Mr. John Terry
Ms. Myriam
M. Seers
Mr. Ryan Lax
Ms. Aria Laskin
Torys LLP
79 Wellington Street West, Suite 3000
Box 270, TD Centre
Toronto, ON
Canada, M5K IN2

Mr. Paolo Di Rosa
Mr. Raúl Herrera
Mr. Csaba Rusznak
Ms. Natalia Giraldo-Carrillo
Arnold & Porter Kaye Scholer LLP
601 Massachusetts Avenue NW
Washington, DC 20001-3743
United States of America
Mr. Dmitri Evseev
Mr. Patricio Grané Labat
Arnold & Porter Kaye Scholer LLP
Tower 42, 25 Old Broad Street
London, EC2N1Q
United Kingdom
Ms. Adriana González
Ms. Arianna Arce
Ms. Francinie Obando
Ms. Marisol Montero
Ministerio de Comercio Exterior de Costa Rica
Plaza Tempo, sobre la Autopista Próspero Fernández, contiguo al Hospital Cima
Piso 3
San José
Republic of Costa Rica

[...]

At this stage, the Tribunal is of the view that it cannot order the discontinuance requested by the Respondent. This request has been made under Rule 44 of the ICSID Arbitration Rules, which addresses discontinuance of the proceedings at the request of a party. According to the Explanatory Notes to Rule 44 in the 1968 version of the Rule (which is identical to its 2006 version), 'under this Rule the agreement (express or implied) of both parties must be secured for discontinuance' (Note C). The Claimant has not consented to the discontinuance, neither expressly nor impliedly. To the contrary, although it has not made a formal objection, it has stated that 'a discontinuance of the proceeding […] would cause significant prejudice to the Claimant.' The Tribunal understands this to be an implied objection.

That being said, the present state of uncertainty cannot last indefinitely. As noted in the Explanatory Notes cited above, 'this Rule provides that if either party wishes to discontinue the proceeding unilaterally, the acquiescence of the other party must be obtained; but, so as not to permit such party to block a discontinuance by inaction, intentional or unintentional, a time limit is to be set for its response' (Note B). The Tribunal already set one time limit for this purpose, of which the Claimant now requests an extension. Given the special circumstances surrounding the Claimant's corporate organization and management, the Tribunal is willing to extend this deadline for an additional three weeks, i.e. until 29 September 2015. If by then the Claimant does not indicate clearly whether it wishes to pursue this arbitration and present a formal objection to the discontinuance requested by the Respondent, the Tribunal will apply Rule 44 and deem that the Claimant has acquiesced in the discontinuance.

The Respondent's request for security for costs is deferred until the Tribunal's final ruling on the discontinuance, if at that stage the request remains applicable.

Tribunal:

Prof. Gabrielle Kaufmann-Kohler President

Prof. Bernard Hanotiau Arbitrator

Prof. Brigitte Stern Arbitrator

ICSID Secretariat:

Ms. Luisa Fernanda Torres Secretary of the Tribunal

For the Claimant:

Mr. John Terry Torys LLP

Ms. Myriam Seers Torys LLP

Mr. Ryan Lax Torys LLP

Ms. Aria Laskin Torys LLP

Mr. Erich Rauguth Infinito Gold Ltd.

Mr. Juan Carlos Hernández Infinito Gold Ltd.

Mr. Erber Hernández Torys LLP (paralegal)

For the Respondent :

Mr. Paolo Di Rosa Arnold & Porter Kaye Scholer LLP

Mr. Dmitri Evseev Arnold & Porter Kaye Scholer LLP

Mr. Patricio Grané Labat Arnold & Porter Kaye Scholer LLP

Ms. Natalia Giraldo-Carrillo Arnold & Porter Kaye Scholer LLP

Ms. Daniela Páez Arnold & Porter Kaye Scholer LLP

Mr. Kelby Ballena Arnold & Porter Kaye Scholer LLP

Ms. Adriana González Ministerio de Comercio Exterior

Ms. Arianna Arce Ministerio de Comercio Exterior

Court Reporter:

Mr. David Kasdan B&B Reporters

■ Claimant: C-445

■ Respondent: RX-001 to RX-003

a. In 1996, Industrias Infinito completed an extensive pre-feasibility study,¹⁴ which was accompanied by several reports and reviews on the viability of the project.¹⁵

b. Industrias Infinito also commissioned other studies and reports addressing the environmental and socio-economic impact of the project.¹⁶

c. In 1999, Industrias Infinito completed a comprehensive feasibility study that allegedly proved the existence of a substantial gold deposit in the Las Crucitas area.¹⁷ According to the Claimant, under the Mining Code this gave Industrias Infinito the exclusive right to obtain an exploitation concession.¹⁸

d. In December 1999, Industrias Infinito submitted the feasibility study to the Directorate of Geology and Mines ("DGM"), a subdivision of the Ministry of the Environment and Energy ("MINAE"), and requested an exploitation concession to develop a surface gold mine at Las Crucitas.¹⁹

a. The SETENA resolution declaring the environmental viability of the project.

b. The SETENA resolution approving the modification of the Las Crucitas Project.

c. The MINAE resolution granting the 2008 Concession.

d. The Executive Decree declaring the project in the national interest.⁵⁹

(i) Resolution No. 3638-2005-SETENA, through which the SETENA declared the environmental viability for the extraction phase of the Las Crucitas Project for a period of 2 years, under specific terms and conditions;

(ii) Resolution No. 170-2008-SETENA, through which the SETENA approved the amendment of the Las Crucitas Project;

a. The MINAE to cancel the 2008 Concession.⁷²

b. Industrias Infinito and the Government to facilitate the restoration of the site, with the quantum of damages to be determined in a different TCA proceeding.⁷³

c. The file to be transmitted to the prosecutor to determine whether criminal proceedings should be initiated against Government officials (including President Arias).

(iii) Resolution No. R217-2008-MINAE, through which the President of Costa Rica and the Minister of Environment and Energy awarded the mining concession to Industrias Infinito;

(iv) Resolution No. 244-2008-MINAE (the Tribunal notes that this document has not been referred to be either Party);

(v) Resolution No. 244-2008-SCH, through which the Arenal-Huetar Norte Conservation Area, through the sub-region San Carlos-Los Chiles, authorized the change of land use in forest areas of forest, in areas of agricultural use without forest, and in plantation areas;

(vi) Executive Decree No. 34801-MINAET, through which the President of Costa Rica and the Minister of Environment and Energy declared the Las Crucitas Project of public interest and national convenience.

[…] Costa Rica does not believe that the evidence available to date is sufficient to sustain such a jurisdictional objection, i.e., that the entirety of Infinito's investment was procured through fraud, corruption or other malfeasance such that it fails to qualify as a bona fide investment under the BIT and the ICSID Convention. As the summary provided by APREFLOFAS shows, the numerous investigations of public officials for corruption and other crimes in relation to the granting of the 2008 Concession are either still ongoing or have resulted in dismissal of the charges.¹⁰⁹

The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally.

a. There must be a legal dispute.

b. That dispute must arise directly out of an investment.

c. The dispute must be between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State.

d. The parties to the dispute must have consented in writing to submit the dispute to the Centre. Once given, this consent may not be withdrawn unilaterally.

ARTiCLE XII

settlement of Disputes between an investor and the Host Contracting Party

1. Any dispute between one Contracting Party and an investor of the other Contracting Party, relating to a claim by the investor that a measure taken or not taken by the former Contracting Party is in breach of this Agreement, and that the investor has incurred loss or damage by reason of, or arising out of, that breach, shall, to the extent possible, be settled amicably between them.

2. If a dispute has not been settled amicably within a period of six months from the date on which it was initiated, it may be submitted by the investor to arbitration in accordance with paragraph (4). The investor will bear the burden of proof to demonstrate:

(a) that it is an investor as defined by Article I of this Agreement;

(b) that the measure taken or not taken by the Contracting Party is in breach of this Agreement; and

(c) that the investor has incurred loss or damage by reason of, or arising out of, that breach.

For the purpose of this Agreement, a dispute is considered to be initiated when the investor of one Contracting Party has delivered notice in writing to the other Contracting Party alleging that a measure taken or not taken by the latter Contracting Party is in breach of this Agreement, and that the investor has incurred loss or damage by reason of, or arising out of, that breach.

