Source(s) of the information:

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

Final Award


Amended Statement of Claim The Claimants' Amended Statement of Claim, dated January 4, 2017
Claimants Mr. Michael Ballantine and Ms. Lisa Ballantine
Claimants' Costs Submission The Claimants' Submission on Costs, dated April 19, 2019
Contracting Parties The Contracting Parties to DR-CAFTA
DCF Discounted cash flow
DR-CAFTA Dominican Republic-Central America-United States Free Trade Agreement, signed on August 5, 2004
EC Report The environmental compliance report that must be submitted to the MMA every six months following the issuance of an environmental permit
Enterprises Jamaca de Dios S.R.L. and Aroma de la Montaña, E.I.R.L.
Environmental Impact Statement The environmental impact statement to be submitted to the MMA when requesting an environmental permit
Environmental Law General Law on the Environment and Natural Resources (Law No. 64- 00) of the Dominican Republic
FET Fair and equitable treatment
Hearing Hearing on jurisdiction, admissibility and merits conducted from September 3 to September 7, 2018, in Washington, D.C., United States of America
ICJ International Court of Justice
ILC International Law Commission
Management Plan The Baiguate National Park's management plan
MFN Most favorable nation
MMA Ministry of the Environment and Natural Resources of the Dominican Republic
MST Minimum standard of treatment
NAFTA North American Free Trade Agreement, signed on December 17, 1992
National Park The Baiguate National Park created by the National Park Decree
National Park Decree Presidential Decree No. 571-09, published on August 7, 2009
Notice of Arbitration The Claimants' Notice of Arbitration and Statement of Claim, dated September 11, 2014
Notice of Intent The Claimants' Notice of Intent to Submit a Claim to Arbitration, dated June 12, 2014
Objection to Admissibility The Respondent's Objection to Admissibility, dated November 8, 2017
Parties The Claimants and the Respondent
PCA Permanent Court of Arbitration
Phase 1 Phase 1 of Jamaca de Dios, comprising the development of the lower portion of the project, as defined by the Claimants
Phase 2 Phase 2 of Jamaca de Dios, comprising the development of the upper portion of the project, as defined by the Claimants
Project(s) Each of the projects within the Jamaca de Dios development, as defined by the Respondent
Rejoinder on Jurisdiction and Admissibility The Claimants' Rejoinder on Jurisdiction and Admissibility, dated May 21, 2018
Rejoinder on Jurisdiction and Merits The Respondent's Rejoinder on Jurisdiction and Merits, dated March 19, 2018
Reply Memorial The Claimants' Reply Memorial, dated November 9, 2017
Reply on Bifurcation The Respondent's Reply on Bifurcation, dated March 8, 2017
Reply to the Notice of Arbitration The Respondent's Reply to the Notice of Arbitration, dated October 13, 2014
Request for Bifurcation The Respondent's Notice of Intended Preliminary Objection and Request for Bifurcation, dated February 17, 2017
Respondent The Dominican Republic
Respondent's Costs Submission The Respondent's Submission on Costs, dated April 19, 2019
Respondent's Amended Costs Submission The Respondent's Amended Submission on Costs, dated May 15, 2019
Response to the Objection to Admissibility The Claimants' Response to the Objection to Admissibility, dated November 17, 2017
Response to the Request for Bifurcation The Claimants' Response to the Notice of Intended Preliminary Objection and Request for Bifurcation, dated March 6, 2017
SENPA The Dominican Republic's National Service for Environmental Protection
Statement of Defense The Respondent's Statement of Defense, dated May 25, 2017
Submission of Costa Rica Non-Disputing Party Submission by Costa Rica, dated July 6, 2018
Submission of the United States Non-Disputing Party Submission by the United States of America, dated July 6, 2018
Surreply on Bifurcation The Claimants' Surreply of Bifurcation, dated March 10, 2017
Technical Evaluation Committee The technical evaluation committee belonging to the MMA in charge of reviewing Environmental Impact Statements
UNCITRAL Rules Arbitration Rules of the United Nations Commission on International Trade Law, as adopted in 2013
VCLT Vienna Convention on the Law of Treaties, signed on May 23, 1969



The Claimants in these arbitration proceedings are Mr. Michael Ballantine and Ms. Lisa Ballantine (the "Claimants" or the "Ballantines"), two U.S. citizens whose stated domicile is at 951 Grissom Trail, Elk Grove Village, Illinois, 60007, United States of America. The Claimants own and control Jamaca de Dios S.R.L. and Aroma de la Montaña, E.I.R.L., two enterprises organized under the laws of the Dominican Republic (the "Enterprises"). In the present proceedings, the Claimants are represented by:

Mr. Matthew G. Allison
Baker & McKenzie LLP
300 East Randolph Street
Chicago, IL, 60601
United States of America

Mr. Teddy Baldwin
Baker & McKenzie LLP
815 Connecticut Avenue, N. W.
Washington, DC, 20006
United States of America

The Respondent in these arbitration proceedings is the Dominican Republic (the "Respondent", and together with the Claimants, the "Parties"). The Respondent is represented in these proceedings by:

Ms. Yahaira Sosa
(Vice-Minister of Foreign Commerce)
Mr. Marcelo Salazar
(Director of Foreign Commerce)
Ms. Leidylin Contreras
(Deputy Director of Foreign Commerce)
Ms. Raquel de la Rosa
(Legal Analyst, Investment Dispute Prevention and Resolution)
Lic. Maria Amalia Lorenzo
(Legal Analyst, Investment Dispute Prevention and Resolution)
Ministry of Industry and Commerce
Av. 27 de febrero No. 209,
Ensanche Naco,
Santo Domingo, 10121
Dominican Republic

Ms. Patricia Abreu
(Vice-Minister of Cooperation and Foreign Affairs)
Ms. Rosa Otero
(Director of Commerce and Environment)
Ms. Claudia Adames
(Attorney of Trade and Environment)
Ms. Johanna Montero
(Attorney of Trade and Environment )
Ministry of the Environment and Natural Resources
Av. Cayetano Germosén, Esq. Gregorio Luperón,
Sector El Pedregal,
Santo Domingo, 02487
Dominican Republic

Mr. Flavio Darío Espinal
(Counsel to the President)

Mr. Paolo Di Rosa
Mr. Raúl R. Herrera
Ms. Mallory Silberman
Ms. Claudia Taveras
Ms. Cristina Arizmendi
Arnold & Porter Kaye Scholer LLP
555 Twelfth Street N.W.
Washington, D.C. 20004
United States of America


From 2005 onwards, the Claimants began developing Jamaca de Dios, a luxury residential housing project located in Jarabacoa, Dominican Republic. The present dispute arose after the Claimants encountered certain difficulties when carrying out their activities in Jamaca de Dios. In particular, the Claimants allege that certain environmental regulations established by the Respondent, and its corresponding enforcement, violated the Claimants' rights under DR-CAFTA.



On June 12, 2014, the Claimants notified the Respondent of their intent to submit a claim to arbitration (the "Notice of Intent"), in accordance with Article 10.16.1(b) of the Dominican Republic-Central America-United States Free Trade Agreement (the "DR-CAFTA"), signed on August 5, 2004 and entered into force on March 1, 2007 between its Contracting Parties (the "Contracting Parties").
On September 11, 2014, the Claimants submitted, on their own behalf and on behalf of their Enterprises, their Notice of Arbitration and Statement of Claim (the "Notice of Arbitration"), pursuant to Articles 3 and 20 of the Arbitration Rules of the United Nations Commission on International Trade Law (the "UNCITRAL Rules"), as adopted in 2013, and Articles 10.16.1(a), 10.16.1(b), and 10.16.3(c) of the DR-CAFTA.


On September 11, 2014, on the occasion of serving on the Respondent the Notice of Arbitration, the Claimants appointed Mr. Henry Burnett, a national of the United States, as the first arbitrator.
By letter dated October 8, 2014, the Claimants informed that Mr. Henry Burnett had withdrawn his acceptance to act as arbitrator. In replacement, the Claimants appointed Ms. Marney Cheek, a national of the United States, as the first arbitrator.
On January 25, 2016, the Respondent appointed Prof. Raúl Vinuesa, a national of Argentina and Spain, as the second arbitrator.
On May 27, 2016, the Secretary-General of ICSID informed the Parties that pursuant to the Parties' Joint Protocol for ICSID Appointment, Mr. Ricardo Ramírez Hernández, a national of Mexico, had been appointed as Presiding Arbitrator.
By letter dated June 3, 2016, Mr. Ricardo Ramírez accepted his appointment as Presiding Arbitrator. On the same day, the Arbitral Tribunal was fully constituted.
On August 10, 2016, the Parties and the Tribunal signed a document entitled Terms of Appointment. Among other things, the Parties confirmed that all members of the Tribunal had been validly appointed in accordance with the Treaty and the UNCITRAL Rules. Additionally, each member of the Tribunal confirmed that they were and shall remain impartial and independent of the Parties and that they had disclosed, to the best of their knowledge, all current circumstances likely to give rise to justifiable doubts as to their independence and impartiality, and that they would disclose without delay any such circumstance that may arise in the future.


This Arbitration has been initiated pursuant to Articles 10.15 and 10.16 of DR-CAFTA:

Article 10.16: Submission of a Claim to Arbitration

1. In the event that a disputing party considers that an investment dispute cannot be settled by consultation and negotiation:

(a) the claimant, on its own behalf, may submit to arbitration under this Section a claim

(i) that the respondent has breached

(A) an obligation under Section A,



(ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach; and

(b) the claimant, on behalf of an enterprise of the respondent that is a juridical person that the claimant owns or controls directly or indirectly, may submit to arbitration under this Section a claim

(i) that the respondent has breached

(A) an obligation under Section A,



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

2. At least 90 days before submitting any claim to arbitration under this Section, a claimant shall deliver to the respondent a written notice of its intention to submit the claim to arbitration ("notice of intent"). The notice shall specify:

(a) the name and address of the claimant and, where a claim is submitted on behalf of an enterprise, the name, address, and place of incorporation of the enterprise;

(b) for each claim, the provision of this Agreement, investment authorization, or investment agreement alleged to have been breached and any other relevant provisions;

(c) the legal and factual basis for each claim; and

(d) the relief sought and the approximate amount of damages claimed.

3. Provided that six months have elapsed since the events giving rise to the claim, a claimant may submit a claim referred to in paragraph 1:


(c) under the UNCITRAL Arbitration Rules.

4. A claim shall be deemed submitted to arbitration under this Section when the claimant's notice of or request for arbitration ("notice of arbitration"):


(c) referred to in Article 3 of the UNCITRAL Arbitration Rules, together with the statement of claim referred to in Article 18 of the UNCITRAL Arbitration Rules, are received by the respondent.

A claim asserted for the first time after such notice of arbitration is submitted shall be deemed submitted to arbitration under this Section on the date of its receipt under the applicable arbitral rules.

5. The arbitration rules applicable under paragraph 3, and in effect on the date the claim or claims were submitted to arbitration under this Section, shall govern the arbitration except to the extent modified by this Agreement.

6. The claimant shall provide with the notice of arbitration:

(a) the name of the arbitrator that the claimant appoints; or

(b) the claimant's written consent for the Secretary-General to appoint such arbitrator.

Article 10.17: Consent of Each Party to Arbitration

1. Each Party consents to the submission of a claim to arbitration under this Section in accordance with this Agreement.

2. The consent under paragraph 1 and the submission of a claim to arbitration under this Section shall satisfy the requirements of:


(b) Article II of the New York Convention for an "agreement in writing;" and

(c) Article I of the Inter-American Convention for an "agreement."


Pursuant to Procedural Order No. 1, the languages of the arbitration are English and Spanish. In cases of differences of interpretation between the English and Spanish versions of the Tribunal's awards, decisions and procedural orders, the English text shall prevail.1
By agreement of the Parties, and as reflected in Procedural Order No. 1, the place of arbitration is Washington, D.C., United States of America.2


On June 16, 2016, the Parties agreed on the Permanent Court of Arbitration (the "PCA") as the registry and as administering institution. They also agreed that, in consultation with the Tribunal, the Secretary-General of the PCA would designate a legal officer of the PCA's International Bureau to act as Secretary to the Tribunal.


In accordance with Article 10.21 of DR-CAFTA, section 10 of Procedural Order No. 1 provides that:

10. Transparency

10.1 The arbitration shall be conducted in accordance with the procedure set forth in Article 10.21 of the CAFTA-DR. The PCA shall make available to the public, on its website, the information and documents listed in Article 10.21(1) of the CAFTA-DR, unless the Tribunal decides otherwise in accordance with the provisions of that Article.

10.2 Pursuant to Article 10.21(2) of the CAFTA-DR, hearings shall be conducted open to the public and the PCA shall determine, in consultation with the Parties and the Tribunal, the appropriate logistical arrangements. If any of the Parties intends to use information designated as protected information in a hearing, it shall so advise the Tribunal, who shall make appropriate arrangements to protect the information from disclosure.


On July 11, 2016, the Tribunal circulated to the Parties for comments the drafts of the Terms of Appointment and the Procedural Order No. 1.
On August 10, 2016, the Parties and the Tribunal executed the Terms of Appointment.
On October 13, 2014, the Respondent submitted its Reply to the Notice of Arbitration (the "Reply to the Notice of Arbitration").
On September 28, 2016, the Parties and the Tribunal held the first procedural meeting through a conference call, to discuss certain procedural issues.
By letter dated October 5, 2016, the Claimants requested the Tribunal that they be given an opportunity to present – should the Respondent raise any jurisdictional objections – a rejoinder on those jurisdictional issues – once the Parties had submitted two memorials each.
By letter dated October 12, 2016, the Respondent requested the Tribunal that the Claimants not be granted the request detailed in their letter dated October 5, 2016.
On October 21, 2016, the Tribunal issued Procedural Order No. 1, which, inter alia, addressed the points raised by the Claimants' letter dated October 5, 2016, and the Respondent's letter dated October 12, 2016.
On January 9, 2017, the Claimants submitted their Amended Statement of Claim, dated January 4, 2018 (the "Amended Statement of Claim"). On February 3, 2017, the Claimants submitted a Spanish version thereof.
On February 18, 2017, the Respondent submitted its Notice of Intended Preliminary Objection and Request for Bifurcation, dated February 17, 2017 (the "Request for Bifurcation"). A Spanish version thereof was submitted on March 6, 2017.
On March 7, 2017, the Claimants submitted their Response to the Notice of Intended Preliminary Objection and Request for Bifurcation, dated March 6, 2017 (the "Response to the Request for Bifurcation"). The Spanish version thereof was submitted on March 22, 2017.
On March 8, 2017, the Respondent submitted its Reply to the Claimants' Response to the Request for Bifurcation (the "Reply on Bifurcation"). The Spanish version thereof was submitted on March 23, 2017.
On March 10, 2017, the Claimants submitted their Surreply to the Respondent's Reply on Bifurcation (the "Surreply on Bifurcation"). The Spanish version thereof was submitted on March 22, 2017.
On March 29, 2017, the Tribunal informed the Parties that the bifurcation request had been denied but a reasoned decision would be issued later.
On April 21, 2017, the Tribunal issued Procedural Order No 2, whereby the majority of the Tribunal rejected the bifurcation request and decided to hear the jurisdictional objection together with the merits of the Claimants' claim.
On May 26, 2017, the Respondent submitted its Statement of Defense and Objections to Jurisdiction, dated May 25, 2017 (the "Statement of Defense"). The Spanish version thereof was submitted on June 10, 2017.
On July 3, 2017, the Respondent submitted the Respondent's Application for an Order on Production of Documents to the Claimants, attaching the Redfern Schedule of the Respondent.
On July 4, 2017, the Claimants submitted their Document Production Requests in the form of a Redfern Schedule.
On July 17, 2017, the Tribunal issued Procedural Order No. 5, deciding on the Parties' requests for document production.
On November 9, 2017, the Respondent submitted its Objection to Admissibility, dated November 8, 2017 (the "Objection to Admissibility"), a submission which was not contemplated within the procedural calendar, but which the Respondent justified on the basis of new evidence resulting from the Document Production Phase of the Arbitration. The Spanish version thereof was submitted on December 1, 2017.
On the same day, the Claimants requested leave from the Tribunal to file a reply to the Respondent's Objection to Admissibility, which was granted by the Tribunal.
Later on the same day, the Claimants submitted their Reply to the Respondent's Statement of Defense (the "Reply Memorial"). The Spanish version thereof was submitted on December 5, 2017.
On November 18, 2017, the Claimants submitted their Response to the Respondent's Admissibility Objection, dated November 17, 2017 (the "Response to the Objection to Admissibility"). The Spanish version thereof was submitted on December 5, 2017.
On December 22, 2017, the Tribunal issued Procedural Order No. 7, deciding to postpone the decision on both the admissibility and merits of the Respondent's Objection to Admissibility until a later stage of the proceedings. The Respondent was invited to answer to the Claimants' Response in its Rejoinder, and in turn, the Claimants were invited to submit their surreply in their Rejoinder on Jurisdiction.
As a result of certain issues that arose between the Parties in December 2017 when the Respondent intended to visit Jamaca de Dios, several exchanges of correspondence ensued between the Parties and the Tribunal. Consequently, Procedural Orders Nos. 8, 9, 10 and 13 were issued by the Tribunal on March 4, April 20, May 14, and August 30, 2018, respectively.3
On March 20, 2018, the Respondent submitted its Rejoinder on Jurisdiction and Merits, dated March 19, 2018 (the "Rejoinder on Jurisdiction and Merits"). The Spanish version thereof was submitted on April 7, 2018.
On May 22, 2018, the Claimants submitted their Rejoinder on Jurisdiction and Admissibility dated May 21, 2018 (the "Rejoinder on Jurisdiction and Admissibility"). The Spanish version thereof was submitted on August 27, 2018,
By e-mail dated July 6, 2018, the Republic of Costa Rica filed its non-disputing party submission ("Submission of Costa Rica").
By e-mail dated July 7, 2018, the United States filed its non-disputing party submission, dated July 6, 2018 ("Submission of the United States").
On August 24, 2018, the Tribunal issued Procedural Order No. 12, establishing the details regarding the hearing to be held in Washington, D.C., United States of America, between September 3 and September 7, 2018 (the "Hearing").


