|Table of Abbreviations|
|Arbitration Rules||ICSID Rules of Procedure for Arbitration Proceedings|
|BIT||Bilateral investment treaty; specifically "Agreement Between the Government of the Kingdom of Sweden and the Government of Romania on the Promotion and Reciprocal Protection of Investments" of 29 May 2002|
|C-Statement||Claimants' Statement of Claim dated 9 March 2007|
|R-Mem.||Respondent's Objections to Jurisdiction and Admissibility dated 10 September 2007|
|C-C.Mem.||Claimants' Counter-Memorial on Jurisdiction dated 1 February 2008|
|R-Reply||Respondent's Reply on Jurisdiction and Admissibility dated 28 March 2008|
|C-Rejoinder||Claimants' Rejoinder on Jurisdiction dated 30 May 2008|
|Exh. C-||Claimants' Exhibits (including legal authorities)|
|Exh. R-||Respondent's Exhibits|
|ICSID||International Centre for Settlement of Investment Disputes|
|ICSID Convention||Convention on the Settlement of Investment Disputes between States and Nationals of other States|
|LA. R-||Respondent's Legal Authorities|
|Request||Request for Arbitration of 28 July 2005|
|Tr.||Transcript of the hearing on jurisdiction|
• Mr. loan Micula, Teatrului Street no. 1-2, Oradea, Bihor County, Romania (hereinafter referred to as "Claimant 1"). Mr. Ioan Micula was born in Romania on 8 April 1957. He moved to Sweden in 1987 where he obtained Swedish nationality in 1992 after having renounced his Romanian nationality. According to Claimants, Mr. Ioan Micula is to be considered a Swedish national for the purpose of this arbitration.
• Mr. Viorel Micula, Colinelor Street no. 48, Oradea, Bihor County, Romania (hereinafter referred to as "Claimant 2"). Mr. Viorel Micula is Ioan Micula's twin brother. He left Romania for Sweden in 1989 where he obtained Swedish nationality in 1995 after having renounced his Romanian nationality. According to the Claimants, Mr. Viorel Micula is to be considered a Swedish national for the purpose of this arbitration.
• Claimants 1 and 2 hold shares in the Corporate Claimants.
• European Food S.A. with its registered office at 13 Septembrie Street, Stei, Bihor County, Romania, registered with the trade register under no. J5/892/1999, registration number 12457015 (hereinafter referred to as "Claimant 3"). Claimant 3 specializes in industrial manufacturing of food products.
• Starmill S.R.L. with its registered office at 41 Draganesti, Pantasesti Village, Bihor County, Romania, registered with the trade register under no. J5/177/2002, registration number 14467201 (hereinafter referred to as "Claimant 4"). Claimant 4 specializes in the manufacturing of milling products.
• Multipack S.R.L. with its registered office at 41, Draganesti, Pantasesti Village, Bihor County, Romania, registered with the trade register under no. J5/178/2002, registration number 14467210 (hereinafter referred to as "Claimant 5"). Claimant 5 is specializes in the manufacturing of plastic packaging.
73. Claimants request reinstitution of the legal framework as in force at the time of the approval of the Government Emergency Ordinance no. 24/1998, alternatively adequate compensation for the losses suffered up to the amount of EUR 450,000,000, plus lost profits and any further losses suffered by Claimants as a consequence of Respondent's actions described above.
Claimants request that the Tribunal find that Romania has violated the BIT.
Claimants request restitution of the legal framework as in force at the time of the approval of the EGO 24/1998, alternatively adequate compensation for the losses suffered up to the amount of EUR 450,000,000, plus lost profits and any further losses suffered by Claimants as a consequence of Respondent's actions described above. The exact amount will be specified at an appropriate point during the proceedings.
Claimants request reimbursement of their costs and expenses including the costs of the present proceedings.
Claimants also request interest compounded quarterly on all monetary claims with the precise rate of interest to be specified at an appropriate time during the proceedings.