3. An investor may submit a dispute as referred to in paragraph (1) to arbitration in accordance with paragraph (4) only if:

(a) the investor has consented in writing thereto;

(b) the investor has waived its right to initiate or continue any other proceedings in relation to the measure that is alleged to be in breach of this Agreement before the courts or tribunals of the Contracting Party concerned or in a dispute settlement procedure of any kind;

(c) not more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage; and

(d) in cases where Costa Rica is a party to the dispute, no judgement has been rendered by a Costa Rican court regarding the measure that is alleged to be in breach of this Agreement.

4. The dispute may be submitted to arbitration under:

(a) The International Centre for the Settlement of Investment Disputes (ICSID), established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States, opened for signature at Washington D.C. on 18 March, 1965 ('ICSID Convention'), if both the disputing Contracting Party and the Contracting Party of the investor are parties to the ICSID Convention;

or

(b) the Additional Facility Rules of ICSID, if either the disputing Contracting Party or the Contracting Party of the investor, but not both, is a party to the ICSID Convention; or

(c) an ad hoc arbitration tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) in case neither Contracting Party is a member of ICSID, or if ICSID declines jurisdiction.

5. Each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration in accordance with the provisions of this Article.

6. (a) The consent given under paragraph (5), together with either the consent given under paragraph (3), or any relevant provision of Annex II, shall satisfy the requirements for:

(i) written consent of the parties to a dispute for purposes of Chapter II (Jurisdiction of the Centre) of the ICSID Convention and for purposes of the Additional Facility Rules; and

(ii) an 'agreement in writing' for purposes of Article II of the United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958 ('New York Convention').

(b) Any arbitration under this Article shall be held in a State that is a party to the New York Convention, and claims submitted to arbitration shall be considered to arise out of a commercial relationship or transaction for the purposes of Article I of that Convention.

7. A tribunal established under this Article shall decide the issues in dispute in accordance with this Agreement, the applicable rules of international law, and with the domestic law of the host State to the extent that the domestic law is not inconsistent with the provisions of this Agreement or the principles of international law.

8. An investor of one Contracting Party may seek interim injunctive relief, not involving the payment of damages, before the judicial or administrative tribunals of the Contracting Party that is a party to the dispute, according to the latter's domestic legislation, prior to the institution of the arbitral proceeding.

9. A tribunal may award, separately or in combination, only:

(a) monetary damages and any applicable interest;

(b) restitution of property, in which case the award shall provide that the disputing Contracting Party may pay monetary damages and any applicable interest in lieu of restitution.

A tribunal may also award costs in accordance with the applicable arbitration rules.

10. An award of arbitration shall be final and binding and shall be enforceable in the territory of each of the Contracting Parties.

11. Any proceedings under this Article are without prejudice to the rights of the Contracting Parties under Articles [ sic ] XIII. Without limiting the generality of the foregoing, however, it is agreed that neither Contracting Party shall give diplomatic protection, or bring an international claim in respect of specific loss or damage suffered by an investor of that Contracting Party, where such loss or damage is, or has been, the subject matter of arbitration under this Article, unless the other Contracting Party fails to comply with the award rendered in such arbitration.

First, the Respondent submits that the claims are barred under Article XII(3)(d) of the BIT, which excludes claims if a "judgment has been rendered by a Costa Rican court regarding the measure that is alleged to be in breach of this Agreement":¹²⁰

a. While the Claimant purports to challenge other acts by the Costa Rican judicial, executive and administrative organs, its complaint is directed to the effects of the 2010 TCA Decision, and as such this is the act that should be deemed to be the relevant "measure" in this case. As in 2011, the Administrative Chamber of the Supreme Court has already rendered a decision on the 2010 TCA Decision, the Tribunal has no jurisdiction to hear the Claimant's claims.

b. Even if one were to consider that the relevant measure is the 2011 Administrative Chamber Decision (which the Respondent denies), the latter submits that "there exist multiple judgments of Costa Rican courts related to that measure within the meaning of BIT Article XII(3)(d)," in particular because "the 2011 Administrative Chamber Judgment is itself a judgment of a Costa Rican court and is inextricably related to another judgment of a Costa Rican court, i.e. the 2010 TCA Judgment."¹²¹ As a result, "Article XII(3)(d) must […] be understood to preclude any challenge either to the 2010 TCA Judgment or to the 2011 Administrative Chamber Judgment, especially given that the challenge is ultimately based on a disagreement with the legal conclusions reached by the Costa Rican courts on matters of domestic law."¹²²

c. Likewise, all of the other measures of which the Claimant complains "(a) are nothing more than vehicles for Claimant's indirect challenge to the 2010 TCA Judgment, and (b) constitute acts regarding which the Costa Rican judiciary has already rendered judgment, and are therefore beyond the Tribunal's jurisdiction pursuant to Article XII(3)(d) of the BIT."¹²³

a. The 2011 Administrative Chamber Decision, which upheld the 2010 TCA Decision.

b. The 2013 Constitutional Chamber Decision, which denied a separate challenge on constitutional grounds against the 2010 TCA Decision.

c. The 2012 MINAE Resolution, which executed the 2010 TCA Decision's order to cancel the 2008 Concession and remove it from the Mining Registry.

d. The 2011 Legislative Moratorium consolidating the open-pit mining ban implemented in 2010 through the 2010 Executive Moratorium, which the Claimant alleges deprived it of the right to seek a new concession after its existing concession was annulled by the 2010 TCA Decision.¹²⁵

Third, the Respondent submits that the Tribunal lacks jurisdiction ratione temporis, i.e. that the claims are time-barred under the three-year statute of limitations contained in Article XII(3)(c) of the BIT.¹³⁰ According to the Respondent, "much of Claimant's case depends on challenges to measures that predate 6 February 2011," which the Claimant accepts is the cutoff date for purposes of assessing the applicability of this provision (the dispute having been submitted to arbitration on 6 February 2014).¹³¹ More specifically:

a. The Respondent contends that "the main pillars of Claimant's arguments about Costa Rican law were thoroughly rejected by the 2010 TCA Judgment, which was officially rendered on 14 December 2010, as well as by earlier decisions of the Constitutional Chamber that Claimant either ignores or plainly misrepresents."¹³² However, this Tribunal has no jurisdiction ratione temporis to review the substantive correctness of any of these court decisions, and "[i]t would also be improper for the Tribunal to find that later-occurring judicial or administrative acts that merely left in place or applied the 2010 TCA Judgment to constitute independently justiciable breaches of the BIT."¹³³

b. Nor can the Claimant escape the "fatal implications of the statute of limitations" for its claim related to the 2010 Moratorium: although Infinito focuses on the mining code amendment (or 2011 Legislative Moratorium) adopted in late 2010 and effective from 10 February 2011 (i.e., within the limitation period), it ignores the fact that the 2010 Moratorium was already in force as a result of two earlier presidential decrees.¹³⁴

a. With respect to the 2011 Administrative Chamber Decision, under the relevant BIT provisions the Claimant must prove that the judicial acts challenged amount to a denial of justice, which it has failed to do. Nor could the Claimant have acquired any legitimate expectations from the 2010 Constitutional Chamber Decision that could later have been violated by the 2011 Administrative Chamber Decision.¹³⁶

b. With respect to the 2013 Constitutional Chamber Decision, the Claimant appears to recognize that the rejection of its unconstitutionality complaint was based on valid procedural grounds. And while it complains of the time that it took to resolve the case, it does not claim prejudice or damage arising from the delay.¹³⁷

c. With respect to the 2012 MINAE Resolution, the Claimant "fails to present an intelligible theory for how this Resolution went beyond the 2010 TCA Judgment, which expressly ordered MINAE to expunge the concession from the Mining Registry," nor has it shown that this decision cancelled any of the Claimant's additional rights.¹³⁸

d. Similarly, the 2015 TCA Damages Decision simply implemented the 2010 TCA Decision by imposing joint liability on the defendants for environmental remediation of the Las Crucitas site. The Claimant does not argue that this decision violated Costa Rican law or was inconsistent with the 2010 TCA Decision. Nor does it claim any damage arising from that decision.¹³⁹

e. As to the ban on open pit-mining, the Claimant has not alleged that the 2011 Legislative Moratorium or the executive decrees that preceded it were illegal or improperly implemented as a matter of Costa Rican law. In addition, while these decrees precluded the granting of new mining rights, the Claimant has not explained how they could have infringed on any right already held by Infinito (indeed, the Costa Rican courts had found that these decrees did not violate the petitioners' acquired rights). Nor has the Claimant shown that it would have been entitled to obtain a new concession and all the necessary permits to develop the Las Crucitas Project in the absence of the 2011 Legislative Moratorium.¹⁴⁰