From September 3 to September 7, 2018, the Parties and the Tribunal held the Hearing, in the World Bank facilities in Washington, D.C., United States of America. In accordance with the transparency provisions under DR-CAFTA, the Hearing was broadcasted live, and the Hearing transcripts were later published in the PCA's website, along with all the Parties' submissions and the Tribunal's Procedural Orders.4
The following persons were present at the Hearing:

Arbitral Tribunal
Prof. Ricardo Ramírez Hernández (Presiding Arbitrator)
Ms. Marney L. Cheek
Prof. Raúl Emilio Vinuesa

Mr. Michael Ballantine
Ms. Lisa Ballantine
Mr. Edward "Teddy" Baldwin, Baker & McKenzie LLP
Mr. Matthew Allison, Baker & McKenzie LLP
Ms. Larissa Diaz, Baker & McKenzie LLP
Ms. Shaila Urmi, Baker & McKenzie LLP
Mr. Eric Kay, Kay Associates
Mr. James Farrell, Berkeley Research Group
Ms. Drew Lehmann, Berkeley Research Group
Mr. Graviel Peña
Ms. Jayne Baldwin
Ms. Leslie Gil Peña

Mr. Marcelo Salazar, Ministry of Industry and Commerce
Ms. Leidylin Contreras, Ministry of Industry and Commerce
Ms. Raquel De La Rosa, Ministry of Industry and Commerce
Ms. Patricia Abreu, Ministry of Environment and Natural Resources
Mr. Enmanuel Rosario, Ministry of Environment and Natural Resources
Ms. Rosa Otero, Ministry of Environment and Natural Resources
Ms. Johanna Montero, Ministry of Environment and Natural Resources
Ms. Claudia Adames, Ministry of Environment and Natural Resources
Mr. Paolo Di Rosa, Arnold & Porter
Mr. Raúl Herrera, Arnold & Porter
Ms. Mallory Silberman, Arnold & Porter
Ms. Claudia Taveras, Arnold & Porter
Ms. Cristina Arizmendi, Arnold & Porter
Mr. Kelby Ballena, Arnold & Porter
Ms. Claudia Boscan, Arnold & Porter
Ms. Kaila Millett, Arnold & Porter
Mr. Jose Antonio Rivas
Mr. Zacarías Navarro
Prof. Eleuterio Martinez
Mr. Jose Roberto Hernández
Mr. Peter W. Deming, Mueser Rutledge Consulting Engineers (MRCE)
Mr. Pieter N. Booth, Ramboll
Mr. Timothy H. Hart, Credibility International
Ms. Laura Connor Smith, Credibility International
Ms. Tyler Smith Khoury, Credibility International

Registry: Permanent Court of Arbitration
Mr. Julián Bordaçahar, PCA Legal Counsel and Secretary to the Tribunal

Ms. Silva Colla
Mr. Daniel Giglio

Court Reporters
Ms. Margie Dauster, Dauster|Murphy
Mr. Virgilio Dante Rinaldi, D-R Esteno
Mr. Dionisio Rinaldi, D-R Esteno

The following witnesses and experts were examined at the Hearing:

Mr. Michael Ballantine
Mr. Zacarías Navarro
Mr. Jaime David Fernández Mirabal5
Prof. Eleuterio Martinez
Mr. José Roberto Hernández

Mr. Graviel Peña
Mr. Eric Kay, Kay Associates
Mr. James Farrell, Berkeley Research Group
Mr. Timothy H. Hart, Credibility International
Mr. Peter W. Deming, Mueser Rutledge Consulting Engineers (MRCE)
Mr. Pieter N. Booth, Ramboll

During the Hearing, information emerged regarding the funding of the Claimants' legal costs by a third party.6 The Tribunal then heard the Parties' submissions on the relevance and consequences arising from the fact that the Claimants' claims were being funded by a third party. After reflecting on the Parties' positions, the Tribunal ordered the Claimants to disclose only to the Tribunal and the PCA the agreement that the Claimants had concluded with the third-party funder.
After reviewing the agreement, and at the Respondent's request, the Tribunal ordered the Claimants to disclose to the Respondent the identity of the third-party funder, and the date of the agreement, to discard any conflicts of interest. On October 2, 2018, the Tribunal issued Procedural Order No. 16 to address the issue of the third-party funder. Among other things, the Tribunal informed the Parties that, to the best of its knowledge, the third-party's involvement in the arbitration did not raise conflicts of interest for any of the Tribunal's members.
At the end of the Hearing, the Tribunal asked the Parties several questions, which were replied orally by the Parties' counsel. Additionally, the Tribunal made the Parties aware that the submission of post-hearing briefs would not be expected.


On April 19, 2019, the Parties filed their respective submissions on costs (the "Claimants' Costs Submission" and the "Respondent's Costs Submission").
On May 15, 2019, the Respondent amended its Costs Submission, reflecting newly acquired information (the "Respondent's Amended Costs Submission").
On July 17, 2019, after having duly consulted the Parties, the Tribunal declared the closure of hearings pursuant to Article 31(1) of the UNCITRAL Rules.



In 2000, Michael Ballantine, Lisa Ballantine and their children travelled to the Dominican Republic to work as Christian missionaries and to undertake humanitarian work, including the distribution of water filters through a non-profit entity created by Lisa Ballantine.7 While they returned to Chicago in 2001, they continued their work in the Dominican Republic, "visiting the country each year to further support the communities they had begun to serve".8
In the early 2000s, the Claimants noticed that in the mountains around Jarabacoa there was no successful luxury real estate development with shared infrastructure and amenities, even though they considered it an ideal place for such a project.9
Thus, the Claimants began purchasing mountain property in the area of Palo Blanco in Jarabacoa. The Claimants distinguish two phases in the development of Jamaca de Dios,10 phase 1 – which focused on the lower portion of the property and was commenced in 200511 – ("Phase 1"), and phase 2 – which was intended to expand the project towards the upper part of the mountain and was commenced in 2009 ("Phase 2").12
In 2003, the Claimants bought their first tract, 218,552 square meters, from Francisco Sanchís. Between 2004 and 2008, they bought additional land rights, primarily from the family of Carlos Manuel Duran. By 2009, all of the land in Phase 1 of Jamaca de Dios was titled to the Claimants' name, as well as, 140,835 square meters of Phase 2. By September 2010, the Claimants owned 194,500 of the 283,000 square meters of Phase 2.13 On January 7, 2011, 45,036.40 square meters were purchased from Ramón Amable Rodríguez.14 On January 14, 2011, 9,905.78 square meters were acquired from María Consuelo Rodríguez.15 On February 9, 2011, 15,130 square meters were bought from Miguel Serrata Rodríguez.16 Lastly, on March 29, 2011, 18,582.99 square meters were purchased from Ana Lidia Rodríguez Serrata.17 Until the initial denial of their expansion request in 2011 they continued to acquire lands for Phase 2.18
The Claimants hold that it was their plan to create a community where private individuals could purchase land and build luxury mountain homes, and where domestic and international tourists could stay in a boutique spa hotel high on the mountain, while enjoying recreational and other activities, such as hiking trails, organic gardens, parks and common areas. The Ballantines intended that homeowners and local citizens could also enjoy first-class dining with striking views of the valley.19
Jamaca de Dios was intended to have at least two development phases. In Phase 1, the lower portion of the property would be developed to create the infrastructure necessary to develop the entire mountain and more than 90 individual parcels would be sold to private buyers to build luxury homes and a restaurant, which would be "a focal point of the complex".20
In Phase 2, the Project would be expanded by extending the road further up the mountain and by subdividing the upper portion of the property.21 The Claimants also planned for the construction of a luxury hotel and spa with a second restaurant, mountain-lodge style apartments, and a larger apartment complex closer to the base of the property.22
By the summer of 2009, after Phase 1 was approved and more than 90 individual luxury parcels were subdivided, the Claimants owned "more than 162,000 square meters of titled property further up the mountain" and were in the process of acquiring an additional 220,000 square meters for further development.23
The Baiguate National Park was created by Presidential Decree No. 571-09, published on August 7, 2009 (the "National Park Decree"), to protect the Salto Baiguate or Baiguate waterfall, the endangered walnut trees and the forests along the river (the "National Park"). By the time the National Park Decree was published, less than half of the land associated with Phase 2 had been purchased by the Claimants.24
The enactment of the National Park Decree was the culmination of a nation-wide environmental protection initiative which began in October 2004.25 From August 2008 to August 2009, Prof. Eleuterio Martínez led a team of government officials, scientists and cartographers in identifying new areas for environmental protection, by relying on existing information and comparing it with information obtained from field visits, to see whether the area should be recommended for protection to a high-level advisory panel. The National Park Decree established 32 new protected areas, including the National Park.26
The Respondent explains that the area where the National Park is located was important for two reasons. First, because it has a sensitive and highly-fragile flora and fauna biodiversity. Second, "for the preservation of ecosystemic services, especially in relation to the production and protection of water in order to avoid potential landslides, given the intense annual dry and rainy seasons".27 Additionally, the Baiguate waterfall was also protected for being a bathing site and holding special rituals, known to the native Taino culture. For the same reasons, the river source and tributaries were included within the National Park's boundaries. According to Prof. Martínez, protecting the river source and tributaries would not only protect the Baiguate waterfall but also the biodiversity in the neighboring Mogote mountain system.28 During that time, the team did not consider who owned the land or what they intended to do with it.29
In addition, the Respondent does not agree with the distinction proposed by the Claimants, since the Phase 1/Phase 2 dichotomy both confounds and oversimplifies the issues at stake.30 According to the Respondent, the Phase 1/Phase 2 contrast is sometimes used by the Claimants to make a geographic distinction, while at other times it is used to make a temporal one.31 Thus, the Respondent rejects the Claimants' proposed nomenclature, and instead identifies five projects (each, a "Project"), distinguishable according to where the Projects are located and at what time they were pursued.32
According to the Respondent, Project 1 was supposedly a reforestation project, for which permission was sought on December 28, 2004, to build an access road.33 Project 2 was the construction of the restaurant Aroma de la Montaña, a housing development on the lower portion of Jamaca de Dios.34 Project 3 included plans to extend Project 1's road, expand Jamaca de Dios further up the mountain, sell at least 70 additional lots for luxury private homes, and the construction of a boutique hotel. However, when the Claimants sought permission from the Ministry of Environment and Natural Resources (the "MMA") for the project, it was described as the construction of 10 cabins and 19 villas.35 This is the project that the Claimants twice sought reconsideration for, and, as a result, they received three denials.36 In the last of these denials, the MMA finally referred to the existence of the Baiguate National Park.37 Project 4 is the mountain lodge that the Claimants sought to build above the restaurant Aroma de la Montaña.38 Lastly, Project 5 refers to an apartment complex for which the Claimants never sought permission.39


The Claimants sought to acquire the approval from the MMA for the Project. However, before that, in October 2004, the Claimants signed an agreement with PROCARYN, a German non-profit, to plant 50,000 trees across the property to stabilize the environment and create a "more enticing setting for the home sites they intended to create".40 In this sense, the Claimants sought permission from the MMA's Forestry Department to build a road to facilitate the reforestation plan. It was the Claimants' opinion that the road was critical for the Project, and they attempted to build one never before done by a private enterprise in the Dominican Republic.41
On December 28, 2004, the Claimants wrote to the MMA seeking permission to build an access road for the reforestation plan.42
On January 18, 2005, the MMA granted permission to cut a road and plant the trees.43 The MMA added that it had no objection as long as no trees were cut, removed and/or transplanted, nor any sand or gravel was extracted or transported.44 The road was completely built within the Claimants' development to be a service entrance for Jamaca de Dios. The Claimants allowed the landowners to the west of Jamaca de Dios to use this road until 2011, as it was much safer and more convenient than the historic pathway, which did not allow the passage of vehicles.45
During the road construction, the Claimants spent significant sums of money on heavy equipment, fuel and earth moving, which involved finding "large deposits of rock and road grade material in varying place[s] throughout the mountain" and then using "[t]his material […] for backfill, engineered support structures, road base, and drainage channels".46 According to the Respondent, these kind of actions were in violation of the conditions set out in the permit.47
The Claimants sough the permit from the MMA in accordance with the procedure established in the Ley General sobre Medio Ambiente y Recursos Naturales (Ley No. 64-00) (the "Environmental Law"). To this effect, the Claimants hired Antilia Environmental Consultants, a Dominican environmental company, to assist them with the permit request.48
In short, the procedure to request an environmental permits is divided into six steps. First, the applicant must obtain a "no objection" letter from the municipal government where the proposed project is to be located. Second, this letter must be provided to the MMA, and the MMA would provide "terms of reference" for the submission of a Declaración de Impacto Ambiental (the "Environmental Impact Statement"). The Environmental Law does not contain a comprehensive list of all the factors that must be taken into account for the Environmental Impact Statement.49 Third, to provide the terms of reference, the MMA must conduct a technical visit to the site of the proposed project. Fourth, the applicant must draft and submit the Environmental Impact Statement. Fifth, the MMA reviews the Environmental Impact Statement and prepares a technical report on the proposed project through its Comité Técnico de Evaluación (the "Technical Evaluation Committee"). Lastly, based on the technical report, the Environmental Impact Statement, and any stakeholder or public comments, the MMA issues a decision granting or denying the permit for the proposed project.50
Thus, the Claimants requested a "no objection" letter from the City Council of the Municipality of Jarabacoa. On February 7, 2005, the "no objection" letter was later provided to the MMA, and the Claimants requested the terms of reference for the Environmental Impact Statement.51 The MMA conducted a technical visit to Jamaca de Dios and some MMA technicians observed, inter alia, the irregular topography of the land, with steep slopes increasing land erosion, and the fact that a road was under construction. The last issue was investigated and flagged for further review. The technicians recommended that the Environmental Impact Statement should focus on the topographic survey of the access road.52
On August 18, 2006, the MMA issued the terms of reference for the Claimants and invited them to submit the Environmental Impact Statement within a year.53 The Claimants submitted the Environmental Impact Statement with the MMA in mid-February, 2007, for 82 home sites and a restaurant.54 After being reviewed by the MMA, it was considered to be deficient, missing many important details. In June 2007, the MMA asked the Claimants to redo it, and for which Antilia Environmental Consultants committed to develop a more thorough study.55
In August 2007, the Claimants submitted a revised study. The Technical Evaluation Committee completed its technical report of the proposed Project. On December 7, 2007, the MMA issued the permit No. 0649-07 for the development of the lower portion of the Project. The permit included an obligation to submit an environmental compliance report every six months (each, an "EC Report") and the assumption of liability for any penalties due to causing any environmental harm. The permit also stated that a new Environmental Impact Statement would be required for any substantial modification or addition, or for any construction site.56 At the time, the Claimants were living in the United States and managing the process from there.57
During this process, the Claimants allege that the MMA did not indicate that the slope in the mountain of the Ballantine's property was an issue of concern, "or that any portion of the land in Phase 1 could not be developed because it exceeded the slope limitations set forth"58 in the Environmental Law. The Claimants and the MMA had a "constructive relationship" during the establishment and initial development of Jamaca de Dios.59
After the approval of Phase 1, the MMA conducted annual inspections on Jamaca de Dios to ensure environmental compliance, reviewed the semi-annual reports submitted by Jamaca de Dios in accordance with Dominican law, and exchanged communications on several topics.60


The Claimants developed the infrastructure necessary to support Phase 1 and the future Phase 2: networks to supply electricity, high-speed Internet, and potable water throughout the property; they hired 24-hour security and maintenance; created recreational and other common areas.61 The Claimants invested in designing and building a "high-quality, environmentally sound road throughout the complex".62
The Claimants explain that mountain roads are difficult to build and maintain. Since the Claimants understood the importance of a quality road for Jamaca de Dios, they invested time and money to create "the finest private mountain road in the Dominican Republic".63 They cleared and fully surveyed the mountain, analyzing potential routes with physical and computer modelling. Their claimed intention was to build a road that would avoid significant steepness, while still gaining altitude and allowing "exploitation of the flattest areas of the mountain for the development of premier home sites".64 The Claimants argue that they were "well-situated to make a simple extension of the road into Phase 2".65 They contend that much of the machinery necessary to build the road had been purchased and they also had in the mountain the raw material necessary for the road bed.66
According to the Claimants, despite the MMA's refusal to allow the expansion based on the slopes, the slopes in Phase 2 are more gradual than in Phase 1, thus, "the engineering necessary to duplicate the quality of the Phase 1 road would be less intensive".67
After having established the necessary infrastructure during Phase 1, the Claimants subdivided the property into individual lots and began selling them to private purchasers through a standard sales contract. The landowners had the right to construct their own homes, subject to certain limitations imposed by Jamaca de Dios. The private purchasers were required to start constructing within two years of purchase and to finish in the following two years.68
The Claimants also developed their restaurant, Aroma de la Montaña. Since its establishment in May 2007, the Claimants state that Aroma de la Montaña has increased in popularity as a dining destination for the residents of Jarabacoa and visitors from elsewhere.69
According to the Claimants, in less than five years, Jamaca de Dios became "the most popular and prosperous mountain tourism and residential project in the Dominican Republic", selling 75 lots between 2007 and 2011. By the time of the Statement of Claim, all of the lots had been sold and "the small remaining inventory consists of reacquisitions by Jamaca".70 The Claimants hold that more than 300 people were directly or indirectly employed in Jamaca de Dios, making it the largest development company in Jarabacoa.71


In 2009, the Claimants commenced Phase 2 of their investment. Their intention was to sell at least 70 lots on the upper portion of Jamaca de Dios, which would have been more valuable that the properties in Phase 1 because of, inter alia, the views, the temperature, the enhanced privacy. Phase 2 would be accessed through an extension of the road that ended at the top of Phase 1. The Claimants also intended to build luxury homes in Phase 2.72
At the beginning of 2011, the Claimants conducted an expansion of Aroma de la Montaña, from 90 to 225 available seats. They also installed a rotating floor in the main dining room, something unique in the Caribbean. The Claimants allege that the expansion was undertaken solely because they anticipated an increasing number of owners and visitors which Phase 2 would attract.73 The Respondent argues the expansion was in 2012 and that it was unauthorized, violating the terms of the Project 2 permit. The only license the Claimants had received for Aroma de la Montaña was a restaurant operating license, granted in May 2014 by the Ministry of Tourism. This license still obliged the Claimants to seek the other permits, licenses and authorizations.74
The Claimants claim that they also intended to construct a boutique hotel in Phase 2. They engaged an architect to design it and a Taino Indian expert to ensure the cultural appropriateness of the hotel design and decoration.75 Additionally, they also planned to construct a mountain lodge at the top of Phase 1. ProHotel, one of the Claimants' consultants, undertook an analysis of the strengths, weaknesses, opportunities and threats of the project. Among the threats, they identified the disruption of the flora and fauna and to the environment. ProHotel recommended to first obtain financing and the permits for the mountain lodge. Only then would a marketing and sales plan be developed, a construction company be hired, and advertising be conducted.76 Instead – the Respondent points out – the Claimants hired a Dominican architect to design the lodge, began a marketing campaign, and even took client deposits for units at the mountain lodge.77
The Claimants explain that they also planned to build an apartment building to host larger families, near the base of the complex. As a result, they had established a management company to oversee rental programs for these apartments.78


