Faisal Al-Nabhani Senior Legal Researcher, Ministry of Legal Affairs

Factual Witnesses (subject to sequestration)

Dr Ghalib Al-Rushdi Director of Legal Department, Ministry of Environmental and Climate Affairs

Mr Ali Al-Waily General Manager, OMCO

Mr Adriaan Hendrick Van der Wiele Managing Director and Principal Environmental Consultant, GEO-Resources

H E Ahmed Al Dheeb Undersecretary, Ministry of Commerce and Industry

Mr Mahmoun Al-Zubair Abdul Survey and Planning Department, Al Buraimi Directorate

Rahman General of Housing, Ministry of Housing

Expert Witness

Ms Delia Meth-Cohn Elite Media

Mr Brent C Kaczmarek Navigant Consulting

Mr Tim Swendseid RungePincockMinarco

Mr Gerard Maglio Navigant Consulting

Mr Andrew Preston Navigant Consulting

29.
At the oral Hearing, the Tribunal heard from the following fact and expert witnesses:1

(i) Called by the Claimant:

Mr Adel A Hamadi Al Tamimi [x T2.11, xx T2.14, xxx T3,104];

Mr Subodh Gupta [x T3,172, xx T3,190, xxx T4.80];

Mr Sari Alabdulrazzak [x T6.2, xx T6.25, xxx T7.2];

Mr Michael F Wick and Mr Joseph G Jandrasits [x T7.36, xx T7.56, xxx T7,163; fxx T7,187]; and

Mr Robert D Archibald [x T7,188, xx T7,204].

(ii) Called by the Respondent:

Mr Ali Al-Waily [x T4,106, xx T4,107, xxx T5.60, fxx T5.67];

Mr Adriaan Hendrick Van der Wiele [x T5.69, xx T5.70, xxx T5.91];

Dr Ghalib Al-Rushdi [x T5,100, xx T5,101];

Mr Mahmoun Al-Zubair Abdul Rahman [x T5,119, xx T5,120, xxx T5,126];

H E Ahmed Al Dheeb [x T5,128, xx T5,129, T5,145];

Ms Delia Meth-Cohn [x T7,226, xx T7,227, xxx T7,268];

Mr Tim Swendseid [x T8.1, xx T8.2, xxx T8.80]; and Mr Brent C Kaczmarek [x T8,103, xx T8,105, xxx T8,194].

30.
A verbatim daily transcript of the oral Hearing was prepared by professional stenographers. This transcript was later issued, as corrected and approved by the Parties on 6 June 2014 and as confirmed by the Tribunal on 21 August 2014.
31.
On 26 May 2014, the Tribunal issued its Procedural Order No 11 concerning certain post-Hearing procedural matters. Relevantly, the order scheduled a list of questions and issues to be addressed by the Parties. In accordance with the Tribunal's direction, on 30 June 2014 each Party filed its respective answers to the Tribunal's list of questions and issues.
32.
On 22 September 2014, the United States of America filed a written submission as a nondisputing State Party pursuant to the US-Oman FTA, Article 10.19.2, on two issues of treaty interpretation. On 24 September 2014, the Claimant objected to the submission on the grounds that: (a) it was untimely; and/or (b) it exceeded the United States' permitted scope of participation under the FTA. Claimant also sought leave to respond substantively to the submission. On 26 September 2014, the Respondent submitted that the Tribunal should accept the submission, arguing that: (a) allowing the submission would cause no prejudice to the Claimant; and (b) the submission was directed to issues of treaty interpretation only. The Respondent opposed the Claimant's request to respond to the submission, submitting that it was not necessary for either party to respond. By letter dated 29 September 2014, the United States argued that its submission was neither untimely nor outside the scope of Article 10.19.2.
33.
On 14 October 2014, the Tribunal issued Procedural Order No 12 admitting the United States' submission into the record, finding, with respect to the issue of timing, that the submission was filed within a reasonable time. With respect to the issue of scope, the Tribunal directed the parties to exchange memoranda discussing: (a) whether the submission fell within the scope of Article 10.19.2; and (b) the substance of the submission and its relevance, if any, to this case. The Tribunal ruled that it would undertake the question of what weight, if any, to give to the United States' submission at the time of its deliberations. On 31 October 2014, each party filed its response to the submission of the United States.
34.
Regarding the Parties' submissions on costs, the Tribunal announced at the conclusion of the Hearing that it would defer submissions on this matter until a later date.2 The Tribunal reiterated this position in Procedural Order No 11. By letter of 4 February 2015, the Tribunal invited the parties to file submissions on costs by 4 March 2015. The parties later agreed to extend that time by two days, as approved by the Tribunal.
35.
The parties filed simultaneous submissions on costs on 6 March 2015. On 9 March 2015, the Claimant filed a corrected submission on costs. The same day, the Parties agreed to submit replies to each other's submissions, as approved by the Tribunal. On 16 March 2015, the Parties filed simultaneous reply submissions on costs.
36.
On 15 September 2015, the Tribunal requested that the Parties file updated submissions on costs strictly limited to updating the quantum of costs. On 16 September 2015, the Respondent informed the Tribunal that it had no further updates in this regard. On 22 September 2015, the Claimant filed its updated submission on costs.
37.
The proceeding was closed on 19 October 2015.

B. THE PARTIES' CLAIMS FOR RELIEF

38.
The Tribunal here records the Parties' formal claims for relief made to the Tribunal through the successive stages of this arbitration.
39.
Claimant's Request for Arbitration : para 105 (pages 54-55) relevantly states: " Without prejudice to his rights to amend, supplement, or restate the relief to be requested in arbitration, Mr Al Tamimi respectfully requests that the Tribunal grant him the following relief :

(i) A declaration that the Sultanate of Oman has breached its obligations under the US-Oman Free Trade Agreement;

(ii) Compensation in an amount of approximately $560 million for the damages caused by Oman's failure to provide Mr Al Tamimi national treatment, fair and equitable treatment, and full protection and security and its expropriation of Mr Al Tamimi's valuable interest in unrestricted mining concessions, which sum includes profits Mr Al Tamimi reasonably could have expected to receive had the Government of Oman not deprived him of the opportunity through its breaches and indirect losses;

(iii) Moral damages;

(iv) Costs associated with these proceedings, including all professional fees and disbursements;

(v) Pre-award and post-award interest at a rate to be fixed by the Tribunal; and

(vi) Such further relief that counsel may advise and that the Tribunal may deem appropriate ".

40.
Claimant's Memorial : para 290 (pages 141-142) states: " Without prejudice to his rights to amend, supplement, or restate the relief requested, Mr Al Tamimi respectfully requests that the Tribunal grant him the following relief:

(i) A declaration that the Sultanate of Oman has breached its obligations under the US- Oman Free Trade Agreement;

(ii) Compensation in an amount no less than USD 226.8 million for the damages caused by Oman's failure to provide Mr Al Tamimi national treatment, fair and equitable treatment, and its expropriation of Mr Al Tamimi's investment;

(iii) Moral damages in an amount no less than USD 10 million;

(iv) Costs associated with these proceedings, including all professional fees and disbursements;

(v) Pre-award and post-award interest at a rate to be fixed by the Tribunal; and

(vi) Such further relief that counsel may advise and that the Tribunal may deem appropriate".

41.
Claimant's Reply : para 304 (page 138) states: " Without prejudice to his rights to amend, supplement, or restate the relief requested, Claimant respectfully requests that the Tribunal grant him the following relief:

(a) A declaration that the [sic] Oman has breached its obligations under the FTA;

(b) Compensation of not less than US$273 million for injuries caused by Oman's failure to provide Claimant national treatment and fair and equitable treatment, and its expropriation of Claimant's investment, consisting of at least US$263 million in economic damages and at least US$10 million in moral damages;

(c) Costs associated with these proceedings, including all professional fees and disbursements;

(d) Pre-award and post-award compound interest at a commercial rate to be fixed by the Tribunal; and

(e) Such other or further relief that counsel may advise and that the Tribunal may deem appropriate ".3

42.
Oman's Counter-Memorial : para 500 (page 165) states: " For the reasons stated above, Oman respectfully requests that the Tribunal:

(a) Dismiss Mr Al Tamimi's claims in their entirety; and

(b) Award Oman all costs incurred in connection with these proceedings, including legal fees, experts' fees, and other costs, and Oman's share of the fees and expenses of the Tribunal ".

43.
Oman's Rejoinder : para 238 (page 83) states: " For the reasons stated above, Oman respectfully requests that the Tribunal:

(a) Dismiss Mr Al Tamimi's claims in their entirety; and

(b) Award Oman all costs and expenses incurred in connection with these proceedings, including all legal fees, experts' fees, hearing costs and Oman's share of the Tribunal's fees and expenses ".

44.
Oman's Pre-Hearing Skeleton of Argument : para 36 (page 15) provides as follows: " Oman respectfully requests that the Tribunal (a) dismiss Mr Al Tamimi's claims in their entirety and (b) award Oman all costs and expenses incurred in connection with these proceedings, including all legal fees, experts' fees, hearing costs and its share of the Tribunal's fees and costs ".

IV. SUMMARY OF RELEVANT FACTUAL BACKGROUND

45.
The following summary is intended to provide a general overview of factual background to the dispute between the Parties. It is not intended to be an exhaustive description of all facts considered relevant by the Tribunal. Further relevant factual material will be addressed in the context of the Tribunal's analysis of the issues in dispute below.
46.
The Claimant, Mr Adel A Hamadi Al Tamimi,4 is a US citizen born in Ajman, one of the seven emirates which make up the present United Arab Emirates (" UAE "). Mr Al Tamimi is a civil engineer who, since the 1970s, has worked in construction management and real estate development, primarily in New England in the United States.
47.
The Respondent, the Sultanate of Oman, is a country located on the southeast coast of the Arabian Peninsula, bordered by the UAE, the Kingdom of Saudi Arabia, and the Republic of Yemen.
48.
This proceeding arises out of the Claimant's investment in the development and operation of a limestone quarry in the Jebel Wasa mountain range, located in the municipality of Mahda, Oman. Mr Al Tamimi's interest in quarrying in Oman was reportedly sparked by the discovery that Nakheel Properties, a real estate development company owned by the Dubai government, was looking for quarry operators to help fill its demand for large quantities of limestone, and had been negotiating with the Omani government to establish a hard rock quarry near the UAE-Oman Border.5
49.
The Claimant's investment was created through two Lease Agreements signed between, respectively, his companies Emrock Aggregate & Mining LLC (" Emrock ") and SFOH Limited (" SFOH "), and the Omani state-owned enterprise Oman Mining Company LLC (" OMCO ").
50.
Emrock was established and registered in Oman pursuant to the laws of Dubai, UAE on 14 June 2006.6 The Claimant served as both General Manager and Chairman of Emrock. The Claimant owned a 49% shareholding in the Company and was apparently entitled to 80% of the profits generated by Emrock by virtue of Emrock's Memorandum of Association.7 The Claimant is said to have exercised sole decision-making power on behalf of Emrock as its General Manager.8
51.
SFOH was established on 15 May 2006 pursuant to the laws of the Jebel Ali Free Zone in Dubai, UAE.9 SFOH was owned and controlled entirely by the Claimant, who held 100% of the shares in the company.10
52.
OMCO was established by Royal Decree No 11/81 in 1981.11 It is a State-owned enterprise, owned almost entirely by the Omani Ministry of Oil and Minerals, established to facilitate the discovery, excavation, manufacturing and marketing of minerals in Oman. OMCO's Board of Directors comprises five members. Mr Ali Al Waily served as OMCO's Executive Manager from 2005 to 2009. Dr Hilal Al Azri, Director-General of Mining at the Omani Ministry of Commerce and Industry (" MOCI "), served as Chairman of OMCO until late 2008. H E Ahmed Al Dheeb succeeded Dr Al Azri as Chairman of OMCO in late 2008.12
53.
The Claimant entered into negotiations with OMCO regarding the Jebel Wasa site after being introduced to Mr Al Waily of OMCO by the Chief Engineer and Manager of Rock Procurement of Nakheel Properties, Mr Saad Ibrahim, in 2005.13 OMCO subsequently wrote to MOCI on 23 November 2005 requesting " authorisation for drilling activities " for limestone in the Jebel Wasa area.14
54.
Emrock and OMCO executed a conditional lease agreement for the Jebel Wasa quarry site on 12 December 2005, pending the approval of OMCO's Board of Directors. OMCO's Board approved the agreement on 13 February 2006, and the final agreement (the " OMCO-Emrock Lease Agreement ") was concluded on 8 April 2006.15 SFOH and OMCO executed a lease agreement for the Jebel Wasa quarry site on 25 May 2006 which was virtually identical in its terms to the Emrock-OMCO Lease Agreement (the " OMCO-SFOH Lease Agreement "), with the exception that under the terms of the latter agreement an area of 4km² of the Jebel Wasa quarry site was demised to SFOH, rather than the 2km² area demised to Emrock.16
55.
The OMCO-Emrock and OMCO-SFOH Lease Agreements each provided that OMCO would use its " best endeavors " to obtain the requisite environmental and operating permits for the quarry.17 The Lease Agreements further provided that they would each come into force upon the obtaining of all permits, licences and access in respect of the Jebel Wasa quarry site.18 Emrock and SFOH agreed under the Lease Agreements to comply with all obligations imposed by the relevant permit, and agreed to indemnify OMCO " at all times " against any claims, demands and liability in respect thereof.19 Emrock and SFOH further agreed to comply with all environmental, mining and crushing requirements and all other laws of the Sultanate of Oman.20 The Lease Agreements provided for termination by either party in case of substantial breach, and provided for the " exclusive jurisdiction " of the Oman Arbitration Centre in the event of a dispute between the parties relating to " any aspect of the contractual relationship ".21
56.
The Lease Agreements required Emrock and SFOH each to pay OMCO a royalty of 5% of gross revenue.22 The Lease Agreements also required the payment of monthly lease payments by each company to OMCO.23 The term of each Lease Agreement was ten years, renewable for three additional terms of five years each.24 The purpose of the Lease Agreements was stated to be for " limestone and other stone materials quarrying and crushing operations ".25
57.
Emrock and SFOH subsequently entered into an Agreement for the Production of Limestone Quarrying and Crushing on 15 January 2007 (the " Joint Production Agreement ").26 Under the terms of the Joint Production Agreement, Emrock undertook general responsibility for quarrying and crushing operations, while SFOH undertook responsibility to prepare the site,27 and to provide for necessary materials and permits for the quarry's operation.28
58.
On 1 April 2006, Emrock entered into a Memorandum of Understanding (" MoU ") with Nakheel Properties to supply it with 15 million tonnes of rock annually for 10 years for the purpose of " various projects in Dubai ".29
59.
In or around November 2006, OMCO, on behalf of Emrock and SFOH, submitted an Application for an Environmental Permit for the Jebel Wasa quarry site (" AEP "), along with an Environmental Impact Assessment (" EIA ") and Environmental Management Plan (" EMP "), to the Omani Ministry of Environment and Climate Affairs (" MECA ").30 These documents, which had been prepared with the assistance of environmental consultancy firm GEO-Resources, addressed the anticipated environmental impacts of the proposed quarrying project and mitigating measures to be implemented.31
60.
On 8 January 2007, OMCO wrote to inform Emrock and SFOH that MOCI had given permission for the quarrying operation to begin, pending the issuing of an environmental permit by MECA.32 Emrock and SFOH subsequently began making necessary purchases, preparations and plans for the operation of the quarry site, including designing and establishing drilling and blasting benches, cutting out and building internal roads, and constructing the camp site and supporting facilities.33
61.
On 3 March 2007, MECA wrote to MOCI to advise that MECA had no objection to the proposed quarry provided it did not exceed a total area of 2km x 2km.34 On 5 March 2007, the Omani Ministry of Housing (" MOH ") issued to OMCO a usufruct contract containing a map (" krooki ") of the concession comprising a total area of 14.7 km². On 25 April 2007, MECA issued an initial environmental permit to OMCO for the Jebel Wasa quarry.35 On 29 May 2007, the municipality of Mahda confirmed to OMCO that it had no objection to the Claimant's quarrying activities.36 On 31 May 2007, OMCO provided to the Claimant a Quarrying Agreement issued by MOCI, along with a Certificate of Quarry Operation (also referred to as a " quarry license "), to establish the limestone quarry at Jebel Wasa.37
62.
On 22 August 2007, having received the initial environmental permit from MECA and the Certificate of Quarrying Operation from MOCI, OMCO instructed Mr Al Tamimi by letter that Emrock and SFOH could begin quarrying operations on 1 September 2007.38 The letters from OMCO to Emrock and SFOH of 22 August 2007 also reminded Mr Al Tamimi that he was authorised to mine only " Quarry strata seams and beds of limestone " and that he was limited to the " exploitation of limestone rock products only ".39 The Claimant accordingly commenced quarrying operations at the Jebel Wasa quarry on 1 September 2007.40
63.
Very quickly, however, the relationship between the Claimant, OMCO and MECA and MOCI deteriorated. This situation culminated in the decision of OMCO to terminate the OMCO-Emrock Lease Agreement by letter of 20 July 2008.41 In addition, OMCO informed the Claimant on 2 June 2008 that it regarded the OMCO-SFHO Lease Agreement as " null and void ", as a result of the Claimant's failure to register SFOH in accordance with the laws of Oman.42 A second termination letter from OMCO to Emrock followed on 17 February 2009.43 Ultimately, on 23 May 2009, the Royal Oman Police arrested the Claimant at the request of MECA for allegedly conducting operations outside of his permitted boundaries, operating without the necessary permits, and removing material from the dry riverbed to the west of the Jebel Wasa mountain range (the " Wadi Sumayni ", hereinafter " wadi ").44
64.
Prior to these events, MOCI and MECA had issued a number of complaints, warnings and fines against OMCO/Emrock, beginning before the Claimant's quarrying operations had even formally begun, and continuing until Mr Al Tamimi's ultimate arrest in May 2009. The reasons behind the complaints and orders were varied and included, but were not limited to, the Claimant's alleged unauthorised use of equipment, excavation of material from the wadi, operating outside of the boundary of the permit, and blasting outside of the concession area.45
65.