a. The 2011 Administrative Chamber Decision, which the Claimant alleges confirmed the 2010 TCA Decision, "thereby rendering final and irreversible the annulment of the exploitation concession, environmental approvals, the declaration of public interest and national convenience, and the land use change permit."¹⁴⁷

b. The 2013 Constitutional Chamber Decision, which Infinito alleges declined to resolve, on admissibility grounds, the conflict between its earlier decision upholding the constitutionality of the Las Crucitas Project approvals and the 2010 TCA Decision.¹⁴⁸

c. The 2012 MINAE Resolution, which Infinito alleges cancelled the 2008 Concession and expunged all of Industrias Infinito's mining rights from the mining registry, going further than what was ordered by the Administrative Chamber.¹⁴⁹

d. The 2011 Legislative Moratorium on open-pit mining, which the Claimant alleges replaced the 2010 Executive Moratorium, prohibiting Industrias Infinito from applying for new permits.¹⁵⁰

a. It expropriated the Claimant's investments by definitively precluding Infinito from building and operating the Crucitas gold mine.¹⁵²

b. It breached Costa Rica's obligation to provide FET to Infinito's investments, by violating its legitimate expectations and denying both procedural and substantive justice to Infinito.¹⁵³

c. It failed to grant Infinito's investments full protection and security.¹⁵⁴

d. It breached two substantive obligations imported into the BIT through the BIT's MFN clause from other bilateral investment treaties signed by Costa Rica: (i) Costa Rica's obligation to do "what is necessary" to protect Infinito's investments, imported from the Costa Rica-France bilateral investment treaty, and (ii) the "umbrella clause" requiring Costa Rica to "comply with [or observe] any obligation assumed regarding investments of investors of the other Contracting Party," found in Costa Rica's bilateral investment treaties with Taiwan and Korea.¹⁵⁵

Fourth, while purporting to require the Tribunal to assess whether Infinito has made a prima facie case on the merits, the Respondent is in fact asking the Tribunal to determine the merits of the dispute and thus to determine contentious issues of fact and law that are inappropriate at the jurisdictional stage. According to the Claimant, "[a] prima facie analysis requires the Tribunal to accept the facts pleaded as true and assess whether they could support a claim for breach of the BIT."¹⁶³ The Claimant asserts that it "has demonstrated Costa Rica's breaches of the BIT on a balance of probabilities," and has thus "more than met its burden to establish prima facie breaches of the BIT."¹⁶⁴ Specifically:

a. With respect to the FET standard in Article II(2)(a) of the BIT:

i. The Claimant argues that no investment tribunal has ever dismissed a claim for breach of the FET standard because the claimant failed to show a prima facie case. This is because the determination of the standard is fact-specific and flexible, and must be assessed in the context of the facts and evidence, which are a matter for the merits.

ii. In any event, the Claimant rejects the Respondent's argument that the FET standard of the BIT is equivalent to the minimum standard of treatment under customary international law ("MST"), and argues that it would be premature for the Tribunal to determine this question during the jurisdictional phase.

iii. Whether the FET standard is autonomous or limited to the MST, the Claimant contends that it has "demonstrated that its claims are capable of breaching the FET standard in Article II(2)(a)," and therefore it has established a prima facie case that this provision was breached:¹⁶⁵

■ With respect to its legitimate expectations claim, the Claimant argues that the Government provided repeated assurances to Infinito, upon which Infinito reasonably relied for more than a decade in deciding to continue investing in the Las Crucitas Project.¹⁶⁶ Specifically, "Industrias Infinito was granted an exploration permit, an exploitation concession, and several other permits and approvals over the course of the project's life," and "[a]t each step, it was encouraged and induced to continue investing in the project."¹⁶⁷ The Claimant further alleges that "[t]he legality of the Crucitas project's exploitation concession and approvals was confirmed in multiple judicial decisions including by the country's highest court."¹⁶⁸ That after "these repeated and far-reaching assurances" "the Administrative Chamber retroactively applied the 2002 moratorium, nine years after it was adopted, and after Infinito had spent millions developing and building the project in reliance on its mining rights and that the 2002 moratorium did not apply to its project," amounts to a breach of the Claimant's legitimate expectations, regardless of whether the standard is autonomous or limited to the MST.¹⁶⁹

■ Likewise, the Claimant submits that it has made a prima facie case of a procedural and substantive denial of justice. Procedurally, the Claimant contends that the Respondent denied justice to Infinito by failing to provide a legal system capable of protecting Infinito's investments, because it lacked a mechanism to resolve the inconsistency between the decisions of different chambers of the Supreme Court. Substantively, the Claimant argues that the Administrative Chamber denied justice to Infinito by incorrectly and retroactively applying the 2002 Moratorium to the 2008 Concession and other project approvals.¹⁷⁰

b. With respect to expropriation, the Claimant contends that it has demonstrated both on a balance of probabilities and on a prima facie basis that Costa Rica expropriated its investments both directly and indirectly.¹⁷¹ In particular, the Claimant advances the following arguments:

i. The sole effects doctrine applies to judicial expropriations in the same manner as it does to other expropriatory measures.¹⁷²

ii. Costa Rica cannot argue that the Administrative Chamber was applying the 2002 Moratorium as a defense. This amounts to arguing that Costa Rica legitimately exercised its police powers, but this defense is not available to Costa Rica because the application of the 2002 Moratorium was neither necessary nor proportionate to any legitimate objective and was in breach of the FET standard.¹⁷³

iii. Compliance with domestic law is not a defense to expropriation, particularly where the domestic law in question (the 2002 Moratorium) post-dates the investment.¹⁷⁴

iv. A court decision that applies domestic law may be expropriatory where the domestic law applied is itself expropriatory or breaches a rule of international law.¹⁷⁵ Here, the Claimant alleges that, as applied by the Administrative Chamber, the 2002 Moratorium was in itself expropriatory.

v. The Respondent's argument that a denial of justice is a prerequisite for a judicial measure to be expropriatory cannot succeed on a prima facie basis.

vi. The Claimant has established beyond a prima facie standard that it had investments capable of being expropriated. The Respondent's argument that Infinito's rights were not capable of expropriation because they were deemed invalid by the 2011 Administrative Chamber Judgment should be rejected: Infinito's investments extended beyond the 2008 Concession and other approvals annulled by the Administrative Chamber and were not capable of being "invalidated" by it. In addition, the validity of the Concession and other approvals must be assessed independently from the 2011 Administrative Chamber Decision, because this is the very measure that the Claimant alleges breached the BIT. In any event, "Costa Rica is estopped from asserting that the 2002 moratorium rendered Industrias Infinito's rights invalid when its own Constitutional Chamber and authorities represented over the course of more than a decade that the moratorium did not apply to the project."¹⁷⁶

The Parties dispute whether Article XII sets out only jurisdictional requirements, or also admissibility requirements. The Respondent submits that all of the requirements set out in Article XII are jurisdictional, because they establish the scope of Costa Rica's consent to arbitration.¹⁸⁵ By contrast, the Claimant argues that the relevant jurisdictional requirements are found in Article XII(2), in conjunction with Costa Rica's unilateral consent to arbitrate provided under Article XII(5), while those in Article XII(3) are conditions for admissibility.¹⁸⁶

1. Any dispute between one Contracting Party and an investor of the other Contracting Party, relating to a claim by the investor that a measure taken or not taken by the former Contracting Party is in breach of this Agreement, and that the investor has incurred loss or damage by reason of, or arising out of, that breach, shall, to the extent possible, be settled amicably between them.

2. If a dispute has not been settled amicably within a period of six months from the date on which it was initiated, it may be submitted by the investor to arbitration in accordance with paragraph (4). The investor will bear the burden of proof to demonstrate:

(a) that it is an investor as defined by Article I of this Agreement;

(b) that the measure taken or not taken by the Contracting Party is in breach of this Agreement; and

(c) that the investor has incurred loss or damage by reason of, or arising out of, that breach.

For the purpose of this Agreement, a dispute is considered to be initiated when the investor of one Contracting Party has delivered notice in writing to the other Contracting Party alleging that a measure taken or not taken by the latter Contracting Party is in breach of this Agreement, and that the investor has incurred loss or damage by reason of, or arising out of, that breach.