By 2011, at the end of the road the Claimants added gates for their property. Immediately after the gates' construction, the Claimants offered the Rodríguez family, the ones using the road built in 2005, to instead drive through the main Jamaca road.79 According to the Claimants, the Rodríguez family was not happy with being unable to keep using the road that the Claimants built in 2005. Thus, the Rodríguez requested the District Attorney to have the gates opened.80 However, the Respondent asserts that the Claimants built the gates at the end of a historic, public, unpaved road that had been used by the Palo Blanco townspeople for more than 80 years. In August 2011, the Palo Blanco townspeople requested the local District Attorney to have the gates to the historical road opened.81
In September 2011, the District Attorney rejected the request to demolish the gates.82 The Respondent alleges that the District Attorney decided in favor of the Claimants because they offered the townspeople to use their road to access their land.83 Despite this ruling, the Claimants continued allowing residents to use the main Jamaca road but requiring them to register the first time they entered the development. The Claimants state that night-time traffic was dissuaded for security reasons, but with advanced permission evening access was allowed.84
On April 17, 2013, the townspeople raised a complaint at a Municipality of Jarabacoa town hall meeting, which was also attended by Jamaca de Dios' representatives. At the end of the meeting, another meeting was proposed for the next day to be held at the site of the gates before the historical road. However, Jamaca de Dios' representatives were not present.85
On April 22, 2013, the Municipality of Jarabacoa decided to ask the Claimants to open the gates and have the Commission of Public Works and the Prosecutor's Office work with Jamaca de Dios' representatives, and the area's dwellers and landowners.86 On the same day, the Municipality of Jarabacoa passed a resolution granting public access to a private road to Jamaca de Dios and authorizing to tear down the Jamaca de Dios' gates.87 The Claimant's contend that the resolution was passed only for Jamaca de Dios, and that they were not informed of it.88 The Municipality had been previously informed that passing the resolution would be unlawful because it is the federal Lands Tribunal which has authority over real property disputes.89
On June 17, 2013, a group of local people, led by the former Director of Maintenance in Jarabacoa, stormed into Jamaca de Dios and tried to forcibly tear down the three gates.90 According to the Claimants, a city truck was used to transport the local people and the police only dispersed the crowd after the Claimants' lawyer arrived at La Vega.91
On the same day, according to the Respondent, the Claimants sought the immediate closure of the historical road before Jarabacoa's Lands Tribunal. The townspeople contested the petition, yet the historical road was closed pending the petition's resolution.92
On July 31, 2013, the Claimants managed to obtain a preliminary injunction from the Lands Tribunal, prohibiting the Municipality of Jarabacoa from entering the Claimants' property and ordering to rebuild the gates.93 When the Claimants began the judicial process, the Claimants state that the crowd returned, tore down the provisional gates and made death threats against Mr. Ballantine. Although the police was called, it allegedly refused to come without authorization from the City of Jarabacoa.94 Despite the injunction, Dominican court officials have declared the Claimants' road to be public.95
On October 1, 2013, the Claimants requested from the Municipality of Jarabacoa a "no objection" letter for the mountain lodge in Phase 1. The Claimants state that that Municipality of Jarabacoa has refused to act on this request.96
On October 5, 2015, a new judge assigned to the case ruled against the Claimants, without holding any hearings on the matter.97 As a result, public access has been granted to the Claimants' private Jamaca road.98 However, the Respondent states that the Dominican Government never declared Project 1 road to be a public road.99
The Claimants also denounce the fact that the Jarabacoa City Council officials acted against them because they expected local businesses to pay the taxes directly to the councilors. The Claimants refused to do so, and instead paid their taxes to the Municipality of Jarabacoa.100 The Claimants add that the City of Jarabacoa has refused to pay for the streetlights within Jamaca de Dios, even though the federal Government reimburses the City of Jarabacoa for such costs, and it pays for the streetlights in Dominican-owned projects. Likewise, since 2005, the City of Jarabacoa has refused to provide any maintenance on the public road that leads to Jamaca de Dios.101


1. The First Phase 2 Inspection by the MMA

On May 22, 2009, MMA officials conducted an environmental inspection at Jamaca de Dios, including men carrying weapons. The Claimants state that they and their employees were treated in a harassing and hostile manner.102 Mr. Ballantine was allegedly threatened with criminal action for allegedly violating environmental laws. The MMA officials contended that by creating access to Jamaca de Dios, flattening a small space on three lots and removing several small trees, environmental regulations had been violated.103 Mr. Ballantine recalls that Ms. Francis Santana, the then-MMA local director, said that this type of unannounced, militaristic inspection was unprecedented and unique. Also, Mr. Ballantine claims that Ms. Santana told him that she had no knowledge of any complaint having been lodged against Jamaca de Dios. According to Mr. Ballantine, Ms. Santana stated that the inspection had been ordered by the Minister of the MMA, Mr. Jaime David Mirabal.104
While the Respondent confirms the inspection occurred, it explains that the visit was not unannounced because the Project 2 license gave the MMA the right to sanction any violations thereof. Thus, it contends that the MMA also had the power to monitor the license's compliance. Several weeks before the inspection, the Claimants were invited to the MMA's office in Jarabacoa to discuss unauthorized work conducted in connection with Project 2. During the meeting, the Claimants stated that they intended to comply with the principles of environmental protection and not to violate the Environmental Law.105 The Respondent does not consider the visit to be unprecedented because it characterizes the evidence as purely hearsay, denied by Ms. Santana herself, and the Environmental Law obliges permit-holders to allow the monitoring by the relevant authorities.106 Nor does the Respondent consider the inspection to have been militaristic because it is common for the National Service for Environmental Protection ("SENPA") to accompany MMA officials during their site visits. They wear distinctive green uniforms and carry non-automatic weapons. Although the Respondent cannot confirm whether the SENPA officials were present during the inspection, it does not consider it surprising if they were.107
In the inspections conducted on May 22, 2009, it was discovered that the Claimants (i) had failed to submit the EC Reports, (ii) had cut certain tree species without authorization, (iii) had engaged in unauthorized ground excavations which interfered with the waterways, and (iv) had divided the lots in a manner different to the development plans the MMA had authorized.108

2. Imposition of the Fine and Meetings between the Parties

On November 19, 2009, on the basis of this inspection, the MMA imposed a fine of almost one million Dominican Pesos on Jamaca de Dios.109 According to the Claimants, this has been the largest fine the MMA has ever imposed in the region to a property owner, and local MMA officials allegedly confessed to them that they considered it "excessive and arbitrary".110 The Respondent denies this. According to the Respondent, the fine was imposed within the scope of the MMA's authority since the Project 2 permit reserved the MMA the right to impose fines for breaches of the permit.111 The MMA also required that the Claimants comply with environmental regulations, undo the environmental damage, suspend work on Project 2 until the fine had been paid, and submit reports proving their compliance every six months.112
The Respondent explains that the quantity of a fine can be up to 3,000 times the minimum wage applicable at the time of the violation.113 The Respondent notes that the fine, even before it was reduced by 50%, was not the largest one imposed in the region. In 2013, Aloma Mountain, for example, received a fine of 1.7 million Dominican Pesos.114
The fine also included an order to complete an EC Report twice every year, which the MMA asserted to be required by law. The Claimants contend that they have submitted the EC Reports for all 15 semi-annual periods but that no Dominican-owned project has been required to do so.115 The Claimants allege that the only EC Reports submitted to the Respondent – other than those submitted by the Claimants – were three from Paso Alto between 2008 and 2009, and one from Quintas del Bosque in 2014.116 The Respondent states that the obligation to submit EC Reports can also be found in environmental permits granted to other entities, and that fines have been imposed on other developments for not submitting the required EC Reports.117
The Claimants contend that they immediately requested a meeting with the MMA Minister Jaime David Mirabal to discuss the fine. However, the MMA did not respond to the meeting request and refused to discuss or reconsider the fine.118 The Claimants refused to pay it and kept requesting a meeting.119
In August 2010, before seeking permission, the Claimants applied for tax-free status for Phase 1 and 2, in accordance with CONFOTUR Law No. 158-01, which intends to promote tourism in the Dominican Republic. On November 10, 2010, the Respondent approved the provisional tax-exemption request.120 The Claimants point out that this approval was signed by the Dominican Ministries of Tourism, Culture, and Tax, and the MMA, the latter without mentioning the slope restrictions or the establishment of the National Park.121 The Respondent explains that this process has nothing to do with the environmental permit process and CONFOTUR informed so to the Claimants in the approval.122
On September 22, 2010, the environmental consultant working with the Claimants on the planned expansion told them that some of their land was within the National Park, a category II protected area.123 Mr. Ballantine asked what that would mean for their expansion plans. The consultant confirmed that Dominican law allowed projects of low-impact tourism, such as nature tourism or ecotourism, within the protected areas, and specifically referred to the Claimants' project as one of those allowed. While the consultant recognized that the issue of the roads and the management of sewage and waste would have to be discussed, she recommended the Claimants request the terms of reference for their expansion and allow the MMA to visit the development to provide an opinion on technical and legal matters and on the projects' viability. Although – in the opinion of the consultant – the project was considered a permitted activity within a category II protected area, the consultant clarified that MMA would still decide which project would or would not be allowed.124 The Respondent emphasizes that neither Project 3, nor any part of Jamaca de Dios has been recognized as ecotourism by the MMA.125
On October 7, 2010, Minister Mirabal allowed for the fine to be reduced by a 50%.126
On November 30, 2010, the Claimants request permission for the so-called Project 3.127
On December 13, 2010, the Claimants received a "no objection" letter from the City Council of Jarabacoa, regarding the expansion plans for the hotel and the subdivision of lots. There was no mention of the slope restrictions or the National Park.128 At the same time, the Claimants requested the MMA to provide the "terms of reference" for the expansion.129
On December 21, 2010, the Claimants received approval from CONFOTUR for their request for certain tax benefits for Jamaca de Dios. The approval included a signature and seal from the MMA, which made no reference to any slopes in Phase 2.130 The Respondent points out that CONFOTUR's granting of the tax benefit is unrelated to the Claimants' compliance with environmental regulation.131 The resolution granting the tax benefits states that it "does not authorize the commencement of construction of the JAMACA DE DIOS project".132
On January 26, 2011, the Claimants' request for an environmental permit was lodged at the MMA.133 At the same time, the Claimants continued to purchase land and made plans to buy excavators.134
On February 1, 2011, the Claimants decided to pay the fine, since the MMA previously stated that it would not provide the requested terms of reference until the fine was paid.135

3. First Reconsideration by the MMA at the Claimants' Request

On February 14, 2011, the Claimants were granted a meeting with the MMA Minister, Mr. Jaime David Mirabal, the Vice Minister of Protected Areas, Mr. Bernabé Mañón, and the Management Director of Protected Areas, Mr. Ekers Raposa.136 In the meeting, Mr. Ballantine expressed his opinion that the fine was unjustified but he still was looking forward to working with the MMA regarding Phase 2.137 According to the Claimants, Minister Mirabal promised to send another inspection team to Jamaca de Dios to investigate the issue and provide a response on the requested expansion. However, there was no mention of the planned expansion being within the boundaries of the National Park.138 Mr. Omar Rodríguez was also present at the meeting.139
According to the Claimants, on mid-February, 2011, an inspection team from the MMA visited Jamaca de Dios. The team was welcomed by Mr. Ballantine and Mr. Eric Kay, the expert who helped design and construct the road of Phase 1 and the development of Phase 2. The Claimants contend that the team was "overwhelmingly positive about the prospects of expansion, never mentioning any issue about slopes or the fact that Phase 2 purportedly" was inside the National Park.140 The lead inspector of the MMA team, Mr. César Sena, allegedly recommended seeking permission to expand the road into Phase 2.141
According to the Respondent, during the February, 2011, site visit the MMA officials took contemporaneous notes that the land was over 40% steep, that the earth movements that would be carried out were major, and that the area provided for the disposal of removed materials was "[i]nadequate/harmful to the environment". The MMA officials further noted there were risks that (i) the project would significantly contaminate the soil and subsoil, (ii) during the construction phase the primary or secondary forest would be cleared, (iii) the project would have "a very strong adverse visual impact on the landscape", and (iv) a slope greater than 60% had been observed.142 The Respondent relies on Mr. Zacarías Navarro to explain that the construction of the road was dangerous and complicated, as it was planned to be done at an area located between 900 to 1200 meters above sea level, in the northern face of the Cordillera Central mountain range, where the precipitation levels exceed 1,600 millimeters per year. Also, there would have been a significant "risk of periodic and irrecoverable environmental harm".143 The MMA, its inspectors, and the Claimants agreed that because the Claimants' intention was to develop towards the top of the mountain and "it is virtually impossible to make the subdivision map without first cutting the road", the Claimants should first request permission for the construction of the road.144
On February 24, 2011, the Claimants wrote a letter to the Vice Minister of the MMA, Ernesto Reyna, seeking permission to begin the expansion of the road immediately.145
On March 18, 2011, there was an inspection on Jamaca de Dios, conducted by an MMA official, Mr. Sócrates Nivar, who purportedly drafted a report dated March 21, 2011.146 The MMA officials recommended declaring the project "not viable" because of the "environmental fragility of the area and natural risk, the land topography and slope, which is over 60% in much of the area, …natural run-offs, the characteristics of the buildings being built in the Project area, and a possible violation of Art. 122, Law 64-00".147 According to the Claimants, a copy of the report was never provided to them until the Respondent's Response to the Notice of Arbitration.148
On April 21, 2011, the Claimants wrote to the MMA regarding the terms of reference. According to the Claimants, they did not receive an answer.149
On May 18, 2011, the recommendation by the MMA official in the March 21, 2011, report was accepted by the MMA's Technical Evaluation Committee.150 According to the Claimants, local MMA Director Mr. Graviel Peña was not invited to the committee meeting, contravening MMA policy standards.151
On May 27, 2011, Mr. Peña wrote to his regional supervisor reporting on non-authorized development in Aloma Mountain. The Claimants contend that his letter was ignored and that the development in Aloma Mountain was not affected.152
On June 9 and 10, 2011, Mr. Kay reached conclusions similar to those reached by the MMA official during his site visit to Jamaca de Dios on March 18, 2011. He was also concerned about the "soft soil conditions" and the water running at the outside edge of the road, increasing water saturation in the soil. He also recognized the existence of a problem with the steep slope areas.153
On July 15, 2011, the Claimants wrote to the MMA again regarding the status of the report. Once more, they received no response, even though the MMA was visited by Jamaca de Dios' workers and by the environmental company Empaca Redes.154
On August 22, 2011, Mr. Ernesto Reyna replaced Mr. Jaime David Mirabal as MMA Minister.
On September 1, 2011, the Claimants sent a letter to Minister Reyna, personally congratulating him on his new position, inviting him to Jamaca de Dios, and seeking a response to the expansion request.155
On September 12, 2011, the MMA rejected the expansion request on the grounds that the slopes on the upper portion of the property exceeded the 60% permitted under Article 122 of the Environmental Law and because it was considered an environmentally fragile area, creating a natural risk. Yet, the MMA was willing to assess the viability of any other areas that the Claimants would provide for Project 3.156 The Respondent points out that the Claimants failed to propose an alternative site.157 The Claimants point out that slope restrictions had never been mentioned by the MMA, even though the land approved in Phase 1 had slopes in excess of 60%.158
Nevertheless, after this rejection, the permit for Jarabacoa Mountain Garden and Mirador del Pino were approved, even though both developments would have slopes in excess of 60%.159 The Claimants contend that in those two projects the MMA worked with the owners "to modify their plans to ensure compliance with regulatory requirements".160 The Respondent explains that the Claimants oversimplify the issue when solely comparing the slopes of the properties. Other factors must be taken into account such as concentration, altitude and environmental impact. The other projects are located in lower altitudes, the access to exploitable land is much easier there and the concentration is much lower than in Project 3.161