On 8 August 2007, for example, MECA issued a complaint pertaining to Emrock's use of a screen.46 On 28 August 2007, OMCO wrote to Mr Al Tamimi alleging that Emrock was in "clear violation" of the OMCO-Emrock Lease Agreement by "processing material originating in the alluvial deposits located in the area's streams".47 On 22 September 2007, MOCI issued a notice to OMCO that its experts had observed during a site visit that the Claimant was working beyond the borders of the delimited site.48 On 29 September 2007, OMCO wrote to Mr Al Tamimi advising that Emrock was engaging in blasting outside the perimeters of OMCO's concession.49 MECA issued further infringement notices to OMCO on 7 October 2007 and 24 October 2007.50 On 25 December 2007, MECA issued an infraction report and fined OMCO RO 2,000.51

66.
Subsequently, the Director-General of Industry at MOCI, H E Dr Al Hinai, wrote to OMCO, in a letter dated 12 November 2007, stating that the quarry boundary was that specified in the Quarry Agreement and Certificate of Quarrying Operation issued by MOCI.52 In February 2008, a meeting took place between the Claimant, the Director-General for Environmental Affairs at MECA, H E Al Maharrami, the OMCO Chairman, Dr Hilal Al Azri, and the Managing Director of GEO-Resources.53 It was agreed that OMCO would " apply [for] and obtain permission for extension of the mining concession area incorporating the location of the screen plant and wadi area for the production of wadi products ".54 In a letter dated 17 February 2008, OMCO asked MOCI for an extension of the worksite and for " approval to produce sand materials ".55 The Claimant subsequently continued quarrying activities at Jebel Wasa, but on 22 April 2008 OMCO wrote to Mr Al Tamimi again alleging that he had engaged in the unauthorised excavation of wadi materials and warning that if he did not cease this activity within one week, OMCO would terminate the OMCO-Emrock Lease Agreement.56
67.
On 21 April 2008, MOCI issued a RO 10,000 fine against OMCO for alleged failure to " observe the boundaries of the leased site as previously determined " and demanded that the Claimant cease such operations immediately.57 Mr Al Tamimi has claimed that he voluntarily ceased all production in the wadi at this time.58 OMCO paid the RO 10,000 fine and sought reimbursement from Mr Al Tamimi. Mr Al Tamimi offered to reimburse OMCO, but only if it would provide him with copies of the permits it had obtained to date.59 Mr Al Tamimi additionally sought a meeting with the Minister of Commerce and Industry, H E Maqbool Bin Ali Sultan, to discuss matters. This meeting took place on 12 June 2008, attended by, inter alia, H E Maqbool Bin Ali Sultan, Mr Al Tamimi, Dr Al Azri, Chairman of OMCO, and H E Dr Al Hinai, Director-General of Industry at MOCI. Mr Al Tamimi has alleged that he was informed by Dr Al Hinai following this meeting that OMCO was responsible for payment of fines, and that Emrock should not reimburse OMCO for the RO 10,000 fine of April 2008.60
68.
On 22 June 2008, however, OMCO wrote to Mr Al Tamimi demanding reimbursement of the fine on or before 24 June 2008, stating that failure to comply would be deemed to constitute grounds for termination of the OMCO-Emrock Lease Agreement.61 By letter of 13 July 2008 headed " Long Overdue Payments ", Mr Al Waily demanded that Mr Al Tamimi " settle all outstanding amounts overdue to OMCO " within five days, or else OMCO would " be forced to exercise their right as per the contract terms ".62 Mr Al Tamimi did not reimburse OMCO for the fine, instead referring OMCO to the advice he said had been earlier given to him by Dr Al Hinai and requiring that he first receive copies of OMCO's permits.63
69.
On 20 July 2008, OMCO purported to terminate the OMCO-Emrock Lease Agreement for failure by Emrock to comply with payment obligations, including, inter alia, failure to indemnify OMCO for the RO 10,000 fine which had been levied by MOCI in April 2008.64
70.
In addition, on 2 June 2008, OMCO informed the Claimant that it considered the OMCO-SFOH Lease Agreement to be " null and void ", because SFOH had failed to register in Oman as required by OMCO's letter of 22 August 2007.65
71.
Despite the purported termination of the OMCO-Emrock Lease Agreement on 20 July 2008, the Claimant continued operations in the Jebel Wasa quarry site. On or around 28 July 2008, the Claimant met with H E Al Maimani, Undersecretary for Administrative & Financial and Regional Affairs at MOCI.66 The Claimant says that he was told by H E Al Maimani that he could continue to operate at the Jebel Wasa quarry.67 H E Ahmed Al Dheeb, Undersecretary for MOCI, also wrote to H E Dr Al Azri, Chairman of OMCO, on 10 August 2008 stating that the Ministry believed the OMCO-Emrock Lease Agreement should continue.68 The OMCO Board of Directors subsequently decided to reconsider its decision to terminate the OMCO-Emrock Lease Agreement, and met with the Minister of Commerce, H E Maqbool Bin Ali Sultan, on 23 September 2008 to discuss the decision to terminate.69
72.
MECA issued additional citations against OMCO on 8 October 200870 and 11 October 2008.71 A further fine of RO 1,000 was attached to the infraction report of 11 October 2008.72
73.
On 5 November 2008, Nakheel Properties engaged the force majeure clause of its supply agreement with Emrock and reduced its daily requirements of limestone from Emrock to 3,000 tonnes per day.73 On 20 November 2008, that amount was further reduced to 1,500 tonnes per day.74 On 30 December 2008, Nakheel Properties informed Emrock that all works under its supply agreement with Emrock would be suspended from 16 January 2009 until further notice.75
74.
The US-Oman FTA came into force on 1 January 2009. In early February 2009, MECA issued a number of further citations against OMCO in respect of Emrock's alleged actions in taking material from the wadi, operating machinery without necessary permits, failure to obtain permits for housing, and uprooting trees.76 The fines attached to these citations totalled RO 12,500. Following the issuing of these citations, OMCO again instructed Emrock to cease wadi production and, on 17 February 2009, purported again to terminate the OMCO-Emrock Lease Agreement on a variety of grounds, including that Emrock had failed to comply with payment obligations allegedly totalling RO 35,440,435.77 OMCO additionally sent Emrock a " demobilization plan " of the same date, requiring that the Claimant immediately cease operations at the Jebel Wasa quarry site and " remove all their equipments [sic] , installations and accommodations " from the site.78
75.
On 15 March 2009, OMCO wrote to inform Emrock that it considered Emrock's continued presence at the quarry site to be illegal and stated that Emrock had 30 further days to vacate the premises.79 A further letter to this effect followed on 18 March 2009.80 On 19 April 2009, after the expiry of the 30-day period, OMCO again wrote to Emrock reiterating that it considered that Emrock remained on the quarry site illegally and instructed Mr Al Tamimi to contact the Public Prosecutor in connection with Emrock's alleged breaches of Oman's environmental laws.81
76.
Meanwhile, on 8 April 2009, Mr Al Tamimi wrote to H E Hamoud Al Busaidi, Minister for Environment and Climate Affairs, asking him to intervene on Emrock's behalf.82 Shortly thereafter, on 13 April 2009, Dr Al Rushdi, Director of the Legal Department at MECA, visited the quarry site for an inspection.83 On 19 May 2009, Mr Al Muharrami, Director-General of Environmental Affairs at MECA, contacted the Royal Oman Police to request that they intervene to stop operations at Jebel Wasa quarry " in order to force the Company to comply with the laws and environmental requirements till the competent judicial authority issue [sic] a decision ".84
77.
Mr Al Tamimi was arrested at the Jebel Wasa quarry site by the Royal Oman Police on 23 May 2009. He was held at a local police station for several hours, where he was photographed, fingerprinted and questioned by police. He was also taken to meet with a local prosecutor. Mr Al Tamimi was ultimately informed that he would be released from custody provided he submitted his US passport, posted RO 5,000 as bail, and signed an undertaking regarding future quarry operations.85 Mr Al Tamimi agreed to sign this undertaking, and was released by police after promising to provide the bail money and his passport the following day. Mr Yasser Al Bulushi, Emrock's head of government affairs, subsequently delivered the bond payment and passport to police.86 Mr Al Tamimi's passport was later returned to him by the Public Prosecutor at the request of his lawyers.87
78.
A criminal trial was subsequently commenced against Mr Al Tamimi in the Mahda Court of First Instance. By virtue of his position as Chairman of Emrock, Mr Al Tamimi was tried and convicted by the Court on 8 November 2009 on two misdemeanour counts: (a) stealing sands and stones without a permit; and (b) violating Omani environmental law by engaging in quarrying and crushing operations without the requisite permissions.88 The Claimant was sentenced to imprisonment for a term of three months and fined RO 3,050. While the Court ordered that the fine should be collected, Mr Al Tamimi's sentence of imprisonment was suspended.
79.
Mr Al Tamimi subsequently filed an appeal with the Ibri Court of Appeal against his conviction by the Mahda Court of First Instance. On 6 June 2010, the Ibri Court of Appeal issued a judgment overturning Mr Al Tamimi's conviction on both misdemeanour counts. The decision of the Ibri Court of Appeal was not appealed to the Omani Court of Cassation.
80.
Meanwhile, on 26 September 2009, while the first decision of the Mahda Court of First Instance was still pending, MECA filed four additional statements of claim with the Public Prosecutor relating to outstanding violations and fines against Emrock. Those four claims were also subsequently tried by the Mahda Court of First Instance, in separate proceedings from the first criminal trial against Mr Al Tamimi. In its ruling of 25 April 2010, the Court found Mr Al Tamimi, again in his capacity as Chairman of Emrock, liable on all charges, and fined him RO 1,500.89 This decision was not appealed to the Ibri Court of Appeal.
81.
In March 2009, MECA also laid three claims with the Public Prosecutor against OMCO for violations of environmental laws.90 On 28 July 2009, the Mahda Court of First Instance ruled on these claims, finding that the claims should have been filed against Emrock as the independent party in control of the Jebel Wasa quarry site and not against OMCO.91
82.
According to the Claimant, production of limestone at the Jebel Wasa quarry site permanently ceased on the date of his arrest, 23 May 2009.92 Emrock continued, however, to sell surplus inventory to buyers, who brought their trucks to the site to collect the limestone.93 The Royal Oman Police allegedly intervened on repeated occasions to stop this process, claiming that Emrock had no legal right to continue to occupy the Jebel Wasa quarry site.94
83.
These police interventions allegedly made it difficult for Emrock to continue any operations at the quarry site. Over time, Emrock's staff were suspended and left the quarry site. Emrock's creditors reportedly seized much of the equipment remaining at the quarry site.95 Mr Francisco Ralutin, Site Office Manager for Emrock, tendered his resignation on 1 March 2010.96 By April 2010, according to the Claimant, none of Emrock's staff remained on the quarry site.97
84.
Mr Al Tamimi commenced proceedings against Oman by filing a Request for Arbitration on 5 December 2011.

V. SUMMARY OF THE PARTIES' ARGUMENTS

A. JURISDICTION

85.
The Respondent submits that the Tribunal lacks jurisdiction to hear the claims raised by Mr Al Tamimi in this proceeding. The Tribunal sets out the Parties' arguments below with respect to the Respondent's objections.

(a) Jurisdiction ratione personae

(i) Respondent's position

86.
In its Counter-Memorial, the Respondent submits that the Claimant may be a dual national of the US and UAE, and as such may not qualify as an investor for the purposes of the US-Oman FTA.98 The Respondent did not present oral argument on this objection at the Hearing, but confirmed at the Hearing that the objection had not been withdrawn.99 As such, the Tribunal will address and determine this objection on the basis of the Parties' arguments set out in their written submissions.
87.
In short, the Respondent submits that, as Mr Al Tamimi appears to be a US-UAE dual national, the Claimant should be deemed an exclusive national of the UAE for the purposes of Article 10.27 of the US-Oman FTA, and as such should be precluded from claiming under that agreement.
88.

Article 10.27 relevantly defines an "investor of a Party’ as follows: "[...] a natural person who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality". The Respondent contends that, as Mr Al Tamimi had previously stated that he was a national of the UAE,100 and as it remains unclear whether Mr Al Tamimi has lost or still retains that citizenship, he may be deemed an exclusive national of the UAE and hence not a covered " investor of a Party " for the purposes of the US-Oman FTA.

(ii) Claimant's position

89.
The Claimant takes a different view of this issue. The Claimant contends that, even if he had become a UAE national involuntarily when the UAE was formed in 1971 (the Claimant was born a citizen of the Emirate of Sharjah and, according to the Claimant, did nothing to claim UAE citizenship when the UAE was formed), he lost that nationality as a matter of both US and UAE law when he became naturalised as an American citizen on 11 June 1980.101 The Claimant contends that the documents conclusively establish that he was (and is) a US citizen and that at all relevant times he held himself out as such;102 in the latter respect the Claimant notes that his nationality is listed uniformly and unconditionally as " American " in all registration documents filed with the UAE and Omani authorities.103
90.
The Claimant also argues that, in the event that he is a dual citizen of the US and the UAE (which is denied), he would nonetheless be entitled to the protection of the US-Oman FTA as his " dominant and effective " nationality (for the purposes of Article 10.27 of the FTA) is clearly American.104 In this respect, the Claimant refers to his residency in the US since 1968, his centre of business interests and family ties in Massachusetts and the New England region of the US, and his involvement in the local community in Wakefield, Massachusetts.105

(b) Jurisdiction ratione materiae

(i) Respondent's position

91.
The Respondent submitted in its Counter-Memorial that the Claimant does not have a " covered investment" under the US-Oman FTA, because the Claimant's alleged investments fail to meet the fundamental requirement that they be in existence on or after the date on which the US-Oman FTA came into force.106
92.
As to the reasons why the Respondent says that the Claimant had no investment in existence by the time of the coming into force of the US-Oman FTA, those submissions are summarised below under the " Jurisdiction ratione temporis " heading.

(ii) Claimant's position

93.

The Claimant has submitted that his investments in Oman, made through Emrock and SFOH, comprised the OMCO-Emrock Lease Agreement and the OMCO-SFOH Lease Agreement as well as " tens of millions of dollars " spent implementing those agreements, including building a road to the quarry site, designing a modern quarrying operation, developing the site, employing and training hundreds of labourers, creating a market presence, and leasing and purchasing equipment.107

94.

The Claimant has submitted that the Tribunal does have jurisdiction ratione materiae in the present case on the basis that: (i) the Claimant is an investor of " the other Party " as defined in the US-Oman FTA; (ii) he has a " covered investment "; (iii) his allegations of breach under Chapter 10 of the US-Oman FTA pertain to measures adopted or maintained by Oman relating to the Claimant and/or his covered investment; and (iv) he has alleged loss or damage by reason of, or arising out of, the breaches he has alleged.108

95.

The Claimant's investments are " covered investments ", the Claimant has submitted, because they were in existence as of the date of entry into force of the US-Oman FTA on 1 January 2009. The present dispute, moreover, concerns measures adopted or maintained by Oman on or after 1 January 2009 relating to the Claimant and his covered investments, which the Claimant alleges caused him to suffer loss.109 As to why the Claimant submits that his investments continued in existence as of the date of entry into force of the US-Oman FTA, again see the summary under the " Jurisdiction ratione temporis ’ heading below.

(c) Jurisdiction ratione temporis

(i) Respondent's position

96.

The Respondent contends that the OMCO-Emrock and OMCO-SFOH Lease Agreements are not " covered investments " for the purposes of the US-Oman FTA.

97.

The Respondent notes that the US-Oman FTA relevantly provides that a " covered investment " under that instrument requires that the purported investment comport with Omani laws and be " in existence as of the date of entry into force of " the FTA (ie 1 January 2009).110 Oman claims that the Claimant's alleged investments fail to meet this requirement.111

98.
Dealing first with the OMCO-SFOH Lease Agreement, the Respondent alleges that such agreement never came into force because SFOH was never registered in Oman.112 Such registration was allegedly required both under (a) Omani law, and (b) the terms of the agreement.113
99.
The Respondent submits that Omani law does not recognise the existence of companies not registered in Oman, or the contracts those companies enter into.114 Despite being subject to this registration requirement under Omani law, and despite being reminded by OMCO of that obligation, the Claimant did not register SFOH.115 On 22 August 2007, OMCO told the Claimant that the OMCO-SFOH Lease Agreement would be void if he failed to register SFOH in Oman by 30 November 2007.116 The Respondent contends that, as he did not do so, the OMCO-SFOH Lease Agreement was a nullity as of 30 November 2007, namely thirteen months before the US-Oman FTA took effect.117
100.
As to the OMCO-Emrock Lease Agreement, the Respondent claims that this is not protected by the US-Oman FTA because OMCO had terminated that agreement before the FTA came into force.118 The Respondent submits that OMCO terminated the OMCO-Emrock Lease Agreement under cover of letter dated 20 July 2008, and that (although its reasons for doing so are not properly in issue before this Tribunal119) OMCO acted within the terms of the agreement in exercising its right to terminate.120 The Respondent refers to a history of correspondence between OMCO and the Claimant (commencing on 30 April 2008) in which OMCO sought reimbursement of the RO 10,000 fine that OMCO paid to MOCI owing to Emrock's unauthorised operations outside the Jebel Wasa; the Respondent submits that the Claimant's failure to make this payment (and other overdue payments under the agreement) entitled OMCO to terminate the OMCO-Emrock Lease Agreement pursuant to Article 10(iv) thereof.121 Again, as this termination was effected on 20 July 2008, the Respondent contends that the Claimant had no " covered investment " as of the date the US-Oman FTA came into force on 1 January 2009.122
101.
The Respondent also contends that the purported termination by OMCO on 20 July 2008 was valid under Omani law.123 The Respondent submits that, contrary to the Claimant's position, Omani law did not require OMCO to obtain a judicial decree from an Omani court authorising the termination of the OMCO-Emrock Lease Agreement in order to validly terminate that agreement.124 In this respect, the Respondent contends that the Claimant's reliance upon RD 6/89 is misplaced, as that law governs only " residential unit[s] or commercial or industrial or professional shops and its leased extensions ".125
102.
The Respondent rejects the Claimant's submission that OMCO rescinded its July 2008 termination of the OMCO-Emrock Lease Agreement.126 The Respondent contends that there is no evidence that OMCO's Board of Directors ever acted to vacate the July 2008 termination or to reinstate the Agreement.127 According to the Respondent, the fact that OMCO did not take immediate steps following termination to evict the Claimant from the site of the project does not mean that the Agreement was not effectively terminated on 20 July 2008.128 In this same connection, the Respondent contends that OMCO's further February 2009 termination of the OMCO-Emrock Lease Agreement does not mean that OMCO had reinstated that agreement after 20 July 2008;129 rather, the Respondent explains that this reaffirmation of the decision to terminate was compelled by the Claimant's refusal to acknowledge the end of the OMCO-Emrock Lease Agreement.130
103.
According to the Respondent, the reaffirmation of the decision was only delayed until after 1 January 2009 (ie after the US-Oman FTA came into force) because of a change in leadership in OMCO: Dr Al Azri, the Chairman of OMCO, stepped down from that position in late 2008, and the OMCO Board of Directors decided to defer issuing the notice to the Claimant until after H E Al Dheeb was installed as the new Chairman in early 2009.131

(ii) Claimant's position

104.

The Claimant submits that it had valid leases on the date the US-Oman FTA came into force and thereafter, and notes that the leases are captured by the definition of " investment " in Article 10.27 of the US-Oman FTA.132 The Claimant notes that the Ibri Court of Appeal found on 6 June 2010 that the OMCO-Emrock Lease Agreement was in force and not validly terminated,133 and that although that court's judgment did not address the OMCO-SFOH Lease Agreement, such agreement was also never validly terminated.134

105.
Addressing the OMCO-Emrock Lease Agreement, the Claimant contends that the lease was in force on 1 January 2009. The Claimant submits that OMCO's purported termination letter of 20 July 2008 had no effect, and that the second attempted termination in February 2009 demonstrates its understanding that the earlier letter was ineffective.135 The Claimant submits that the second letter was also ineffective in this respect.136
106.
The Claimant raises a number of arguments as to why the 20 July 2008 letter was ineffective in purporting to terminate the OMCO-Emrock Lease Agreement. First, the Claimant alleges that the purported termination of a multimillion dollar agreement for the alleged non-reimbursement of a comparatively small fines totalling only RO 10,000 (about US$26,000) was an evident pretext (rather than a legitimate reason) for terminating the lease.137 The Claimant notes that Emrock had not failed to pay any legitimate amounts due to OMCO, and that (as found by the Ibri Court of Appeal) OMCO had obtained the proper permits for Emrock, and Emrock was operating the quarry within the concession area.138 To the extent that proper permits had not been obtained, this was a breach of OMCO's own obligations under the OMCO-Emrock Lease Agreement, for which OMCO could not seek an indemnity from Emrock.139
107.
Second, the Claimant contends that OMCO's purported termination did not comply with the provisions of the OMCO-Emrock Lease Agreement.140 The purported termination was made under Article 10(iv) of the lease, which relevantly states that the lessor has a right of termination if the tenant is " not complying with the term of payment under this agreement ".141 According to the Claimant, that provision could not apply to the present case, as the alleged failure to reimburse OMCO for fines was not Emrock's responsibility under the lease agreement.142
108.
The Claimant posits that OMCO's correspondence with Emrock demonstrates that OMCO understood that Article 10(iv) did not apply.143 OMCO, in its 22 June 2008 letter to Emrock, first relied upon the " substantial breach " provision in Article 10(iii) of the OMCO-Emrock Lease Agreement (rather than Article 10(iv)); the " substantial breach " clause required OMCO to allow Emrock 60 days to remedy the alleged breach.144 However, the lease was purportedly terminated only 28 days later, in reliance (for the first time) upon Article 10(iv) of the lease as the grounds for termination, and without the required 60-day notice of Article 10(iii).145 As submitted by the Claimant, Article 10(iv) does not apply here, and the inconsistent grounds for termination articulated by OMCO further demonstrates that its stated reasons were a pretext.146
109.
Third, the Claimant observes that Omani law requires that a judicial decree be obtained before a lease agreement for real property may be terminated.147 The Claimant submits that, as OMCO did not use the proper legal channels to seek redress by applying for a termination, Oman cannot rely upon OMCO's meaningless declaration of termination.148 Even had a judicial decree been sought, the Claimant contends that it would not have been granted, as Emrock had not breached the lease, and even if it had (which is denied), Oman offers no reason to think that any reasonable Omani judge would have permitted OMCO to seize on non-payment of a few thousand dollars to terminate a lease worth hundreds of millions.149
110.
Finally, the Claimant submits that, even if non-reimbursement of a small amount of fines constituted grounds for termination under the OMCO-Emrock Lease Agreement, the termination of a lease worth hundreds of millions of dollars on that basis would violate basic requirements of proportionality.150 In this respect, the Claimant notes that Omani courts enforce principles of proportionality in considering applications to terminate a lease or other contract, and that proportionality is a principle of customary international law.151
111.
Turning to OMCO's second purported termination letter of 17 February 2009, the Claimant maintains that this letter was also ineffective to terminate the OMCO-Emrock Lease Agreement.152 Further, by the fact of sending the second letter, the Claimant contends that OMCO demonstrated its understanding that the lease was still in effect at that time (namely, over a month after the US-Oman FTA came into force).153
112.