For the Tribunal, not all of the conditions set out in these provisions go to its jurisdiction. Only the following are jurisdictional requirements:

a. There must be a dispute (Article XII(1)). Read together with Article 25(1) of the ICSID Convention, this dispute must be legal in nature.

b. The dispute must be between one Contracting Party to the BIT and an investor of the other Contracting Party (Article XII(1)).

c. The dispute must relate to a claim by the investor that a measure taken or not taken by the host State is in breach of the BIT (Article XII(1)).

d. The dispute must also relate to a claim "that the investor has incurred loss or damage by reason of, or arising out of, that breach" (Article XII(1)).

e. A period of six months must have elapsed from the date on which a notice of dispute has been delivered in accordance with the final paragraph of Article XII(2)), during which the Parties must have attempted to settle the dispute amicably, before the claim can be submitted to arbitration (Article XII(2)).¹⁸⁷

3. An investor may submit a dispute as referred to in paragraph (1) to arbitration in accordance with paragraph (4) only if:

(a) the investor has consented in writing thereto;

(b) the investor has waived its right to initiate or continue any other proceedings in relation to the measure that is alleged to be in breach of this Agreement before the courts or tribunals of the Contracting Party concerned or in a dispute settlement procedure of any kind;

(c) not more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage; and

(d) in cases where Costa Rica is a party to the dispute, no judgement has been rendered by a Costa Rican court regarding the measure that is alleged to be in breach of this Agreement.

Article XII(3)(a) is clearly a jurisdictional requirement, as there can be no jurisdiction without a party's consent. Article XII(3)(b) is also jurisdictional in nature: the host State has not consented to arbitrate if the investor has not waived its right to initiate or continue other proceedings before the courts of the host State.

The Parties dispute whether the conditions set out in sub-paragraphs (c) and (d) of Article XII(3) constitute jurisdictional requirements or go to admissibility. As explained in Section IV.C.4.c infra, in what pertains to Article XII(3)(c) the Tribunal defers this discussion to the merits phase, should it become relevant at that stage; and in what pertains to Article XII(3)(d), the Tribunal observes that the matter is of no consequence (Section IV.C.4.a(iii) infra).

Accordingly, for the Tribunal to have jurisdiction over this dispute, the following conditions must be met:

a. There must be a dispute (Article XII(1)). Read together with Article 25(1) of the ICSID Convention, this dispute must be legal in nature. The Parties agree (and rightly so) that there is a legal dispute in this case.

b. The dispute must be between one Contracting Party to the BIT and an investor of the other Contracting Party (Article XII(1)). Here, the dispute clearly involves one Contracting Party (Costa Rica). The notion of "investor", on the other hand, is defined in Article I(h) as:

(i) any natural person possessing the citizenship of one Contracting Party who is not also a citizen of the other Contracting Party; or

(ii) any enterprise as defined by paragraph (b) of this Article, incorporated or duly constituted in accordance with applicable laws of one Contracting Party;

who owns or controls an investment made in the territory of the other Contracting Party.¹⁸⁸

Article I(b) defines "enterprise" as:

(i) any entity constituted or organized under applicable law, whether or not for profit, whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association; and

(ii) a branch of any such entity;

For further certainty, 'business enterprise' means any enterprise which is constituted or organized in the expectation of economic benefit or other business purposes.

In turn, Article I(g) defines "investment" as:

[…] any kind of asset owned or controlled either directly, or indirectly through an enterprise or natural person of a third State, by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the latter's laws and, in particular, though not exclusively, includes:

(i) movable and immovable property and any related property rights, such as mortgages, liens or pledges;

(ii) shares, stock, bonds and debentures or any other form of participation in an enterprise;

(iii) money, claims to money, and claims to performance under contract having a financial value;

(iv) goodwill;

(v) intellectual property rights;

(vi) rights, conferred by law or under contract, to undertake any economic and commercial activity, including any rights to search for, cultivate, extract or exploit natural resources;

but does not mean real estate or other property, tangible or intangible, not acquired in the expectation or used for the purpose of economic benefit or other business purposes.

For further certainty, investment does not mean, claims to money that arise solely from:

(i) commercial contracts for the sale of goods or services by a national or enterprise in the territory of one Contracting Party to a national or an enterprise in the territory of the other Contracting Party; or

(ii) the extension of credit in connection with a commercial transaction, such as trade financing, where the original maturity of the loan is less than three years.

Without prejudice to subparagraph (ii) immediately above, a loan to an enterprise where the enterprise is an affiliate of the investor shall be considered an investment.

For the purpose of this Agreement, an investor shall be considered to control an investment if the investor has the power to name a majority of its directors or otherwise to legally direct the actions of the enterprise which owns the investment.

Any change in the form of an investment does not affect its character as an investment.

For greater clarity, returns shall be considered a component of investment. For the purpose of this Agreement, "returns" means all amounts yielded by an investment, as defined above, covered by this Agreement and in particular, though not exclusively, includes profits, interest, capital gains, dividends, royalties, fees or other current income.

The Respondent does not dispute that the Claimant is an investor under this definition. Indeed, it is undisputed that Infinito is an enterprise duly constituted in accordance with the applicable laws of Canada, being incorporated in that country. Nor does the Respondent dispute that Infinito owns or controls an investment made in the territory of Costa Rica. The Claimant asserts that it owns or controls the following assets in the territory of Costa Rica: "(i) its shares in Industrias Infinito; (ii) the money it invested in Industrias Infinito through intercompany loans; (iii) the exploitation concession; (iv) the pre-existing mining rights underlying the exploitation concession; (v) the other approvals for the Crucitas project; (vi) the physical assets associated with the project, including the half-built mining infrastructure; and (vii) the intangible assets associated with the project."¹⁸⁹ The Respondent does not contest this. However, as noted in Section IV.A.3 supra, APREFLOFAS has argued that the Claimant's investment was not obtained in accordance with Costa Rican law, and therefore does not meet the definition of investment at Article I(g) of the BIT. As explained in that same Section, the Tribunal has deferred this matter to the merits.

c. The dispute must relate to a claim by the Claimant that a measure taken or not taken by Costa Rica is in breach of the BIT (Article XII(1)). Here, there is no dispute that the Claimant claims that measures taken by Costa Rica are in breach of the BIT, but the Parties dispute what those measures are and whether they qualify as "measures" for the purposes of the BIT. This dispute is at the heart of several of the Respondent's objections to jurisdiction.

d. The dispute must also relate to a claim "that the investor has incurred loss or damage by reason of, or arising out of, that breach" (Article XII(1)). Again, the Claimant claims that it has incurred loss or damage arising out of the breaches it alleges, but the Respondent disputes that this damage could have arisen from the measures identified by the Claimant as being in breach of the BIT. This dispute is also central to one of the Respondent's objections.

e. The Claimant must have consented in writing to submit the dispute to arbitration (Article XII(3)(a)). There is no dispute that Infinito and Industrias Infinito¹⁹⁰ have both consented in writing to arbitrate this dispute by filing the Request for Arbitration and providing written consents to arbitration,¹⁹¹ with the exception of the objection directed to the claim regarding the 2015 TCA Damages Decision, a claim that the Claimant has in any event withdrawn, and an objection that the Respondent does not presently pursue, as discussed at paragraphs 154 and 167 and note 142 supra. It is noted in this context that the Respondent's consent is found at Article XII(5), which provides that "[e]ach Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration in accordance with the provisions of this Article."

f. A period of six months must have elapsed from the date in which a notice of dispute has been delivered in accordance with the final paragraph of Article XII(2), during which the Parties must have attempted to settle the dispute amicably, before the claim can be submitted to arbitration (Article XII(2)). There is no dispute that this requirement has been met, with the same exception as the one noted in subparagraph (e) above.

g. The Claimant must have waived its right to initiate or continue any other proceedings in relation to the measures that are alleged to be in breach of the BIT before the Costa Rican courts or tribunals or in a dispute settlement procedure of any kind (Article XII(3)(b)). There is no dispute that both Infinito and Industrias Infinito have provided the required waiver,¹⁹² with the exception of the objection directed to the claim regarding the 2015 TCA Damages Decision mentioned in subparagraph (e) above.