4. Subsequent Reconsiderations by the MMA of Jamaca de Dios' Environmental Permit Request

As a result of the first denial, the Claimants ceased purchasing land and negotiations on the purchase of Paso Alto.162
The Claimants state that they acquired the MMA's own maps for Phase 2 in a public meeting held in Jarabacoa in December 2014. The map would show that the proposed development area does not have any slopes exceeding the 60% limit, revealing the denial's lack of substantive scientific support.163 However, the Respondent denies this, as five different site visits were conducted for the Project 3's permit, and measuring tools were used to analyze the slopes.164 By applying these factors, even Project 2 and 3 are different, albeit both have slopes exceeding 60%. The former is at a lower altitude and thus, there is lower risk of massive landslides.165
On November 2, 2011, the Claimants requested the MMA to reconsider its decision, stating that no slope in Phase 2 of any area designated for home construction would exceed the 60 degree limit, and asking for another inspection team to visit the project. According to the Claimants, MMA did not provide any reports, findings or technical data supporting its rejection and no further inspection of the project was conducted.166 The Respondent points out that Mr. Ballantine's letter states that no slope would exceed 60 degrees, while acknowledging that the slope where the road would be constructed would be equivalent to 34 degrees.167
In contrast to the Claimants' allegation that no further site visit was performed, the Respondent contends that on January 23, 2012, the MMA's officials conducted another site visit.168 On February 22, 2012, the MMA organized a Technical Evaluation Committee meeting to support the rejection. Mr. Graviel Peña attended the meeting and stated that no technical issues were not discussed, instead only Zacarias Navarro's opinion was requested.169
On March 8, 2012, the Claimants' request for reconsideration was rejected.170 The MMA explained that the project was located in lots with slopes between 20 and 37 degrees, which would in turn mean slopes of 36% and 75%, respectively. The Environmental Law prescribes a maximum slope of 60%, not 60 degrees.171 Also, the MMA asserted that the project would modify the area's natural runoff and the local hydrological and the micro basin's condition, affecting the mountain's ecosystem. Additionally, the type of soil found on the site could only be used for certain purposes. The MMA had considered the Claimants' initial proposal improper, however it became concerned after finding out that their plan was even more ambitious and large than before. Thus, the MMA informed the Claimants that their application file had been closed.172
On March 3, 2012, Mr. Peña wrote to Mr. Reyna, informing of non-permitted development in Aloma Mountain. The Claimants contend that his letter was ignored and that the development in Aloma Mountain was not affected.173
On August 3, 2012, the Claimants again asked the MMA to reconsider its decision, based on the fact that the extension of the project at that time was located at an area with a pitch of 32 degrees.174
On December 18, 2012, the MMA rejected the Claimants' second reconsideration request by letter, with the same content as the letter dated March 8, 2012.175
In May 2013, Mr. Victor Pacheco, the then-Director of the Export and Investment Center, organized and attended a meeting with Mr. Ballantine and Mr. Jean-Alain Rodríguez, the Executive Director of the Export and Investment Center of the Dominican Republic. The Respondent argues that Mr. Ballantine's letter to Jean-Alain Rodriguez was misleading and mischaracterized the issue because it stated that the Claimants had complied with the relevant provisions of the Environmental Law related to the construction of the road.176
In June 2013, the Claimants sent a letter to the MMA acknowledging the reasons for rejecting the permit but requesting a reconsideration.177 On the same month, Project 2's permit was renewed for five years.178 The Respondent points out that during that time the Claimants launched a marketing campaign for Phase 2, with misleading messages, such as the approval of their project and its environmental friendliness. An open house was held in September 2014.179
In June 2013, Ms. Nuria Piera investigated the situation around Jamaca de Dios. In her report, she highlighted the differential treatment between Jamaca de Dios and Aloma Mountain, and the alleged political connections between Mr. Domínguez and the MMA.180
On July 1, 2013, Mr. Victor Pacheco, wrote a letter to the Director of the MMA, Mr. Bautista Gómez Rojas, after having been informed by Mr. Ballantine of the situation in Jamaca de Dios.181 The next month, Mr. Ballantine received an e-mail from Mr. Pacheco, informing him that Mr. Domínguez was "neck deep" in the MMA's mistreatment of Jamaca de Dios.182
On July 4, 2013, Empaca Redes submitted to the MMA an extensive engineering and geological report, showing that the slopes in Phase 2 complied with all applicable slope restrictions and other environmental requirements.183 As alleged by the Claimants, the MMA ignored the report and has not answered to the factual contentions included in it.
On July 18, 2013, the Claimants met officials from the U.S. Embassy in Santo Domingo.184
On July 30, 2013, the U.S. Embassy officials met with Ms. Zoila González from the MMA. By letter dated August 22, 2013, they expressed their concerns regarding the MMA's treatment of the Claimants.185
On August 28, 2013, the MMA sent another inspection team to Jamaca de Dios. Mr. Ballantine gave them a tour around Phase 2 and showed them the slope maps, part of the Empaca Redes report, and satellite images showing the unpermitted development of Aloma Mountain. Mr. Ballantine expressed his concern that Jamaca de Dios was being treated unfairly.186
On September 13, 2013, Mr. Ballantine, his lawyer Mr. Mario Pujols, Ms. Miriam Arcia from Empaca Redes, and Ms. Leslie Gil Peña, the administrator of Jamaca de Dios, met with Mr. Zacarías Navarro, the MMA's Director of the Environmental Evaluation.187 Mr. Navarro informed Mr. Ballantine that the planned expansion was within the boundaries of the National Park. According to the Claimants, this was the first time the National Park had ever been mentioned by the MMA, in a written or oral communication.188
On September 23, 2013, Mr. Navarro visited Jamaca de Dios as part of the reconsideration appeal. He explained to the Claimants that even setting aside the slope and earth movement issues, the area for Phase 2 was within the National Park limits, and so the Project could not move forward.189
On October 1, 2013, Mr. Ballantine sought redress from President Danilo's office. His requests for assistance were rejected.190 The Claimants note that an appeal made by Jarabacoa Mountain Garden to the President's office was treated differently: the Presidency directly intervened in the permitting process and the approval was granted for the entire process.191 However, the Respondent explains that the Presidency reviewed and forwarded the letter to the MMA on October 10, 2013.192
Two weeks later, the office of the President informed Mr. Ballantine that the letter had been forwarded and that officials from the MMA would be in contact with him in the following days.193 Regarding the assertion that the President intervened in favor of Jarabacoa Mountain Garden, the Respondent considers it purely hearsay and thus, with no evidentiary value.194
In October 2013, the Claimants wrote to the Municipality of Jarabacoa to request a "no objection" letter for the construction of the Mountain Lodge.195
On January 15, 2014, the MMA provided its fourth and final rejection, giving the same reasons as set out before.196 According to the Claimants, there was no response to the submission provided by the Claimants through Empaca Redes.197 The letter stated that the Claimants could not develop Phase 2 because it was located within the National Park, which had been designated as a protected area. The Claimants point out that the designation took place in August 2009 by the National Park Decree,198 yet the letter of January 2014 was the first one relying upon the existence of the National Park to deny Phase 2. Between 2009 and 2014, the Claimants and the MMA exchanged many written and oral communications, in which the National Park was never mentioned. In fact, the Claimants point out that the MMA extended the duration of the permit in Phase 1, despite the fact that a significant portion of it was inside the National Park.199 The Respondent explains that the final rejection was not based on the creation of the National Park, but rather that the National Park was an additional reason. The application had already been formally rejected on September 12, 2011 and the file was formally closed on March 8, 2012, when the Claimants opted to contest the decision rather than to choose an alternative location.200 The letter also reminded the Claimants that pursuant to Article 40 of the Environmental Law and to the environmental authorization regulations, any construction, extension, and/or renovation activities of a project cannot be performed if the corresponding environmental authorization has not been granted.201
The Claimants responded to the MMA's letter, dated January 15, 2014, asking the MMA the reasoning behind the National Park's boundaries, as there did not seem to be "any coherent environmental, geological, geographic, or altitude-related reason for it to have located the park lines through the middle of their development".202 They also asked the MMA to explain the reasons why the National Park Decree was now being applied to reject the Claimants' expansion permit, after being in force for more than four years.203
In November 2014, the Claimants met with Ms. Katrina Naut, Foreign Trade Director, and Ms. Patricia Abreu, Vice Minister for International Cooperation, to discuss the possibility of suspending the current proceeding.204
On December 4, 2014, a community meeting was held to discuss the existence of the National Park and the creation of its management plan (the "Management Plan").205
On December 11, 2014, a meeting was held with the City of Jarabacoa. The City Council officials explained that they knew that the MMA was concerned about Jamaca de Dios' expansion and thus, they had asked the MMA for further information. The moment they received it, they would contact the Claimants to inform them of the City Council's position.206 During the meeting, the Respondent asserts that Ms. Leslie Gil Peña, a representative of the Claimants, verbally withdrew their request for a "no objection" letter, stating that it was unsuitable.207 The Claimants deny this, relying on the minutes of the meeting. According to the Claimants, Ms. Gil Peña explained that they were seeking first a conditional "no objection" letter, in order to continue pursuing the rest of the necessary permissions for the Mountain Lodge, and later they would request the definitive "no objection" letter.208
On December 19, 2014, the MMA's Coordinator for Public Areas, Mr. Pedro Arias, acknowledged the local communities' frustration at finding out that their property was within the boundaries of the National Park.209 A draft map provided by the MMA at the community meeting explicitly shows that Jamaca de Dios and Aloma Mountain had been designated as ecotourism areas.210
On February 16, 2015, the City Council informed the Claimants that if they secured confirmation from the MMA that Project 4 would not give rise to environmental concerns, then the City Council would provide a "no objection" letter. According to the Respondent, the Claimants did not pursue Project 4 any further.211
The Management Plan was created before the Respondent submitted its Statement of Defense. In the Management Plan, while ecotourism is allowed, the standard for what constitutes ecotourism has not been fully defined.212 The Respondent faults any delay in the drafting and issuance of the Management Plan on the limited resources the Dominican Republic has at its disposal to conduct the necessary studies to produce each Management Plan.213 In any event, the Respondent explains that under Law No. 202-04 on Protected Areas, in a land included under category II, like the National Park, ecotourism is allowed.214



In their Notice of Arbitration and Statement of Claim, the Claimants request that the Tribunal grant the following relief:

(1) declare that Respondent has breached its obligations under the [DR-CAFTA] and international law;

(2) award Claimants monetary damages of not less than US$20 million (twenty million U.S. dollars) in compensation for losses sustained as a result of Respondent's breaches of its obligations under the CAFTA-DR and international law, including, inter alia, reasonable lost profits, direct and indirect losses (including, without limitation, loss of reputation and goodwill), losses of all tangible and intangible property, and moral damages;

(3) award all costs (including, without limitation, attorneys' fees and all other professional fees) associated with any and all proceedings undertaken in connection with this arbitration, including all such costs undertaken to investigate this matter and prepare this Notice of Arbitration and Statement of Claim, and all such costs expended by Claimants in attempting to resolve this matter amicably with Respondent before serving this Notice of Arbitration and Statement of Claim;

(4) award pre- and post-judgment interest at a rate to be fixed by the Tribunal;


(5) grant such other relief as counsel may advise or the Tribunal may deem appropriate.215

In their Amended Statement of Claim, the Claimants increased the monetary damages to USD 37.5 million deemed as direct damages, and added USD 4 million for moral damages.216 For their Reply Memorial, the Claimants' monetary damages, as calculated by their expert, Mr. Farrell, were re-assessed to total approximately USD 35.5 million.217
In their Admissibility Response, the Claimants request the Tribunal to grant the following relief: "dismiss the Respondent's admissibility and jurisdictional objection. The Tribunal should also order Respondent to pay the Ballantines' costs of defending against this Submission".218


In its Statement of Defense and its Rejoinder, the Respondent requests that the Tribunal grants the following relief:

a. That the Tribunal dismiss all of the Ballantines' claims, on the basis of lack of jurisdiction, inadmissibility, and/or lack of merit;

b. That, in the event that it were to decide that one or more claims are meritorious, the Tribunal decline to grant any damages to the Ballantines, on the basis that their damages calculations are unreliable, erroneous, and/or speculative;

c. That the Tribunal grant to the Dominican Republic all of the costs of the proceeding, as well as the full amount of the Dominican Republic's legal fees and expenses; and

d. That the Tribunal award to the Dominican Republic such other relief as may deem just and proper.219



1. The Dominican Republic's Consent

The Respondent argues that the Claimants bear the burden of establishing the jurisdictional ground for their claims, including the Dominican Republic's consent.220 Its scope is defined in Article 10.17 of DR-CAFTA, which states that each Contracting Party "consents to the submission of a claim to arbitration under this Section [B] in accordance with this Agreement".
Article 10.16 explains which types of claims can be submitted to arbitration, by whom, and how. It provides that

(a) the claimant, on its own behalf, may submit to arbitration under this Section a claim

(i) that the respondent has breached

(A) an obligation under Section A,

(B) an investment authorization, or

(C) an investment agreement; and

(ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach; and

(b) the claimant, on behalf of an enterprise of the respondent that is a juridical person that the claimant owns or controls directly or indirectly, may submit to arbitration under this Section a claim

(i) that the respondent has breached

(A) an obligation under Section A,

(B) an investment authorization, or

(C) an investment agreement; and

(ii) that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.221

The Respondent focuses on two aspects. First, that only a claimant, as defined by DR-CAFTA Article 10.28 has the right to submit a claim to arbitration under Chapter 10, Section B. Second, that the only type of claim that can be submitted by a claimant is one according to which a respondent has breached an obligation under Articles 10.1 to 10.14. Accordingly, there is no consent if either the party submitting a claim to arbitration is not a "claimant" as defined by DR-CAFTA, or the claims asserted are not connected to the obligations set out in Articles 10.1 to 10.14. The Respondent argues that in this case neither the Ballantines are "claimants" under the purposes of the DR-CAFTA, nor do their claims involve any obligations under Articles 10.1 to 10.14, due to the fact that neither at the time they submitted their Notice of Arbitration, nor at the time of the alleged violations, their dominant and effective nationality was that of the U.S.222

2. The Ballantines Do Not Qualify as "Claimants" Under DR-CAFTA

The Respondent contends that the Claimants must demonstrate that at the time of the submission of their Notice of Arbitration and Statement of Claim, on September 11, 2004, they qualified as "claimants" under the DR-CAFTA.223
Under Chapter 10 of the DR-CAFTA, "claimant" is understood as "an investor of a Party that is a party to an investment dispute with another Party".224 Therefore, in this case, the claimant must be an investor of a Contracting Party other than the Dominican Republic. An "investor of a Party":

means a Party or state enterprise thereof, or a national or an enterprise of a Party, that attempts to make, is making, or has made an investment in the territory of another Party; provided, however, that a natural person who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality.225

The Respondent points out that the Claimants acknowledge that they have to comply with the definition of "claimant" under the DR-CAFTA, that the issue of whether they are "claimants" is connected to the question of their dominant and effective nationality, and they did not contest that September 11, 2014 was the day on which their claims were submitted to arbitration.226 However, the Claimants do question whether the date of submission is relevant in the first place.227
The Respondent emphasizes the importance of the date of submission.228 First, it argues that should DR-CAFTA be silent on the relevant timing for the question of nationality, the Tribunal would be required to decide the issue on the basis of international law, in accordance with Article 10.22. Under international law, one of the relevant dates for purposes of jurisdiction is the date on which "the moving party avails itself of a remedy".229 Accordingly, jurisdiction must exist at the time the claim was filed, and at the time of the alleged treaty breach, and a State cannot be subject to claims raised by its own dominant and effective nationals before an international forum.230
Second, it contends that in fact DR-CAFTA is not silent on this issue, but rather that it is connected to the issue of consent. The question is whether the Claimants were allowed to submit their claim at the time they did so. Thus, one would examine the state of affairs on the date of submission.231
Third, the Respondent rejects the Claimants' assertion232 that the issue of dominant and effective nationality only becomes relevant if the investor holds dual nationality at the time of making the investment in the host State. The definition of "claimant" in Article 10.28 would support the position that the relevant time period cannot be earlier than the time when the investment dispute arose.233
Fourth, the Respondent alleges that even if the Tribunal were to focus on DR-CAFTA's definition of "investor of a Party", it would not find any support for the Claimants' claim that the question on the nationality refers to the date the investment was made. Article 10.28's definition of "investor of a Party" has two cumulative requirements: (i) there must be a "national of a Party"; and, (ii) the national must attempt to make, is making or has made an investment in the territory of another Party. The notion of dominant and effective nationality is only related to the first requirement. The Respondent does not contest that the second requirement is disjunctive, since it allows for three different options to define someone as an investor.234 However, if one would follow the Claimants' arguments not all the options would be relevant. Therefore, the Claimants' assertion must be rejected.235
Fifth, the Respondent considers the Claimants' assertion that the "Tribunal should not merely take a snapshot in time and, at any specific date, attempt to weigh [as of that date] the Ballantines' connections to the US against their connections to the DR",236 (Emphasis added by the Respondent) is misguided. Further, it points out that the Iran-U.S. Claims Tribunal's Malek decision the Claimants are relying on does not support such a contention.237
The Respondent contends that because the Claimants held dual nationality at the time of the submission of their claims to arbitration, on September 11, 2014, the question is which nationality was the dominant and effective one at that time.238 The effective nationality refers to whether there is a genuine connection between the person and the State.239 The Respondent does not dispute the genuine connection between the Claimants and the United States, nor between them and the Dominican Republic. The dominant nationality refers to which nationality is stronger.240
Since the DR-CAFTA does not include any standard for determining it, the Respondent proposes to approach the question applying international law. The Respondent relies on case law from the International Court of Justice (the "ICJ"), the Italian-United States Conciliation Commission and the Iran-U.S. Claims Tribunal to argue that the adjudicator must take into account several factors, such as the State of habitual residence, the circumstances in which the second nationality was acquired, the subject's personal attachment for the country, and the center of a person's economic, social and family life.241 The Respondent notes that in Procedural Order No. 2 the Tribunal recognized these factors.242
The Claimants argue that other factors should also be included, inter alia, the country of residence of their immediate family, where the Claimants went to college, where their children were born, the primary language spoken at home or, their religious faith and practice.243 The Respondent states that no jurisprudential, doctrinal or logical support has been offered for the consideration of these factors.244
When it comes to their immediate family, the Claimants point out that their children went for college to the United States.245 However, the Respondent argues that the fact that the Claimants chose to stay in the Dominican Republic shows a greater commitment and allegiance to the Dominican Republic.246 The Respondent considers it irrelevant that the Claimants went to college in the United States before they visited the Dominican Republic for the first time. However, the fact that Ms. Lisa Ballantine went back to Northern Illinois University after she had visited Jarabacoa is relevant, mainly for the studies she decided to undertake.247 Ms. Lisa Ballantine decided to study ceramic filter manufacturing and the Dominican Republic's history to "create a social entrepreneurial startup that would focus on clear water" in Jarabacoa.248 Instead of indicating a connection with the United States, this fact points to the Dominican Republic.249
The Respondent considers it entirely irrelevant where the children were born, because the youngest one was born six years before they visited the Dominican Republic for the first time. Regarding the language being spoken at home, the Respondent considers it irrelevant that it was English, because the Claimants do not provide any authority to support their conclusion. In fact, the same can be said of their religious faith and practice.250
The Claimants also raise two additional factors, the laws regarding dual nationality in the United States and the Dominican Republic, and how both States viewed the Claimants.251 Yet, the Respondent argues that these factors do not support their position.252 Regarding their first factor, the Claimants supposedly argued that the Dominicans laws do not matter because Dominican authorities do not respect Dominican citizens and in any case, their Dominican naturalization only represented a "tenuous" connection since their citizenship could be taken away.253 The Respondent rejects these arguments stating that the laws apply irrespective of the private citizens' perceptions of them and their connection was anything but tenuous, thus the circumstances under which naturalization can be taken away are irrelevant here.254 Regarding the second factor, the Respondent argues that each State's opinion on which nationality was considered dominant is irrelevant, since neither of the two States had any knowledge that the Claimants had dual nationality.255
Accordingly, and considering the factors mentioned by the Claimants, the Respondent concludes that the Claimants' dominant and effective nationality was Dominican at the relevant times.256 The Claimants held their habitual residence in the Dominican Republic, they voluntarily applied for the Dominican citizenship, they had a deep personal attachment with the country and it was the center of their economic, social and family lives.257
As mentioned above, Mr. Michael Ballantine and Ms. Lisa Ballantine were born in the United States and lived there until 2000, when they moved to the Dominican Republic for a year to work as missionaries.258 In 2001, they returned to Chicago but they continued to visit the Dominican Republic every year.259 In 2005, Mr. Ballantine announced to Ms. Ballantine his intention to sell his business in the U.S. and to invest all of their life savings to develop a tropical mountain in the Dominican Republic. The following year, they sold their home and many of their possessions and they moved to the Dominican Republic.260 On the same year, the Claimants acquired the "permanent resident" status, which was renewed in June 2008.261
To be perceived as Dominicans by the Dominican government and their clients, the Claimants voluntarily decided to live in Jamaca de Dios and to become Dominican citizens.262 While the Claimants downplay this fact to a simple pledge to uphold the Dominican laws and constitution,263 the Respondent emphasizes their obligation to be faithful to the Dominican Republic. The Respondent argues that when a person voluntarily decides to acquire a second nationality, it is in itself an indication that the voluntarily acquired nationality has become the dominant one.264 As the ICJ in Nottebohm held