The Claimant notes that the second letter relevantly provides that OMCO " hereby terminate[s] EMROCK with immediate effect because EMROCK has not complied with making payments to [OMCO]."154 The Claimant submits that this language clearly reflects OMCO's understanding that the lease was still in place as of 17 February 2009 (the date of the second letter), as the lease could not be terminated " with immediate effect " had it already been terminated in July 2008.155 Further, the Claimant contends that subsequent statements by OMCO also confirm OMCO's understanding that the lease agreement was not terminated until after the US-Oman FTA entered into force: in various communications made by OMCO in 2010, OMCO referred to the OMCO-Emrock Lease Agreement having been cancelled/terminated since March 2009.156

113.
As to the effectiveness of the second purported termination, the Claimant submits that this is irrelevant to the Tribunal's jurisdiction, as this alleged termination (in February or March 2009) occurred after the US-Oman FTA came into force.157 In any event, the Claimant contends that the 17 February 2009 letter suffers from the same flaws as the 20 July 2008 letter, as it is a disproportionate sanction for a minor alleged non-payment of an amount that was actually OMCO's responsibility, it failed to comply with the lease, and it did not receive judicial approval.158
114.
With respect to the OMCO-SFOH Lease Agreement, the Claimant maintains that such agreement was in force on 1 January 2009 and that (contrary to the Respondent's submission) SFOH was not under an obligation (under either Omani law or the lease agreement itself) to register in Oman.159 The Claimant notes that the Respondent has not cited any provision of the OMCO-SFOH Lease Agreement to support the proposition that the agreement required registration by SFOH.160 The Claimant also submits that the Omani laws requiring registration of foreign entities do not apply to SFOH, as SFOH carried out no mining or other relevant business operations in Oman itself; rather, it acted only through Emrock pursuant to the Agreement for Production of Limestone and Crushing Project dated 15 January 2007.161
115.
The Claimant also submits that, even had registration been required, SFOH's failure to register would not have resulted in the OMCO-SFOH Lease Agreement being automatically null and void.162 It is the Claimant's contention that, under applicable Omani law, the penalty for failure to register a company doing business in Oman is a small monetary fine.163 The Claimant submits that nothing in that law declares contracts void as a consequence of non-registration.164 Further, to the extent that the Respondent argues that Omani law does not recognise the existence of companies not registered in Oman, the Claimant submits that this is inconsistent with the imposition of fines on those companies by Oman for non-registration: ie if such companies were treated as non-existent, Oman could not fine them.165
116.

The Claimant also notes that OMCO never attempted to terminate the OMCO-SFOH Lease Agreement on the basis of SFOH's alleged failure to register.166 Instead, OMCO only stated in its 22 August 2007 letter that the lease would be treated as " null and void " if SFOH did not register by 30 November 2007; it never issued a notice of substantial breach under that lease and a 60-day opportunity to cure.167 Even if the 22 August 2007 could be construed as a notice of substantial breach, the Claimant observes that no actual notice of termination was subsequently issued (as required under the lease) and no judicial decree of termination was obtained (as required under Omani law).168

117.
Finally, the Claimant submits that OMCO acquiesced in SFOH's non-registration, as it never replied to the Claimant's letter of 4 July 2008 which explained why OMCO was incorrect in believing that SFOH was required to register.169 As OMCO did not object or respond to that letter, the Claimant argues that is evident that OMCO was satisfied with Mr Al Tamimi's response, or at least gave him ground to believe that it was.170

B. MERITS

(a) Overview

118.
The Claimant submits that the question of Oman's liability cannot be disputed, as the Respondent is bound by the decision of its own appellate court, which is a part of the Omani state.171 That court judgment, according to the Claimant, relevantly held that the Claimant was operating within the boundaries allotted to him by a valid and existing lease, and that he had not committed the environmental violations of which he was accused.172 It so follows that Oman had no justification for its coercion (through its environmental authorities and police) of Mr Al Tamimi to undertake to stop operating the quarry as a condition for being released from jail pending trial.173
119.
Even if the appellate court's decision were to be disregarded, the Claimant maintains that the facts indisputably establish that the court's conclusions were correct.174 In this respect, the Claimant notes that Oman had provided Mr Al Tamimi with multiple conflicting coordinates of where he was allowed to mine, and also notes that the environmental citations issued to the Claimant's quarry had little (if any) basis in fact.175
120.
The Claimant presents three questions of liability under the US-Oman FTA for determination by this Tribunal, namely: expropriation, denial of fair and equitable treatment, and denial of national treatment.176 As compensation for these breaches, the Claimant claims damages in the amount of US$273 million plus interest, attorneys' fees and other costs of the arbitration.177
121.
The Respondent opposes the Claimant's arguments with respect to liability and submits that the Claimant has not presented any evidence discharging his obligation to prove that Oman breached the US-Oman FTA.178 The Respondent submits that the Claimant seeks to transform a conventional breach-of-contract case against OMCO (whose acts are not attributable to Oman) into a treaty claim based on actions allegedly taken by Oman.179
122.
The Respondent contends that the Claimant has no treaty claim with respect to the actions of OMCO, as that entity did not exercise any regulatory, administrative or other governmental authority on the part of Oman.180 As such, OMCO's termination of the OMCO-SFOH Lease Agreement and the OMCO-Emrock Lease Agreement cannot be attributed to Oman181 (in any event, and as discussed above, the Respondent maintains that OMCO terminated these agreements, and hence any investment the Claimant might have had, before the US-Oman FTA took effect182). If the Claimant had wished to challenge OMCO's actions with respect to the OMCO-Emrock Lease Agreement, the Respondent submits that the proper remedy was in accordance with the arbitration provisions of that agreement, not under the US-Oman FTA.183
123.
To the extent that the Claimant complains of actions attributable to Oman, the Respondent submits that those actions were not in breach of the US-Oman FTA. According to the Respondent, Mr Al Tamimi's arrest by the Royal Oman Police was inconsequential, as it occurred long after he had lost his investment and any right to occupy the quarry site.184 Further, the Respondent contends that the Claimant had been trespassing on the quarry site and operating in violation of Omani environmental regulations by excavating sand and gravel material from areas outside the Jebel Wasa (the Respondent notes that his authorisations only covered the quarrying of hard limestone rock in the Jebel Wasa), and that such actions led to his arrest.185 The Respondent submits that the Claimant had been repeatedly told to stop his activities and that the Claimant knew he never had authorisation to excavate wadi material from outside the Jebel Wasa.186
124.
The Respondent also argues that the Ibri Court of Appeal judgment cannot sustain the Claimant's treaty claims.187 The Respondent submits that the Claimant mischaracterises the court's findings, and that in any event, his US-Oman FTA claims are not tied to whether he was guilty of the criminal charges he faced following his 23 May 2009 arrest.188
125.
The Respondent contends that the Claimant's claims should be dismissed in their entirety with costs.189

(b) The Ibri Court of Appeal judgment

(i) Claimant's position

126.
The Omani Court of Appeal's judgment forms a central pillar of the Claimant's case on liability.190 The Claimant submits that the court relevantly found that the Claimant was operating lawfully when Oman shut down his quarry: first, he was operating within the approved concession area for mining (namely, the 14.7 km² area identified in the Housing Ministry's krooki191), and second, OMCO had received all of the required environmental approvals in order for the Claimant to operate his crushers and quarry.192
127.

As to operation within site boundaries, the Claimant alleges that, among other evidence, the Ibri Court of Appeal considered the testimony of Mr Mamoun Al-Zubair Abdul Rahman, a survey engineer from Oman's Ministry of Housing, Electricity and Water, who had visited Emrock's site on 4 May 2013.193 The Claimant submits that Mr Abdul Rahman testified that the Emrock encampment was within the boundaries of Emrock's approved area and that " there was no work taking place outside the western side, and likewise there was no exploitation on the northern side of the site ".194 The court, after reviewing all the evidence (including Mr Abdul Rahman's testimony), concluded that the evidence proved that Emrock was operating within the authorised area.195

128.

As to the question of environmental approvals, the Claimant submits that the Ibri Court of Appeal held that the documents in the record established that OMCO " obtained all the required government licenses for the quarrying and crushing operations in addition to the requisite authorisations for carrying out this activity ".196 The court accordingly declared Mr Al Tamimi innocent of the charge of operating quarries and crushers without the proper permits.197

129.
Noting that investment arbitration tribunals have found in appropriate cases that national court decisions are determinative of facts underlying an investor's international law claims,198 the Claimant contends that the Ibri Court of Appeal determined in his favour the key factual components that underpin his substantive claims against Oman in this arbitration (namely, operation within site boundaries and compliance with environmental permit requirements).199 The Claimant submits that the facts determined by the Ibri Court of Appeal establish Oman's liability in this proceeding.200
130.
The Claimant submits that Oman cannot contradict the binding judgment of the Omani state itself, acting through its courts, in a proceeding that the Omani prosecutors brought against the Claimant.201 In this respect, the Claimant argues that the decision of the Ibri Court of Appeal is attributable to Oman under basic principles of state responsibility.202
131.

To the extent that the Respondent may wish to challenge the findings of the Ibri Court of Appeal, the Claimant argues that such judgment is entitled to res judicata effect against Oman in this arbitration.203 In so doing, the Claimant submits that the principle of res judicata, including the subsidiary doctrine of " collateral estoppel ", applies in both international arbitration and under Omani law.204 Applying such principle, as a result of the Ibri Court of Appeal judgment, the Claimant contends that the Respondent cannot challenge in this arbitration the lawfulness of Mr Al Tamimi's operations.205

132.

The Claimant also submits that the 25 April 2010 judgment of the Mahda Court of First Instance is entitled to no weight in this arbitration.206 The Claimant argues that this judgment was not the result of a " civil " proceeding against Mr Al Tamimi, but rather was (like the proceeding before the Ibri Court of Appeal) a criminal proceeding.207 Relevantly, the Claimant notes that the Ibri Court of Appeal's judgment resolved substantially the same issues as the 25 April 2010 judgment of the Mahda Court of First Instance, and as the Ibri Court of Appeal is a higher court, and as its judgment was later in time, such judgment must supersede that of the Mahda Court of First Instance.208

(ii) Respondent's position

133.
The Respondent, on the other hand, submits that the Claimant seriously mischaracterises the Ibri Court of Appeal judgment.209 The Respondent contends that the judgment is irrelevant to this proceeding, as the Claimant's substantive claims under the US-Oman FTA do not rise or fall on whether Mr Al Tamimi was guilty of the two misdemeanour counts with which he was charged following his 23 May 2009 arrest.210 On the Respondent's case, the issues relevant to Mr Al Tamimi's claims under the US-Oman FTA were not before the Ibri Court of Appeal, and its decision has no conceivable res judicata or " collateral estoppel " effect in this proceeding.211
134.
As to the findings of the Ibri Court of Appeal as characterised by the Claimant, the Respondent submits that the court did not find that (a) Mr Al Tamimi or Emrock had the requisite environmental permits to operate outside the area in the Jebel Wasa leased from OMCO, or (b) Mr Al Tamimi had previously been operating only within permitted areas.212
135.
First, the Respondent contends that Mr Al Tamimi had not asked the Ibri Court of Appeal to decide the question of whether he or Emrock had the requisite environmental permits.213 Rather, his defence to the second count against him (namely, concerning violation of environmental regulations) was that he could not be justly accused of failing to obtain the requisite licences and approvals when it was OMCO that was required to obtain them under the OMCO-Emrock Lease Agreement.214 The court acquitted Mr Al Tamimi of this count, and in doing so simply noted the approvals initially obtained by OMCO; the Respondent submits that the court did not, as the Claimant contends, find that OMCO had received all of the environmental approvals required in order for the Claimant to operate his crushers and quarry (in particular, those approvals required in order to excavate wadi materials from locations outside the Jebel Wasa).215
136.
Second, the Respondent contends that the Ibri Court of Appeal did not find that all of Mr Al Tamimi's operations were within the OMCO concession area, and that such issue was not presented to the court.216 The Respondent contends that the Claimant mischaracterises the evidence of Mr Abdul Rahman, the Ministry of Housing, Electricity and Water surveyor who attended the site and gave evidence before the Ibri Court of Appeal.217 On the Respondent's case, and also on Mr Abdul Rahman's own evidence in this arbitration, Mr Abdul Rahman inspected the site on only one occasion for the purpose of marking the boundary points of the concession granted to OMCO, not for determining where the Claimant was conducting mining or excavation activities.218
137.
The Respondent also argues that the 25 April 2010 judgment of the Mahda Court of First Instance is relevant to this proceeding.219 In its judgment, the Mahda Court of First Instance convicted Mr Al Tamimi of four environmental charges, including the claim that Mr Al Tamimi was excavating wadi material beyond the western boundaries of the Jebel Wasa without authorisation.220 Relevantly, the Respondent claims that, while the judgment is not dispositive of the Claimant's treaty claims, it does reveal Mr Al Tamimi's unauthorised operations outside the Jebel Wasa.221
138.
The Respondent submits that, despite the Claimant's contention otherwise, the Ibri Court of Appeal did not resolve substantially the same issues as the Mahda Court.222 For the Respondent, the Ibri Court of Appeal judgment could not and did not absolve the Claimant of the environmental violations for which he was charged and for which the Mahda Court of First Instance imposed penalties.223 The Respondent relevantly argues that the charges in the Ibri Court of Appeal proceedings resulted from the Claimant's 23 May 2009 arrest, whereas the claims leading to the Mahda Court judgment were based on earlier site inspections by MECA officials.224
139.
The Respondent also observes that the Claimant never contested the decision of the Mahda Court of First Instance, and that it is groundless for Mr Al Tamimi still to claim that he was not aware of the proceedings at that time.225 In the latter respect, the Respondent notes that, before a decision had been rendered by the Mahda Court, Mr Al Tamimi had asked the Public Prosecution Authority in Muscat to intervene to stop the Public Prosecutor in the Al Buraimi Government from continuing with the charges against him.226

(c) Emrock's operations

(i) Claimant's position

140.
Notwithstanding the binding effect of the Ibri Court of Appeal judgment, the Claimant submits that the facts prove that Emrock was operating inside the OMCO concession area and with the proper permits.227
141.
First, the Claimant submits that, under the two Lease Agreements, Emrock's and SFOH's activities were not confined to any particular area within the concession area.228 On the Claimant's case, Oman's allegation that Mr Al Tamimi was operating outside the concession area or in the Wadi Sumayni ignores the geography of the site.229 In this respect, the Claimant refers to Oman's allegation that the Claimant had unlawfully extracted materials in the Wadi Sumayni.230
142.
The Claimant notes that Emrock's operations were fully within OMCO's concession area, and that the Wadi Sumayni is far outside it.231 In this regard, the Claimant submits that he was entitled to quarry up to 6 km² anywhere within OMCO's concession area, which was the entire 14.7 km² described by the Omani Housing Ministry's krooki.232 The Claimant notes that a flat plain with deposits of sand and gravel, known as the Sayh Sumayni, lies between the Jebel Wasa mountain (the limestone deposit that was at the core of the Claimant's operations) and the Wadi Sumayni ; OMCO's concession area boundary runs through that sand and gravel plain, so that the plain lies partly within and partly outside the concession site.233 The Claimant does not dispute that Emrock excavated sand and gravel from the Sayh Sumayni beside the mountain, which was within its concession area,234 but contests that any such materials were excavated from the Wadi Sumayni.235
143.
To the extent that the Respondent alleges that the Claimant was operating a " crusher in the Wadi [Sumayni] to excavate sand and gravel from the Wadi ", the Claimant submits that this defies common sense.236 The Claimant asks why he would have travelled several kilometres to the Wadi Sumayni to obtain sand and gravel which was already available within the concession area in the Sayh Sumayni.237 Further, the Claimant notes that he did not possess an " alluvial crusher ", which he is alleged by Oman to have used in the Wadi Sumayni.238
144.
Second, the Claimant claims that, notwithstanding Oman's allegation otherwise, the Claimant was not required to obtain any additional environmental permits.239 The Claimant submits that it was OMCO, not the Claimant, which was responsible for obtaining all the required permits (both under the Lease Agreements and under Omani law),240 and in this respect, OMCO had confirmed to the Claimant on 22 August 2007 that OMCO had fulfilled its obligations under the Lease Agreements by obtaining all necessary permits.241
145.
The Claimant submits that, as a matter of fact, OMCO's representation was accurate as OMCO had obtained all of the permits required for the project to proceed.242 To the extent that Oman alleges that OMCO required a separate permit for crushers, the Claimant notes that OMCO's applications specifically stated in numerous places that the quarry would use " crushers " to process excavated limestone,243 and that the temporary permit subsequently granted by MECA did not exclude the use of crushers or say anything about a separate permit for crushers being required.244 In any event, if a permit for a crusher was required, the Claimant contends that the burden is on Oman to explain why its state-owned mining company did not apply for that permit (as the leases and Omani law required), and why the permit would not have been granted if OMCO had applied for it at that time.245
146.
Third and finally, the Claimant submits that Oman's allegation that he was operating outside the approved area for mining is contrary to the facts.246 To the extent that RPM, Oman's expert, argues that the Claimant's quarrying operations were beyond the boundary described by the coordinates in MECA's initial environmental approval (even if within the OMCO concession boundaries), the Claimant notes that this mining boundary was different from the boundary identified in OMCO's application.247 The Claimant alleges that the mining boundary in the approval, although roughly the same size as that identified in OMCO's application, was square and had been moved slightly to the southeast.248
147.
The Claimant submits that neither Oman nor RPM has identified any reason as to why MECA shifted the boundary without giving any explanation.249 Also, the Claimant suggests that there is nothing on the record to suggest that MECA ever discussed the boundary shift with the applicant (OMCO), and that neither OMCO nor MECA ever discussed the reason for the shift with the Claimant.250 The Claimant submits that the most obvious explanation for the change is that the new coordinates were an error in description in the licence, or that the boundary was only intended to be a rough approximation of the general area of quarrying.251
148.
To the extent that RPM's report alleges that the Claimant's limestone drilling and blasting extended beyond the approved mining area, but still within the OMCO concession area, the Claimant notes that this allegation was rejected by the Ibri Court of Appeal.252 In any event, even had he extended beyond that area, the Claimant notes that he can hardly be faulted for not knowing precisely where he was supposed to mine, given that Oman itself could not determine what the proper coordinates were.253