(C-Statement, ¶ 380-383)
(i) On behalf of Claimants
• Prof. Christoph Schreuer, University of Vienna
• Mr. Gerold Zeiler, Schönherr Rechtsanwälte
• Mrs. Ursula Kriebaum, Schönherr Rechtsanwälte
• Mr. Alfred Siwy, Schönherr Rechtsanwälte
• Mr. Eric Schwartz, Dewey & LeBoeuf
• Ms. Sabine Konrad, Dewey & LeBoeuf
• Mr. Christophe Guibert de Bruet, Dewey & LeBoeuf
• Mr. Alain Farhad, Dewey & LeBoeuf
• Ms. Andreia Dumitrescu, Mu§at & Asociatii
• Mr. Gelu Maravela, Mu§at & Asociatii
• Ms. Luminita Popa, Mu§at & Asociatii
• Mr. Ioan Micula
• Mr. Viorel Micula
• Ms. Oana Popa, employee of Claimants
• Mr. Ciprian Popa, employee of Claimants
(ii) On behalf of Respondent
• Mr. Brian King, Freshfields Bruckaus Deringer
• Mr. Georgios Petrochilos, Freshfields Bruckaus Deringer
• Mr. Michael Feutrill, Freshfields Bruckaus Deringer
• Mr. Boris Kasolowsky, Freshfields Bruckaus Deringer
• Mr. Moto Maeda, Freshfields Bruckaus Deringer
• Mr. Manuela Nestor, Nestor Nestor Diculescu Kingston Petersen
• Mrs. Johanna Garrido, Freshfields Bruckaus Deringer
• Mr. Matei Purice, Freshfields Bruckaus Deringer
• Ms. Emma Sultan, observer.
[A] Disfavoured Region is an area that meets at least one of the following requirements: (i) the production in this area focuses on only one industry that employs more than 50% of the employed labour force; or (ii) the area is a mining region where employees were dismissed due to the restructuring of the mining activities; or (iii) dismissals affected more than 25% of the population living in this area; or (iv) the unemployment rate in this area exceeds the national unemployment rate by at least 25 percent; or (v) the infrastructure of this area is either inexistent or underdeveloped.
(C-Statement, ¶ 73)
• an exemption from customs duties on machinery, tools, installations, means of transportation and other goods imported into Romania as well as a VAT exemption on these goods if they had been manufactured in Romania with a view to performing and conducting investments in the disfavoured regions (i.e., Machinery Related Incentive, Article 6(1)(a));
• a full refund of the customs duties on raw material, spare parts and components necessary for achieving the investor's own production in the region (i.e., Raw Material Related Incentive, Article 6(1)(b));
• an exemption from the payment of profit tax during the existence of the investment in the disfavoured region (i.e., Profit Tax Related Incentive, Article 6(1)(c));
• an exemption from the payment of taxes collected for improvements to the land or for conversion of agricultural land to industrial land (i.e., the Agricultural Land Related Incentive, Article 6(1)(d)); and
• preferential subsidies from a special State development fund (i.e., Subsidies, Article 6(1)(e)).
• A plant for the production of food and sauces located in Ştei;
• A plant for the production of emulsions and syrup flavours located in Draganesti;
• A facility for the production of beer and purification of water in Draganesti;
• A facility for the transformation of electricity in Draganesti;
• A facility for the production of syrup made of sugar;
• A facility for the production of vinegar;
• A plant for the production and bottling of fruit juice, mineral water, and other liquids.
(C-Statement, ¶ 145)
• Claimant 3 holds Permanent Investor Certificate No. 524 issued on 1 June 2000 that is valid until 1 April 2009 (Exh. C-42);
• Claimant 4 holds Permanent Investor Certificate No. 1664 issued on 17 May 2002(according to Claimants) that is valid until 1 April 2009 (Exh. C-43);
• Claimant 5 holds Permanent Investor Certificate No. 1663 issued on 17 May 2002 that is valid until 1 April 2009 (Exh. C-44).
(i) Claimants do not have a sufficient legal interest to pursue their claims under the BIT and their claims must be dismissed. Claimants have suffered no actual loss, which renders their claims hypothetical and thus inadmissible.
(ii) Claimants 1 and 2 have not demonstrated Swedish nationality. In particular, there are serious doubts as to the compliance by Claimant 2 with the residence conditions required under Swedish law to acquire Swedish nationality. In any case, Claimants cannot invoke Swedish nationality in a claim against Romania where the Claimants have no effective link to Sweden but maintain effective links to Romania.
(iii) The claim for restitution of the legal regime as in force at the time of the approval of EGO 24/1998 is inadmissible.
(iv) There has been no expropriation of an investment in the sense of Article 1 of the BIT.
(v) The alleged violations of the BIT took place prior to its entry into force and are outside the temporal scope of the BIT.