[n]aturalization is not a matter to be taken lightly. To seek and to obtain it is not something that happens frequently in the life of a human being. It involves his breaking a bond of allegiance and his establishment of a new bond of allegiance.265

The Claimants applied for Dominican citizenship in September 2009.266 They had to submit several documents, such as a sworn statement that their domicile was in the city of Jarabacoa and a declaration from their attorney stating that the Claimants "identify closely with Dominican sentiment and customs given their long standing respect for, and period living in, our country, for which reason they would be happy to confirm, legally, their Dominican sentiment".267 They also had to pass an assessment on their written and oral proficiency in Spanish, on their knowledge of Dominican history and culture, and a standard naturalization interview.268
On December 30, 2009, their applications were approved and thus, the Claimants became naturalized Dominican citizens in 2010. Thereupon, the Claimants exercised their newly acquired nationality in various ways, such as: for travelling,269 for exercising their right to vote,270 for filing claims in Dominican courts, or for legal documents, such as contracts or powers of attorney.271 They also attended church in the Dominican Republic and sent their children to school there.272 They even used their Dominican nationality in 2010 to request the Dominican nationality for their youngest children.273 Although their children moved back to the United States for college, the Respondent relies on Ms. Tobi Ballantine's social media postings to show that she had a stronger connection with the Dominican Republic, than to the United States.274 Accordingly, the Respondent rejects the Claimants' contention that they never acted, felt or were ever perceived as Dominicans or that they were never politically, culturally or socially connected to the Dominican Republic.275
The Claimants argue that their U.S. bank accounts kept more funds than their Dominican ones. Yet, this reflects activity in the Dominican Republic and the United States. Moreover, they had a separate U.S. bank account for Jamaca de Dios.276 The Respondent points out that the Claimants assert that they had invested all of their money in the Dominican Republic.277 Although the Claimants had opened a U.S. retirement and college savings accounts, the accounts were barely used.278 Furthermore, other sources confirmed that from 2006 onward, their assets were primarily located in the Dominican Republic.279 Their non-profit organizations, "Jesus for All Nations" and "Filter Pure", mainly operated in the Dominican Republic.280 Their U.S. tax returns stated the Claimants did not have a salary or earn wages during the relevant time period. If they earned income at that time, 70% came from their activity in the Dominican Republic, like interest payments from Jamaca de Dios.281 Thus, the Respondent states that the center of their economic life was the Dominican Republic.
At the time of September 11, 2014, the Claimants had lived for eight years in the Dominican Republic, their permanent residence in law and spirit. They had their own community there, which they designed to promote their vision of social life.282 At some point, they came to consider themselves as Dominican.283 In fact, when the Claimants moved back to the United States in the summer of 2015, they stated that they "have been gone for so long that I feel out of touch with american [sic] society. The culture is so different than when I left 10 years ago. I feel such a culture shock coming back".284 Indeed, the Claimants ended up claiming moral damages to the Dominican Republic in this arbitration for allegedly forcing them to sell their home and leave their friends and colleagues.285
According to the Respondent, U.S. law, case law and doctrine support a similar conclusion: that the Claimants' dominant and effective nationality at paramount times was the Dominican. In the Sadat v. Mertes case, the court held that the plaintiff's voluntary naturalization indicated that his dominant nationality was the one he acquired. Additionally, the fact that the plaintiff did not take all reasonable steps to avoid or quit his status as a U.S. national, was sufficient evidence of his continued, voluntary association with the U.S. and his intention to remain there.286 The U.S. State Department embraced the Sadat decision in the U.S. Digest on International Law (1991-1999).287
The state of habitual residence is considered one of the most important factors in the analysis.288 According to the Respondent, although the Claimants were born and lived most of their lives in the United States, their connection to the United States did not remain unbroken for the entirety of the Claimants' lives.289 As Ms. Lisa Ballantine confessed in June 2015, she had spent almost one third of her life in the Dominican Republic.290 Even their travel records between 2010 and 2014 show that the Dominican Republic was their home base.291
Although the Claimants argue in their Notice of Arbitration and Statement of Claim that the United States was the State of their dominant and effective nationality,292 the Respondent alleges that the evidence provided does not match with the latter statement.293 The Claimants state that they have always maintained one or two residences in the United States and they provide a list of five different addresses.294 They even contend that their contact details are the following "Michael and Lisa Ballantine[,] 951 Grissom Trail[,] Elk Grove Village, [Illinois, USA] 60007".295 Nevertheless, the Respondent states that there was no evidence that the Claimants lived on any of those five locations, since they acquired their Dominican nationality and until they submitted their claims to arbitration.296 Since 2006, their permanent residence was in the Dominican Republic.297 Furthermore, the house at 951 Grissom Trail, belongs to Mr. Michael Ballantine's mother and her husband.298
Accordingly, the Respondent considers it irrelevant whether the Claimants were born in the United States and kept their U.S. nationality when they decided to acquire the Dominican nationality.299 The relevant question is which nationality has been indicated for their residence and other voluntary associations,300 which in the case of the Claimants is Dominican.301

3. The Ballantines' Claims Do Not Involve Obligations Under Articles 10.1 to 10.14 of DR-CAFTA

The Respondent contends that the second takeaway from Article 10.16 of the DR-CAFTA is that an arbitration is only permissible under the DR-CAFTA if the claim refers to obligations breached under Articles 10.1 to 10.14.302 The Claimants contend that the Respondent has breached its obligations under Articles 10.3 (National Treatment); 10.4 (Most-Favored-Nation Treatment); 10.5 (Minimum Standard of Treatment); 10.7 (Expropriation and Compensation); and 10.18 (Transparency).303
As a threshold matter, the Respondent points out that Article 10.18 is titled "Conditions and Limitations on Consent of Each Party" – not "Transparency". The Respondent presumes that the Claimants refer to Article 18 but in that case, the claim exceeds the scope of the Respondent's consent to arbitration.304 The Claimants have amended their claims and state that it actually refers to a violation of Article 10.5 with Chapter 18 as a guide.305 The Respondent argues that the contents of Chapter 18 cannot be imported to Chapter 10 if the Contracting Parties did not provide for it. To do so would be going against the interpretative principle expressio unius est exclusio alterius.306
According to the Respondent, almost all of the claims are based on alleged State actions that supposedly took place between November 30, 2010 – when the Claimants requested permission from the MMA to expand Jamaca de Dios –, and March 11, 2014 – six months after the events giving rise to the claim occurred.307 These claims exceed the scope of the Dominican Republic's consent because (i) its consent only applies to claims that hold that the Respondent breached an obligation under Articles 10.1 to 10.14; (ii) a State action can only be deemed to have breached an international obligation if the State is bound by it at the time the breach occurred; and (iii) at the time of the acts alleged by the Claimants, the Dominican Republic was not bound by the obligations invoked by the Claimants.308
All the DR-CAFTA provisions invoked by the Claimants apply only to "covered investments" and "investors of another Party".309 The term "covered investment" is defined in Article 2.1 as an investment in the territory of one of the Contracting Party owned by an investor of another Contracting Party.310 In the present case, "the investor of another Party" is a person attempting to make, making or who has made an investment in the Dominican Republic and whose dominant and effective nationality is the U.S. nationality. Therefore, the Claimants have to demonstrate that their U.S. nationality was their dominant and effective nationality at the time the alleged illegal State conduct took place, in order to establish the Dominican Republic's consent to arbitration.311
The Respondent contends that the Claimants' dominant and effective nationality through the relevant time period was Dominican. As a result, they cannot be considered U.S. investors; their investment does not comply with the definition of "covered investments"; the obligations invoked by the Claimants do not apply; and, therefore the Tribunal lacks jurisdiction.312
Again, the Claimants argue that the Tribunal must look at the nationality the Claimants held at the time they made their investment in the Dominican Republic.313 The Respondent rejects this allegation on the basis of the same arguments raised in the previous section.314 Previous investment arbitration tribunals have concluded that the date of an alleged treaty violation is a fundamental jurisdictional requirement.315 In Pac Rim, the tribunal held that under DR-CAFTA the nationality requirements must be fulfilled at the time of the alleged breach.316 Furthermore, Article 44 of the Articles on State Responsibility states that "[t]he responsibility of a State may not be invoked if: (a) the claim is not brought in accordance with any applicable rule relating to the nationality of claims".317


1. The Claims Were Submitted in Accordance With DR-CAFTA

The Claimants do not debate the Respondents' arguments on the DR-CAFTA framework and "its foundation upon consent of the parties".318 They acknowledge that they have to comply with the DR-CAFTA definition of "claimant" in order to pursue relief for their claims.319
Their claims were submitted (i) on their behalf under DR-CAFTA Article10.16(1)(a); and (ii) on behalf of their enterprises incorporated in the Dominican Republic, directly or indirectly owned or controlled by the Claimants under DR-CAFTA Article 10.16(1)(b). The Claimants own or control several Dominican enterprises such as Jamaca de Dios SRL, Aroma de la Montana, E.I.R.L., Pino Cipres Investments SRL, Pina Aroma Investments SRL, and Upper Dreams Investments SRL but they also have other ownerships and concessions.320 These investments qualify as such under Article 10.28.321

2. The Ballantines Qualify as "Claimants" Under the DR-CAFTA

The Claimants argue that they have always been dominantly and effectively U.S. citizens.322 As mentioned above,323 they acknowledge that they have to comply with the DR-CAFTA definition of "claimant". As a result, they have to be investors of a Contracting Party, other than the Dominican Republic, attempting to make, making or who have made an investment in the Dominican Republic. The Claimants consider this a disjunctive definition and so, any of the three tenses can be used to determine who can be defined as a claimant.324
Accordingly, the Claimants argue that the Tribunal should only look at the nationality of the Claimants "as of the time that they made their investment in the Dominican Republic".325 (Emphasis omitted) According to the Claimants, the reference to "dominant and effective nationality" only becomes relevant if the investor has dual nationality at the time the investment was made. Since a great part of the land at issue in this arbitration was acquired by the Claimants well before they became Dominican citizens, they conclude that they have the explicit right under the DR-CAFTA to make their claims. Thus, these jurisdictional objections should fail.326
Even if they have to establish that they were dominantly U.S. citizens at the time of submission of their Notice of Arbitration, the Claimants argue that they still would not be required to demonstrate that they were dominantly U.S. citizens during the time their claims arose. This would not be specifically required by DR-CAFTA and the provisions on dual nationality would be silent on the time frame of the evaluation. In any case, the Claimants consider it unnecessary to decide on the appropriate time frame for the evaluation of the dominant nationality, since the Claimants at all times have been dominantly and effectively U.S. citizens.327
The Claimants agree with the Respondent that for the purposes of Article 10.28 there is no test to decide which of the two nationalities should be considered dominant. DR-CAFTA Article 10.28 simply sets out a non-exhaustive list of qualified investments. The Claimants claim that their investments are listed in Article 10.28.328 By contrast, to determine which of the two nationalities should be considered dominant the Tribunal should resort to international law.329
The Claimants hold that the Iran-U.S. Claims Tribunal's decisions the Respondent relies upon relate to entirely different circumstances and arise under an entirely different treaty. Thus, although they can provide guidance on the factors that should be considered in order to decide on the dominant nationality, they should not serve as precedents.330 The Claimants contend that the Respondent's interpretation of the factors is incomplete and too narrow in their timespan. In Malek v. Islamic Republic of Iran, the tribunal interpreted the A/18 decision as requiring it to look at "the entire life of the [c]laimant, from birth, and all the factors which, during this span of time, evidence the reality and sincerity of the choice of national allegiance."331 (emphasis added by the Claimants) Accordingly, the Claimants argue that the tribunal "need not merely take a snapshot in time and, at any specific date, attempt to weigh the Ballantines' connections to the US against their connections to the DR".332 The Tribunal should not only look at the time period between 2010 and 2014 – i.e. after the Claimants acquired the Dominican citizenship –, but their entire life to determine whether they are more closely aligned with the United States or the Dominican Republic.333
The Claimants recognize334 that the Tribunal held in Procedural Order No. 2 the relevance of certain factors such as, "the State of habitual residence, the circumstances in which the second nationality was acquired, the individual's personal attachment for a particular country, and the center of the person's economic, social and family life."335 Additionally, the Tribunal should consider other factors, inter alia : (i) the country of residence of the Claimants' entire family; (ii) where the Claimants went to college; (iii) where their children were born; (iv) the primary language spoken at home; (v) their religious faith and practice.336 In their Reply Memorial, the Claimants state additional factors: (i) the Claimants' motivation to become dual nationals, (ii) their entire life; which includes but is not limited to the facts at the relevant times; (iii) how they viewed themselves; (iv) how the United States and the Dominican Republic and their nationals viewed the Claimants; and (v) the laws regarding nationality in the two states.337
The Claimants argue that this is not a treaty-shopping situation. The Claimants have always been U.S citizens, yet they acquired Dominican citizenship six years after they made their investment because they realized how Dominican officials treated foreigners. They maintained a residence in the Dominican Republic to supervise and develop their investment. However, they moved back permanently to the United States when they suffered the treaty violations by the Respondent.338 Since the Tribunal acknowledged, "that the same facts would necessarily have a bearing or would be relevant for both the procedural and the substantive determination",339 (emphasis added by the Claimants) the Claimants contend that the differential treatment received by the Claimants, compared to the treatment received by other Dominican investors, should be relied on when deciding whether they are dominantly U.S. or Dominican citizens.340
The Claimants reject the Respondent's approach to determine which nationality is the dominant and effective one. According to them, the Respondent's approach is legally and factually unsubstantiated. The Nottebohm opinion concerned the issue of diplomatic protection and whether one could rely upon a nationality which had been granted "in exceptional circumstances of speed and accommodation" and without a substantial bond, or the nationality with which it had a long-standing and close connection. The Respondent's reliance341 on the U.S. State Department report would also be incorrect because the case cited by the report supports the Claimants' position.342 The applicant in that case was found to be a U.S. national – despite residing in Egypt – because of his continued, voluntary association with the United States and his wish to remain a U.S. citizen.343 Yet, in this case the Claimants argue that there is no doubt about the Claimants' genuine and lifetime U.S. citizenship.344
According to the Claimants, the Sadat v. Mertes case was relied on by the Respondent to contend that the Claimants' voluntary naturalization in the Dominican Republic is proof of the dominant nationality by itself.345 However, the Sadat case is inapplicable because in that case the subject renounced any allegiance to foreign states when acquiring U.S. citizenship. In the Claimants' case, there was no such requirement to become Dominican citizens. Even if they did swear faith to the Dominican Republic, they did not renounce their U.S. citizenship.346
The Claimants obtained Dominican citizenship six years after making their initial land purchase in Jarabacoa in July 2004. Although at the beginning they intended to manage their investment from Chicago, later it became apparent that they needed to be present and they started to reside in the Dominican Republic from August 2006 onwards.347 For the Claimants, their choice to apply for the Dominican nationality was a business decision made as a result of the discriminatory treatment given by Dominican officials to foreigners, because of Jamaca de Dios' market conditions and to demonstrate their commitment to their investment.348
The Claimants state that the Respondent attempts to equate residency with dominant nationality. However, the Claimants contend that this is not the test. While the Claimants lived in the Dominican Republic, they always maintained at least one residence, or even two, in the United States:

a) From March 1, 1994 through August 18, 2011, the Ballantines owned a residence at 33w231 Brewster Creek Circle in Wayne, Illinois;

b) On October 1, 2010 through December 31, 2011, the Ballantines rented a home at 1163 Westminster Avenue in Elk Grove Village, Illinois;

c) On December 2, 2011, the Ballantines purchased a home at 850 Wellington Avenue, Unit 206, in Elk Grove Village, Illinois, and sold this home in November of 2015;

d) on April 19, 2012, the Ballantines purchased a home at 3831 SW 49th Street, in Hollywood, Florida, and sold that home on March 28, 2014;

e) on July 15, 2015, the Ballantines rented a home at 505 N. Lake Shore Drive, Unit 4009, in Chicago, Illinois.349

