• Witness Statement of Mr. Mark Jacobson dated 18 September 2013;
• Witness Statement of Mr. Alan Jacobson dated 18 September 2013;
• Witness Statement of Mr. Leslaw Kwasik dated 18 September 2013;
• Witness Statement of Mr. Daniel Brol dated 19 September 2013;
• Volumes 1-7 that contained chronologically ordered contemporaneous correspondence and documents;
• Volumes 8 and 9 that contained reference materials;
• Volumes 10-12 that contained legal authorities; and
• Volumes 1A and 1B that contained additional correspondence, documents, reference materials and legal authorities.4
• Witness Statement of Ms. Mira Todorovic Symeonides dated 20 January 2014;
• Witness Statement of Mr. Branko Vujovic dated 20 January 2014;
• Exhibits R-002 to R-057; and
• Legal Authorities RLA-001 to RLA-140.5
• Second Witness Statement of Mr. Mark Jacobson dated 20 June 2014;
• Second Witness Statement of Mr. Leslaw Kwasik dated 20 June 2014;
• Second Witness Statement of Mr. Daniel Brol dated 20 June 2014;
• Montenegrin Law Expert Report of Professor Vladimir Pavic and Dr. Milos Zivkovic dated 16 June 2014;
• Brattle Group Expert Report entitled "Damages to MNSS B.V. and Recupero Credito Acciaio N.V." dated 20 June 2014;
• Volumes 14-17 that contained chronologically ordered contemporaneous correspondence and documents;
• Volumes 18 and 19 that contained legal authorities;
• Volumes 20-22 that contained the legal authorities referenced by the Montenegrin Legal Expert Report; and
• Volume 2A that contained additional correspondence, documents, reference materials and legal authorities.
• Second Witness Statement of Mr. Branko Vujovic dated 20 November 2014;
• Montenegrin Law Expert Report of Professor Dragan Radonjic and Assistant Professor Vladimir Savkovic dated 20 November 2014 with Exhibits LEX-0001 to LEX-0051;
• Expert Report of Mr. Brent C. Kaczmarek dated 20 November 2014 with Appendices A-H and Exhibits NAV-001 to NAV-135;
• Exhibits R-058 to R-126; and
• Legal Authorities RLA-141 to RLA-232.
• Third Witness Statement of Mr. Mark Jacobson dated 18 February 2015;
• Second Montenegrin Law Expert Report of Professor Vladimir Pavic and Dr. Milos Zivkovic dated 20 February 2014;
• Volume 23 that contained chronologically ordered contemporaneous correspondence and documents;
• Volume 24 that contained legal authorities; and
• Volume 25 that contained the legal authorities referenced by the Second Montenegrin Legal Expert Report.
|For the Claimants:|
|Mr. Toby Landau QC||Essex Court Chambers|
|Professor Dan Sarooshi||Essex Court Chambers|
|Mr. Tim Hardy||CMS Cameron McKenna LLP|
|Mr. Csaba Kovacs||CMS Cameron McKenna LLP|
|Ms. Aimee Cook||CMS Cameron McKenna LLP|
|Ms. Jennifer Stoddart||CMS Cameron McKenna LLP|
|Mr. Duncan Weston||CMS Cameron McKenna LLP|
|Ms. Jessica Foley||CMS Cameron McKenna LLP|
|Mr. Goran Martinovic||Harrisons Solicitors|
|Mr. Mark Jacobson (also a witness)||Authorized representative of MNSS B.V. and Recupero Credito Acciaio, former Chairman and Director of Zeljezara Niksic a.d.|
|Mr. Daniel Brol (also a witness)||Authorized representative of MNSS B.V. and Recupero Credito Acciaio, former executive officer and Director of Zeljezara Niksic a.d.|
|For the Respondent:|
|Dr. Christoph Lindinger||Schönherr|
|Ms. Anne-Karin Grill||Schönherr|
|Mr. Leon Kopecky||Schönherr|
|Mr. Michael Stimakovits||Schönherr|
|Mr. Florian Stefan||Schönherr|
|Mr. David Pawlak||David A. Pawlak LLC|
|Mr. Slaven Moravcevic||Moravcevic Vojnovic & Partners|
|Ms. Jelena Bezarevic Pajic||Moravcevic Vojnovic & Partners|
|Ms. Tanja Sumar||Moravcevic Vojnovic & Partners|
|Mr. Igor Luksic||Minister of Foreign Affairs and European Integration of Montenegro|
|Mr. Vladimir Kavaric||Minister of Economy of Montenegro|
|Mr. Dragan Kujovic||Acting Director, Directorate for Industry and Entrepreneurship at the Ministry of Economy of Montenegro|
|Mr. Goran Nikolic||Officer, Directorate for Industry and Entrepreneurship at the Ministry of Economy of Montenegro|
|Ms. Svetlana Stijepovic The following persons were examined:||Translator, Ministry of Economy of Montenegro|