In addition, the following two requirements must also be met (whether as a matter of jurisdiction or admissibility, a debate over which the Tribunal does not presently rule):

a. Not more than three years must have elapsed from the date on which Infinito first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that it had incurred loss or damage (Article XII(3)(c)). The Respondent disputes that this requirement is met.

b. No judgment has been rendered by a Costa Rican court regarding the measure that is alleged to be in breach of the BIT (Article XII(3)(d)). Compliance with this requirement is also disputed by the Respondent.

The disagreements noted at (c) and (d) of the preceding paragraph are at the heart of several of the Respondent's objections. Specifically:

a. Underlying virtually all of the Respondent's objections is the argument that the Claimant is formally challenging certain measures, when its case is "really" about other (previous) measures. The question thus arises whether, for jurisdictional purposes, the Tribunal must focus on the measures as pleaded or whether it can re-characterize them, including by determining whether the acts impugned qualify as "measures" for purposes of the BIT at all.

b. The Respondent also submits that the claims amount to a disagreement with Costa Rican courts on matters of domestic law, rather than a genuine claim under the BIT. While it does not expressly ground this objection on a particular provision of Article XII, the Tribunal understands that this is related to the jurisdictional requirement that the dispute must relate to a claim by the Claimant that a measure taken or not taken by Costa Rica is in breach of the BIT (Article XII(1)).

c. The Respondent further argues that the Claimant fails to show a prima facie case of any of the alleged breaches of the BIT. This objection also appears to be grounded on the jurisdictional requirement that the dispute must relate to a claim that a measure taken or not taken by Costa Rica is in breach of the BIT (Article XII(1)), as well as on Article XII(2)(b).

d. In addition, the Respondent contends that the Claimant has failed to articulate how it suffered losses from the challenged measures. Again, this objection appears to be based on the jurisdictional requirement that the dispute must relate to a claim that the investor has incurred loss or damage by reason of, or arising out of, the breaches alleged (Article XII(1)), and on Article XII(2)(c), according to which the Claimant bears the burden of proving that it has "incurred loss or damage."

[I]t is for the investor to allege and formulate its claims of breach of relevant treaty standards as it sees fit. It is not the place of the respondent State to recast those claims in a different manner of its own choosing and the Claimants' claims accordingly fall to be assessed on the basis on which they are pleaded.²⁰⁷

a. The November 2011 Administrative Chamber Decision, which the Claimant alleges confirmed the 2010 TCA Decision, "thereby rendering final and irreversible the annulment of the exploitation concession, environmental approvals, the declaration of public interest and national convenience, and the land use change permit."²⁰⁹

b. The June 2013 Constitutional Chamber Decision, which Infinito alleges declined on preliminary admissibility grounds to resolve the conflict between its earlier decision upholding the constitutionality of the Las Crucitas Project approvals and the 2010 TCA Decision.²¹⁰

c. The January 2012 MINAE Resolution, which Infinito alleges cancelled the 2008 Concession and expunged all of Industrias Infinito's mining rights from the mining registry, going further than what was ordered by the Administrative Chamber.²¹¹

d. The 2011 Legislative Moratorium on open-pit mining, which the Claimant alleges replaced the 2010 Executive Moratorium, prohibiting Industrias Infinito from applying for new permits.²¹²

An ICSID Tribunal will not act as an instance to review matters of domestic law in the manner of a court of higher instance. Instead, the Tribunal will accept the findings of local courts as long as no deficiencies, in procedure or substance, are shown in regard to the local proceedings which are of a nature of rendering these deficiencies unacceptable from the viewpoint of international law, such as in the case of a denial of justice.²²⁷

a. The arbitrariness claim fails in the face of correct (or even good-faith) application of domestic law.

b. The legitimate expectations claim fails because the expectation of engaging in an activity cannot be legitimate if it is illegal under domestic law.

c. The expropriation claim fails because no wrongful taking can result from the legitimate application of Costa Rica's legal system.

a. Neither the legitimate expectations nor the expropriation claim depend on whether Costa Rican courts correctly applied Costa Rican law (in particular, the 2002 Moratorium). Although the Respondent relies on its domestic law as a defense, it is well-established that a State cannot rely on its internal law to justify an internationally wrongful act.²⁴⁶

b. The procedural denial of justice claim, the claim for breach of FET because the 2011 Administrative Chamber Decision was arbitrary, and the full protection and security claim are based on expert evidence that the 2011 Administrative Chamber Decision conflicted with binding decisions of the Constitutional Chamber. As explained in paragraph 163 supra, the Claimant asserts that there is no mechanism available in Costa Rica to resolve that conflict. While the Administrative Chamber considered that there was no conflict, under Costa Rican law only the Constitutional Chamber is empowered to make that decision, but there is no mechanism allowing it to do so.

c. The substantive denial of justice claim is the only claim which implies that the Tribunal find that the Administrative Chamber incorrectly applied Costa Rican law by applying the 2002 Moratorium to Industrias Infinito's 2008 Concession and other project approvals. The Claimant submits that, "in the context of a substantive denial of justice claim, the Tribunal has the power to determine whether the Administrative Chamber's failure to properly apply Costa Rican law also amounts to breaches of the BIT."²⁴⁷ Citing Dolzer and Schreuer, the Claimant submits that the Tribunal is not bound by the findings of the Administrative Chamber in deciding whether its decision was arbitrary, or whether Infinito was denied justice or legal security.²⁴⁸ The Claimant accepts that the task of applying and interpreting domestic law lies primarily with the courts of the host country, but this is not exclusively so: where domestic law is applied in a manner that is evidently arbitrary, unjust or idiosyncratic, or in breach of a fundamental right, international liability arises.²⁴⁹ Citing Chevron, the Claimant further contends that "the defectiveness of internal law, the refusal to apply it, or its wrongful application by judges [can] constitute elements of proof of a denial of justice, in the international understanding of the expression."²⁵⁰

a. The facts and law that are necessary to determine jurisdiction may be assessed rigorously. At the jurisdictional stage, tribunals may definitively determine questions of fact that relate to jurisdiction, such as whether there was an investment, or an investor, but these questions do not arise in this case. The cases on which the Respondent relies all relate to this type of inquiry.

b. By contrast, the facts and law that are relevant to the merits must be considered on a prima facie standard. The Tribunal must accept the Claimant's factual allegations relating to the merits unless they are plainly without foundation. The Respondent cannot cite a single arbitral decision where the tribunal engaged, at the jurisdictional stage, in a detailed review of the factual evidence to determine whether a substantive BIT standard had been breached. Nor is it appropriate for the Tribunal to engage in a detailed analysis of the BIT's substantive provisions at this stage.

c. The Tribunal's analysis should be based on the Claimant's allegations, not on the Respondent's reformulation of the case. The Claimant submits that "Infinito is free to plead its claims as it deems appropriate," and "is entitled to provide facts and legal theory in support of its arguments. In response, Costa Rica is entitled to provide its own facts and legal theory. The Tribunal then considers both sides' positions, in light of the allegations made by the claimant. The claimant's facts and argument are not shielded from arbitral review; but the Tribunal's analysis must be based on the claimant's case, not the respondent's recasting of it."²⁸⁴

i. Whether there is a legal dispute (Article 25(1) of the ICSID Convention, and Article XII(1) of the BIT).

ii. Whether that dispute arises directly out of an investment (Article 25 of the ICSID Convention).

iii. Whether that investment qualifies as such under Article I(g) of the BIT, including whether it is owned or controlled in accordance with Costa Rican Law (Article I(g) of the BIT in connection with Article 25 of the ICSID Convention and Article XII(1) of the BIT).

iv. Whether the Parties qualify as a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State); and an "investor" of another Contracting State (Article 25 ICSID of the ICSID Convention, and Article XII(1) of the BIT).

v. Whether the Parties have consented in writing to ICSID arbitration (Article 25(1) of the ICSID Convention, and Article XII(3)(a) of the BIT).

vi. Whether the dispute relates to a claim that a measure breaches the BIT (Article XII(1) of the BIT).

vii. Whether the dispute relates to a claim that the investor has incurred a loss or damage (Article XII(1) of the BIT).

viii. Whether a period of six months has elapsed since the notice of dispute and the Parties have attempted to settle the dispute amicably (Article XII(2) of the BIT).

ix. Whether the Claimant has waived its right to other proceedings in relation to the measures (Article XII(3)(b) of the BIT).

x. Whether more than three years have elapsed from the date on which the Claimant first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that it had incurred loss or damage (Article XII(3)(c) of the BIT).

xi. Whether a judgment has been rendered by a Costa Rican court regarding the measure that is alleged to be in breach of the BIT (Article XII(3)(d) of the BIT).