For the foregoing reasons, and those that will be added in further submissions as may be directed by the Tribunal, Romania respectfully requests that the Tribunal:
(a) DISMISS Claimants' claims in their entirety; and
(b) ORDER Claimants to pay in their entirety the costs of this arbitration, including the fees and expenses of the Tribunal and the Centre and the fees and expenses incurred by Romania in defending against Claimants' claims. (R-Reply, ¶ 139)
(i) Claimants have shown a prima facie case with regard to both liability and actual damages.
(ii) They are "investors" in the sense of Article 1(2)(a) of the BIT and "nationals of another Contracting State" -Sweden- under Article 25(2) of the ICSID Convention.
(iii) There is an investment for the purpose of Article 25 of the ICSID Convention and Article 7 of the BIT.
(iv) The dispute is within the ratione temporis scope of the BIT.
(v) The claim for restitution is admissible and the discussion of remedies is premature.
Claimants request that
(i) the Tribunal find that the dispute is within the Jurisdiction of the Centre and the competence of the Tribunal;
(ii) dismisses all of Respondent's objections to the admissibility of the claims, the jurisdiction of ICSID, and the competence of this Tribunal;
(iii) make the necessary order for the continuation of the proceedings on the merits. (C-Rejoinder, ¶ 265)
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.
(1) Any dispute concerning an investment between an investor of one Contracting Party and the other Contracting Party shall, if possible, be settled amicably.
(2) If any such dispute cannot be settled within three months following the date on which the dispute has been raised by the investor through written notification to the Contracting Party, each Contracting Party hereby consents to the submission of the dispute, at the investor's choice, for resolution by international arbitration to either:
(i) the International Centre for Settlement of Investment Disputes (ICSID) for settlement by conciliation or arbitration under the Washington Convention of 18 March 1965 on the Settlement of Investment Disputes between States and Nationals of Other States, (the Washington Convention); or
(ii) an ad hoc tribunal set up under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). The appointing authority under the said rules shall be the Secretary General of ICSID.
[F]irst, a tribunal has to satisfy itself that the legal arguments advanced by the claimant, including the construction of any relevant treaty or other legal instrument, are plausible. Second, it has to satisfy itself that the pleaded facts are capable of sustaining the cause of action advanced by the claimant within the plausible legal framework.
(R-Reply, ¶ 16, footnote omitted)
(a) 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 pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not include any person who on either date also had the nationality of the Contracting State party to the dispute.
(b) any juridical person which 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 and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention.
b) legal entities, including companies, corporations, business associations and other organisations, which are constituted or otherwise duly organised under the law of a Contracting Party and which have their seat in the territory of that same Contracting Party; and
c) legal entities wherever located which are effectively controlled by citizens of a Contracting Party or by legal entities having their seat in the territory of that Contracting Party.
3. For the purpose of this Article and Article 25(2)(b) of the said Washington Convention, any legal person which is constituted in accordance with the legislation of one Contracting Party and which, before a dispute arises, is controlled by an investor of the other Contracting Party, shall be treated as a legal person of the other Contracting Party.
For the purposes of this Agreement
1. "investment" shall mean any kind of asset owned or controlled invested directly or indirectly by an investor of one Contracting Party in the territory of the other Contracting Party, provided that the investment has been made in accordance with the laws and regulations of the other Contracting Party, and shall include in particular, though not exclusively:
a) movable and immovable property as well as any other rights in rem, such as mortgage, lien, pledge, usufruct and similar rights;
b) shares, debentures and other forms of participation in companies;
c) claims to money and other rights relating to any performance having an economic value;
d) intellectual property rights, technical pro- cesses, trade names, know-how, goodwill and other similar rights;
e) business concessions conferred by law, administrative decisions or under contract, including concessions to search for, cultivate, extract or exploit natural resources; and
f) goods that under a leasing agreement are placed at the disposal of a lessee in the territory of one Contracting Party by a lessor being an investor of the other Contracting Party.
A change in the form in which assets are invested does not affect their character as investments.
[...] This question may be relevant to determine whether it is necessary to demonstrate that some of Romania's expropriatory actions were illegal not only under the BIT but also under customary international law. But this is not a question that has any influence on jurisdiction in this case (C-C.Mem., ¶ 79, emphasis in original).
• The objections of Respondent are dismissed.
• The Tribunal has jurisdiction over the dispute submitted to it in this arbitration and rejects any objections as to the admissibility of the claims.
• The decision on costs is deferred to the second phase of the arbitration on the merits.