The Claimants disagree with the Respondent's use of the word "permanent" to describe the Claimants' move to the Dominican Republic.350 The jurisdictional attestation in the Notice of Intent plainly stated that the Claimants maintained their permanent residence in Chicago.351 The mail-forwarding facility was established to ensure the arrival of important mail to a single location.352 Also, the Claimants informed Mr. Ballantine's parents' address for the purposes of this arbitration because they were unsure where to live and they wanted to ensure they would be notified of any procedural events in these arbitration proceedings.353
The personal attachment of an individual for a particular country is one of the factors to be considered by the Tribunal. The Claimants emphasize their deep connection to U.S. culture and society,354 while they were only connected with the Dominican Republic for commercial reasons.355
The Claimants allege that only initially was all their capital was invested in Jamaca de Dios. The funds for the investment originated from Mr. Michael Ballantine's work in the United States and their financial life remained always there.356 The Claimants have since 2004 filed individual federal income tax returns in the United States, while they did not do so in the Dominican Republic.357 They also maintained their U.S. checking bank account since 1996, a retirement account since 2009, U.S. health insurance cover since 2010 and separate credit cards issued in 1992 for Mr. Michael Ballantine and in 2012 for Ms. Lisa Ballantine.358 Additionally, they established college savings accounts for their children's college education.359 Regarding their U.S. non-profit organizations, the Claimants explain that "Filter Pure" was created in February 2008 and was directed by Ms. Lisa Ballantine until 2015.360 In contrast, the "Jesus for All Nations" was managed by them while they were Dominican nationals and they raised money and filed U.S. tax returns since at least 2010.361
While the Claimants recognize that they used the Dominican nationality as the Respondent states, the Claimants conclude that they were still at all times dominantly U.S. citizens.362 Between 2010 and 2014, the Claimants were in the United States 30 different times. Moreover, the Claimants assert that they solely used their Dominican passports when entering the Dominican Republic but they used their U.S. passports to enter elsewhere.363 The Claimants reject the Respondent's count of how much time the Claimants spent in the Dominican Republic and in the United States between 2010 and 2014. The amount of days in the Dominican Republic does not compare to the Claimants' personal, cultural, familiar, and social attachment to the United States.364
The Claimants recognize that they built a house to promote their development and they lived there while they were in the Dominican Republic. However, the Claimants decided to put their home for sale in September 2012, to reduce the amount of time they were spending in the Dominican Republic.365
The Claimants also resort to the educational paths taken by each of their four children to show the dominant connection between the Claimants and the United States. All of the Claimants' children attended college in the United States, even though at the time the Claimants were living in the Dominican Republic. Furthermore, while their youngest children attended school in the Dominican Republic, said school was supported by a U.S. non-profit institution. The students were taught in English by U.S. citizens.366
The Claimants argue that they also attended an American church in Jarabacoa, which was on the campus of the Caribbean Mountain Academy, a Christian reform high school, attended exclusively by U.S. students and where instruction was provided exclusively by U.S. teachers. The church services were conducted in English.367
The Claimants rely on the testimony of their American friends and colleagues in the Dominican Republic, to confirm their strong and continuing connection to the American community in and around Jarabacoa. In their testimonies, they confirm that the Claimants referred to Chicago as their "home" and that they almost exclusively socialized with Americans.368 In their communications with friends, the Claimants stated how they wanted to leave the Dominican Republic or how they felt like outsiders there.369
The Claimants admit that they voted on the 2012 Dominican election. However, they also voted on the 2008 U.S. Presidential election and the 2014 midterm U.S. elections, while residing in the Dominican Republic.370
The Claimants assert that despite Ms. Lisa Ballantine's and Ms. Tobi Ballantine's social media postings quoted by the Respondent, they considered themselves U.S. citizens. The postings have been taken out of context, especially Ms. Tobi Ballantine's, which are casual, flippant or sarcastic. In any case, the Claimants wonder how her youngest daughter social media postings are relevant to determining their dominant and effective nationality.371 Regarding Ms. Lisa Ballantine's Facebook postings, the Claimants complain that the Respondent only submitted the ones she refers to the Dominican Republic, while ignoring the many others in which she talks about the United States as her home or her connection to it. Although the Claimants do not consider these social media postings relevant, they refer to several between 2010 and 2014 that show her connection to the United States.372
The Claimants consider themselves foreign investors in the Dominican Republic and dominantly U.S. citizens. And equally important, the Respondent also considered them to be foreign investors and dominantly U.S. citizens.373 The Claimants explain that the dominant and effective nationality rule contained in the DR-CAFTA is a codification of the existing rule of customary international law on effective nationality for dual nationals in the context of diplomatic protection.374 The test of dominant and effective nationality was created to prevent "treaty shopping" and looking for diplomatic protection from a stronger state, while there is no genuine link of nationality between the individual and the state.375
The Claimants recall certain moments in which they were considered foreigners. In 2010, shortly after becoming naturalized Dominican citizens, the Claimants commenced the proceedings to have Jamaca de Dios registered as a foreign investment under the Dominican Foreign Investment Law 16-95. Although they did not proceed with the application, the registration would have allowed to submit the Jamaca de Dios' profits to the United States.376 In May 2013, Mr. Rodríguez, the Executive Director of the CEI-RD, considered the Claimants to be foreign investors and attempted to intervene on their behalf before the MMA.377 In July 2013, Mr. Michael Ballantine became an associate member of the American Chamber of Commerce in the Dominican Republic.378 On the same month, the Claimants met with U.S. Embassy officials to seek assistance in their appeal against the decision on the permit.379 The U.S. Embassy wrote to the MMA on behalf of the Claimants, as they were allegedly considered predominantly U.S. citizens. In May 2014, Mr. Rodríguez wrote to the American Chamber of Commerce, confirming the Dominican government's view that the Claimants were foreign investors.380
The Claimants contend that if the U.S. officials had viewed the Claimants as dominantly and effectively Dominicans, they would not have advocated for them. It would make no sense for U.S. officials to advocate for Dominican investors before the Dominican government.381 The Claimants also refer to all the instances in which they were treated differently compared to Dominican-owned projects, to argue that even the Dominican officials viewed them as U.S. citizens and not Dominicans.382
In September 2016, the Claimants allegedly began to take steps to renounce their Dominican citizenship.383 According to the Claimants, if they had known that their expansion permits would be denied, they would never have acquired dual citizenship.384 They claim not to have any familiar, cultural or economic ties with the Dominican Republic, apart from their investment.385


The United States cites DR-CAFTA Articles 10.16 and 10.28 to explain who is considered a claimant and an investor and when a claim is deemed to be submitted to arbitration under the DR-CAFTA. Accordingly, if the investor is a natural person and holds at the time of submitting the claim as the dominant and effective nationality the one of the respondent State, then the investor would not be considered at that time a party to the dispute. Thus, the investor must be from another Contracting Party at the time of the alleged breach, in order for a breach under Chapter 10, Section A to arise.386
Relying on the doctrine of the continuous nationality, if the investor does not have a different nationality than the host State's at the relevant time, the respondent State will not be considered to have consented to the submission of a claim to arbitration and the tribunal will lack jurisdiction ab initio under Article 10.7.387


The Respondent objects to the admissibility of several claims because the documentation produced as a result of Procedural Order No. 5 shows that the Claimants knew in September 2010 about the creation of the National Park and the restrictions it would impose on Jamaca de Dios. Therefore, the Respondent considers the claims of violation of DR-CAFTA Articles 10.7, 10.5, 10.3 and 10.4 inadmissible, on the basis of the restrictions imposed by the National Park, since they would fall outside the three-year limitation period established by Article
The Claimants argue that the Respondent is omitting key information of the e-mail exchange in September 2010, specifically that ecotourism was allowed within the National Park. The Claimants considered their project to be ecotourism and they were told that it was allowed within the protected area of the National Park. Additionally, the Claimants argue that the creation of the National Park was never mentioned in the denial of permits, until the fourth one on January 2014. Thus, until January 2014 they never had knowledge of having suffered a loss.389


The Respondent argues that this is an admissibility claim because it affects the claim itself, instead of the ability of the tribunal to hear the case.390 Since the objection is not one of jurisdiction, it is not governed by Article 23(2) of the UNCITRAL Rules.391
As a result, the Respondent contends its objection is timely because

(i) it was raised as soon as practicable after the evidence and facts underlying the objection came to light, and (ii) it is in any event an objection of admissibility rather than jurisdiction, and therefore not subject to Article 23(2) of the UNCITRAL Rules.392

However, if the Tribunal would consider it a jurisdictional objection, the Respondent argues that it should still be admitted because it was submitted as soon as practicable, after the Respondent became aware of the evidence and facts underlying the objection. The Respondent only acquired the e-mail exchange on August 2, 2017, after it had submitted its Statement of Defense. Therefore, the exception in Article 23(2) of the UNCITRAL Rules should apply. The Respondent relies on a leading commentary of the UNCITRAL Rules and arbitral jurisprudence to explain that late pleas due to the discovery of new evidence fall under the definition of "justifiably late pleas" under UNCITRAL Rules Article 23(2).393 Additionally, the Respondent argues that admission of the objection would not cause any prejudice to the Claimants, as they would have ample opportunity to respond.
Finally, the Respondent reminds the Tribunal that it has an ex officio obligation to ascertain that the claims are admissible and within its jurisdiction. The Tribunal's power under UNCITRAL Rules Article 23(2) allows it to establish its own jurisdiction, deciding which issues can be addressed before it and which cannot, while giving the Parties a fair and sufficient opportunity to put forth their cases.394
In their witness statements, Mr. Michael Ballantine and Ms. Leslie Gil Peña stated that he first learned of the creation of the National Park on September 13, 2013, and about the restrictions imposed on Project 3 lands on January 15, 2014.395 However, two sets of produced documents show that in fact both knew about the National Park much earlier.396
According to the Respondent, these documents show that the Claimants as of September 29, 2010, at the latest, were aware of: (i) the creation of the Baiguate National Park; (ii) the fact that Project 3 was within the National Park; (iii) the restrictions imposed by the National Park on the lands within it; and (iv) the effects of the latter on Project 3.397
On September 22, 2010, Ms. Arcia informed Mr. Ballantine by e-mail that lots 67 and 90 of Jamaca de Dios were within the National Park, through the submission of a map.398 The map also shows that the area where the Claimants were hoping to develop Project 3 was within the National Park's boundaries. Ms. Arcia also explained that the use of lands was restricted to "scientific research, education, recreation, nature tourism, ecotourism", pursuant to the law on protected areas.399
On the same day, Mr. Michael Ballantine acknowledged the existence of the Baiguate National Park and asked whether this was pursuant to the Environmental Law. The next day, Ms. Arcia replied that the boundaries had been created by the National Park Decree.400
On September 29, 2010, Mr. Mario Mendez confirmed that the land use was restricted. He stated that low impact ecotourism projects such as the Claimants', would be allowed, but the roads, and management of sewage and other waste would have to be discussed.401 Thus, Mr. Michael Ballantine had been warned that it was uncertain whether the construction of roads and the waste management facilities would be allowed within the National Park. Notwithstanding the previous e-mail exchange, the Claimants proceeded with the construction of a high-impact luxury complex.402
DR-CAFTA Article 10.18.1 states that

[n]o claim may be submitted to arbitration under this Section if more than three years have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged under Article 10.16.1 and knowledge that the claimant (for claims brought under Article 10.16.1(a)) or the enterprise (for claims brought under Article 10.16.1(b)) has incurred loss or damage.403

The Respondent holds that to decide whether the claims submitted to arbitration are within the time limit, the Tribunal must determine (a) the date on which the Claimants first acquired actual or constructive knowledge of the alleged breach; and, (b) the date on which the Claimants first acquired actual or constructive knowledge of the damages caused by such breach. According to the Respondent, if either one of the two dates is more than three years before the date on which the claims were submitted to arbitration, they will be time-barred.404
The Claimants' claims for expropriation, breach of fair and equitable treatment, breach of obligation of national treatment and most-favored-nation treatment were all based on the creation of the Baiguate National Park.405 Furthermore, they were all submitted on September 11, 2014, pursuant to the Notice of Arbitration of the same date. Thus, since the e-mail exchange shows that the Claimants already had knowledge on September 2010, the claims are time-barred and dismissed.406
DR-CAFTA Article 10.18.1 envisages two types of knowledge of breach and loss or damage: (a) actual knowledge, which would be what the Claimants did in fact know at a given time; and, (b) constructive knowledge, which is what they should have known at a given time. The Claimants have to acquire either one of the two.407
Two decision under the North American Free Trade Agreement ("NAFTA") have addressed the implications of the terms "knowledge of the breach". For the UPS v. Canada tribunal, the relevant question is "when [claimant] first had or should have had notice of the existence of conduct alleged to breach NAFTA obligations and of the losses flowing from it."408 (emphasis added by the Respondent) The tribunal in Grand River held that its task was to decide if the record showed that the claimant had knowledge "of the measures complained of as breaches of relevant Articles of NAFTA."409 (emphasis added by the Respondent) The Claimants conclude that the relevant question is actually if and at what point the claimant became aware of the measure itself, instead of, if and at what point it became aware that that the measure would constitute a treaty breach.410
In the present case, the e-mail exchange shows that as of September 29, 2010, the Claimants knew of the creation of the Baiguate National Park, its restrictions and their effects on Project 3 lands. Thus, they knew of the measure that allegedly breached the DR-CAFTA.
In the DR-CAFTA case Spence v. Costa Rica, the tribunal held that the constructive knowledge test is an objective standard.411 Previous tribunals have confirmed that constructive knowledge "entails notice that is imputed to a person, either from knowing something that ought to have put the person to further enquiry, or from willfully abstaining from inquiry in order to avoid actual knowledge".412
Accordingly, since the creation of the National Park would impose restrictions on Project 3 lands, the Claimants as prudent investors, should have known on September 29, 2010 the underlying facts on which they based their claims of expropriation, breach of national treatment and most-favored-nation treatment, and fair and equitable treatment.413
Particular knowledge of the treaty rights is not deemed relevant in order to assess the existence of actual or constructive knowledge.414 However, even if it was required, the Respondent explains that as of September 2010, it had for several years been conducting a solid media campaign for the civil society and the business community about DR-CAFTA and its investment chapter.415 Furthermore, the Claimants had legal counsel advising them, on their investment in Jamaca de Dios on September 2010. Thus, they should have known of the relevant treaty rights and the alleged breach thereof, by September 29, 2010, at the latest.416
The Respondent contends that by September 2010, the Claimants had actual knowledge of the restrictions imposed by the National Park and actual knowledge of the purported damage or loss incurred as a result thereof.417
In order to comply with the "knowledge of the loss or damage" requirement, the Claimants do not need to have known the exact amount of injury or loss suffered but just that some was caused.418 As another DR-CAFTA tribunal held, "[i]t is the first appreciation of loss or damage in consequence of a breach that starts the limitation clock ticking."419
Since the Claimants have argued that the restrictions imposed by the creation of the National Park deprived them of "significant commercial value" and "reasonable commercial use", they should have been able to appreciate this loss or damage on September 29, 2010, at the latest.420
As a result, the Claimants' expropriation, fair and equitable treatment, national treatment, and most-favored-treatment claims based on the creation of the Baiguate National Park and the restrictions it imposed, fall outside the time limit pursuant to DR-CAFTA Article 10.18.1 and are therefore inadmissible.421
According to the Respondent, in their Admissibility Response, the Claimants argue that first, they have not based any claim in the creation of the Baiguate National Park and second, that any such claim would suffer from conceptual flaws.422 The Respondent denies the first part, and points out to several paragraphs in the Amended Statement of Claim which evidence otherwise.423 The Respondent interprets thereof that the Claimants abandon these claims and assumes so.
However, if the Claimants raise these claims again, the Respondent states that it does not accept their legal, procedural or factual arguments on the issue of admissibility or the merits underlying these claims, and that unless otherwise stated, nothing in its Rejoinder should be construed as acceptance thereof.424


The Claimants rely on two DR-CAFTA cases, one of which against the Dominican Republic, in which the respondent States argued that the tribunal lacked jurisdiction over the case because the claims were time-barred pursuant to Article Even NAFTA tribunals have always considered the question as one of jurisdiction, not admissibility.426
Accordingly, the Claimants argue that the Respondent's objections are jurisdictional and thus, time-barred.427 A leading commentary of the UNCITRAL Rules contends that untimely jurisdictional objections can only be admitted in very rare circumstances.428
The Claimants recognize that the Respondent did not have this evidence when it filed its Statement of Defense. Nevertheless, it does not add anything new to the Respondent's knowledge because, pursuant to Article 10.18.1, the Claimants only have to show when they acquired or should have first acquired knowledge of the breach and of the loss or damage. The Claimants argue that along its Statement of Defense, the Respondent contends that the Claimants should have known by 2009 that the Baiguate National Park would be created. As a result, there is no such situation of grave injustice because the e-mail exchange does not show that Mr. Michael Ballantine knew of a breach or of a loss or damage.429
As a result, the Respondent cannot claim that the e-mail exchange provided information that it did not have before for the purposes of an objection under DR-CAFTA Article 10.18.1. The Respondent had enough information to make such an objection earlier. Simply having new evidence is not sufficient to grant this late jurisdictional objection.430 Therefore, the Claimants argue that they are not responsible for the Respondent's late objection.431
The Claimants contend that the Respondent must show that the Claimants had knowledge of the breach and of the loss, and not either one of them.432 Thus, the relevant date is shifted further to the one in which the Claimants – both of them – had knowledge of the breach and the loss or damage.
According to the Claimants, the e-mail exchange in September 2010, between Mr. Michael Ballantine and the Empaca Redes consultants did not amount to the required knowledge of a breach – much less for Ms. Lisa Ballantine who was not even copied on the e-mails – because: (i) the e-mail explained that in the National Park ecotourism was allowed and the Claimants' Phase 2 was considered as such; (ii) other projects were freely developing in category II national parks, some even in the Baiguate National Park; (iii) the possibility that the National Park would be an impediment to develop Jamaca de Dios was not raised by the Respondent until September 2015; (iv) the three denials of the permit did not mention the National Park or the restrictions imposed by it; and (v) CONFOTUR approved Phase 2 after Mr. Michael Ballantine learned about the National Park.433
Therefore, the Claimants argue that the Respondent did not breach DR-CAFTA obligations because it had not used the National Park as a basis to deny the Claimants' permit, nor had it imposed restrictions on their development based on the National Park, until September 2013. Although the Claimants consider the manner in which the project was created discriminatory, since Dominican-owned projects were excluded, they recognize that the drawing of the National Park's boundaries is not a breach by itself.434
Additionally, the Claimants contend that the e-mail exchange in September 2010 did not amount to knowledge of having suffered loss or damage at that point in time. The Respondent cannot argue that the Claimants suffered any loss in September 2010 because (i) the Claimants had been reassured by their environmental consultants that the National Park allowed ecotourism and the Phase 2 expansion was such; (ii) the Claimants could see other land owners developing in national parks; (iii) the National Park was not used to deny the permit or to impose restrictions on Jamaca de Dios until 2014.435 In fact, the Respondent does not deny that ecotourism is allowed within the National Park because its Management Plan made on 2017 allows for it.436
The Claimants argue that having knowledge of an offending measure is not the same as having knowledge of a breach, or of loss or damage, as was raised in the Spence v. Costa Rica case.437 The tribunal held that "[w]hile the Claimants' knowledge at the time of purchase may be material for purposes of any assessment of the value of the properties in question, it is not ultimately determinative either of issues of jurisdiction or of liability".438 (emphasis added by the Claimants) The Spence tribunal held, same as the Corona tribunal, that the relevant date is when the claimant first acquired knowledge of the breach and of the loss or damage as a result thereof.439 In this case, the Claimants argue that they would not have had a basis to know in September 2010 that they might be subject to expropriation and other significant restrictions. Even if they had known, it would still not raise the time bar.
Other tribunals have held that measures that take place before the time bar limit commences, can be relevant for purposes of merits, even if they do not start the time bar clock.440 In this case, the Claimants bring to the attention of the Tribunal the discriminatory circumstances surrounding the creation of the National Park, which only arose in 2014, when the permit was denied based on them.441
Regarding the Respondent's interpretation that the Claimants have abandoned their claims, the Claimants explain that they argued that the creation of the National Park did not give rise to a claim by itself because there was no indication that the National Park would prohibit the development.442 If a person does not notice that it has suffered a loss, then the claim has not yet arisen. Therefore, the Claimants did not abandon their claims, but they simply did not have them until the permit was denied on the basis of the National Park.443