[T]he task of the Tribunal at the stage of determining whether it has jurisdiction to hear a claim under an investment treaty merely consists in determining whether the facts alleged by the claimant(s), if established, are capable of constituting a breach of the provisions of the BIT which have been invoked [...]. In performing this task, the Tribunal applies a prima facie standard, both to the determination of the meaning and scope of the relevant BIT provisions invoked as well as to the assessment of whether the facts alleged may constitute breaches of these provisions on its face.²⁸⁹

a. First, the Claimant has asserted that its investment in Costa Rica lost all value as a result of the 2011 Administrative Chamber Decision (indeed, on the Claimant's damages theory, this is the only cause asserted for the Claimant's alleged damage). However, the Respondent contends that the 2011 Administrative Chamber Decision was not the true cause of the Claimant's loss; the true cause was the 2010 TCA Decision, which annulled the Claimant's 2008 Concession.²⁹⁴

b. Second, even if the 2010 TCA Decision was not the true cause of the Claimant's loss, the Claimant has failed to show what specific damage the 2011 Administrative Chamber decision caused to its business. The Claimant's main argument appears to be that it suffered losses "based on stock valuations, which fluctuate on a daily basis and are often based on nothing more than a hope or wishful thinking;" "[b]ut a loss of hope is not a compensable injury for which a tribunal may award damages in international arbitration."²⁹⁵ As to the Claimant's argument that it continued to spend money on the project in the period between the 2010 TCA Decision and the 2011 Administrative Chamber Decision, it is likely that "such money related to the legal actions it was pursuing at the time, as it was affirmatively barred from undertaking any development on the project during the pendency of the cassation request."²⁹⁶

c. Third, if the 2011 Administrative Chamber Decision is the true cause of the Claimant's losses, it is unclear how the Claimant could have "incurred loss or damage by reason of, or arising out of" later measures.²⁹⁷ By its own admission, its losses became final, and its investment in Costa Rica substantially worthless, with the issuance of the 2011 Administrative Chamber Decision:²⁹⁸ "It is logically impossible for something that has already been lost to be lost again through a subsequent act."²⁹⁹ Citing Pey Casado, the Respondent contends that "a claimant must prove damages for each relevant act and cannot pretend that its damages were caused by one act when in fact they were caused by another."³⁰⁰

d. Fourth, the 2011 Legislative Moratorium could not have caused the Claimant any damage because this moratorium did not deprive the Claimant of the possibility to obtain a new concession, which it had lost before through the 2010 Executive Moratorium. The Respondent presumes that the Claimant chose not to challenge those decrees because they are "evidently outside the Tribunal's jurisdiction ratione temporis."³⁰¹ In addition, the 2010 TCA Decision ordered the Las Crucitas area to be reforested, thus precluding the Claimant's possibility of obtaining new mining rights.³⁰² Even if the Claimant could have potentially sought new mining rights, it has "failed to explain how the vaguely defined hope to acquire new mining rights could qualify as a genuine loss under the BIT."³⁰³

According to the Claimant, in the case of a composite breach, a claimant is not required to prove separate damages associated with each individual measure.³¹⁶Pey Casado, cited by the Respondent, is inapposite because it did not address whether each individual measure must cause separate damages.³¹⁷ Here, the Claimant is alleging that its losses only crystallized by the combined operation of the four challenged measures: "absent the other measures that Infinito challenges, the exploitation concession and other project approvals could have been restored or a new concession and new approvals could have been granted. Had that occurred, then the Crucitas project could have continued, and Infinito's investments would not have been rendered substantially worthless."³¹⁸

a. While the starting point should be the ordinary meaning of the provision, an ordinary meaning that leads to an illogical result should not be accepted.³²¹ In addition, where, as here, there are several equally authentic versions of a treaty, it may be necessary to consider the terms in each of the authentic languages.³²² Further, in accordance with Article 31(4) of the VCLT, the ordinary meaning does not apply where a special meaning has been agreed by the parties.³²³

b. In accordance with the ordinary meaning of its terms, it is "clear that Article XII(3)(d) constitutes a limitation of arbitral jurisdiction in an investor-State dispute under the BIT."³²⁴

c. All that is required to trigger this bar is a judgment of a Costa Rican court "regarding" the measure in question. The ordinary meaning of the term "regarding" is broad and "must be understood to cover a broad range of possible relationships between the challenged measure and the relevant Costa Rican judgment," denoting "a situation in which the measure in question has any type of genuine connection with the Costa Rican court judgment."³²⁵ For the Respondent, the word "regarding" must be equated with "concerning," "about" or "related to."³²⁶ This is consistent with the authentic Spanish version of the provision, which uses the terms "relativo a la medida" (i.e., "related" to the measure), and to the equally authentic French version, which uses the words "au sujet de la mesure," which the Respondent translates as "on the subject of" or "about" the measure.³²⁷

a. The 2010 TCA Decision has been the subject of the judgment of a Costa Rican court, specifically of the 2011 Administrative Chamber Decision which ruled on Industrias Infinito's cassation request regarding the 2010 TCA Decision.³³¹

b. The 2010 TCA Decision is, in itself, a judgment rendered by a Costa Rican court regarding the annulment.³³²

c. The 2010 TCA Decision was also the subject of the 2013 Constitutional Chamber Decision.³³³

a. The 2011 Administrative Chamber Decision is in itself a judgment of Costa Rica's highest court. According to the Respondent, "it is impossible to identify a measure more closely related to a Costa Rican court judgment than a judicial 'measure,' especially when such measure consists in upholding another Costa Rican court judgment."³³⁵ A contrary interpretation "would render the treaty provision essentially meaningless because it could always be circumvented by defining the judicial decision (rather than the act regarding which that judgment was rendered), as the relevant 'measure.'"³³⁶

b. Likewise, the 2013 Constitutional Chamber Decision is also a judgment of a Costa Rican court.³³⁷

c. Seen from a different perspective, the 2011 Administrative Chamber Decision, the 2013 Constitutional Chamber Decision and the 2012 MINAE Resolution are all "measures" related to the 2010 TCA Decision, which is in itself a judgment of a Costa Rican Court.³³⁸

d. The 2010 Executive Moratorium and the 2011 Legislative Moratorium have also been subject to multiple judgments of the Costa Rican courts. The 2010 Executive Moratorium was comprised of two executive decrees (the Arias Moratorium Decree and the Chinchilla Moratorium Decree), as well as the 2011 Legislative Moratorium, which all were challenged before the Constitutional Chamber of the Supreme Court. In each case, the Constitutional Chamber dismissed the challenge. With respect to the 2011 Legislative Moratorium, the Constitutional Chamber even considered and rejected claims that it violated the BIT (the fact that the plaintiff was not Industrias Infinito is irrelevant for present purposes, because the Article XII(3)(d) does not require that the judgment regarding the "measure" involve the same parties).³³⁹

a. The Claimant acknowledges that the BIT contains a special definition of the term "measure," but then proceeds to ignore that definition, asserting that the term is generally understood to encompass judicial measures.³⁴⁶

b. Even if the BIT's definition of "measure" should be read to include judicial decisions, it does not follow that judicial breaches must be arbitrable. According to the Respondent, "[i]t is quite common for investment treaties to provide protection against a wide range of breaches, but to restrict international dispute resolution concerning such measures to a narrower subset."³⁴⁷

c. The jurisdictional limitation contained in Article XII(3)(d) cannot be inconsistent with Costa Rica's "unconditional consent" to arbitration, as the Claimant suggests, because such "unconditional consent" has been given in accordance with the provisions of the entirety of Article XII, which includes the carve-out in Article XII(3)(d).³⁴⁸

d. The fact that Article VIII(1) of the BIT gives investors the opportunity for judicial review of expropriations in Costa Rica is not inconsistent with Costa Rica's interpretation of Article XII(3)(d).³⁴⁹ The BIT does not impose a requirement to exhaust domestic remedies, but if judicial remedies are invoked and result in a judgment, Article XII(3)(d) precludes an investor from bringing another challenge by means of international arbitration.