(ii) Respondent's position

149.
The Respondent submits that, as a matter of fact, the Claimant was operating outside the approved area and without the requisite permits.254 The Respondent notes that, in the Claimant's submissions, Mr Al Tamimi elides the distinction between the concession area awarded to OMCO (consisting of around 14.7 km²) and the smaller area within that concession leased to Emrock for hard-rock mining.255 The Lease Agreements did not afford him the right to excavate wadi material throughout the entire concession area, and further, he had not obtained approval from the Omani authorities to do so.256
150.
For the Respondent, the distinction drawn by the Claimant between the Sayh Sumayni and the Wadi Sumayni is irrelevant, as the Claimant was not permitted to excavate wadi materials (ie sand, gravel and boulders) from either area: the Claimant was only permitted to drill, blast, and extract hard rock from within the 4 km² area of the Jebel Wasa leased from OMCO for that purpose.257 The Respondent also contends that Mr Al Tamimi did not at the time draw the distinction between the Sayh Sumayni and the Wadi Sumayni that he draws today.258 Rather, Mr Al Tamimi was aware that the relevant distinction was between hard rock mining in the 4 km² area of the Jebel Wasa, and his unauthorised operations to excavate wadi material from outside that area.259
151.
With that distinction in mind, the Respondent notes that OMCO had made efforts to extend Mr Al Tamimi's area of operations: on 17 February 2008, OMCO applied to MOCI for approval to allow the excavation of wadi material within the OMCO concession area.260 The Respondent submits that Mr Al Tamimi was aware of these efforts by OMCO (in particular, the Respondent notes that Mr Al Tamimi was present at a 17 February 2008 meeting which resulted in the decision that OMCO would make the application for approval to extend operations outside the Jebel Wasa, and also notes a letter from the Claimant to OMCO's then chairman dated 28 April 2008 referring to the " request of the extension/permitting " filed by OMCO " in regard to the wadi production "261), and as such, that he knew he was not authorised to excavate wadi material outside the Jebel Wasa.262 Despite MOCI not granting OMCO's request, the Claimant continued to excavate the wadi material he knew he was not authorised to excavate.263
152.
The Respondent submits that the alleged difference between the concession boundaries plotted in OMCO's application and in MECA's initial environmental approval is without significance.264 First, moving the coordinates was within that Ministry's discretion, and second, the exact location of the 4 km² quarrying area was not the source of the Ministry's censure: it was the Claimant's operations outside the Jebel Wasa.265
153.
Apart from the distinction between the Sayh Sumayni and the Wadi Sumayni being irrelevant (and not a distinction that the Claimant drew at the relevant times), the Respondent also submits that the Claimant's contention that his operations did not take place in the Wadi Sumayni is incorrect.266 The Respondent argues that Mr Al Tamimi repeatedly excavated wadi material from the Wadi Sumayni, and in this respect the Respondent relevantly refers to the evidence of an OMCO surveyor who plotted the area(s) within the Wadi Sumayni where Mr Al Tamimi had excavated wadi material.267 The Claimant's focus on the boundaries relating to OMCO's concession area ignores that excavations were conducted outside Emrock's permitted area for mining and in the Wadi Sumayni, which the Claimant concedes to be out of OMCO's concession.268
154.
The Respondent also contends that, notwithstanding the Claimant's submission otherwise, the Claimant was operating without the requisite permits.269 The Claimant's authorisations were limited to the quarry project in the Jebel Wasa, and as the Claimant knew at the time, in February and April 2008, he was not authorised to excavate wadi material at any location falling within the OMCO concession area.270 The Respondent notes that OMCO's obligations under the OMCO-Emrock Lease Agreement were limited to the hard-rock mining project in the Jebel Wasa: under that lease, OMCO was not required to seek authorisation on the Claimant's behalf from MOCI to excavate wadi material outside the Jebel Wasa, although it did so in February 2008.271 As noted above, the Ministry did not grant that authorisation.272

(d) Attribution

(i) Claimant's position

155.
The Claimant submits that the actions of OMCO can be attributed to Oman under the US-Oman FTA.273 The Claimant however notes that, as MECA, the Housing Ministry, Public Prosecutor, and Royal Oman Police were all closely involved in the activities that led to the destruction of the Claimant's investment, the Respondent's submission that OMCO's acts are not attributable to Oman does not detract from the Claimant's claims.274
156.
The Claimant makes two main arguments on this issue. First, it contends that, regardless of OMCO's status, MECA's actions precipitated the purported lease termination.275 Second, it submits that OMCO is in fact an organ of the Omani State.276
157.
As to its first submission, the Claimant alleges that Oman intervened to use its influence or sovereign power for its own purposes to force OMCO to use OMCO's contractual right as a pretext for terminating the underlying agreement.277 The Claimant submits that OMCO's purported lease termination was motivated by governmental pressure, and that in such respect the purported termination for non-payment of minimal fines was nothing more than a pretext.278
158.
The Claimant contends that the evidence shows that MECA had been putting pressure on OMCO to force Emrock and SFOH out of business (and out of Oman), including by bringing criminal charges against OMCO and Mr Al Waily.279 According to the Claimant, the termination notice sent to Emrock in 2009 was largely motivated by a desire to placate MECA in the hope of ending Mr Al Waily's prosecution.280 To that end, the Claimant refers to a 3 May 2009 letter from OMCO's attorneys, Trowers & Hamlins, to Mr Al Muharrami of MECA.281 That letter, according to the Claimant, reveals the strategy of OMCO's lawyers: namely, to cast blame on Emrock, assure Mr Al Muharrami that they were cooperating with him in stopping Emrock's operations, and to ask Mr Al Muharrami to withdraw the prosecution of Mr Al Waily on that basis.282 For the Claimant, the letter makes clear that the purported termination of the lease took place under coercive conditions created by Mr Al Muharrami of MECA.283
159.
As to its second argument, the Claimant alleges that OMCO operates at all times as an arm of the Omani State.284 In so doing, the Claimant contends that OMCO exercises governmental authority under Article 10.1.2 of the US-Oman FTA, and that in any event, responsibility for OMCO is attributable to Oman under principles of customary international law.285
160.
The Claimant relevantly notes that the Omani Ministry of Oil and Gas is the 99% shareholder of OMCO, and that, pursuant to OMCO's bylaws, OMCO's board members act at all times as representatives of the shareholders.286 The Claimant also submits that OMCO's mining activities are closely controlled by MOCI, and in that respect observes that the managers and board members of OMCO are usually directors and ex-employees of MOCI.287 For that reason, according to the Claimant, MOCI exercises effective control over the activities and decisionmaking process of OMCO and its business.288

(ii) Respondent's position

161.
The Respondent's position is that the question of attribution constitutes a fatal flaw in the Claimant's case.289 Specifically, the Respondent submits that the relevant actions allegedly causing the Claimant's losses, namely the termination of the Lease Agreements, were undertaken by OMCO, whose actions are not attributable to Oman under the US-Oman FTA.290
162.
The Respondent notes that the State Parties to the US-Oman FTA purposefully narrowed the grounds for attribution of state responsibility, as the wording of the FTA only tracked one ground for attribution under the International Law Commission's Articles on State Responsibility.291 In so doing, the Respondent submits that the US and Oman intentionally limited the circumstances that might result in Host State responsibility to those situations in which: (a) the State delegated governmental authority to a state enterprise, and (b) the enterprise exercised the governmental authority delegated to it.292 The Respondent submits that such a situation does not exist here.293
163.
The Respondent argues that there is no evidence that Oman delegated to OMCO any governmental authority, much less in connection with the OMCO-Emrock Lease Agreement.294 In this respect, the Respondent notes that OMCO could not even issue licences, permits, or approvals for the Claimant's projects, as that authority resided with the Omani ministries.295 The Respondent also submits that there is no evidence that OMCO in fact exercised any governmental authority.296
164.
Insofar as the Claimant alleges that MOCI exerted "effective control" over OMCO, the Respondent submits that this test for attribution does not apply under the FTA and that, in any event, the test is not made out.297 In the latter regard, the Respondent contends that the evidence proves that MOCI did not control OMCO.298
165.
The Respondent claims that Mr Al Tamimi's characterisation of the facts is not supported by the record.299 To the extent that the Claimant alleges that MECA was putting pressure on OMCO to force Emrock and SFOH out of business and out of Oman, the Respondent relevantly notes that the Claimant does not refer to any document from MECA to OMCO suggesting that OMCO should terminate the Lease Agreements.300 Further, the evidence to which the Claimant does refer (namely, various citations issued by MECA) demonstrates that there is no correlation between those citations and OMCO's termination of the OMCO-Emrock Lease Agreement.301 In this respect, the Respondent notes that the citation letters (except for one) were all sent by MECA after (a) OMCO delivered its 20 July 2008 notice terminating the OMCO-Emrock Lease Agreement, and (b) the 30 November 2007 date on which OMCO told the Claimant the OMCO-SFOH Lease Agreement was void.302
166.
The Respondent also submits that the Claimant's characterisation of the 3 May 2009 letter from OMCO's attorneys to Mr Al Muharrami suffers from a similar defect.303 The letter refers to a 15 April 2009 conversation between OMCO and MECA officials, which took place months after OMCO's Board had approved its actions with respect to Emrock, including the further 17 February 2009 termination of the OMCO-Emrock Lease Agreement.304

(e) Expropriation

(i) Claimant's position

167.
The Claimant argues that Oman's actions constitute a breach of Article 10.6 of the US-Oman FTA.
168.
The Claimant notes that expropriation includes not only open and deliberate transfers of property but also " covert or incidental interference with the use of property which has the effect of depriving the owner in whole or in significant part of the use or reasonably to be expected benefit of property even if not necessarily to the obvious benefit of the Host State ".305 The Claimant contends that Oman's actions through its police (according to the Claimant, the Omani police stopped mining operations at the quarry and subjected Emrock's workers at the site to harassment, threats of arrest, and other measures that had the effect of forcing them to leave the site permanently) are a clear case of expropriation.306
169.
The Claimant submits that he did not voluntarily abandon his investment, as contended by the Respondent, but rather was effectively ejected from the quarry site by the Omani police.307 The Claimant notes that, on 23 May 2009, Omani police and MECA representatives attended at the Claimant's site, ordered him to stop quarrying operations, and arrested him.308 In order to secure his release from jail, the Claimant claims that he was coerced by Omani police to make an undertaking that he would stop operating both of his crushers and screen; the effect of which was to require the Claimant to shut down limestone production, as without this equipment he could not produce limestone for sale.309 The Claimant submits that the Respondent expropriated his investment by forcing him to sign that undertaking which gave up his contractual rights in return for his release from jail.310
170.
According to the Claimant, the Omani police then enforced the closure of the entire quarry, not just operations at specific locations and not just operations of crushers and screens.311 Although Emrock ceased its production activities immediately following Mr Al Tamimi's arrest (as the restrictions imposed by police prevented any production), the police stopped Emrock from conducting any operations at all.312 The Claimant submits that the Omani police prevented Emrock employees from (inter alia) loading trucks, selling limestone, and even cooking food, and progressively forced Emrock's employees to leave the site entirely.313 The Claimant contends that, in light of these facts, it is incorrect for Oman to allege that Mr Al Tamimi voluntarily abandoned his investment.314
171.
The Claimant also alleges that the Omani police's actions ensured that he could never return to the site.315 To the extent that the Respondent submits that there was no expropriation because the Ibri Court of Appeal judgment did not prevent the Claimant from returning to the site or pursuing claims against OMCO, the Claimant submits that this argument disregards key facts: by forcing Emrock's employees from the quarry site and then allowing Emrock's infrastructure and equipment to be looted and destroyed, the Omani police ensured that Emrock would not be able to return the quarry to operation after the Ibri Court of Appeal judgment.316 Further, the Claimant notes that Oman has not identified a basis on which he may have pursued claims against OMCO for the wrongful acts of the Omani police.317
172.
The Claimant also contests Oman's argument that its actions were a valid exercise of its right to enforce its environmental laws under the " police powers " doctrine (as incorporated in Annex 10- B of the US-Oman FTA).318 The Claimant notes that Annex 10-B relevantly provides that regulatory takings are shielded only when they are " non-discriminatory " and are " designed and applied " for " legitimate " public purposes.319 In this way, the Claimant submits that Oman's actions were not designed and applied for legitimate purposes and were discriminatory.320

(ii) Respondent's position

173.
The Respondent argues that it did not expropriate Mr Al Tamimi's investment.321 To the extent that the Claimant complains of OMCO's termination of the OMCO-Emrock Lease Agreement, the Respondent submits that OMCO's actions cannot be attributed to Oman (as discussed above) and that, even if they could, Mr Al Tamimi's expropriation claim sounds only in contract.322 The Respondent submits that the Claimant has not demonstrated that OMCO's allegedly wrongful termination of the OMCO-Emrock Lease Agreement constitutes both a breach of contract and of the US-Oman FTA, and as such, the only available remedy against OMCO's actions was in accordance with the arbitration provisions of the OMCO-Emrock Lease Agreement.323 The Respondent notes that the Claimant did indeed retain lawyers in 2009 to claim against OMCO under those provisions, but the claim was subsequently abandoned.324
174.
On the other hand, insofar as the Claimant complains of his arrest and its alleged aftermath, the Respondent submits that Mr Al Tamimi had no investment capable of being expropriated as of the date of his arrest (23 May 2009).325 As explained above, the Respondent submits that Mr Al Tamimi's investments in Oman were tied to the Lease Agreements, which ended long before 23 May 2009.326
175.
The Respondent also contends that Mr Al Tamimi's property rights were not impacted by his arrest or prosecution.327 The Respondent notes that Mr Al Tamimi's undertaking was tied to the pending charges against him, namely that he was operating outside the Jebel Wasa, and that such undertaking did not prevent him from conducting limestone quarrying activities in the Jebel Wasa (although the Respondent contends that he no longer had any right to do so under the Lease Agreements).328 Further, the Respondent argues that there is no credible evidence that anyone, including the Omani police, ever sought to enforce the undertaking in the manner contended by the Claimant.329
176.
The Respondent contests the Claimant's allegations with respect to the actions of Oman's police.330 The Respondent relevantly notes that the Claimant has not produced any contemporaneous evidence of an arrest or detention involving Emrock's staff, and that, rather than being forced from the site by the police, Emrock's employees were dismissed in stages by Emrock in 2009 and 2010.331
177.
The Respondent also submits that the Claimant cannot undercut Oman's reliance on the " police powers " doctrine.332 The Respondent argues that the application of existing environmental laws lies at the core of a State's police power, and that any application of those laws that leads to the loss of property constitutes a non-compensable regulatory action as opposed to a compensable taking.333
178.
The Respondent points to Annex 10-B of the US-Oman FTA as underscoring Oman's right to exercise police powers.334 The Respondent also refers to Article 10.10 of the US-Oman FTA, by which the State Parties were explicit that neither Party should be constrained from " enforcing any measure [...] it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environment concerns ".335 Oman submits that, in accordance with the police power doctrine and contrary to the Claimant's allegations, the actions of its police and prosecutors were bona fide and taken for a legitimate purpose.336
179.
Relevantly, the Respondent notes that the number of violations issued throughout the history of the Claimant's project makes clear that the Claimant's arrest was undertaken for a legitimate purpose rather than on account of the alleged ill-motives of one person (Mr Al Muharrami).337 According to the Respondent, the legitimacy of the police actions is further confirmed by a number of independent findings, including those findings made against the Claimant by the Mahda Court of First Instance in its 8 November 2009 and 25 April 2010 decisions.338 Oman also submits that the exoneration of the Claimant before the Ibri Court of Appeal does not prove that the arrest or the decision to prosecute constituted improper regulatory actions.339
180.
The Respondent submits that the Claimant cannot rely upon the doctrine of res judicata to avoid the application of the " police powers " doctrine.340 In this respect, the Respondent relevantly observes that it is accepted that international tribunals do not apply res judicata to domestic judgments,341 and that the ruling of the Ibri Court of Appeal does not suggest that either the police or the Omani prosecution authorities were acting for an illegitimate purpose.342 Oman submits that the only issue before the court was the legality of the Claimant's actions under Omani law, not that of the police or prosecutor under international law standards.343

(f) Minimum standard of treatment

(i) Claimant's position

181.
The Claimant alleges that Oman has breached its obligation under the US-Oman FTA to provide the minimum standard of treatment to the Claimant's investment. The Claimant notes that Article 10.5 of the US-Oman FTA relevantly provides as follows:

1. Each Party shall accord to covered investments in accordance with customary international law, including fair and equitable treatment and full protection and security.

2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to covered investors. The concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights.344

182.
The Claimant also refers to the text of Appendix 10-A to the US-Oman FTA:345

The Parties confirm their shared understanding that "customary international law" generally and as specifically referenced in Article 10.5 and Annex 10-B results from a general and consistent practice of States that they follow from a sense of legal obligation. With regard to Article 10.5, the customary international law minimum standard of treatment of aliens refers to all customary international law principles that protect the economic rights and interests of aliens.

183.
The Claimant alleges that Oman's conduct violated the most basic notions of fair and equitable treatment and full protection and security.346 The Claimant notes that the Respondent, through its provision of conflicting coordinates, made it impossible for the Claimant to know where he was permitted to operate.347 The Claimant also submits that Oman never explained consistently what additional permits Mr Al Tamimi was required to have (and why).348 In this context, the Claimant characterises the Royal Oman Police's actions as extraordinary and in breach of Article 10.5: the police arrested him, forced him to sign an undertaking to stop operations at the quarry, then enforced that undertaking to shut down the quarrying operations entirely and force Emrock's remaining employees from the site.349
184.
The Claimant submits that throughout 2009 the Respondent arbitrarily and repeatedly harassed Mr Al Tamimi, asserting without any basis that Emrock was violating environmental regulations and the terms of its lease agreement by operating in the Wadi Sumayni.350 In this respect the Claimant contends that the Ibri Court of Appeal judgment demonstrated that Emrock was not violating the law,351 and in any event, the Claimant argues that Oman has not provided any legitimate basis on which it could genuinely believe that Emrock was violating the law.352 The Claimant submits that it follows that Oman was harassing the company arbitrarily and without reason.353
185.
In particular reliance upon the arbitral tribunal's award in Occidental Petroleum Corporation and Occidental Exploration and Production Company v Republic of Ecuador354, the Claimant submits that proportionality is a principle of customary international law.355 The Claimant further contends that, as the principle of proportionality falls within the set of " all customary international law principles that protect the economic rights and interests of aliens " (for the purposes of Appendix 10-A to the US-Oman FTA), it was a component of Oman's duty to provide the Claimant with fair and equitable treatment under Article 10.5 of the US-Oman FTA.356
186.
The Claimant maintains that, in light of the above, the Respondent cannot argue it is not in breach of the US-Oman FTA because the Claimant contravened Oman's environmental laws.357 First, the Claimant contends that the factual premise of that argument is contrary to both the Ibri Court of Appeal judgment and the evidence on the record in this proceeding.358 Second, and in any event, the Claimant submits that a breach of local law does not give the Host State carte blanche to violate basic principles of fair and equitable treatment: under the principle of proportionality an investor may prove a breach of fair and equitable treatment by showing that the Host State's conduct was disproportionate to the investor's infractions.359
187.
The Claimant claims that the police's actions were disproportionate to the alleged wrongdoing, and in this regard notes that Oman normally treated the alleged offences in question as trivial.360 The Claimant submits that the alleged environmental violations were punishable only by small fines under Omani law, and relevantly notes that Oman has presented no evidence that other quarries at the time were shut down for similar alleged violations.361

(ii) Respondent's position

188.
The Respondent submits that the Claimant has not demonstrated that the doctrine of proportionality has become an element of the minimum of standard of treatment under customary international law.362 Although Oman does not dispute that the doctrine of proportionality has been endorsed by international tribunals, it contends that such endorsement alone is insufficient proof that the doctrine has attained the status of customary international law.363 In this respect, the Respondent submits that the Claimant is required to provide evidence that a general practice has been accepted as law, which is generally determined based on: (a) the general practice of States and (b) what States have accepted as international law.364 The Respondent submits that this demanding standard has not been satisfied here.365
189.
As with its arguments regarding expropriation, the Respondent contends that the Claimant has failed to demonstrate that his claims rise beyond ordinary contract claims.366 In this way, the Respondent submits that Mr Al Tamimi has not established a violation which Oman has committed in the exercise of its sovereign power, because he has not demonstrated that OMCO acted as a sovereign authority.367
190.
To the extent that the Claimant complains of actions by the Omani State itself, the Respondent argues that proper investigation by the State does not constitute regulatory harassment or an actionable wrong but instead qualifies as justified regulatory action.368 The Respondent submits that it fairly and consistently applied its pre-existing laws.369
191.
The Respondent contends that the Claimant's focus upon discrepancies in the coordinates is irrelevant, as there was no confusion concerning Mr Al Tamimi's unauthorised excavation of wadi material outside the Jebel Wasa.370 Likewise, there was no ambiguity in the repeated directives that Mr Al Tamimi was given by Omani authorities (and by his own consultant, GEO-Resources) that he could not excavate that material outside the Jebel Wasa unless he was granted authorisation to do so by MOCI.371
192.
As to permits, the Respondent contends that the Claimant's effort to deflect blame to OMCO is to no end.372 The Respondent notes that OMCO had only assured the Claimant that it had obtained the necessary approvals to operate a hard-rock quarry, not screens, crushers, or other equipment outside the Jebel Wasa.373 Irrespective of which entity was responsible for obtaining the permits, the Respondent submits that Emrock was obliged to comply with the permits it had; Emrock's failure to do so risked the scrutiny of the regulators charged with enforcing Oman's environmental laws, and the consequences flowing from that failure are solely the fault of the Claimant.374 The Respondent contends that, notwithstanding the Claimant's serial disregard of the relevant environmental approvals, Oman treated the Claimant and his investments fairly and equitably.375
193.
The Respondent also submits that its treatment of the Claimant's investment was not disproportionate (without prejudice to its primary submission that the Claimant has not demonstrated that the doctrine of proportionality has attained the status of customary international law).376 First, the Respondent notes that the other quarry operators referred to by the Claimant, and unlike the Claimant, were only permitted to continue after they had brought their operations into compliance with the law.377 Second, the Respondent submits that Oman's actions in response to Emrock's improper conduct did not result in the shut-down of Emrock's operations: the Claimant's arrest had no effect on either the Lease Agreements, as these had ended long before, or on the operations on Emrock, as Emrock no longer had the right to conduct such operations on the site.378
194.
With respect to the Claimant's full protection and security argument, the Respondent submits that the Claimant has not demonstrated that Oman instigated or had to protect him against isolated acts of vandalism long after his investment had expired.379 The Respondent observes that there is no evidence that Oman encouraged, fostered or contributed to the vandalism alleged by the Claimant, which is the test to be met under this standard,380 and that in any event, the vandalism which took place (if at all) occurred more than a year after the Claimant's investment had ended and after he and Emrock had abandoned the site.381 In light of this, the Respondent submits that the Claimant's allegation is not made out.382