1. Costa Rica

Costa Rica, as non-disputing Party in these arbitration proceedings analyzes the statute of limitations under DR-CAFTA Article 10.18. The tribunal's jurisdiction is derived from the consent of the parties to arbitration. Article 10.18 sets out a series of conditions and limitations on consent. The statute of limitations as a provision reinforces legal certainty by requiring "diligent prosecution of known claims and insuring that claims will be resolved when evidence is reasonably available and fresh, therefore to protect the potential debtor from late actions".444
DR-CAFTA Article 10.18.1 sets out a relevant question for the tribunal: "What is the date on which the claimant first acquired knowledge of the breach that is being alleged?"445 (Emphasis in original) There are two alternatives to answer this question: (i) determining the date on which the claimant first acquired knowledge of the alleged breach; or, (ii) determining the date on which the claimant should have first acquired knowledge of the alleged breach. For the first alternative there is enough evidence to identify the specific moment in which the knowledge was first acquired. For the second alternative, the focus is on a set of circumstances surrounding the claimant that should have allowed it to acquire knowledge of the alleged breach. The facts must have been evident, made public and notorious, or there must have been a situation in which it was the claimant's duty and responsibility to know them.446
According to Costa Rica, the two alternatives provide the Tribunal with a range of possibilities to draw a line on its jurisdiction regarding ratione temporis.447

2. United States of America

According to the United States, a tribunal must find that a claim satisfies the requirements set out in Article 10.18.1 to establish the Contracting Party's consent to the claim. Thus, there is a ratione temporis jurisdictional limitation on the tribunal's authority to act on the merits of a dispute in this Article.448 And since the claimant bears the burden of proof, it has to demonstrate the necessary and relevant facts to prove that the claims fall within the three-year limitations period.449
The limitation period is "clear and rigid" and it is not subject to any suspension, prolongation or other qualification.450 An investor or enterprise will first acquire knowledge of an alleged breach or loss or damage at a particular moment in time that would be the relevant date under Article 10.18.1. The operative date will be the date on which the claimant first acquired actual or constructive knowledge of sufficient facts to make the claim under the Article.451 Regarding the incurred "loss or damage" under Article 10.18.1, an investor may have knowledge of it even if the financial impact of that loss or damage is not immediate, as the Grand River tribunal held.452



1. The Respondent's Arguments

The Respondent states that protection and conservation of the environment are important considerations under DR-CAFTA.453 Its Chapters 10 and 17 establish certain environmental obligations for the Contracting Parties. In particular, DR-CAFTA Article 10.11 provides that

[n]othing in this Chapter shall be construed to prevent a Party from adopting, maintaining, or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.454

According to this provision, the Contracting Parties preserve their right to apply their environmental policies without breaching their substantive obligations, notwithstanding the protections offered to investments under Chapter 10.455 Thus, the Respondent emphasizes that protection of the environment and promotion of open trade should be reconciled and be made mutually supportive.456
The Respondent compares NAFTA Article 1114 with CAFTA Article 10.11.457 NAFTA Article 1114 was interpreted to allow the adoption of regulatory measures to protect the environment without breaching investment obligations unless such measures were discriminatory.458 According to the Respondent, this would apply mutatis mutandis to DR-CAFTA, given the parity between the two provisions.459
The Respondent also refers460 to paragraph 4(b) of Annex 10-C to DR-CAFTA which provides that

[e]xcept in rare circumstances, nondiscriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations.461

Accordingly, the Respondent holds that a high threshold applies when claiming that an environmental measure was discriminatory, and thus in breach of DR-CAFTA Chapter 10.462 The Respondent summarizes the Claimants' allegations to the adoption of two measures: the Environmental Law and the National Park Decree.463 The first one is a general application law establishing the environmental protection framework for the Dominican Republic, while the second one is a general application norm which created 32 protected areas, including the Baiguate National Park.464 The Respondent defends the creation of the National Park as reasonable, to fulfill the Respondent's international commitments related to biodiversity and environmental protection and in reliance of Mr. Sixto Inchaustegui's Expert Report.465
Accordingly, the Respondent concludes that the Claimants have not met the high threshold established by DR-CAFTA, when it comes to prove that an environmental measure has resulted in a DR-CAFTA violation. Consequently, the enactment and enforcement of the Environmental Law and the National Park Decree cannot be considered DR-CAFTA violations.466

2. The Claimants' Arguments

The Claimants explain that the exception in Article 10.11 will only apply if the measures are consistent with DR-CAFTA Chapter 10. Thus, if the measures are expropriatory or violate national treatment they will still result in a DR-CAFTA violation, despite being related to environmental concerns.467
In this sense, the Claimants argue that the Respondent has not applied these two measures transparently and non-discriminatorily.468 The manner in which they were applied and the circumstances surrounding the creation of the National Park would be inconsistent with Chapter 10, and so the exception in DR-CAFTA Article 10.11 does not apply.469

3. Costa Rica's Non-disputing Party Submission

According to Costa Rica, DR-CAFTA addresses the Contracting Parties' common interest of the protecting of the environment, as reflected in the treaty's Preamble.470 Through Article 10.11 the Contracting Parties ensure that the obligations in Chapter 10 are interpreted in conjunction with the intentions manifested in the Preamble.471 As a result, Costa Rica considers that Article 10.11 allows a Contracting Party to take measures necessary to address its environmental concerns and acknowledges the host State's general prerogative to regulate and enforce environmental measures.472
In this sense, Costa Rica highlights the importance given by DR-CAFTA to investments and the environment, which can be appreciated when Article 10.11 is read in the context of Chapter 10, the rest of DR-CAFTA, and its implementation.473
Costa Rica contends that to ensure the effectiveness of a treaty's objective and purpose, tribunals need to analyze the intention of the contracting parties by looking closely into the ordinary meaning of their words in their context. In the case of DR-CAFTA Article 10.11, the host States have the right to regulate, with a special focus on environment. As a result, this clause shows that the Contracting Parties' intention was to maintain a balance between both elements.474
In sum, according to Costa Rica DR-CAFTA Article 10.11 reflects the Contacting Parties' determination to develop their policies on environmental protection without substantially breaching their DR-CAFTA obligations. That should be considered its point of effectiveness, in accordance with the principle of effet utile, which stems from the principle of good faith.475 As a result, when analyzing a claim, Costa Rica considers that there should be a balance between the investment protection and the maintenance of domestic environmental policies.476


1. The Claimants' Arguments

The Claimants contend that the Respondent has breached its national treatment and most-favored-nation ("MFN") obligations under the DR-CAFTA, which apply to "investors" and "investments" equally. Thus, according to the Claimants, the Respondent has an obligation to treat the investors as favorably as it treats nationals and every foreigner and another obligation to treat investments "in the same no less favorable manner".477

(a) National Treatment

The Claimants explain478 that the purpose of the national treatment provision is to "ensure that a national measure does not upset the competitive relationship between domestic and foreign investors".479 Conversely, the MFN provision establishes the duty to treat U.S. investors and investments no less favorably than investors and investments from other foreign countries.480
Relying on the decision by the Pope & Talbot tribunal,481 the Claimants allege that the Respondent is obliged to provide them with the treatment equivalent to the "best" treatment accorded to the domestic investors or investments in like circumstances.482 Thus, "no less favorable" treatment means comparable to the best treatment accorded to the comparator, not better nor worse.483 The difference in treatment can amount to a violation of the national treatment obligation, unless it has "a reasonable nexus to rational government policies that (1) do not distinguish, on their face or de facto, between foreign–owned and domestic companies, and (2) do not otherwise unduly undermine the investment liberalizing objectives of NAFTA".484 Thus, the Claimants conclude that the focus must be set on the treatment, rather than on the policy.485
The Claimants resort to Cargill v. Mexico,486 which lays out the basic requirements of these obligations, as follows:

[I]t must be demonstrated first that the Claimant, as an investor, is in "like circumstances" with the investor of another Party or of a non-Party, or that the Claimant's investment is in "like circumstances" with the investment of an investor of another Party or of a non-Party. And second, it must be shown that the treatment received by Claimant was less favorable than the treatment received by the comparable investor or investment.487

Relying on several commentators488 the Claimants state that they only have to show that one single domestic comparator received more favorable treatment.489 The Parties agree on the three-part test applied to determine whether the host State breached the national treatment clause:

(1) whether the domestic investor is an appropriate comparator to the disputing investor or covered investment; (2) whether the disputing investor was in fact accorded a less favorable treatment than its domestic comparator; and (3) whether any differential treatment that may have existed was justified on the basis of legitimate policy and/or legal reasons.490

For the Claimants, the concept of "like circumstances" must be assessed on a case-by-case basis.491 The Claimants rely on the decision by the Pope & Talbot tribunal,492 which explained that "'circumstances' are context dependent and have no unalterable meaning across the spectrum of fact situations".493 The "like" examples must be the most "apt comparators where possible".494 In that sense, the Claimants note495 that the tribunal in Methanex stated that "it would be as perverse to ignore identical comparators if they were available and to use comparators that were less 'like,' as it would be perverse to refuse to find and to apply less 'like' comparators when no identical comparators existed".496
The Claimants explain that the first step in analyzing whether the Respondent violated the DR-CAFTA provisions is to identify the comparators in "like circumstances". There are three principal factors that must be taken into account, when identifying these comparators: (i) whether the comparators operate in the same business or economic sector; (ii) whether the comparators produce competing goods or services; and (iii) whether the comparators are subject to a comparable legal regime or requirements.497
Regarding the first one, the analysis "focuses on the commercial operations of the investor, rather than the scale of operations".498 Special attention is given to the business' various activities, like the economics of the service offered, the customers and the logistics and internal administration of the operations.499
Regarding the second factor, the analysis focuses on whether the investor provides the same or competing goods or services as the proposed comparators. The Claimants rely on the Corn Products International v. Mexico decision to contend that "where an investor's product is in direct competition with that of a comparator, this factor supports a conclusion that the two entities are in 'like circumstances'".500
Regarding the third factor, the Claimants state that the Tribunal's analysis should be whether the Claimants and the comparator are subject to the same legal regime.501 This analysis was conducted in Grand River (NAFTA) and Merrill & Ring v. Canada.502
According to the Claimants, the comparators fulfill the requirements under the three categories.503 The Claimants claim to operate in the same sectors as the comparators – i.e. the resort/restaurant/hotel sector –, and would compete directly with them.504 Moreover, their investment is under the same legal regime than the comparable businesses when it comes to the permitting requirements and national park restrictions. These comparators are Jarabacoa Mountain Garden, Mirador del Pino, Aloma Mountain, Paso Alto and Quintas del Bosque, among others.505
The Claimants argue that the Respondent's proposed "environmental impact" comparable factor is not a proper and relevant factor to determine the "like circumstances",506 though it would be one of the factors to evaluate when considering whether comparators are in "like circumstances".507 The relevant factor "must take into account the regulatory purpose of the treatment in question and who or what is affected", and "the appropriate comparator for the like circumstances analysis cannot be divorced from the reasons for the treatment in question".508
According to the Claimants, the Respondent's proposed factor is too narrow and too subjective.509 The Claimants explain that if the Claimants' and the Dominicans' projects are compared solely on their "environmental impact" it would be unnecessarily narrow, since a broad interpretation would be preferred to fully review the measure under the national treatment clause.510 Therefore, the Claimants propose the Tribunal to focus on comparing "the different projects operating in similar environmentally sensitive areas, such as developments or road projects in mountainous areas in the DR", which would be completely compatible with the Respondent's proposed factor.511 (Emphasis added by the Claimants)
Additionally, the Claimants argue that the Respondent's proposed comparator is too subjective because the analysis would result in dividing the projects between their positive and negative impact on the environment, a complicated exercise.512 It would allow the Respondent to simply choose "the comparators by asserting that other projects do not have the same environmental impact". Yet, the Respondent would not be a neutral observer and its negative assessment of the Claimants' project's environmental impact should "not be taken at face value".513
Nevertheless, if the Tribunal were to use the "environmental impact" factor as a comparator, the Claimants state that their experts, Mr. Potes and Mr. Richter, provide enough evidence to assert that there are other projects more environmentally sensitive than Jamaca de Dios' Phase 2, such as Jarabacoa Mountain Garden, Mirador del Pino, Paso Alto and Quintas del Bosque I and II.514 In any case, the "environmental impact" factor would be misplaced. According to the Claimants, "the 'like circumstances' analysis must be based on an objective criterion which can easily be assessable by a neutral observer".515
Furthermore, the Claimants claim that this comparator has never been applied by investment arbitration tribunals.516 The Claimants refer to the analysis in S.D. Myers on the "like circumstances" test,517 in which the tribunal held that the general principles of NAFTA must be taken into account,

including its concern with the environment and the need to avoid trade distortions that are not justified by environmental concerns. […] [A]lso take into account circumstances that would justify governmental regulations that treat them differently in order to protect the public interest.518

The Claimants state that the S.D. Meyers tribunal adopted an objective comparator and focused on the assessment of the same business or economic sector to decide on the less favorable treatment claim.519
The Claimants allege that the comparison must be between the planned Phase 2 of Jamaca de Dios and any other project planned or completed in the mountains or in an environmentally sensitive area, in particular in Jarabacoa or Constanza, such as: Quintas del Bosque I and II, Jarabacoa Mountain Garden, Aloma Mountain, Paso Alto, Mirador del Pino, Sierra Fría, La Montaña, Rancho Guaraguao, Alta Vista, Monte Bonito, Los Auquelles and Ocoa Bay.520 According to the Claimants, all these projects would be environmentally significant, include luxury housing, have slopes in excess of 60%, and be in mountainous areas.521 If any of these projects is found to be a comparator and the Respondent cannot reasonably justify the disparate treatment, the Respondent would have breached DR-CAFTA.522
The Claimants allege that since the Respondent has identified Aloma Mountain to be in "like circumstances" with Jamaca de Dios,523 the conditions for establishing the first part of the "three-part test" regarding this comparator should be considered to have been fulfilled.524

(b) Less Favorable Treatment

Having identified the analysis the Tribunal has to follow and the comparator to focus on, the Claimants discuss the "no less favorable" standard.525 According to the Claimants, it means "equivalent to, not better or worse than, the best treatment accorded to the comparator".526 There are two different types of nationality-based discrimination which can result from government measures: de jure or de facto. A de jure discriminatory measure will directly treat certain entities differently, while a de facto discriminatory measure are at the outset neutral but they still result in a differential treatment.527
In this case, the Claimants contend that although the slope restrictions, national park regulations and other measures would also apply to the comparators, they have been applied in a much less favorable manner to the Claimants.528
While the Respondent denies that the Claimants received a different treatment than Aloma Mountain,529 the Claimants allege that there was in fact differential treatment between the two projects.530 Compared to other projects in the area, the Respondent would have treated Jamaca de Dios' Phase 2 less favorably.531
The Claimants add that the Respondent has failed to satisfy its burden of proving that the less favorable treatment afforded to Jamaca de Dios was justified.532 In this sense, the Respondent would have had to show that the differential treatment towards the Claimants "bears a reasonable relationship to rational policies not motivated by" nationality-based preferences.533 The Claimants allege that this reasonable relationship to rational policies must be shown at the time when the Claimants were not allowed to develop for having slopes over 60%, while other properties with the same slopes were allowed to; or when the Claimants' private road was nationalized, while other private roads were allowed to remain private.534
The Claimants contend that a State will not be able to meet the burden if it could have achieved its objective with non-discriminatory measures,535 as stated in the S.D. Meyers award.536

According to the Claimants, when assessing whether a State's treatment towards an investor bears a "reasonable relationship to a rational policy", the tribunals have identified two elements required to justify the measures. First, there must be a rational policy and second, an "appropriate correlation between the state's public policy objective and the measure adopted to achieve it".537

Regarding the first requirement, the rational policy must have been implemented "following a logical (good sense) explanation and with the aim of addressing a public interest matter".538 Regarding the second, the correlation must be "reasonable, proportionate, and consistent" to be considered reasonably related to a rational policy.539
The Claimants contend that in this case the measure was not consistently applied, as only the Claimants were prevented from developing Phase 2 of Jamaca de Dios, have been placed inside a park and have lost their private road. By contrast, other projects with the same slopes exceeding 60% were allowed to develop, even without permits.540 Also, the Claimants contend that these circumstances show that the Respondent intended to discriminate against the Claimants, and yet even if the differential treatment was purely accidental or an administrative mistake, "this would not cure or ameliorate the violation".541 According to the Claimants, there would be no reasonable relationship between the Respondent's measures and the rational policy alleged by the Respondent.542