|On behalf of the Claimants:|
|Mr. Mark Jacobson||of MNSS B.V. and Recupero Credito Acciaio, former Chairman and Director of Zeljezara Niksic a.d.|
|Mr. Daniel Brol||Authorized representative of MNSS B.V. and Recupero Credito Acciaio, former executive officer and Director of Zeljezara Niksic a.d.|
|Mr. Alan Jacobson||Former interim executive officer and Director of Zeljezara Niksic a.d.|
|Mr. Leslaw Kwasik||Former Chief Executive Officer of Zeljezara Niksic a.d.|
|Mr. Carlos Lapuerta||The Brattle Group|
|Mr. Richard Caldwell||The Brattle Group|
|Dr. Milos Zivkovic||University of Belgrade|
|Professor Vladimir Pavic||University of Belgrade|
|On behalf of the Respondent: Witness:|
|Mr. Branko Vujovic||Director of the Insurance Supervision Agency of Montenegro|
|Professor Dragan Radonjic||University of Montenegro|
|Assistant Professor Vladimir Savkovic||University of Montenegro|
|Mr. Brent C. Kaczmarek||Navigant Consulting, Inc.|
"[f]ollowing the 2006 privatisation, ZN's ability to improve on current production levels and to introduce operating improvements was constrained by a deficiency in working capital funding, this deficiency being exacerbated as production volumes were increased. In late 2007 these challenges had led to a position where ZN was struggling to meet some of its liabilities as they fell due... MN was left with little option but to agree to a sale of its interest in ZN to one of the Claimants (MNSS) "8
"a. that the present was to be an investment contract concluded between a foreign investor and various state actors...;
b. that their relation could as such give rise to claims under international law;
c. and, in particular, that the foreign investor might at some point bring claims on the basis of the applicable BIT or else under international law against Montenegro."16
"were Clause 11.1 to refer only to contract claims which could be brought against the GoM in its capacity as a Seller under the PA - i.e. to claims having their substantive basis in the PA itself - there would be no reason to single out the GoM as a defendant. Rather, this formulation again underlines that the covered claims also include treaty claims against the host State Montenegro and were not limited to contractual claims arising out of the PA."17
"A loan is inherently repayable (even if not necessarily interest-bearing). This implies that the funds needed for such loan repayment need to be generated in the course of the business operation of the funded company. As such, financing on the basis of loans is financing on the basis of assets of the company (a capital increase or else a shareholder's contribution, however, would be a way of financing without using the assets of the financed company)."30
"appeals to the bankruptcy judge against the decisions of the bankruptcy administrator, to the higher court instances against decisions of the bankruptcy judge, the exhaustion of court instances in respect of the acts and omissions of Prva Banka. recourse to the contractual arbitration forum for alleged breaches of the Privatisation Agreement or other contracts by government representatives and, respectively, recourse to the administrative courts for ministerial or governmental decisions taken ius imperii."34
"[t]he loan assignment agreement was executed in Amsterdam on the part of MNSS and in Curacao on the part of RCA. Further, the loan assignment agreement is governed by the laws of the Netherlands and provides for the jurisdiction of the competent courts in Amsterdam. Finally, the loan assignment agreement provides that RCA shall issue a promissory note to MNSS as consideration for the receivable acquired by it under the agreement. Thus, there was no flow of funds into Montenegro resulting from the loan assignment agreement and no link whatsoever to Respondent was created by entering into of [sic] the loan assignment agreement."45
"The ‘umbrella clause': Article 3(4) of the BIT provides as follows:
‘4) Each Contracting Party shall observe any legal obligation it may have entered into with regard to investments of investors of the other Contracting Party.'