(g) National treatment

(i) Claimant's position

195.
The Claimant submits that, in breach of Article 10.3 of the US-Oman FTA, Oman treated the Claimant less favourably than it treats domestic investors in like circumstances.383
196.
In order to establish the discrimination prohibited by Article 10.3, the Claimant submits that he bears the initial burden to establish a prima facie case that local competitors in like circumstances received more favourable treatment than he did.384 The Claimant contends that, once he has done so, the burden shifts to Oman to establish either the absence of like circumstances or a credible justification for its disparate treatment.385
197.
In this proceeding, the Claimant submits that he has made out a prima facie case of both " like circumstances " and more favourable treatment.386 As to " like circumstances ", the Claimant and Mr Abdul Rahman have identified limestone quarry owners who, as their quarries all operated in Oman and under Omani law, were in " like circumstances " to the Claimant for the purposes of Article 10.3 of the US-Oman FTA.387 The Claimant contends that, as Omani laws regarding quarrying and environmental regulations do not distinguish between quarries based on physical attributes or other features, the Jebel Wasa quarry should be understood as being in " like circumstances " with all limestone quarries in Oman (and their respective owners should be understood as being in " like circumstances " with each other).388
198.
The Claimant submits that the Respondent's argument regarding " like circumstances " (namely, that the identified quarries were not in " like circumstances " because some had permits while Emrock did not) actually supports the Claimant's argument concerning more favourable treatment: Emrock did have the required permits, and the fact that some of those other companies did not have permits, yet were still permitted to operate, demonstrates disparate treatment.389
199.
As to more favourable treatment, the Claimant submits that the actions Oman took against him were unprecedented and out of all proportion to how Oman treated environmental violations by Omani-owned companies.390 In this respect, the Claimant relevantly notes that Mr Abdul Rahman's testimony before the Ibri Court of Appeal observed that other quarries that had operated outside of their concession limits were able to settle the matter by paying additional amounts, while Mr Al Tamimi alone was wrongfully prosecuted for theft.391 The Claimant also refers to the evidence of Mr Subodh Gupta, who relevantly testified that Omani-owned neighbouring quarries were operating crushers and extracting sand and gravel, apparently without the permits that Mr Al Muharrami claimed Mr Al Tamimi was required to have.392 Mr Gupta also testified that, unlike Emrock, the competing quarries did not have any trouble from MECA based on the lack of permits.393
200.
The Claimant submits that the burden has now shifted to Oman.394 On the Claimant's case, the Respondent has not met this burden.395 In this respect, the Claimant contends that the witness statement of Dr Al Rushdi, Director of the Legal Department at MECA, is phrased in generalities and does not show that Oman did not treat the Claimant more harshly than Omani quarry owners.396 The Claimant also argues that the Respondent's reference to the prosecution of Mr Al Waily (OMCO's General Manager) does not assist Oman's case: first, his prosecution only confirms the disparate treatment of Emrock, as Mr Al Waily's prosecution was in connection with Emrock's operations, not any competing quarry.397 Second, Mr Al Waily, unlike the Claimant, only received a small fine for the alleged environmental violations.398

(ii) Respondent's position

201.
The Respondent argues that the Claimant has cited no evidence to substantiate his claim under Article 10.3 of the US-Oman FTA.399 In order to establish a successful prima facie case, the Respondent contends that a claimant must (a) identify a local subject for comparison, (b) demonstrate that he is in like circumstances with that local subject, and (c) prove that he was subjected to less favourable treatment in comparison to the local subject.400 The Respondent submits that the Claimant has not established any of these elements.401
202.
In considering the Claimant's argument with respect to " like circumstances ", the Respondent submits that it is not sufficient to identify alleged comparators that are in the same economic group.402 According to the Respondent, identifying quarries that operate in Oman and under Omani law is not sufficient to meet the Claimant's burden.403 The Respondent submits that, rather, the Claimant must establish that the comparative quarries he seeks to rely upon are " in all material respects "404 the same as Emrock's, and that they are in like circumstances " in light of the regulatory treatment being challenged ".405
203.
The Respondent submits that, as the Claimant admits that many of the quarries he identifies had been given the requisite permit for excavating wadi material, those quarries cannot serve as adequate local comparators because they were not operating under the same authorisations as Emrock.406
204.
Turning to the Claimant's discrimination claim, the Respondent submits that the evidence relied upon by the Claimant does not meet his burden of proof.407 The Respondent contends that Mr Abdul Rahman's evidence before the Ibri Court of Appeal did not provide proof that other quarries held by domestic operators were treated more favourably than Emrock.408 The Respondent argues that the evidence of Mr Subodh Gupta is also ineffectual, as he does not provide any specific information as to what permits the identified quarries possessed or any information suggesting whether those quarries were involved in operations contrary to their permits.409
205.
The Respondent contends that the evidence of H E Ahmed Al Dheeb, Undersecretary of MOCI, dispels any grounds for inferring that Oman discriminates between local and foreign companies.410 The Respondent notes that his evidence provides that the " vast majority " of companies which were found by MOCI to have violated the applicable permits and regulations were Omani companies owned and managed by Omani individuals.411
206.
The Respondent also submits that the Claimant's argument with respect to Mr Al Waily's prosecution is without merit.412 The Respondent notes that the charges directed to OMCO and Mr Al Waily demonstrate that the Claimant was not singled out by Oman: despite his nationality, Mr Al Waily received the same treatment as Mr Al Tamimi.413

C. DAMAGES

207.
With respect to damages, the Claimant seeks compensation of not less than US$273 million for injuries caused by Oman's breaches of the US-Oman FTA, consisting of at least US$263 million in economic damages and at least US$10 million in moral damages (a full record of the relief sought by the Claimant in the successive phases of this arbitration is set out above).414 The Respondent opposes this claim, submitting that the Claimant's purported investment was worthless as of late 2008, and in any event, that he has not discharged his burden to prove that any alleged breach caused actual losses. In this section, the Tribunal will address the Parties' arguments with respect to the monetary damages sought by the Claimant, both economic and moral.

(a) Economic damages

(i) Claimant's Position

The Standard for Compensation

208.
In accordance with Article 10.6 of the US-Oman FTA, the Claimant alleges that the appropriate measure of compensation for expropriation is the fair market value for his investment at the time of expropriation.415 The Claimant also submits that the standard of compensation for the other alleged treaty violations (ie denial of fair and equitable treatment and denial of national treatment) is the fair market value of Emrock at the time of the loss.416

The Condition of the Claimant's Business

209.
Although Oman submits that the Claimant's investment had no value when the US-Oman FTA came into force, the Claimant contends that this submission is without support.417 According to the Claimant, Emrock was a robust and growing young business at that time, and at the time of breach.418 The Claimant notes that Mr Al Waily himself described the Claimant's project as a " mega quarry and crushing project with a very large scale operation ".419
210.
The Claimant submits that the Emrock quarry had a substantial value at the time Oman terminated Emrock's business at the end of May 2009: not only had the Claimant constructed tangible assets on site (and constructed a high-quality road connecting that site to the highway), he had also substantially developed the limestone-mining areas.420 According to the Claimant, Emrock's larger-than-usual capital expenditure at the outset would have facilitated lower longterm cost and would have allowed ramp-up production at a higher than usual rate.421 Indeed, the Claimant contends that Emrock was able to ramp-up production unusually quickly, noting that Emrock had reported a profit in only its second year of operation, that it had begun to make inroads into the lucrative market for export of limestone to India for chemical use, and that Emrock had at least 130 customers, including one major customer (Nakheel Properties).422
211.
To the extent that the Respondent alleges that Emrock was experiencing extreme financial distress and illiquidity by year end 2008, the Claimant submits that such allegation is contradicted by the evidence.423 The Claimant notes that Emrock realized a profit in 2008, and generally that Oman fails to take account of the Claimant's ongoing profits and the extremely valuable Lease Agreements with OMCO.424
212.
The Claimant submits that Oman significantly overstates the significance of the Nakheel contract, as Nakheel was not Emrock's only customer: by June 2009, Emrock had made sales to at least 130 customers, including large volume sales to Maher Rahal.425 The Claimant also notes that Nakheel never cancelled its contract with Emrock, but rather only temporarily suspended it.426
213.
The Claimant submits that the Respondent cannot dismiss Mr Al Tamimi's project as an untried start-up venture, as Emrock already had substantial sales, an established customer base, and was showing a profit.427 To the extent that the Respondent alleges liquidity problems at Emrock, the Claimant notes that this is disputed, but that in any event these alleged problems could have been remedied by an additional investment from Mr Al Tamimi or an outside investor.428 The Claimant contends that the Respondent cannot argue that Mr Al Tamimi's long-term rights to mine over one billion tonnes of limestone, together with the infrastructure that had been constructed at the site, would have been worthless to a reasonable buyer at arm's length.429

The State of the Market

214.
As to the state of the market, in reliance upon the MEED Expert Report, the Claimant submits that Emrock was well positioned to sell into a huge market with substantial unmet demand and significant potential for long-term growth.430 MEED's report shows that, even during the slowdown in the Dubai real estate industry in late 2008 and early 2009, there was still a substantial gap between demand and supply of limestone in the region.431
215.
The Claimant also notes that, because of its location in Oman, Emrock had a number of advantages over other local quarries to capture that market gap.432 In this respect, the Claimant points to, among other advantages, the high quality of limestone sold by Emrock, Emrock's superior geographical location, its access to roads, a longer concession period than any of its competitors in the UAE, and Emrock's ability to grow rapidly to meet demand.433 The MEED Expert Report also suggests that the demand for limestone in the UAE as a whole continued to grow in 2009, and the expectation in June 2009 was that the slowdown would be short-lived.434
216.
Addressing the Respondent's submissions concerning the prevailing macroeconomic conditions, the Claimant argues that Oman and Navigant Consulting Inc (one of the Respondent's experts) greatly overstate the extent of the slowdown in the Gulf region in late 2008 and early 2009.435 To that end, the Claimant submits that Navigant's analysis makes the macroeconomic outlook seem worse than it was because it focuses its analysis on the real estate construction market in Dubai to the exclusion of oil-rich Abu Dhabi and other markets.436 Navigant also relies heavily on Nakheel's default on obligations in November 2009 as a further indicator of the state of the economy at the end of May 2009, but MEED notes that Nakheel's default was unforeseen in early 2009.437

The Valuation of Emrock

217.
The Claimant alleges that, based on the conclusions of the Second Expert Report of John T Boyd Company, the fair market value of his expropriated assets as of 1 June 2009 was US$292 million.438 Boyd concludes that US$263 million, or 90% of US$292 million, represents Mr Al Tamimi's share of that value.439
218.
Boyd's valuation is based on projections through 1 September 2032, namely the date on which the Lease Agreements would have terminated after the initial term of ten years and three extensions of five years each.440 Boyd applies the discounted cash flow (" DCF ") methodology in reaching its valuation, and uses the Weighted Average Cost of Capital (" WACC ") to calculate and apply a discount rate of 10 percent to the projected net after tax cash flows.441
219.
The Claimant submits that Boyd's valuation remains in many ways conservative.442 Among other examples, the Claimant notes that Boyd relies upon pricing for armour rock and aggregate which, as shown by MEED's research, is substantially discounted from the market price for Emrock's products.443 The Claimant also notes that Boyd assumes a 12% rate of tax on the entire operation after expiration of the 10-year tax exemption, even though Mr Al Tamimi might have been able to structure the business to redirect profits to SFOH, which is based in a tax-free zone.444 Further, Boyd assumes a slow ramp-up to full production, and assumes that production would end eight months prior to the end of the Lease Agreements to allow sufficient time for site reclamation activities.445
220.
To the extent that the Respondent asserts that it is flawed for Boyd to rely upon a 25-year term of investment (ie its maximum term under the Lease Agreements), the Claimant submits that this is justified under the plain terms of the Lease Agreements and well-established principles of damages.446 The Claimant contends that, in the valuation context, tribunals analyse renewal options in light of legitimate expectations, often based on the terms of the contract.447 In this respect, the Claimant observes that the Lease Agreements made renewal available at the option of Emrock and SFOH, and that those agreements do not place any conditions or requirements on renewal, but merely state that the agreements are " extendable ".448 Even if OMCO's consent to renew were required, the Claimant submits that it would be in OMCO's interest to renew a contract that was generating ongoing royalties for OMCO as the parties' 25-year plan contemplated.449
221.
The Claimant also notes that the business dealings between Emrock, SFOH and OMCO indicate that all parties expected the Lease Agreements would be renewed for their full 25-year term.450 The Claimant submits that he had a legitimate expectation that he would exercise his rights to renew, and that calculating damages based upon that expectation is necessary to restore the Claimant to the rightful position he would have enjoyed but for the wrongful acts of Oman.451
222.
The Claimant argues that, contrary to Oman's suggestion, the fact that Boyd limited its analysis to a project cash flow approach does not undermine Boyd's valuation.452 The Claimant notes that the DCF is the most commonly implemented valuation methodology, especially in the valuation of mineral entities, because the unique and local nature of the industry and the different reserve life spans of each entity make comparable sales or EBITDA (earnings before interest, taxes, depreciation and amortization) multiples difficult.453 In this respect the Claimant contends that Navigant's use of an EBITDA multiplier is flawed: the companies Navigant used for the purposes of comparison are not similarly situated to Emrock, and in any event, an EBITDA multiplier is not a first-line valuation method for a mining concession, because value depends primarily on available reserves, which do not necessarily relate to past earnings.454
223.
As a part of the DCF approach, Boyd's valuation of Emrock includes the application of an appropriate discount rate.455 Boyd makes projections through 1 September 2032, then discounts the projected net after tax cash flows to present value applying a discount rate of 10 percent.456 It derived that rate using the WACC typical for large multinational building materials companies of the type likely to be interested in buying the Jebel Wasa quarry (ie the WACC a likely buyer would apply in valuing the quarry).457
224.
To the extent that the Respondent alleges that the 10 percent discount rate in Boyd's analysis is too low, the Claimant observes that Boyd chose the discount rate based on direct data evidencing the discount rate that a likely buyer would use to value the assets.458 According to the Claimant, in the presence of actual empirical observations of the discount rates used by buyers in the market, it is not necessary or appropriate to resort to a theoretical construct (as Navigant suggests Boyd should have done) to try to reconstruct what such a buyer might pay.459
225.
The Claimant also notes that it is reasonable for Boyd to have assumed that Emrock would not be subject to income tax for ten years.460 Boyd provides in its first report that the assumption was based upon both statements from Mr Jaime Guzman of OMCO and the terms of the Lease Agreements:461 Mr Guzman had written to the Claimant on 19 September 2005 that Oman routinely " awards exemption of the corporate income tax for a period of five years from the beginning of production, with a possible extension for an additional five years ",462 and the Lease Agreements expressly required OMCO to " apply its best endeavors " in order to obtain the tax exemption of the income and corporate taxes pursuant to the provision of the tax law provided for a foreign company registered in Oman.463
226.
Beyond the fair market value methodology applied by Boyd, the Claimant also defends Boyd's determination of fair market value:

(a) First, the Claimant submits that Boyd's determination regarding the quality of the limestone contained in the concession area is fully supported, and in doing so notes that Boyd reviewed several testing samples which confirmed the high quality of limestone contained throughout the concession area.464

(b) Second, Boyd's projection that Emrock could ramp-up production to reach 25 million tonnes in 2022 is, on the Claimant's case, entirely realistic.465 The Claimant notes that this projection is consistent with the conclusions in the Archibald Expert Report and also with OMCO's own description of the project as a " mega quarry and crushing project with a very large scale operation ".466

(c) Third, the Claimant argues that Boyd's assumed product mix is reasonable given the market demand for armour rock, aggregate and chemical stone, and notes in this respect that Emrock did not need an additional permit to excavate limestone-based sand and gravel within the concession area.467

(d) Fourth, Boyd's assumption that Emrock would have diversified its product mix to include chemical stone is fully supported by the facts.468 The Claimant observes that Emrock was in the process of doing so at the time Oman shut it down, and in this regard points to ArcelorMittal (a major steelmaker) contacting Emrock in 2008 in order to establish what it called a " long term relationship " for the supply of chemical stone.469 Boyd explains that, had Emrock's business continued, it was reasonable to assume that it would have sold chemical stone in the Indian market.470

(e) Fifth, MEED's projection that Emrock could capture 29 percent of the total unmet limestone demand did not require Emrock to compete with existing players' own market share.471 In any event, even if Emrock had to compete with other players, the Claimant notes that Emrock had a number of competitive advantages, in particular its geographic location.472 As the MEED Expert Report notes, Emrock's location provides a " shorter distance " to the main centres of limestone consumption in the Emirates of Dubai and Abu Dhabi.473

(f) Finally, the Claimant submits that it is reasonable (even conservative) for Boyd to assume that the Claimant would be entitled to 90 percent of the overall project value.474 The Claimant notes that he owned 100 percent of Emrock's dividends and 80 percent of SFOH's dividends; assuming a 50/50 percent production split between Emrock and SFOH (as anticipated in the environmental applications), the Claimant is therefore entitled to 90 percent of the overall project.475