The Claimants hold that the legal standard of "like circumstances" and less favorable treatment does not require that the investor prove that the less favorable treatment was caused by the investor's nationality, but only that the elements of the test are met.543 The Claimants state that tribunals have recognized that proving nationality-based discrimination can be an "insurmountable burden".544 For that reason, a claimant is not required to prove discriminatory intent.545

2. The Respondent's Arguments

(a) National Treatment

The Respondent argues that it has not violated its obligation to provide national treatment to the Claimants, as set forth in Article 10.3 DR-CAFTA, based on four arguments: (i) the scope and meaning of Article 10.3; (ii) that the Dominican comparators suggested by the Claimants are not in "like circumstances" as Jamaca de Dios; (iii) that the Dominican Republic accorded the Claimants a treatment no less favorable compared to Dominicans; and (iv) that there are reasonable justifications to explain any differences in such treatment.546
The Respondent contends that Article 10.3 intends to protect foreign investors and investments against discrimination by comparing them with domestic investors in "like circumstances".547 The Parties agree on the three-prong test used by investment arbitral tribunals to assess the host State's national treatment obligation.548
As a result, the Claimants have a double burden: first, they must identify at least one Dominican comparator in "like circumstances"; and second, they have the burden of proving that the Dominican Republic has actually treated the Dominican comparator more favorably than the Claimants. However, the Respondent concludes that the Claimants have failed to satisfy either requirement.549
According to the Respondent, the Claimants have challenged nine measures550 under Article 10.3:

(i) the denial of permission to develop their property on grounds that the area has slopes over 60%; (ii) the denial of permission to build a road and sell property that is within the boundaries of the Baiguate National Park; (iii) the requirement of environmental permits to construct a road and buildings; (iv) the inclusion of the Ballantines' property in the Baiguate National Park; (v) the rejection by the President of the Dominican Republic of the appeal against the permit denial; (vi) the non-issuance of a non-objection letter required from municipal authorities to proceed with a proposed mountain lodge project; (vii) the loss of control or dominion over the roads in the Ballantines' project; (viii) inspections and fines imposed on the Ballantines; and (ix) the imposition on the Ballantines of a requirement to submit environmental compliance reports every six months.551

Additionally, the Claimants identified several Dominican comparators.552 The Respondent argues that these alleged comparators are not in "like circumstances" compared to Jamaca de Dios.553 The Respondent contends that the three factors identified by the Claimants for the "like circumstances" test554 have not been applied by the tribunals as part of a three-part test.555 In Pope & Talbot, Corn Products and Grand River cases, the tribunals applied one of the three factors, based on their appropriateness to the circumstances of each case, rather than applying all of them at once.556
While the Respondent acknowledges the relevance of the factors set forth by the Claimants, they should not be considered the only factors to be taken into account. In particular, in the present case the Respondent argues that primary consideration should be given to the environmental impact of each of the projects.557
The Respondent mentions that the Claimants' Project 3 posed risks to the surrounding water resources, possibly causing erosion and mudslides, negatively impacting the ecosystem's biodiversity, and affecting the Cordillera Central's endemic species.558 Thus, except for Aloma Mountain, the rest of the comparators are not comparable to Jamaca de Dios based on the environmental impact and risks that each posed.559
The Responder holds that the location of each project indicates its environmental value.560 Jamaca de Dios' Project 3 is located at an altitude of between 900 and 1260 meters above sea level on Loma La Peña, part of a set of mountains known as "El Mogote System", with a unique environmental value and requiring special protection because of its altitude, water sources and biodiversity. The Respondent states that all the projects identified by the Claimants are outside the El Mogote System and at a much lower altitude, between 600 and 800 meters above sea level.561
Thus, except for Aloma Mountain, the Respondent argues that the rest of the comparators cannot be considered to be in "like circumstances" regarding the projects' location.562 In addition, the Respondent states that it has not been proven that any of the comparators provide or intend to provide competing goods or services.563 Although the Claimants still argue that Aloma Mountain is appropriate as a comparator – because even though it was fined, it kept developing –, the Respondent rejects the comparison for relying on largely anecdotal evidence564 which "proves very little on its own".565 The aerial footage would show that construction of a road took place between 2002 and 2006, and further development occurred between 2006 and 2011. However, from then on, there is no additional construction until 2017, since Aloma Mountain was fined in 2013 for building without a permit.566 Furthermore, Aloma Mountain's environmental permit request was rejected.567
Additionally, the Respondent claims that the alleged comparators and Jamaca de Dios are not under the same legal regime.568 While some comparators are located in other protected areas, the Respondent explains that such protected areas' classification is different. In a category IV area, for example, more human activities are allowed than in a category II area such as Baiguate National Park.569
Moreover, the Respondent argues that the comparators and Jamaca de Dios were not subject to the same regulatory measures under the same jurisdictional authority.570 Many of the alleged comparators did not have an environmental permit, nor had they requested one.571 If the Claimants seek to compare the fine imposed on them and the lack of fines in the other projects, the Respondent points out that in that case, the claim would be time-barred under the DR-CAFTA three-year limit, since the fine was imposed on November 19, 2009.572 In any case, the claim would be unfounded because even if it was based on the amount of the fine, it still would not demonstrate discrimination, let alone nationality-based discrimination. Notably, the MMA has imposed fines on eight of the projects mentioned by the Claimants.573
The Respondent complains about the Claimants' assertion that the Respondent is not a neutral observer in this case. The MMA's assessments of the projects are well-documented and pre-date the present arbitration proceedings. The Respondent disputes the contention that an agency created to protect the environment would go against its principles to win the present case. If the MMA did not really care about the environment, it would have been much easier to allow the Claimants' request for a permit. However, the Respondent's concerns for the environment are genuine and – based on Mr. Booth's and Mr. Deming's Expert Reports – Project 3 would have had a greater negative impact on Jamaca de Dios and on the National Park than Project 2.574
Accordingly, the Claimants have failed to establish that the comparators are in "like circumstances" with Jamaca de Dios, and thus, the Respondent requests the Tribunal to dismiss their national treatment claim.575

(b) Less Favorable Treatment

The Respondent denies that the Dominican Republic accorded a less favorable treatment to the Claimants than it did to Dominican nationals. According to the second part of the "three-part test", the Respondent explains that the Claimants have to show that the investor or the covered investment was treated less favorably than a domestic comparator. To do so, the Claimants have the burden of proving a de jure or de facto discrimination.576 To demonstrate a de facto discrimination, the Claimants have the burden of proving that "the practical effect of the measures is to create a disproportionate benefit for nationals over non-nationals".577
Although the Claimants allege that they have been subject to deliberate measures to destroy their investment and favor Dominicans, the Respondent contends that these measures have not benefited the Dominican competitors, taking into account that they are considered –according to the Claimants578 – commercially and financially unviable.579
The Respondent complains that the Claimants have denounced the measures individually or only parts thereof, distorting the facts. Thus, the Respondent explains in a table the principal measures with respect to which the Claimants raise discrimination claims.580
As a result, the Respondent divides the different projects shown in the table into two groups. One group consists of projects at a lower altitude, such as Jamaca de Dios' Project 2, Jarabacoa Mountain Garden, Quintas del Bosque, Mirador del Pino and Paso Alto. While all these projects received a permit, some of them, such as Jarabacoa Mountain Garden, Mirador del Pino and Paso Alto, received a permit imposing slope-related restrictions.581 The second group compromises projects within the Baiguate National Park, such as Aloma Mountain and Jamaca de Dios' Project 3. Both are also located at a higher altitude than the others and in the El Mogote mountain system,582 and were thus accorded similar treatment.583
The Respondent further notes that with regards to the imposition of fines, Dominican-owned projects, similarly to Jamaca de Dios, received fines for violating environmental regulations. The MMA even suspended work on Dominican-owned projects and Jamaca de Dios for violating these regulations.584 Thus, the Respondent asserts that the treatment given to the Claimants and Jamaca de Dios was not less favorable than to Dominicans and their projects.585
Lastly, the Respondent contends that it had valid justifications for whatever differential treatment the Claimants received. The differential treatment was justified because it was based on objective distinctions between Jamaca de Dios and the other comparators.586 The Respondent relies on GAMI to argue that a differential treatment has been justified when a host State has proven the existence of legitimate policy or legal reasons for the measures at issue.587 The Respondent recalls the nine forms of disparate treatment claimed by the Claimants, and states that each form of disparate treatment was grounded on such legitimate policy or legal concerns.588
First, regarding the denial of the environmental permit for Project 3 because of the slopes exceeding 60%, the Respondent explains that the permit was denied because in their request for terms of reference the Claimants did not clearly express that they would not build on slopes exceeding 60%. The Respondent recognizes that if project owners undertake not to build in areas with slopes exceeding 60%, it grants the permit. However, since the Claimants did not mention in their letter requesting reconsideration the possibility of changing the location or pledging not to develop in any area with slopes exceeding 60%, the Respondent denied the permit.589
Second, regarding the differential treatment between the Claimants and the comparators on conducting activities in the Baiguate National Park, the Respondent explains that there is either no differential treatment, or the differential treatment is based on environmental considerations.590 There are different types of legal regimes concerning environmental protected areas that affect Jamaca de Dios and the comparators. While Jamaca de Dios is located within a category II National Park, which prohibits a wider range of project development activities; others are located in category IV National Parks, which are less restrictive on business activities.591 Regarding Aloma Mountain, the Respondent emphasizes that construction was not allowed. Aloma Mountain's first permit request was denied, and a reconsideration request confirmed the first denial. Furthermore, the Respondent points out that Aloma Mountain was fined due to unauthorized construction.592
Third, regarding the requirements to obtain an environmental permit not imposed on other developers, especially Aloma Mountain and Los Auquelles, the Respondent rejects the Claimants' allegations. Aloma Mountain's permit was denied twice, and a fine on the project was imposed.593 For Los Auquelles, the Respondent states that the project was never granted a permit, and was similarly fined for unauthorized construction.594
Fourth, regarding the inclusion of Jamaca de Dios within the Baiguate National Park and the exclusion of other projects, the Respondent relies on its experts and witnesses to explain the legitimate environmental reasons behind the National Park's borders.595 If the discrimination had been the real reason, the Respondent contends that in that case the Aloma Mountain project would have been completely excluded by the National Park boundaries. Yet, since it shares environmental and height characteristics with Project 3's land, it was included.596
Fifth, regarding the discriminatory rejection of the Claimants' request for reconsideration, the Respondent argues that the claim does not give factual basis. The Claimants' argument that Jarabacoa Mountain Garden received the permit after meeting with officials of the Dominican Presidency, is considered hearsay by the Respondent.597 The Respondent asserts that Jarabacoa Mountain Garden is different to Jamaca de Dios because – while the initial proposal by the promoters was denied – the project accepted the slope restrictions imposed by the MMA.598
Sixth, regarding the discriminatory non-issuance of the non-objection letter by the Municipality of Jarabacoa, the Respondent considers this a rational reaction, considering that the Claimants only requested a "no objection" letter after the MMA had expressed its concerns on the viability of the project.599 In addition, the Respondent holds that the Municipality of Jarabacoa replied to the Claimants, explaining that it could not issue it since they were aware of the MMA's concerns.600 According to the Respondent, the Municipality acted in the most diligent way possible, in concert with other government bodies and avoiding causing false expectations on the foreign investors.601
Seventh, regarding the alleged governmental pressure to turn the Claimants' private road into a public one, once a residential community is legally created, the roads are automatically yielded to the public domain.602 Furthermore, the Respondent argues that any circumstances related to the road were caused by the Claimants and thus, they are estopped from blaming the Dominican Republic or the Municipality of Jarabacoa.603 Since the Claimants were the ones who decided to open the road to the public, the Claimants cannot claim discrimination on the private or public nature of the road.604 In any case, the Respondent adds that it never forced the Claimants to turn their private road into a public one, however since they were blocking the long-standing public easement, the Palo Blanco community had no choice but to use their road.605
Eighth, regarding the inspections and fines imposed on the Claimants but not on other projects, the Respondent denies this assertion because inspections have been carried out, and fines have been imposed, on other projects as well. Thus, there would be no differential treatment.606
Ninth, regarding the requirements imposed on the Claimants to submit the EC Reports, the Respondent contends that the same obligation was imposed on other developers who requested an environmental permit. Furthermore, the MMA has imposed a fine on businesses which have not submitted the required EC Reports.607 The Claimants cannot consider this an added burden because the requirement was already imposed on their Project 2 permit. Lastly, the Respondent reminds the Tribunal that the fine related to the EC Reports submission was imposed after the Claimants had violated several other environmental regulations.608
In relation to the Claimants' overall discrimination claim,609 the Respondent states that the MMA invited the Claimants twice to propose alternative sites for their project. According to the Respondent, it would not be reasonable for the MMA to offer its limited time and resources to a project that it has no intention to approve in the end, simply because of its owners.610
The Respondent relies on DR-CAFTA Article 17.2.1 and the case Al-Tamimi to explain that the enforcement of environmental law is not inherently consistent because certain factors, such as the particular circumstances of each subject and project, affect its application.611
Lastly, the Respondent states that with regards to the Claimants' MFN claim,612 pursuant to the "three-prong test",613 the Claimants should have provided a comparator that was neither U.S., nor Dominican. However, the only comparators they have identified are Dominican.614 The Respondent affirms that the Claimants have not been able to demonstrate a specific treatment accorded to them or their investment which is less favorable than to the one accorded to another foreigner or their investments.615 As a result, the Claimants' MFN claim should be considered abandoned.616

3. The United States of America's Non-disputing Party Submission

The United States explains that DR-CAFTA Article 10.3 provision forbids nationality-based discrimination between domestic and foreign investors that are in "like circumstances". A claimant has the burden of proving that its investments: (i) were accorded "treatment"; (ii) were in "like circumstances" with domestic investors; and, (iii) received a "less favorable" treatment than that accorded to domestic investors or their investments.617
The term "like circumstances" will vary according to the facts of each case. The United States interprets the term "circumstances" as "to denote conditions or facts that accompany treatment as opposed to the treatment itself".618 Thus, consideration must be given to several factors, not just the business or economic sector but also the regulatory framework and policy objectives, among others. The foreign and the national investors should be compared in all relevant aspects but for nationality of ownership. Moreover, whether the treatment has been accorded in "like circumstances" under Article 10.3, will depend on all the circumstances, including whether the relevant treatment distinguished between investors or investments on the basis of legitimate public welfare objectives.619
Moreover, Article 10.3 does not require to accord the investors or investments of another Party the best or most favorable treatment, given to any national investor or the investment of any national.620


1. The Claimants' Arguments

The Claimants contend that the Respondent's actions constitute a violation of the "fair and equitable" treatment ("FET") obligation of Article 10.5 of the DR-CAFTA.621 Through a comparable analysis, the Claimants conclude that DR-CAFTA Article 10.5 is identical in substance to NAFTA Article 1105.622 The Claimants state that NAFTA tribunals have held that a State will be deemed to have violated the minimum standard of FET towards a foreign investor if it has violated the investor's legitimate expectations on which the investor relied when making the investment, if it failed to act in good faith or with evident discrimination, or if it engaged in arbitrary conduct.623
The Claimants argue that the Respondent's measures were discriminatory and arbitrary, and they lacked transparency and due process. These measures would include the creation of the National Park and its effect on the Claimants.624
The Claimants hold that the investor need not demonstrate the existence of bad faith to prove the State's international responsibility.625 In this sense, the tribunal in Mondev v. United States stated that "a State may treat foreign investment unfairly and inequitably without necessarily acting in bad faith."626
The Claimants rely on Mondev, and ADF v. United States to contend that the minimum standard of treatment (the "MST") is a standard under customary law that can evolve.627 According to the Mondev tribunal, bilateral investment treaties include the standard of FET to try to incorporate customary international law, evidencing state practice and opinio juris.628 The Claimants quote the Glamis Gold tribunal,629 which stated that treaty arbitration decisions "serve as illustrations of customary international law if they involve an examination of customary international law, as opposed to a treaty-based, or autonomous, interpretation."630
The Claimants disagree with the Respondent's reliance on the Neer decision.631 First, because the decision issued in 1926 does not reflect the current state of the law on the protection of foreign investors, which in the Claimants' opinion has significantly evolved since the Neer decision.632 Second, because the Neer decision would stand in contrast to general state practice.633
The Claimants request the Tribunal to reject the Respondent's argument634 that the standard of protection should be the one set out in the Neer decision.635 The Claimants argue that the Neer case did not deal with the question on the appropriate level of protection that should be granted to foreign investors, as the tribunals in Mondev and Windstream explained.636 According to the Claimants, several scholars have noted the limited relevance of the Neer decision, since it does not discuss the protection of investments, but rather a host State's obligation to arrest and punish perpetrators of crimes against aliens.637
Regarding the second reason, the Claimants argue that even if the Neer decision was considered relevant to assess the content and scope of the MST for foreign investors, the standard of protection accorded to them has undeniably changed since 1926.638 For the Claimants, the decision's general statements stand "in contrast to state practice".639 The Claimants rely on several NAFTA awards to support this.640 Accordingly, the Claimants affirm that the MST has not remained fixed in time.641
The Claimants find the Respondent's reliance on Pope & Talbot,642Eli Lily643 and Glamis Gold,644 three NAFTA decisions, to defend the applicability of the Neer standard to be misleading and incorrect.645 The Claimants state that the Pope & Talbot tribunal explicitly rejected in a previous award any requirement on the claimant to show egregious, outrageous or shocking State conduct to evidence a breach of the FET standard of protection.646 The Claimants add that Eli Lily award did not address the issue of whether the Neer standard is presently applicable, but rather accepted in principle the analysis and conclusions reached by the Glamis Gold tribunal on the content of the FET standard and the liability threshold.647 Lastly, the Claimants acknowledge648 that the tribunal in Glamis Gold stated that "the fair and equitable treatment standard is that as articulated in Neer".649 However, the Claimants note that the Glamis Gold tribunal also held that what is currently considered "egregious" and "shocking" is different to what it was considered so in the 1920s, acknowledging the evolutionary nature of the FET standard.650
The Claimants rely on the Railroad DR-CAFTA award, in which the tribunal held that the MST had evolved since the Neer decision, to contend that under the DR-CAFTA the question on the scope and evolutionary character of the MST should therefore be considered settled.651
The Claimants claim that no DR-CAFTA tribunal has defined the threshold to establish a breach of the