e. Costa Rica's interpretation is not inconsistent with its substantive obligation to provide FET, insofar as that obligation must be understood to include an obligation not to deny justice in domestic courts. The Claimant confuses the existence of a substantive obligation with the question of which treaty breaches are subject to arbitration. While Costa Rica agrees in principle that the minimum standard of treatment under international law includes a protection against denial of justice, "Article II(2)(a) of the BIT makes no mention of judicial measures or denial of justice per se, meaning that nothing in the particular wording of the clause contradicts Costa Rica's assertion that, under Article XII(3)(d) of the BIT, Costa Rican court judgments are not subject to review through arbitration."³⁵⁰

a. The Claimant's argument that, under Costa Rica's interpretation, the State could always defeat jurisdiction by launching a challenge of the measure and ensuring that its courts reject that challenge, "implies the existence of collusion between administrative authorities and the courts to deny an investor its day in court."³⁵⁸ In such a scenario, a tribunal may well find that the State is estopped by its own bad faith conduct from invoking an otherwise valid jurisdictional exception. Here, however, there is no suggestion that Costa Rica initiated judicial challenges in bad faith, nor can it be disputed that the Claimant took full advantage of the Costa Rican court system to defend its Concession.³⁵⁹

b. With respect to the Claimant's suggestion that it would be inappropriate to interpret Article XII(3)(d) as precluding arbitration related to judgments in proceedings in which the Claimant did not take part, the Respondent argues that it is for the Tribunal to determine whether the relevant judgment is sufficiently related to the measure being challenged. Here, however, the Respondent notes that the Claimant participated in all the key proceedings in this case, with the exception of those cited by Costa Rica with respect to the 2010 Moratorium. That said, the Respondent insists that these judgments are sufficiently related to the challenged measure as to fall within the scope of Article XII(3)(d) of the BIT.³⁶⁰

a. There is no judgment of a Costa Rican court regarding the 2011 Administrative Chamber Decision.³⁶⁷ The Claimant notes that this decision was made by an appellate court in Costa Rica and is not subject to review by Costa Rican courts. Indeed, part of Infinito's claim is based on the lack of availability of judicial recourse to address the inconsistency created by this decision. As explained further below, the Claimant denies that this decision is a judgment "regarding" itself for purposes of Article XII(3)(d). The Claimant also denies that the 2013 Constitutional Chamber Decision was a judgment "regarding" the 2011 Administrative Decision; it was a statement by the Constitutional Chamber that it was not empowered to render a judgment regarding the 2010 TCA Decision.

b. There is no judgment regarding the application of the 2011 Legislative Moratorium to the Las Crucitas Project. The court decisions to which Costa Rica refers relate to the application of the 2011 Legislative Moratorium and previous moratorium decrees to other parties and other projects. As explained below, these decisions do not fall under the scope or Article XI I(3)(d).³⁶⁸

c. There is no judgment regarding the 2012 MINAE Resolution. Contrary to Costa Rica's contention, the 2010 TCA Decision cannot be understood to be a judgment "regarding" the 2012 MINAE Resolution. While the 2012 MINAE Resolution may be "regarding" the 2010 TCA Decision and the 2011 Administrative Chamber Decision, the reverse is not true. But Article XII(3)(d) does not "bar challenges to administrative measures that were adopted subsequently to judgments and that go further than what those judgments require."³⁶⁹

d. Likewise, there is no judgment regarding the 2013 Constitutional Chamber Decision. This decision, which dismissed Industrias Infinito's unconstitutionality action on admissibility grounds, has never been the subject of any Costa Rican judgment.³⁷⁰

e. Finally, the Claimant contends that there is no judgment regarding the composite impact of the individual measures.³⁷¹

a. As discussed in Section IV.C.3.a(ii) supra, the "measure that is alleged to be in breach" of the BIT must be the measure that the Claimant alleges is in breach of the BIT, not the measure as redefined by the Respondent. Likewise, the "breach" that has been alleged must be assessed, at the jurisdictional level, as pleaded by the Claimant.

b. As discussed in Section IV.C.3.b(ii) supra, the term "measure" includes judgments.

c. The judgment "regarding" the measure alleged to be in breach must be an act different from the measure. The term "regarding" denotes a connection between the relevant measure and the relevant judgment, which in turn requires at least two discrete entities or acts. To permit the "judgment" to be the same act as the "measure" would be contrary to the ordinary meaning of the term "regarding."³⁷³ As a result, a judgment cannot be "regarding" itself, as the Respondent maintains.

a. As explained above, it is consistent with the plain meaning of the terms "alleged to be in breach" and "regarding."³⁸⁰

b. It is consistent with the BIT as a whole in light of its context. As explained further below, there is no support in the context of Article XII(3)(d) for the exclusion of judicial measures, or requiring only a tenuous connection between the "judgment" and the "measure." Likewise, the Claimant argues that its interpretation is consistent with the remainder of the BIT's provisions.³⁸¹

c. It is in line with the object and purpose of the BIT, which for the Claimant is the promotion and protection of investments, as stated in the BIT's Preamble.³⁸² Citing Aguas del Tunari, the Claimant submits that "[t]he 'primary objective' of the BIT is to create the framework, and to select [...] 'an independent and neutral forum for the resolution of investment disputes in accordance with a substantive applicable law'."³⁸³ Its interpretation is further in conformity with the treaty's object and purpose, because it "preserves investors' rights to submit to international arbitration claims that substantive provisions of the BIT […] have been breached."³⁸⁴

d. Its interpretation facilitates the fulfillment of the object and purpose of the BIT by allowing investors to pursue, without requiring them to exhaust, domestic remedies. The Claimant notes that the "exhaustion of local remedies is often considered a requirement for an investor to establish that it has experienced a denial of justice at the hands of the host state."³⁸⁵ With respect to other claims, it submits that "the pursuit of local remedies is widely accepted as a desirable, if not necessary, pre-requisite to arbitration, even in the absence of an explicit exhaustion of local remedies requirement in the relevant BIT."³⁸⁶ Citing Generation Ukraine, Apotex and Loewen, the Claimant submits that "[t]o qualify as a final 'measure' under the BIT, an investor must make at least a reasonable effort to obtain local redress."³⁸⁷

e. Finally, the Claimant's interpretation is supported by the available supplementary interpretative aids under Article 32 of the VLCT, in particular, by the BIT's travaux préparatoires. The negotiating history of the BIT shows that Costa Rica attempted to introduce an exhaustion of local remedies requirement, but Canada did not accept it. Instead, the parties reached a compromise, reflected in Article XII(3)(d), which encouraged the use of local remedies.³⁸⁸ Only Infinito's interpretation of this provision can be reconciled with this intended purpose.³⁸⁹

a. "Read in harmony with the broader context of the BIT, the 'judgment' must be 'regarding' the application of the 'measure' to Infinito before Article XII(3)(d) will be engaged;" "[i]t is not enough for there to be a tenuous, immaterial connection or for the judgment to relate to aspects of the measure not directed at Infinito's investments."³⁹⁴

b. Citing Methanex, where the tribunal was interpreting the phrase "relating to," the Claimant argues that the term "regarding" should be "defined with some form of logical limit, that requires proximity between the investor, measure and judgment."³⁹⁵ For a "judgment" to be "regarding" a "measure […] alleged to be in breach," it must relate to the investor's allegation as to how that measure breached its rights. Accordingly, "the judgment must relate to the application of the measure to Infinito or its investments."³⁹⁶ According to the Claimant, "[t]he question is not whether there are any judgments relating to Infinito's claims;" the question is "whether there are judgments regarding the measures alleged to be in breach. "³⁹⁷

c. Nor can a judgment be "regarding" itself: as explained above, the term "regarding" requires a connection between two discrete entities. The Respondent cannot circumvent this requirement by artificially bifurcating judgments into written reasons and dispositive results: "[w]hen investors challenge judicial measures, they challenge the 'obligation created by the decree of the court;' the 'measure' is the 'judgment.'"³⁹⁸

a. As explained above, the travaux préparatoires show that Costa Rica insisted on a provision that would require the exhaustion of local remedies. The fact that the drafters previously discussed and removed an exhaustion of local remedies clause does not demonstrate, as Costa Rica now alleges, that Article XII(3)(d) is a fork-in-the-road clause. It is "nonsensical" to argue that "the treaty drafters decided, after months of debating one possible clause, to replace it with an entirely unique clause that had the opposite effect, without any related discussion."⁴¹³

b. Nor is there any evidence in the travaux that the parties intended to insulate all judgments from being challenged under the BIT: had the parties intended this result, they presumably would have said so explicitly, for instance by excluding judicial measures from the definition of "measure."⁴¹⁴

c. The Claimant also argues that the parties' intentions cannot be discerned from Costa Rica's pride in its judiciary. While the Claimant "does not dispute that Costa Rica is proud of its judiciary; it challenges the impermissible leap from that pride to Costa Rica's proposed interpretation of Article XII(3)(d), which is made without evidence or justification."⁴¹⁵

d. The Claimant finally objects to Costa Rica's reliance on an internal memorandum that stated that certain rights enshrined in the BIT were also protected under Costa Rica's constitution.⁴¹⁶ This evidence is not probative. Even if it were relevant (quod non), it provides no support for Costa Rica's argument, as it refers to the substantive content of Costa Rica's constitution, not the procedure it agreed for international arbitration.⁴¹⁷