(ii) Respondent's Position

227.
The Respondent submits that, even if Mr Al Tamimi were to meet his burden of demonstrating that Oman violated the US-Oman FTA and directly caused him harm, he would not be entitled to the compensation he seeks because his purported damages model is " incurably flawed and inflated to an extent that is entirely fanciful ".476 The Respondent contends that the Claimant's project had no value as of 1 January 2009 when the US-Oman FTA came into effect, much less on 1 June 2009, the Claimant's purported valuation date.477
228.
The Respondent first addresses the standard to be applied. In the event that Oman breached Article 10.6 of the US-Oman FTA (ie the prohibition against expropriation), the Respondent submits that the relevant standard for compensation is equivalent to the " fair market value of the expropriated investment immediately before the expropriation took place ".478 As to non-expropriatory breaches, the Respondent submits that fair market value is not the proper measure of damages, but rather, the more appropriate standard is loss " adequately connected to the breach " of the specific provision of the US-Oman FTA.479
229.
The Respondent observes that while, in principle, a claimant is entitled to recoup all " financially assessable damage including lost profits ", that right is confined to instances when the claimant can demonstrate that the lost profits claim has " sufficient attributes to be considered a legally protected interest of sufficient certainty to be compensable ".480 The Respondent contends that when damages are too remote or uncertain, the claim must be denied.481
230.
The Respondent also notes that, as a general matter, damages must not put a claimant in a better position than he would have been absent the breach, but must instead compensate the claimant only for the losses actually incurred as a result of the wrongful act.482 To achieve this objective, a party must demonstrate a sufficient link between the wrongful act and actual provable damages directly caused by the wrongful act.483
231.
Turning to the valuation provided by the Claimant's expert, the Respondent refers to Navigant's opinion that the Claimant's project was insolvent and worthless as of 1 June 2009.484 As Navigant explains, " none of the evidence provided by Claimant or its three (now conflicting) experts changes [its] opinion that the Project failed as an unfortunate consequence of macroeconomic and commercial reasons rather than Oman's actions ".485
232.
The Respondent submits that the global economic crisis that began to unfold in the fall of 2008 severely depressed economic growth in the Gulf region, and relevantly for this case, caused the real estate and construction sectors to collapse.486 The Respondent contends that, by the end of 2008, the Claimant's project had significant inventories of rock, three months of unpaid receivables with Nakheel (which cancelled its supply contract with Emrock around that same time), and spiralling obligations to equipment providers and banks that Emrock would never pay.487 As explained by Navigant, Emrock's financial statements reveal that by year end 2008 the Claimant's project was experiencing financial distress and illiquidity.488 The Respondent contends that the Claimant's project did not have realistic market prospects as of 1 January 2009 or 1 June 2009.489
233.
The Respondent also submits that Boyd's valuation cannot assume the Lease Agreements would be renewed for the maximum renewal period.490 The Respondent notes that, as explained by Navigant, Boyd's updated model assumes that 81 percent, or US$236,964,429 of the project's value, would be derived from cash flows arising after the expiration of the initial 10-year term of the Lease Agreements on 1 September 2017.491 The Respondent submits that there is no evidence suggesting the remotest possibility that OMCO would have renewed the Lease Agreements, and as such those damages are entirely speculative.492
234.
The Respondent first observes that the Lease Agreements could not later be renewed because they had ceased to exist: the OMCO-SFOH Lease Agreement was null and void, and OMCO had terminated the OMCO-Emrock Lease Agreement on 20 July 2008 and 17 February 2009.493 Second, even if the agreements were still in force and effect, the Respondent submits that renewal was not available at the sole option of Emrock and SFOH.494 Rather, the express wording of those Lease Agreements demonstrates that renewal was conditional and wholly dependent upon the approval of both parties.495 The Respondent notes in this respect that each of the three possible extensions was far from certain: OMCO and Emrock/SFOH demarcated several different points in time when the parties could reassess matters and determine whether to renew the Lease Agreements in light of the then prevailing circumstances.496
235.
The Respondent also contends that, contrary to the submission of the Claimant, the parties' business dealings do not give rise to a legitimate expectation that OMCO would have renewed the Lease Agreements.497 Rather, the Respondent submits that the parties' actual performance and the history of their business dealings prove the opposite, and in this respect refers to OMCO's termination of the OMCO-Emrock Lease Agreement and the substantial evidence showing OMCO's displeasure with Mr Al Tamimi and his project's performance.498 The Respondent relevantly notes that both the SFOH and Emrock business plans considered investment horizons in line with the initial terms of the Lease Agreements (namely, 10 years), and that both business plans did not anticipate long-term capital investment: the SFOH business plan did not expect additional capital investment after the first year, and the Emrock plan assumed that investment would occur over a five year period.499
236.
The Respondent submits that LETCO v Liberia is inapposite, as in that case the claimant had a unilateral right to renew the agreement at issue for an additional period of 15 years.500 As argued by the Respondent, no such unilateral right exists in this case.501 Rather, the case facts here bear close resemblance to those in CMS Gas Transmission Co v Argentina502 and Gemplus v Mexico,503 where the right to renew the relevant agreement in each case was conditional: in CMS, the right of renewal was dependent on the claimant's compliance with performance requirements (as is the case in this proceeding), and in Gemplus, any renewal of the relevant licence agreement required approval from the respondent country and the claimant's full compliance with the conditions specified in the agreement.504 In each of those cases, the tribunal rejected a damages claim based on the possible renewal of the relevant agreement.505
237.
The Respondent also notes that Navigant has confirmed that it " was highly questionable whether a hypothetical buyer and seller would include the Lease Agreements' three five-year extensions in a calculation of the fair market value of the Project ".506
238.
In addition to Boyd's assumption with respect to the renewal of the Lease Agreements, the Respondent submits that the updated valuation in the Boyd Second Expert Report contains certain serious flaws, including the following:

(a) Boyd relies upon a post-hoc business plan that does not accord with the reality of the project and otherwise relies on an inflated and unsubstantiated view of the market and the project's market potential.507 The Respondent submits that Boyd incorrectly adopts MEED's conclusions that there was a limestone supply deficit in the UAE and Oman (which there was not) and that the project was positioned and capable of supplying it (which it was not).508

(b) Boyd uses assumptions about resource quantity and quality that were not derived in accordance with accepted industry practice and which are otherwise unsound and unreliable.509

(c) Boyd assumes that Emrock would have become a major exporter and producer of chemical limestone, despite the fact that Emrock had never sold chemical limestone to a single customer (and lacked any long-term relationships with potential customers) and had not confirmed the location or existence of such materials within the Jebel Wasa.510

(d) The valuation is rendered invalid because Boyd's assumptions concerning the volumes of limestone to be mined, extracted, and sold require unfounded assumptions concerning transportation logistics.511 According to RPM and Navigant, those transportation logistics are impossible.512

(e) Boyd discounts projected cash flows at the WACC rather than the cost of equity for the project.513 Navigant opines that the correct discount rate is the cost of equity capital, given the nature of the Claimant's investment in the project.514 By incorrectly using the WACC, Navigant explains that Boyd wrongly lowers the discount rate and thereby increases its valuation.515

(f) Boyd purports to have calculated the Enterprise Fair Market Value of the project (ie the value of equity and debt), instead of the value of the Claimant's shareholding in the project.516 The Respondent notes that the distinction is significant, because Mr Al Tamimi did not directly invest in or own the Jebel Wasa quarry.517 As he only indirectly invested in the quarry through his equity shareholdings in Emrock and SFOH, he could expect to receive cash flows from the project only through dividends paid by those companies.518 As such, on the Respondent's case, the approach of Boyd and the Claimant ignores the capital structure of the project.519

(g) Boyd grounds its analysis in MEED's assessment of macroeconomic conditions in the region, but as shown by Elite Media in its expert report, MEED's assessment is entirely too optimistic.520 The Respondent submits that, in reliance upon the reports of Navigant and Elite Media, any conceivable market for limestone had dried up as a result of deteriorating macroeconomic conditions.521

(b) Causation

(i) Claimant's position

239.
In reliance upon the tribunal's award in Lemire v Ukraine,522 the Claimant submits that there are two " aspects " to causation: one, that the State party's actions led to the aggrieved party's losses, and two, that no intervening or superseding factor broke the chain of cause and effect.523 The Claimant contends that both aspects are satisfied here.524
240.
The Claimant submits that there can be no serious doubt that Oman's actions were at least a cause of Mr Al Tamimi's losses.525 In this respect, the Claimant notes that Oman arrested the Claimant and enforced an order that the quarry stop all production; without any income, the Claimant's companies became insolvent.526 The Claimant also observes that Omani police then forced the Claimant's employees from the quarry site, after which they allowed the site to be looted and destroyed.527 As a result, so the Claimant submits, Oman's actions destroyed Claimant's value in his investment.528
241.
As to the second aspect, the Claimant contends that no other factors (in particular, external market forces, the Claimant's own alleged wrongdoing, and OMCO's purported termination of the Lease Agreements) caused the Claimant's losses.529 With respect to market forces, the Claimant submits that Oman's suggestion that Emrock closed, or inevitably would have closed, for economic reasons is contrary to the facts.530 The Claimant argues that Emrock was a promising and well-positioned business that would have achieved significant success but for Oman's treaty violations.531
242.
Insofar as the Respondent submits that the Claimant's alleged misconduct caused his losses, the Claimant repeats his earlier arguments on this subject.532 First, the Claimant submits that SFOH was not required to register in Oman, and even if it had been, the legal consequence for such failure would have been a small fine.533 Second, late payment by Emrock to OMCO was not a cause of the Claimant's loss, as Emrock had timely rendered all payments due to OMCO under the OMCO-Emrock Lease Agreement.534 Further, in the event that a payment had been late, OMCO never obtained a judicial decree terminating the Lease Agreement on that basis.535 Finally, the Claimant did not operate outside the concession area, without proper permits, or without a valid license.536
243.
The Claimant also submits that the purported termination of the OMCO-Emrock and OMCO-SFOH Lease Agreements did not cause his losses.537 As argued in the context of jurisdiction, the Claimant contends that OMCO never effectively terminated the Lease Agreements.538 Additionally, as argued in the context of the merits of his case, the Claimant submits that OMCO's purported termination of the OMCO-Emrock Lease Agreement was itself a breach of the US-Oman FTA.539

(ii) Respondent's position

244.
The Respondent, on the other hand, contends that the Claimant has not proved that Oman's actions caused the Claimant's alleged losses, and as such, he is precluded from recovering damages in this proceeding.540 The Respondent submits that the Claimant has not met the ‘test' set out in Lemire v Ukraine.541
245.
The Respondent submits that the Claimant's losses, if any, were caused by: (i) external commercial and market forces, including the financial decline of Nakheel; (ii) the Claimant's own wrongdoing; and (iii) OMCO's termination of the Lease Agreements.542
246.
The Respondent contends that the loss in December 2008 of Nakheel, Mr Al Tamimi's only customer for the hard rock mined in the Jebel Wasa quarry, owing to the economic crisis that swept the Gulf region, spelled the end of the Claimant's project in Oman.543 Although there were numerous causes for the project's decline, the Respondent submits that the Claimant would not have been able to overcome the loss of Nakheel even if the project had not otherwise been crippled by Mr Al Tamimi's actions.544 The Respondent notes that the Claimant had no other long term customers at the time of Oman's alleged FTA breach, and any claim that he could secure additional customers is belied by the relevant macroeconomic conditions.545
247.
The Respondent also submits that the Claimant's own actions materially contributed to his alleged losses.546 The Respondent in particular points to Mr Al Tamimi's insistent unauthorised actions outside the approved area for mining; his failure to register SFOH; his failure to make timely payments under the OMCO-Emrock Lease Agreement; and his failure to obtain the required approvals and authorisations.547 The Respondent contends that these failures (Nakheel aside) were fatal to the viability of the Claimant's purported investment.548
248.
Finally, the Respondent submits that any losses suffered by the Claimant were caused by the end of the OMCO-Emrock and OMCO-SFOH Lease Agreements.549 As the acts of OMCO are not attributable to Oman under the US-Oman FTA, the Claimant cannot show that any breach of the FTA by Oman was the proximate cause of any loss he might have suffered after 1 January 2009.550

(c) Moral damages

(i) Claimant's position

249.
In addition to economic damages, the Claimant also seeks moral damages of US$10 million.551 The Claimant submits that he has suffered both material and non-material damages as a result of Oman's wrongful actions, and argues that compensation only for material damages will fall short of wiping out all of the consequences of Oman's violations of the US-Oman FTA.552 In this respect, the Claimant contends that " [t]he constant interference with his business, the repeated harassment by agents of the Omani government including ministry agents and police, the false criminal and civil allegations against him by the Omani ministries, police, state prosecutor, and OMCO, his detention, eviction, and ultimate destruction of his business represent moral damages which must be compensated ".553
250.
The Claimant observes that, pursuant to Article 10.21 of the US-Oman FTA, this arbitration is governed by " applicable rules of international law ".554 The Claimant submits that a well-settled principle of customary international law is that a State must " make full reparation for the injury caused by [its] internationally wrongful act ".555 The Claimant contends that such principle requires both compensation for economic loss but also for moral damage caused by the State's internationally wrongful act.556
251.
The Claimant notes that international courts and tribunals have awarded damages for a wide range of non-material injuries such as shame, degradation and reputational harm.557 Referring to the rulings in Desert Line558 and Diallo,559 the Claimant submits that tribunals examine several factors when considering whether to award moral damages, including whether the conduct complained of involved: (a) physical detention, suffering or duress; and (b) damage to reputation, stress, humiliation, or shame.560 In terms of the calculation of moral damages, the Claimant notes that this rests on equitable principles and, as such, the Tribunal must look at the circumstances of the case before it to make a reasonable determination.561
252.
Mr Al Tamimi contends that his situation is analogous to that of the claimant in both Desert Line and Diallo.562 Moral damages were awarded in both of those cases. The Claimant relevantly notes that:

(a) As in Desert Line, where the claimant's personnel were confronted, threatened, detained, and the claimant was coerced into a settlement, Mr Al Tamimi suffered physical intimidation, detention, humiliation and reputational harm and was forced to close his quarry or face indefinite detention for vague, unsubstantiated reasons.563

(b) As in Diallo, Mr Al Tamimi incurred psychological stress from an arbitrary arrest and suffered reputational damage caused by the Respondent in forcing him to leave Oman and sever his business ties.564

253.
The Claimant notes that, as in Desert Line and Diallo, the award of moral damages in addition to economic damages is necessary in this case to fully compensate the Claimant for the anxiety, reputational damage and humiliation inflicted upon him by Oman.565

(ii) Respondent's position

254.
The Respondent, however, describes Mr Al Tamimi's claim for moral damages as " baseless ", and submits that he has not satisfied (and cannot satisfy) the extraordinary tests required for moral damages.566 By reference to, relevantly, the awards in Lemire v Ukraine and Europe Cement v Turkey,567 the Respondent notes that moral damages are exceptional and permitted only in the most egregious circumstances.568 In this regard, the Respondent observes that international tribunals have routinely rejected claims for moral damages in investment treaty cases.569
255.
To the extent that the Claimant relies upon Desert Line and Diallo, the Respondent submits that those cases are not analogous to the facts of this proceeding, and that they do not depart from the rigorous standard required for the award of moral damages.570 In seeking to distinguish the facts of those cases, the Respondent notes that in Desert Line the claimant was subject to a siege of heavy artillery and an armed assault, and that its executives " suffered stress and anxiety of being harassed, threatened, and detained by the respondent and armed tribes " and the respondent's actions impacted their physical health.571 In Diallo the claimant had been detained for a total of 72 days, accused of unsubstantiated crimes, and then had been wrongfully expelled from the country.572 The Respondent also questions the relevance of the ruling in Diallo given that the case involved the standards for assigning moral damages in the context of human rights violations.573
256.
The Respondent submits that Mr Al Tamimi's claims do not reach the exceptional standards set forth in Desert Line or Diallo.574 In doing so, the Respondent contends that there is no evidence that the Claimant was mistreated by the Omani police, or that he or his staff was subject to any excessive use of force, physical intimidation, harassment or assault.575 The Respondent also submits that Mr Al Tamimi's claims as to reputational damage and humiliation are also unsupported by evidence.576

D. US SUBMISSION AND PARTIES' RESPONSES

(a) US Submission

257.
Among the questions scheduled by the Tribunal in Procedural Order No 11 are the following two:

Footnote 1 of Chapter 10, requires that Art 10.5, the Minimum Standard of Treatment clause be interpreted in accordance with Annex 10-A. Under Annex 10-A, does a claimant bear the burden of proving the existence of an applicable rule of customary international law that is claimed to be breached by a respondent?

Article 10.15(1)(a)(i) of the FTA permits the Tribunal to determine whether there has been a breach of any obligation set forth in s A of that Chapter. Article 10.21, Governing Law, requires the Tribunal to "...decide the issues in dispute in accordance with this Agreement and applicable rules of international law." What is the relationship between the Tribunal's subject-matter jurisdiction and the Governing Law clause?

258.
In response, as noted above, the United States of America (the " United States "), a non-disputing party, exercised its right under Article 10.19.2 of the FTA by filing a submission (the " US Submission ") on 22 September 2014. The US Submission addressed the following two points: (1) the burden to establish the content of customary international law; and (2) the governing law clause in Article 10.21.
259.
With respect to the first point, the United States argued that " [t]he burden is on a claimant to establish the existence and applicability of a relevant obligation under customary international law that is not otherwise incorporated expressly in the text of Art 10.5 " (internal citation omitted). In support of its argument, the US Submission relied on the arbitral decisions in Cargill Inc v Mexico, ADF v United States, Glamis Gold v United States and Methanex v United States which, the United States contended, place the burden of establishing the content of customary international law on the claimant.
260.
The criteria for a claimant to establish the existence of a rule of customary international law, the United States submitted, are listed in Annex 10-A. The same are recognised by the International Court of Justice. The decisions of arbitral tribunals interpreting fair and equitable treatment and full security and protection provisions that fall outside the scope of customary international law cannot be used as evidence of the content of the customary international law standard found in Art 10.5 and Annex 10-A.
261.
Moreover, the minimum standard of treatment under customary international law, the United States submitted, does not include a general obligation of proportionality. Proportionality is not a self-standing obligation. Once customary international law has been established, the claimant must show that the State has engaged in conduct that has violated it. The breach must be established in light of the high measure of deference that international law gives to States when it comes to regulating matters within their borders.577
262.
With respect to the governing law clause in Article 10.21, the second point addressed in the US Submission, it requires the Tribunal to apply international law when interpreting the provisions of Chapter 10.A and when deciding claims of breach of Chapter 10.A. Article 10.21 limits the Tribunal's jurisdiction to claims of breach of the obligations found in Chapter 10.A.

(b) Claimant's response

263.
In its submission of 31 October 2014 in response, the Claimant made the following three-part argument: (i) the matters addressed in the United States Submission are either irrelevant or beyond the scope of Article 10.19.2 of the FTA; (ii) the United States does not dispute that proportionality is relevant to claims of expropriation and denial of national treatment, or even claims of violation of the minimum standard of treatment; and (iii) the requirement of proportionality is well established as a component of the minimum standard of treatment under customary international law. Each of these points is summarised below:

a. First, according to the Claimant, the United States' view on questions of treaty interpretation are consistent with those of the Parties and need not be decided by the Tribunal. These views are: (i) that Article 10.5 and Annex 10-A incorporate customary international law standards rather than "an autonomous treaty-based standard"; and (ii) that the governing law clause in Article 10.21 does not extend the Tribunal's jurisdiction to include claims arising outside the FTA or undo the requirements of the Annex 10-A. However, the United States' views on questions of customary international law are improper under Article 10.19.2 for two reasons, and the Tribunal is entitled to ignore the US Submission in this regard. The burden of proof and the weight to be given to various evidence of customary international law are evidentiary and procedural matters that are neither addressed by the FTA nor are they issues of treaty interpretation. Moreover, the US submission goes further than addressing the burden of proof by commenting on the sufficiency of the evidence and the content of customary international law.

b. Second, on the issue of proportionality, the US Submission is not inconsistent with the Claimant's position. The United States concedes that proportionality may be " one factor in a discussion of expropriation ". In this regard, the Claimant's argument is that for Oman to be found not to have expropriated the Claimant's investment, it has to show prima facie that its shutdown of the quarry was a justified exercise of its police power and was not a disproportionate response to the alleged environmental irregularities. Moreover, the United States does not dispute that disproportionate treatment is relevant to the Claimant's national treatment claim. Here, the Claimant's argument is that it was treated with disproportionate harshness compared to local Omanis, so Oman had to prove that it had reasonable grounds for such differential treatment. Finally, the United States does not argue that proportionality is irrelevant to the Claimant's argument on the minimum standard of treatment. The United States only argues that proportionality is not an independent source of obligation within the minimum standard of treatment. The FTA is explicit that the minimum standard of treatment includes fair and equitable treatment and full protection and security. Fair and equitable treatment " necessarily implies that a state has an obligation not to apply penalties or restrictions that are seriously disproportionate to the violation that the state seeks to penalize or the harm the state seeks to prevent ".578

c. Third, according to the Claimant, arbitral tribunals have recognised, contrary to the United States' arguments, that proportionality is a part of the minimum standard of treatment under customary international law. Also, the views of the United States are not binding on the Tribunal under Article 10.19.2 of the FTA and the United States does not contend so. This is in contrast to Articles 10.21.3 and 19.2.3(b) which establish procedures for adopting binding interpretations of the FTA.

d. In addition, the US Submission assumes, in error, that the burden of proof applies to questions of law. However, numerous courts and tribunals have held that the doctrine of jura novit curia applies to questions of law, thus the Tribunal is free to determine questions of customary international law. The United States relies on Glamis Gold, Cargill, and several other cases. Glamis Gold gives little reasoning to support its conclusion that the Claimant has the burden of proving customary international law. The tribunal in Cargill acknowledged that its view, that the claimant has the burden of proof of change of customary international law, was a departure from the views of other tribunals. The other cases relied upon by the Claimant, ie ADF Group, Methanex, and North Sea Continental Shelf, do not decide the question of burden of proof. The United States cited yet other cases, none of which support its position.

e. In any event, if the Claimant has the burden of proof, it has met it. Tribunals have recognised proportionality as a freestanding requirement of fair and equitable treatment under the minimum standard of treatment. The United States, in arguing that the Claimant bears the burden of proving the content of customary international law, does not dispute that arbitral decisions may constitute sufficient evidence, especially since the United States itself relies on such decisions to support its arguments. What the United States disputes is relying on awards decided under autonomous treaty standards, rather than customary international law. However, tribunals have found no difference between fair and equitable treatment based on treaties versus customary international law, and proportionality has been found to be a part of the minimum standard of treatment in either instance.

(c) Respondent's response

264.

The Respondent makes two main arguments in its submission of 31 October 2014: (i) the US Submission addresses issues of treaty interpretation; and (ii) the US submission has reaffirmed accepted rules of law. These are summarised below:

a. First, the Respondent argued that the United States offers its general views on the nature and scope of the obligations to which it has agreed, and by implication not agreed. The substance or content of the minimum standard of treatment obligation is what defines the signatory parties' obligations under the FTA. The Claimant's burden " to establish the existence and applicability of a relevant obligation under customary international law that is not otherwise incorporated expressly in the text of Art 10.5 " is precisely the type of issue on which the signatory parties are expected to provide their views. The United States made a similar submission in Railroad Development Corp v Guatemala.

b. Second, the Respondent submitted that there is abundant authority supporting the view that the party seeking to rely on customary international law bears the burden of proving the existence and content of that law. Disagreeing with the Claimant, the Respondent added that the four decisions in Cargill, ADF, Glamis Gold, and Methanex all support its view. It is a two-part test based on consistent State practice and an understanding that the practice is required by law. Here, Mr Al Tamimi has failed to carry his burden to prove, based on either, that the doctrine of proportionality is part of customary international law cognisable under the FTA.

c. In addition, the Respondent submitted that the Claimant's interpretation of the doctrine of jura novit curia is flawed in that the doctrine allows a tribunal to take judicial notice of certain legal authorities or pre-existing laws and regulations to ascertain and apply the governing law. The Respondent cited a number of decisions that it claimed support this view. For example, in Glamis Gold the tribunal found that " the inquiry as to whether particular rules have become part of customary international law is ‘necessarily a factual inquiry, looking to the actions of States and the motives for and consistency of these actions '".579 In Patrick Mitchell v Democratic Republic of Congo, the annulment committee found that " while tribunals may have jura novit curia powers, they are not obliged to exercise them ".580 The tribunals in CME Czech Republic BV v Czech Republic and Cargill reached similar conclusions.

d. The question whether a particular rule has attained the status of customary international law cannot be answered by looking to arbitral tribunals' decisions. Such decisions interpreting certain provisions do not constitute evidence of the content of customary international law required by Article 10.5 and Annex 10-A.

e. The Respondent argued that many of the cases cited by the Claimant do not support his claims of proportionality. Notably, the reference to Occidental cannot, without more, satisfy the burden of proving that the doctrine of proportionality has become a part of the minimum standard of treatment under customary international law, because the decision is not grounded in the type of evidence necessary to prove State practice and opinio juris.

f. According to the Respondent, the Claimant's proportionality claim is that OMCO acted disproportionally when it terminated the OMCO-Emrock Lease Agreement for relatively small sums Emrock owed to OMCO. However, OMCO's actions are not attributable to Oman, which precludes an investment treaty claim based on the termination. In addition, OMCO had a unilateral right to terminate the Agreement based on Emrock's non-payment, without regard to the amount due or the duration of the debt. Principles of customary international law would be applicable here only if Oman had exercised its sovereign power to direct OMCO's action, which was not the case.

g. Similarly, the Claimant's claims that the doctrine of proportionality should have a bearing on the Tribunal's assessment of Mr Al Tamimi's arrest as well as the police shutdown of the project site are both unfounded.

h. Lastly, the Respondent contended that the United States' submission correctly confirms that the governing law clause does not expand the Tribunal's jurisdiction, which is limited to breaches of the obligations listed in Chapter 10 of the FTA.

VI. TRIBUNAL'S ANALYSIS

A. JURISDICTION

(a) Jurisdiction ratione personae

265.
The first issue to be considered is whether the Tribunal has jurisdiction ratione personae over the Claimant, Mr Al Tamimi. The question can be dealt with briefly, both because the answer is clear and because the Respondent has not actively pursued its challenge to Mr Al Tamimi's nationality.581 The Tribunal finds that there is no evidential basis for the Respondent's suggestion that Mr Al Tamimi is unable to rely on the US-Oman FTA by virtue of his nationality.
266.

Chapter 10 of the US-Oman FTA,582 headed ""Investment’, applies only to measures adopted or maintained by a Party relating to the covered investments of " investors of the other Party ".583 Article 10.27 defines " investor of a Party " in the following terms:

investor of a Party means a Party or state enterprise thereof, or a national or an enterprise of a Party, that attempts to make, is making, or has made an investment in the territory of the other Party; provided, however, that a natural person who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality.

267.
The meaning of ""national [...] of a party’ is defined in Article 1.2 of the FTA:

national means:

(a) with respect to Oman, any person who is a citizen within the meaning of its domestic laws governing nationality; and

(b) with respect to the United States, "national of the United States" as defined in Title III of the Immigration and Nationality Act;

268.
The ICSID Convention also defines the meaning of " national of another Contracting State " for its purposes under Art 25(2), relevantly including:584

[...] any natural person who had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date on which the request was registered […]

269.
The Tribunal will thus have jurisdiction ratione personae over Mr Al Tamimi only if it can be established that: (a) he is a national of the United States, as defined in Title III of the Immigration and Nationality Act; and (b) he has made, or has attempted to make, an investment in the territory of Oman. The second limb will be discussed in further detail in the context of the Tribunal's jurisdiction ratione materiae below; it suffices for now to observe that the Respondent has not disputed the Tribunal's jurisdiction ratione personae based on this latter criterion.
270.
In respect of the first limb, the Respondent has not provided a factual basis for a finding that Mr Al Tamimi is anything other than a national of the United States as defined in Title III of the Immigration and Nationality Act. That provision provides that a person may become a citizen of the United States of America either through birth or through naturalisation. Mr Al Tamimi has tendered in evidence his US government-issued Certificate of Naturalization, which shows that he became a naturalised US citizen within the meaning of Title III on 11 June 1980.585 Mr Al Tamimi is also the bearer of a current US passport.586 The Respondent has not contested the validity of either of these documents.
271.
Rather, the Respondent has suggested that Mr Al Tamimi " appears " also to be a national of the United Arab Emirates, and that pursuant to Article 10.27 his " dominant and effective nationality " is Emirati rather than American.587 The Tribunal finds that there is insufficient evidence to conclude Mr Al Tamimi is a dual national. Mr Al Tamimi has acknowledged that he was born as a citizen of the Emirate of Sharjah, which now constitutes part of the UAE.588 However it seems clear that, pursuant to Article 15 of the UAE Law Concerning Nationality, Passports and Amendments thereof, Mr Al Tamimi lost whatever Emirati citizenship he previously possessed when he voluntarily adopted the nationality of the United States in 1980. That provision states that:589

Article (15)

Nationality of the country shall be lost from any person enjoying such nationality in the following cases:

[…]

C. If he has adopted, voluntarily, a nationality of another country.

272.
This has been the position taken by the Claimant since his Notice of Intent dated 19 April 2011:590

The investor in this dispute is Mr Adel A Hamadi Al Tamimi. He is a naturalized citizen of the United States of America. Prior to obtaining his American citizenship in 1986, Mr Al Tamimi was a national of the United Arab Emirates ("UAE"). Mr Al Tamimi no longer holds UAE nationality.

273.
Mr Al Tamimi has given evidence that since his naturalisation as a US citizen he has not applied for, obtained or claimed nationality or citizenship in any other country.591 The Respondent has not produced any evidence to the contrary.592 Indeed, all documents relevant to this arbitration, filed with the UAE and Omani authorities, list Mr Al Tamimi's nationality exclusively as "American".593 The Tribunal therefore finds on the evidence presented to it that Mr Al Tamimi is a national of, and only of, the United States of America for the purposes of Chapter 10 of the US-Oman FTA.
274.

In any event, as a matter of interpretation of Article 10.27, the Tribunal does not consider that the language of " dominant and effective nationality " is intended to prevent dual citizens of both the United States and a third-party State, such as the UAE, from invoking the US-Oman BIT - even where the nationality of the third-party State is predominant. Rather, the Tribunal considers that the provision is aimed at preventing claims by dual nationals of both State parties (ie the United States and Oman) from seeking to use the FTA to claim against their own State of dominant and effective nationality -thereby defeating the purpose of the FTA to apply investment protection only to " investors of the other Party ". However, it is unnecessary for the Tribunal to definitively determine this interpretative point because the evidence does not disclose that Mr Al Tamimi is a national of any country other than the United States.

(b) Jurisdiction ratione materiae

275.

Pursuant to Art 10.1, the investment protections contained in Chapter 10 of the US-Oman FTA apply only to " covered investments ".594 The meaning of " covered investment " is defined under Article 1.3:

covered investment means, with respect to a Party, an investment, as defined in Article 10.27 (Definitions), in its territory of an investor of the other Party in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter;

276.
Similarly, Article 25(1) of the ICSID Convention provides in relevant part that:595

The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State […] and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre.

277.

The meaning of " investment " is relevantly defined in Article 10.27 of the US-Oman FTA:

investment means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include:

(a) an enterprise;

(b) shares, stock, and other forms of equity participation in an enterprise;

(c) bonds, debentures, other debt instruments, and loans;

(d) futures, options, and other derivatives;

(e) turnkey, construction, management, production, concession, revenuesharing, and other similar contracts;

(f) intellectual property rights;

(g) licenses, authorizations, permits, and similar rights conferred pursuant to domestic law; and

(h) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens, and pledges;

278.
Mr Al Tamimi has framed his claim on the basis that his primary investment in Oman consisted of the two Lease Agreements signed between his companies, Emrock and SFOH, and OMCO: namely, the OMCO-Emrock Lease Agreement and the OMCO-SFOH Lease Agreement.596 The Tribunal is satisfied that these Lease Agreements meet the requirements of Articles 1.3 and 10.27 of the US-Oman FTA for protection under the Treaty. Article 10.27(h) specifically includes within the scope of covered investments " other tangible or intangible, movable or immovable property, and related property rights, such as leases […]".597 The two Lease Agreements also exhibit the exemplary characteristics described in Article 10.27 above: the commitment of capital and other resources, the expectation of gain or profit, and the assumption of risk. Accordingly the Tribunal finds that it has jurisdiction ratione materiae in respect of the OMCO-Emrock and OMCO-SFOH Lease Agreements, out of which a dispute between the Claimant and Respondent directly arises.
279.
The Claimant has also referred to physical infrastructure and equipment at the quarry site as forming part of his investment: " equipment, machinery, spare parts, and services that he purchased to make the [q]uarry operational ".598 The Claimant has submitted that these physical assets cost him " tens of millions of dollars ".599 They too form part of Mr Al Tamimi's claims against Oman: in 2009, Mr Al Tamimi has alleged, the physical infrastructure and equipment at the quarry site was " wrecked, looted, and dismantled with the aid of heavy equipment ", either at the direction of the Omani authorities or at their sufferance.600
280.
The Tribunal is satisfied that these physical assets additionally meet the test for a covered investment under Articles 1.3 and 10.27. They too fall within the Article 10.27(h) definition of " other tangible or intangible, movable or immovable property ", and involve the commitment of capital, the expectation of gain or profit and the assumption of risk. Although intimately tied to the two Lease Agreements, by virtue of which the Claimant was permitted to establish physical infrastructure and equipment at the quarry site, the Tribunal is satisfied that these physical assets constitute an independent investment in their own right, out of which a dispute additionally arises for the purposes of the ICSID Convention.
281.
Finally, the Tribunal considers it worthy of note that Mr Al Tamimi was not in fact the direct owner of the investments in respect of which he now claims protection. Rather, Mr Al Tamimi invested in Oman through the corporate vehicles of Emrock and SFOH. Mr Al Tamimi owns only 49% of the shares in Emrock (a requirement under UAE law),601 although he claims sole executive decision-making authority over the company.602 Mr Al Tamimi owns 100% of the shares in SFOH.603
282.

The Respondent has not challenged Mr Al Tamimi's entitlement to bring the present proceedings in respect of assets owned and controlled by him only indirectly. The Tribunal therefore does not consider it necessary to make a direct ruling on this issue. It suffices to observe that although recent ICSID tribunals have reached varying positions on the standing (" ius standi ") of parties to bring investment protection claims in respect of assets held or controlled only indirectly, the language of Article 10.27 (" owns or controls, directly or indirectly ") is sufficiently broad to encompass Mr Al Tamimi's claims.

(c) Jurisdiction ratione temporis

283.

The US-Oman FTA came into force on 1 January 2009. There is no suggestion in the language of the Treaty that the investment protections of Chapter 10 were intended to apply with retrospective effect.604 Indeed, the definition of " covered investment ", cited at [275] above, stipulates that in order to qualify for the purposes of Chapter 10 an investment must be either " in existence as of the date of entry into force of this Agreement " or else established thereafter. Equally, Article 10.1 provides that Chapter 10 will apply only to measures " adopted or maintained " by a party affecting an investment, which presupposes the existence of an investment after 1 January 2009.605 The Claimant has acknowledged that the effect of Article 10.1 is that investment protection can apply only to measures taken or maintained against an investment after the Treaty entered into force.606

284.
As previously noted, Mr Al Tamimi's primary investment in Oman comprised the OMCO-Em rock and OMCO-SFOH Lease Agreements. The Respondent has argued that both agreements ceased to have effect prior to the entry into force of the US-Oman FTA on 1 January 2009: the OMCO-Emrock Lease Agreement, it says, was terminated by OMCO on 20 July 2008, while the OMCO-SFOH Lease Agreement was rendered " null and void " by 2 June 2008 at the latest, owing to SFOH's failure to register in Oman as required by Omani law.607
285.
The Tribunal finds below that the OMCO-Emrock Lease Agreement was not terminated until after 1 January 2009, with the result that the Tribunal has jurisdiction ratione temporis over that agreement. In respect of the OMCO-SFOH Lease Agreement, however, the Tribunal finds that as a result of SFOH's failure to register in Oman that agreement was rendered null and void prior to 1 January 2009. The Tribunal therefore has no jurisdiction ratione temporis over the latter agreement.

(i) The OMCO-Emrock Lease Agreement

286.
OMCO first purported to terminate the OMCO-Emrock Lease Agreement on 20 July 2008, when it sent Mr Al Tamimi, in his capacity as Chairman of Emrock, a letter declaring termination under Article 10(iv) for " non-compliance with payment obligations ".608 The Respondent has said that this breach was triggered by Mr Al Tamimi's failure to reimburse, inter alia, a RO 10,000 fine which OMCO had paid to the Ministry of Commerce on Emrock's behalf.609 The termination notice of 20 July 2008 declared that " we [OMCO] hereby terminate [the OMCO-Emrock Lease Agreement] with immediate effect ".610
287.
The termination notice was sent on 20 July 2008, many months before the coming into force of the US-Oman FTA on 1 January 2009. If this letter had the effect of ending the OMCO-Emrock Lease Agreement, then the Tribunal can possess no jurisdiction ratione temporis over that investment.
288.

The evidence shows, however, that the parties did not act in a manner consistent with the termination of the OMCO-Emrock Lease Agreement at that date. Most significantly, on 17 February 2009, OMCO sent Mr Al Tamimi a second termination notice. That second notice referred again to Article 10(iv) and Emrock's purported " non-compliance with payment obligations ", and again stated that " we [OMCO] hereby terminate [the OMCO-Emrock Lease Agreement] with immediate effect because EMROCK has not complied with making payments to us ".611

289.

It is true, as the Respondent has submitted, there is no evidence that the OMCO Board of Directors ever expressly rescinded or otherwise vacated the termination notice of 20 July 2008. Equally, however, the language and intent of the second termination notice of 17 February 2009 demonstrate that this second notice was not intended as a mere reaffirmation of the 20 July 2008 notice. The use of the wording " we hereby terminate " and " with immediate effect " in the second notice, for instance, indicates that OMCO did not consider that the OMCO-Emrock Lease Agreement had already been terminated.612 The schedule of late payments attached to the second termination notice, on which OMCO relied as its ground for termination, was additionally updated in the second termination notice to 13 February 2009.613 As the Claimant has submitted, " Oman's assertion that the 2009 termination notice was just a reiteration or confirmation of the 2008 notice is inconsistent with the language of the 2009 notice itself ".614

290.
Moreover, subsequent communications between OMCO and Emrock, as well as communications between OMCO and the Omani government, plainly indicate OMCO's understanding that the lease was not terminated until 2009.615 The Respondent has submitted that the reaffirmation of OMCO's decision to terminate the lease was delayed until after 1 January 2009 only because of a change in leadership at OMCO.616 Yet in the Tribunal's view, the fact that the OMCO Board of Directors determined to defer issuing the second termination notice until after the installation of its new Chairman, H E Al Dheeb, strongly suggests that the Board did not consider its earlier termination notice to have been effective. Rather, the Board wished to wait for the input of its new Chairman before deciding whether finally to terminate Emrock's lease. The Respondent's submissions have effectively acknowledged this point:617

The OMCO's Board's willingness to reconsider the matter culminated in the Board's meeting with H E Maqbool in September 2008, when H E Maqbool said it was up to the Board to proceed with the termination of the OMCO-Emrock Lease Agreement if it believed it had legal justification for doing so. […] But for the fact that OMCO's Chairman, Dr Al Azri, stepped down from that position in late 2008, the Board would have reaffirmed the decision to terminate the OMCO-Emrock Lease Agreement before 1 January 2009.

291.
In the meantime, between July 2008 and February 2009, OMCO continued to allow Emrock to operate at the site.618 Although OMCO had advised Mr Al Tamimi in July 2008 to " stop quarrying, processing and removal of materials from our site at Jebel Wasa ", it does not appear that this instruction was ever directly followed up or enforced prior to February 2009.619 Indeed, as the abovequoted passage from the Respondent's submissions makes clear, the OMCO board had decided to " reconsider " the termination of the OMCO-Emrock Lease Agreement in August 2008, and met with Minister of Commerce H E Maqbool in September 2008 for that purpose.620 Mr Al Tamimi has also alleged that he received contrary messages from government officials at this time as to the validity of OMCO's termination of the lease agreement.621 Although the evidence shows that by December 2008 OMCO's management and the necessary majority of the company's existing board members continued to support terminating the Emrock contract,622 it would not have been, in the Tribunal's view, unreasonable for Mr Al Tamimi to assume before February 2009 that the termination had at the very least been put on hold, if not rescinded, by OMCO.
292.

In light of this evidence, the Tribunal finds that the second termination notice of 17 February 2009 must be taken to have superseded the earlier notice of 20 July 2008, with the effect that the earlier notice was rendered ineffective. In other words, the specification of a 2009 termination date in the second termination notice (" we hereby terminate […] with immediate effect ") effectively waived the earlier purported termination date.

293.
The Tribunal accordingly finds that it possesses jurisdiction ratione temporis over the OMCO-Emrock Lease Agreement, which remained in existence as of 1 January 2009.

(ii) The OMCO-SFOH Lease Agreement

294.

The Respondent has further claimed that the OMCO-SFOH Lease Agreement was rendered " null and void " prior to 1 January 2009 because SFOH was never registered in Oman.623 It is, indeed, common ground that SFOH - a company established in the UAE624 - was never registered in Oman.625

295.

The OMCO-SFOH Lease Agreement was signed on 25 May 2006.626 On 11 September 2006, Mr Jaime Guzman of OMCO wrote to Emrock and SFOH reminded those companies that as a " crucial […] necessary and mandatory first step " they each needed to register in Oman.627 Mr Van der Wiele too informed Mr Al Tamimi by email 17 October 2006 that Emrock and SFOH needed to apply to register before seeking environmental approval from MECA.628

296.