An investor may submit a dispute as referred to in paragraph (1) to arbitration in accordance with paragraph (4) only if:

[…]

(d) in cases where Costa Rica is a party to the dispute, no judgement has been rendered by a Costa Rican court regarding the measure that is alleged to be in breach of this Agreement.⁴¹⁸

The Respondent submits that the Tribunal must address three issues to determine this objection:⁴²⁰

a. First, it must identify the cut-off date for the three-year limitation period.

b. Second, it must determine whether the Claimant knew or should have known of the alleged breach or breaches before that cut-off date. The Respondent submits that the "treaty […] requires identification of the moment when, for the first time, Infinito knew or should have known that its rights to the Crucitas project had been impaired."⁴²¹ For the Respondent, "[t]he triggering event is not certainty of such impairment;" [n]or is it relevant whether because of later governmental action, the relevant impairment may have been magnified."⁴²² In this respect, the Tribunal must also determine "when there is an earlier measure along with a later one that confirms, implements, and/or reinstates the earlier one, which one should be considered relevant for purposes of this Clause of the Treaty."⁴²³ The Respondent submits that "[t]he Tribunal must objectively determine the relevant facts for purposes of jurisdictional issues, including this one, and it need not accept blindly the Claimant's factual characterizations."⁴²⁴

c. Third, it must determine whether the Claimant knew or should have known that it had incurred loss or damage before the cut-off date. The Respondent emphasizes that the BIT asks when the Claimant first acquired knowledge of having incurred loss or damage; it does not require the loss to be complete, final or irreversible.⁴²⁵ Relying on Mondev and Grand River, the Respondent contends that "damage or injury may be incurred even though the amount or extent may not become known until some future time."⁴²⁶

a. Corona, in which the tribunal held that "[w]here a 'series of similar and related actions by a respondent state' is at issue, an investor cannot evade the limitations period by basing its claim on 'the most recent transgression in that series.'"⁴⁴⁷

b. Vieira, where the tribunal found that the dispute predated the relevant treaty because all of the claims derived from the State's denial of a fishing license application before the treaty entered into force. This was despite the claimant's argument that appeals were filed after the treaty had entered into force, and that the fact they had been denied constituted separate violations of the treaty.⁴⁴⁸

c. ST-AD, where an attempt by a claimant to acquire jurisdiction by resubmitting an application that had been denied before it became an investor was rejected by the tribunal: "a tactic based on the resubmission of an application that has been denied before a claimant becomes an investor after it has acquired such status is unacceptable. It creates an illusion of an event that happened when a protected investor was on the scene. But like all illusions, it is a misleading illusion."⁴⁴⁹

The Claimant further rejects the Respondent's legal arguments regarding the application of the BIT's statute of limitations. First, there is no merit to Costa Rica's argument that events outside the three-year limitation period cannot be relied upon in establishing a breach of the BIT. Citing Tecmed, the Claimant submits that "[a] tribunal can rely on preceding events, in its analysis, if those events culminated in a breach that was itself timely."⁴⁷⁸ Prior events must not be confused with the measure challenged: "while 'a dispute may presuppose the existence of some prior situation or fact [...] it does not follow that the dispute arises in regard to the situation or fact.'"⁴⁷⁹ Circumstances that pre-date the alleged breach are not barred from the Tribunal's consideration; they "can provide the necessary background or context for determining whether breaches occurred during the time-eligible period."⁴⁸⁰ Tribunals may also rely on events pre-dating a treaty's entry into force, or pre-dating the moment at which an investor actually acquired an investment, provided that the alleged breach occurred after the treaty entered into force or the investor acquired its investment.⁴⁸¹ What matters is that the alleged breach itself is timely. Referring to Tecmed, the Claimant argues that "[t]he limitation period would not run until 'the point of consummation of the conduct encompassing and giving an overarching sense to such acts.'"⁴⁸² Relying on Renée Rose Levy, the Claimant submits that "the critical date is the one on which the State adopts the disputed measure, even when the measure represents the culmination of a process or sequence of events which may have started years earlier. It is not uncommon that divergences or disagreements develop over a period of time before they finally 'crystallize' in an actual measure affecting the investor's treaty rights."⁴⁸³

a. In Sistem, the question whether an appellate decision amounted to a distinct breach of the treaty did not arise, which makes this case irrelevant to decide that issue.⁴⁹⁰

b. In Apotex, although the tribunal declined jurisdiction over a time-barred measure because the claimant had instituted further litigation to challenge it, it assumed jurisdiction over claims arising from the final appellate court decisions themselves.⁴⁹¹ Applying the tribunal's reasoning, a direct claim against the 2010 TCA Decision would be time-barred, but a claim based on the 2011 Administrative Chamber Decision would not.⁴⁹²

c. Feldman and Grand River are inapposite because they stand for the proposition that a limitation period cannot be suspended or prolonged, but here "Infinito does not require any suspension or prolongation because the breaches alleged by it occurred within the three-year limitation period."⁴⁹³

d. Contrary to the Respondent's contention, Mondev does not suggest that appellate decisions represent a failure to remedy previous breaches rather than new breaches. It rather stands for the proposition that, to be successfully challenged, court decisions must independently give rise to actionable breaches, which the Claimant does not dispute. In fact, the Mondev tribunal did assume jurisdiction over challenges to judicial measures.⁴⁹⁴

a. The 2011 Administrative Chamber Decision upheld the 2010 TCA Decision by applying the 2002 Moratorium to the 2008 Concession and other project approvals, even though it had the power to reverse it, thus rendering final and irreversible the annulment of the Concession and other approvals.

b. The 2012 MINAE Resolution went even further, extinguishing all of Infinito's mining rights, not only those annulled by the Administrative Chamber.

c. Through the 2013 Constitutional Chamber Decision, a different chamber of the Supreme Court refused on procedural grounds to address the 2010 TCA Decision.

d. Finally, the 2011 Legislative Moratorium prevented Infinito from applying for a new concession and other approvals.

And the provision in XII(3)(d), which prevents a measure with respect to which there has been a subsequent Judgment, prevents us from bringing any claim with respect to the TCA decision. So, we're operating very much consistently in our submission with the provisions of the Bilateral Investment Treaty in respecting the particular provisions that the Parties have agreed to with respect to when a claim can properly be brought in this case.⁴⁹⁹

a. In Article XII(5) of the BIT, Costa Rica consents unconditionally to submit disputes under the BIT to international arbitration in accordance with the provisions of Article XII.⁵⁰¹

b. The Tribunal's jurisdiction (i.e., "the power of the tribunal to hear the case") is defined by Article XII(2) of the BIT. Here, the jurisdictional requirements set out in Article XII(2) are satisfied because "Infinito (i) is an investor as defined in Article I of the BIT, (ii) claims damages resulting from measures that arose after the BIT came into force, [and] (iii) claims damages arising out of a breach of the BIT for an investment in Costa Rica's territory."⁵⁰²

c. By contrast, Article XII(3) sets out admissibility, not jurisdictional, requirements. For the Claimant, admissibility requirements relate to the "particulars of the claim," as opposed to the power of the tribunal to hear the case.⁵⁰³ Here, "Article XII(3) sets out admissibility requirement[s] because it provides the conditions that an investor must satisfy in order to submit a claim to arbitration."⁵⁰⁴ This is made clear by the opening language of Article XII(3) ("[a]n investor may submit a dispute as referred to in paragraph (1) to arbitration in accordance with paragraph (4) only if […]"), and is supported by the fact that on its plain language Article XII(2) is not qualified by or subject to the satisfaction of Article XII(3).⁵⁰⁵