On 22 August 2007, OMCO wrote to Mr Al Tamimi, in his capacity as Chairman of SFOH, indicating that it would consider the OMCO-SFOH Lease Agreement " null and void " if he failed to complete the necessary documentation to register SFOH in Oman by 30 November 2007.629 Mr Al Tamimi did not do so. Six months later, on 2 June 2008, OMCO therefore purported to determine that the OMCO-SFOH Lease Agreement had been rendered null and void:630

Despite repeated requests from Oman Mining Company LLC (OMCO), you have failed to submit any documentation to show the Registration of SFOH LLC in the Sultanate of Oman. In particular, by our letter dated 22nd August 2007, OMCO gave you a deadline of 30 November 2007 to remedy this failure, failing which the agreement shall be treated as null and void.

Since you have failed to submit the requested documentation, this notice is to reiterate as null and void the Lease Contract between OMCO and SFOH dated 25 May 2006.

297.
The question for the Tribunal is whether Mr Al Tamimi's failure to register SFOH in Oman had the legal effect for which OMCO, and latterly the Respondent, has contended.
298.
Extensive submissions were made by the parties as to whether the OMCO-SFOH Lease Agreement required registration of SFOH in Oman under its own contractual terms. The OMCO-SFOH Lease Agreement, however, simply affirms that SFOH must comply " with all obligations […] and laws for the time being in force or any statutory modifications or re-enactment thereof ".631 As the abovequoted passage from OMCO's letter of 2 June 2008 makes clear, OMCO did not purport to terminate the OMCO-SFOH Lease Agreement for breach of that agreement's contractual provisions. Rather, OMCO had determined to treat the lease as " null and void " because SFOH had failed to establish a legal presence in Oman in alleged breach of Oman's statutory company laws. Thus the relevant question is more fundamental: did SFOH's failure to register in Oman render that company, as well as the lease agreement into which it entered with OMCO, null and void as a matter of Omani law?
299.
The Commercial Companies Law (" CCL ") of Oman provides for the legal regulation of companies in Oman in six different forms, including limited liability companies.632 Article 2 of the CCL provides that a company is " null and void " unless it " adopts one of the types listed ".633 Article 136 of the CCL confirms the mandatory requirement to register a limited liability company in Oman: the owners of a limited liability company " shall register the limited liability company in the Commercial Register pursuant to the law ".634 Article 140(c) of the CCL provides that a " limited liability company shall not be deemed finally constituted " until " [r]egistration of the company in the Commercial Register " has occurred.635
300.
Registration in the Commercial Register is thus clearly central to the existence of a company's separate legal personality under Omani law. Additionally, Article 4 of the CCL provides that " [a]ll contracts, receipts, notices and other documents issued by commercial companies shall indicate the company's name, its form, its principal place of business and the number and place of its registration in the Commercial Register ".636 Similarly, Article 9 of the Commercial Register Law (" CRL ") stipulates that " [a]ny commercial company whose main center of operations is located in Oman must be registered in the Commercial Register of the region where such center is situated ".637
301.
It is clear from the above provisions, especially when they are considered together, that in order to have a legal presence in Oman - including the ability to conduct business and enter into contracts as a legal entity - a limited liability company must be registered in the Omani Commercial Register.
302.
In addition to these requirements, foreign investors wishing to conduct business in Oman are subject to the Foreign Capital Investments Law (" FCIL ").638 Under the FCIL, non-Omanis (whether natural or juridical persons) may not conduct a " commercial, industrial or tourism " business in Oman unless they first obtain a license from MOCI.639 The same requirement, indeed, applies under the CRL: Article 3 of the Commercial Register Law Amendment (" CRLA ") requires that " any natural or legal person " must obtain a " license from the Ministry of Commerce and Industry " before " exercising commerce in the Sultanate ".640
303.

In order for a non-Omani to obtain a license to operate under the FCIL, Article 2 first requires that the proposed business must be " conducted by an Omani company with a capital of not less than RO 150,000 ", of which the foreign shareholding may be no more than 49% (or up to 65%, with the approval of the Foreign Capital Investment Committee and MOCI).641 An annex to the FCIL, entitled " Instruction for Establishment of Omani Companies Subject to Commercial Companies Law and Foreign Business and Investment Law " sets out the process for incorporation of an Omani company to satisfy the requirements of Article 2 of the FCIL, including obtaining a certificate from the Omani Commercial Register, preparing the company's articles of association, and establishing a corporate capital of no less than RO 150,000.642

304.

Again, reading these legal requirements together, it is clear to the Tribunal that Omani law requires that any " commercial, industrial or tourism " business conducted in Oman must be carried out by a local company registered in the Commercial Register.

305.

The Claimant, however, has submitted that SFOH was not subject to these requirements because it was not " conduct[ing] any commercial, industrial or tourism business in Oman ".643 Under the terms of the Joint Production Agreement executed between Emrock and SFOH on 15 January 2007, the Claimant says, SFOH carried out no mining activities but merely held a real property lease.644 The Respondent, in return, has argued that SFOH cannot rely on a private contract such as the Joint Production Agreement to circumvent registration requirements imposed by domestic law.645

306.

The Tribunal accepts the Respondent's submission that SFOH was not exempt from the registration requirement merely because Emrock and SFOH agreed under the Joint Production Agreement that Emrock would be responsible for day-to-day quarrying and crushing operations at the quarry site. The CRL contains a list of relevant " business activities " which includes " [o]il, gas and mineral resources investment ".646 The terms of both the OMCO-SFOH Lease Agreement and the Joint Production Agreement reveal that the carrying out of such activities was precisely SFOH's purpose.647 Under the terms of the OMCO-SFOH Lease Agreement, SFOH committed to " contribute any or all investment in the plant, equipment and working capital necessary to establish and maintain the quarrying and crushing operation, as appropriately reviewed by both parties, particularly in regard to the periodic production schedule ", as well as being " responsible for the day-to-day technical and financial management and administration of the project ".648

307.

Similarly, the Joint Production Agreement provided that Emrock and SFOH would " establish a business relation […] the principal objectives of which shall be the Quarrying of Natural Stone, sale and distribution of products ".649 In that role, SFOH agreed with Emrock to secure all necessary permits and approvals for quarrying and crushing, provide necessary materials such as diesel and explosives, and obtain visas and working permits.650 SFOH additionally undertook to " prepare the site ", including the provision of explosives storage (with necessary permits), diesel and water storage tanks, a power generator, a graded and paved road from the quarry to the main road, and a mobile camp for 100 residents with kitchen, dining area and bathrooms.651 SFOH also assumed a monthly obligation under the Joint Production Agreement to pay Emrock for tonnage of material shipped out of the quarry (as well as 70% of stockpiled material if less than an average of 25,000 MT was picked up every month).652

308.
That SFOH would be directly involved in the Claimant's quarrying operations at Jebel Wasa was also the position represented externally to the Omani authorities. In its AEP submitted to MECA, for example, SFOH had stated that " SFOH will operate its own quarry and share crushing and other infrastructure with Emrock LLC [...] Each Company will produce 15 million tonne per annum (mpta) limestone product for a combined total of 30 mpta ".653
309.
The Tribunal therefore rejects the Claimant's submission that SFOH " act[ed] only through Emrock ".654 Rather, as a matter of law and practice, SFOH was intended to operate in Oman in its own right. As a non-Omani entity conducting business in Oman, SFOH was required to register on the Commercial Registry of Oman and obtain a license from MOCI. Indeed, it appears that at one point the Claimant held the intention of doing just that: in the AEP submitted by SFOH to MECA, when asked for SFOH's commercial or industrial registration number, the application stated " [c]ommercial registration applied for and pending ".655 Mr Van der Wiele of GEO-Resources, who assisted with preparing the AEP, gave evidence that " Mr Al Tamimi informed me that he would in fact be registering SFOH in Oman. It is for this reason that we later provided a statement to that effect in our draft Application for Environmental Permit ".656
310.

What, then, was the legal consequence of SFOH's failure to do register in Oman? The Claimant has submitted that the " legal consequence for such a failure would have been a small fine ", and not the nullification of the OMCO-SFOH Lease Agreement, correctly noting that under Art 17 of the FCIL, the penalty for conducting business without a license is a fine of no less than RO 5,000 and no more than RO 10,000.657 However, as a matter of Omani law the consequences of SFOH's failure to register clearly run deeper. The provisions of the CCL cited above indicate that a company has no legal presence in Oman unless registered. Article 2 of the CCL, it will be recalled, provides that a company is " null and void ’ unless it " adopts one of the types listed ’.658 Article 4 of the CCL, moreover, provides that " [a]ll contracts, receipts, notices and other documents issued by commercial companies shall indicate the company's name, its form, its principal place of business and the number and place of its registration in the Commercial Register ".659 The Tribunal accepts the Respondent's submission that the effect of Article 4 is to " requir[e] an Omani registration number to meet the threshold requirement of having a legal presence in the jurisdiction. Accordingly, registration is a condition precedent for any agreement entered into by the company to become effective ".660

311.

Without legal personality, SFOH had no capacity to enter into contracts such as the OMCO-SFOH Lease Agreement. The Tribunal therefore finds that OMCO was entitled to treat the lease agreement as null and void owing to SFOH's failure to register and obtain a business license in Oman. This consequence finds additional support in the wording of the OMCO-SFOH Lease Agreement: Article 2 provides that the lease agreement would only commence and come into effect " upon […] the issuance of all relevant licenses , permits and approvals from the relevant authority at the Sultanate of Oman ".661 There is no evidence that OMCO " acquiesced " in SFOH's non-registration, as the Claimant has contended.662

312.
The Tribunal accordingly finds that it has no jurisdiction ratione temporis over the OMCO-SFOH Lease Agreement.

(iii) Physical infrastructure and equipment

313.
As noted above, the Claimant has also referred to other physical assets (mining infrastructure and equipment) as constituting part of his investment. Those physical assets remained at the quarry site after 1 January 2009, as permitted under the extant OMCO-Emrock Lease Agreement. For the avoidance of doubt, therefore, the Tribunal finds that it has jurisdiction ratione temporis over that investment.

B. ATTRIBUTION

(a) Attribution of OMCO's conduct

314.
The Claimant has, as set out above, submitted that the actions of OMCO can be attributed to the Respondent for the purposes of State responsibility under the US-Oman FTA. Investment protection under Chapter 10 of the US-Oman FTA, of course, applies only to " measures adopted or maintained by a Party ".663 Attribution of OMCO's conduct is therefore necessary for the Claimant to claim against the Respondent in respect of OMCO's purported termination of the OMCO-Emrock Lease Agreement in February 2009.664
315.
The Claimant has effectively made a two-fold argument as to attribution. He has argued:665 (a) that OMCO is an organ of the Omani State by virtue of its being a governmental company exercising " governmental authority " under Article 10.1.2 of the US-Oman FTA; and/or (b) that OMCO acted pursuant to the directions of MECA in terminating the OMCO-Emrock Lease Agreement, relying on Emrock's alleged non-payment of overdue fines as mere " pretext " to conceal a politically-motivated decision.666
316.
The Tribunal finds that the actions of OMCO are not attributable to the Respondent. Simply put, OMCO does not meet the test under the US-Oman FTA for attribution. There is no evidence that in making the decision to terminate the OMCO-Emrock Lease Agreement, OMCO was exercising, or indeed would have been authorised to exercise, any regulatory, administrative or governmental authority. There is, furthermore, no evidence that OMCO acted under direction from MECA, and the Tribunal is not satisfied in any event that this would meet the narrow test for attribution under the US-Oman FTA. The Tribunal elaborates on each of these points below.

(i) Attribution under the US-Oman FTA

317.
There is no dispute that OMCO is a state-owned enterprise. Indeed, OMCO was expressly established as such in 1981 pursuant to Royal Decree 11/81.667 To that end, 99% of the shares in OMCO are owned by the Omani Ministry of Oil and Minerals,668 its directors are appointed by royal decree,669 and its board of directors has included current and former ministers in the Omani government.670
318.
However, Article 10.1.2 of the US-Oman FTA sets out a relatively narrow test for the circumstances under which the actions of a state enterprise may be attributed to the State:671

A Party's obligations under this Section shall apply to a state enterprise or other person when it exercises any regulatory, administrative, or other governmental authority delegated to it by that Party .

319.
For the purpose of attribution under the US-Oman FTA, therefore, the fact that OMCO is a state enterprise is insufficient. To be attributable to the Respondent, OMCO's conduct must occur in the exercise of " regulatory, administrative, or other governmental authority delegated to it " by Oman.
320.
This test under Article 10.1.2 may be narrower in some respects than the test for State responsibility under customary international law - as described, for example, in the ILC Articles on State Responsibility (" ILC Articles "), which set out a number of grounds on which attribution may be based. The ILC Articles suggest that responsibility may be imputed to a State where the conduct of a person or entity is closely directed or controlled by the State,672 although the parameters of imputability on this basis remain the subject of debate.673
321.

The Tribunal accepts the Respondent's submission that contracting parties to a treaty may, by specific provision (lex specialis), limit the circumstances under which the acts of an entity will be attributed to the State.674 To the extent that the parties have elected to do so, any broader principles of State responsibility under customary international law or as represented in the ILC Articles cannot be directly relevant.

322.
The effect of Article 10.1.2 of the US-Oman FTA is to limit Oman's responsibility for the acts of a state enterprise such as OMCO to the extent that: (a) the state enterprise must act in the exercise of " regulatory, administrative or governmental authority "; and (b) that authority must have been delegated to it by the State.675 The Respondent is therefore correct in its submission that, whether or not the Ministry of Oil and Minerals exercised " effective control " over OMCO through its 99% shareholding, or through influence over its directors or managers, as the Claimant submits,676 this is not relevant to the test for attribution under Article 10.1.2 of the US-Oman FTA.677
323.
The US-Oman FTA does not define what is meant by " regulatory, administrative or governmental authority ". The Respondent has submitted, however, that in this respect the " requirement for attribution in the FTA closely parallels that in Article 5 of the ILC Articles ".678 Under Article 5 of the ILC Articles, a person or entity which is not an organ of the State must be empowered by the law of that State to " exercise elements of the governmental authority " and must act " in that capacity in the particular instance ".679 The conduct at issue must be " governmental " or sovereign in nature (acta jura imperii). Purely commercial conduct (acta jure gestionis) cannot be attributed to the State under Article 5.680
324.
Given the specific test laid out by the State parties under Article 10.1.2, the criteria of Article 5 of the ILC Articles are not directly applicable to the present case. Indeed, there may be points of divergence between the test under Article 5 and the test under Article 10.1.2 of the US-Oman FTA: Article 10.1.2 refers to the exercise of " regulatory " and " administrative " authority in addition to " governmental " authority.681 But Article 5 nevertheless provides a useful guide as to the dividing line between sovereign and commercial acts.
325.
There is, quite simply, no evidence that OMCO exercised any delegated " regulatory, administrative or governmental authority " in any of its dealings with Emrock, much less in its decision to terminate the OMCO-Emrock Lease Agreement. The Claimant has emphasised that OMCO's board of directors comprised ministers from various governmental departments, placing particular emphasis on the dual role of Dr Hilal Al Azri as both Director-General of Minerals for MOCI and Chairman of OMCO's Board of Directors.682 Yet the mere fact that a number of OMCO's board members also served as government ministers does not by itself demonstrate that OMCO exercised regulatory, administrative or governmental powers, or that the ministers sitting on OMCO's board exercised any such powers when sitting in their capacity as directors of OMCO .683
326.
Most significantly, the Claimant has been unable to identify any relevant law that specifically delegates any regulatory, administrative or governmental authority or powers to OMCO. As previously noted, OMCO came into existence in 1981 pursuant to Royal Decree 11/81. That decree makes expressly clear that OMCO was established simply as a " limited liability company " under the CCL, exercising ordinary commercial powers.684 The Royal Decree delegates no regulatory, administrative or governmental powers to OMCO.
327.
Pursuant to Article 16 of OMCO's bylaws, moreover, OMCO's board of directors is empowered to act only as necessary " to implement the company goals ", with its powers restricted by law and the company's Agreement of Association.685 OMCO's " company goals " are set out at Article 5 of the Agreement of Association (and repeated in Article 5 of the bylaws). They too contain nothing to suggest that OMCO is intended or empowered to conduct any regulatory, administrative or governmental functions. Rather, OMCO's company purposes are limited to:686

a. " exploration and drilling for minerals […] excavating mines and establishing all equipments [sic] required for operating same and for collecting and fusing the produced raw materials ";

b. " [m]arketing produced raw materials "; and

c. " [m]anufacturing raw materials and marketing manufactured materials ".

328.
In his Memorial, the Claimant acknowledged that " OMCO was established to search for minerals, construct and drill mines for the collection and production of minerals, and marketing and manufacturing of minerals ", without reference to the exercise of any regulatory, administrative or governmental authority.687 Rather, the Claimant recognised in his Memorial that other organs of the Omani State exercised administrative and regulatory control over his investment:

a. " [m]ining activities of OMCO are controlled, monitored and licensed by the Ministry of Commerce ";688

b. " Oman's Ministry of Environment and Climate Affairs […] enforces Oman's laws pertaining to the environment and pollution controls " and is " responsible for issuing certain permits a quarry operator must have in order to excavate and process limestone ";689 and

c. " the Ministry of Housing has the power to record all land rights and grant land ownership rights " and is " responsible for zoning lands in Oman for residential, commercial and industrial uses ".690

329.
That it was indeed these Omani ministries, rather than OMCO, which exercised the relevant regulatory, administrative or governmental powers is fully supported by the record of evidence. The OMCO-Emrock Lease Agreement, for instance, described OMCO simply as a " State-owned company which has been awarded mining concession[s] in the Jebel Wasa in the Sultanate of Oman by the Ministry of Commerce & Industry ", one of which concessions it intended to " demis[e] " to Emrock.691 The agreement did not grant the Claimant any regulatory or administrative approval to operate the quarry: rather, the agreement expressly contemplated that it would only " come [into] effect upon [...] the issuance of all relevant license, permits and approvals from the relevant authority at the Sultanate of Oman ".692
330.
It is apparent from this wording that the parties understood that OMCO itself exercised no regulatory authority to grant licenses, permits or approvals. Those powers resided with the relevant authorities of the Omani government, and the record shows that OMCO itself was subject to their application. OMCO committed under the lease agreement only to using its " best endeavours in obtaining of the necessary environmental and operating permits ", conditioned on Emrock's operational and environmental management plans meeting the " satisfaction of the relevant authorities ".693 It was, of course, to these relevant Omani authorities that the parties subsequently turned in order to obtain the necessary regulatory approvals.
331.
There is no evidence that OMCO ever acted, or purported to act, during the relevant period in any capacity other than as commercial lessor of the quarry concessions which had been awarded to it by the Omani government. When concerns were raised about Emrock's compliance with Omani law in conducting its quarrying activities, it was not OMCO but MECA and MOCI which issued regulatory warnings and later imposed fines. That these warnings were issued by MECA and MOCI to OMCO, and the fines paid by OMCO in the first instance, provides further evidence of the arm's-length regulatory relationship which existed between OMCO and the relevant Omani authorities. The Claimant's repeated claims that it was OMCO's obligation to pay the fines imposed by the relevant Omani ministries is also inconsistent with his argument that Oman had delegated " regulatory, administrative or governmental authority " to OMCO in respect of the operations at the Jebel Wasa quarry site.
332.
Finally, and most significantly, the evidence relating to OMCO's termination of the OMCO-Emrock Lease Agreement - the specific conduct which forms the basis of Mr Al Tamimi's claim under the US-Oman FTA - equally discloses no evidence that OMCO was acting, or purporting to act, in the exercise of any regulatory, administrative or governmental authority. In the second termination notice, sent on 17 February 2009 from OMCO to Mr Al Tamimi in his capacity as Chairman of Emrock,694 OMCO did not purport to invoke or rely upon any regulatory, governmental or administrative authority to terminate the OMCO-Emrock Lease Agreement. Rather, it expressly relied on its perceived contractual entitlement under Article 10(iv) to terminate the agreement on the basis of Emrock's non-compliance with payment obligations. OMCO observed in the termination notice that Mr Al Tamimi was " well aware of this provision " and that " we are always having to chase you for payments […] this situation is intolerable ".695
333.
As the Respondent has submitted, the terms of OMCO's second termination notice make it plain that " OMCO was acting like any other commercial party, enforcing its view of its contractual rights pursuant to a negotiated private agreement ".696 OMCO did not purport to - and nor could it -terminate the lease agreement in exercise of any extra-contractual regulatory, administrative or governmental powers. The Tribunal finds that OMCO's conduct in terminating the OMCO-Emrock Lease Agreement was nothing more than what it was expressed to be: a commercial response to Emrock's alleged various and repeated