"it is entirely unsurprising that the Government is singled out in Clause 11.1 of the Privatisation Agreement alongside the Sellers. The Respondent's explanation that the singling out of the Government is meant somehow to provide support for the scope of any purported waiver as including the Respondent's treaty obligations is, as explained above, wrong. As already noted, it is the State - and not the Government - that is the Contracting Party to the Bilateral Investment Treaties."56
"contracting parties are free to agree [sic] the arbitration of foreign investment disputes with the Respondent in any arbitral forum. Whether or not there is such an arbitration agreement, the foreign investor in a contractual relationship with the Government may initiate an ICSID AF arbitration against the Respondent without any further manifestation of consent by the Respondent. The added value of the final limb of the first paragraph is that if the investment agreement with the Government provides for an arbitral forum other than the ICSID Additional Facility, depending on the scope of such agreement, the foreign investor has the alternative of initiating a claim against the Government based on that agreement."64
"11. 1. Governing Law
The law governing the rights and obligations of the Parties arising out of this Agreement shall be that of the Republic of Montenegro.
The Buyer acknowledges that it has taken legal advice in relation to the rights and obligations of the parties under this Agreement and considers them to be fully consistent with any obligations of the Government of Montenegro and its agents under international law with respect to foreign investment, including without limitation, any applicable bilateral or multilateral investment treaties. Any act or acts of the Sellers or the GoM under or pursuant to this Agreement shall be deemed to be compliant with such international treaty obligations and the Buyer waives on behalf of itself any right which it might otherwise have under international law to assert claims against the Sellers or the GoM other than pursuant to the express terms of this Agreement.
11.2 Settlement of Disputes
11.2.1 Any dispute or difference arising out of this Agreement, or the breach, termination or invalidity thereof, which cannot be resolved by amicable negotiations within fourteen (14) Calendar Days of written notice of the dispute by one Party to another (or such further period as the Parties may agree) shall be referred to and finally resolved by ad hoc arbitration in accordance with the UNCITRAL Arbitration Rules without recourse to the ordinary courts of law."65
"Any dispute arising out or in connection with this Assignment Agreement shall be exclusively settled by the dispute resolution provisions set forth in clause 11.2 of the SPA [the Privatization Agreement]. For the avoidance of doubt, it is hereby expressly agreed between the Assignee and the Sellers that the validity of the Arbitration Clause of the SPA shall remain in full force and effect."66
"a private party can by contract waive rights or dispense with the performance of obligations imposed on the States parties to those treaties under international law. Although under modern international law, treaties may confer rights, substantive and procedural, on individuals, they will normally do so in order to achieve some public interest. Thus the question is not whether the Tribunal has jurisdiction: unless otherwise expressly provided, treaty jurisdiction is not abrogated by contract ."69
This notwithstanding, the SGS v. Philippines tribunal applied the jurisdictional clause of the contract by finding the investor's claim inadmissible before it would be submitted to the Philippine courts. The Claimants have further developed the argument of the public interest served by investor-State arbitration, in particular by reference to Professor Schreuer's analysis of waivers and have requested that the Tribunal adopts that analysis.
"[...] there is no question of the investor claiming on behalf of the State. The State of nationality of the Claimant does not control the conduct of the case. No compensation which is recovered will be paid to the State. The individual may even advance a claim of which the State disapproves or base its case upon a proposition of law with which the State disagrees."70
But in the view of the Tribunal, the public interest may not be ignored. The Tribunal agrees with Professor Scheuer that "Investor-State arbitration serves not only the investor's interests but has an important function in the public interest for the relations between the States concerned."71 Thus the question is not whether the rights may or may not be waived, but to what extent, if they have been waived, the waiver is in detriment of the public purpose pursued by the State parties to the BIT.
"Any dispute arising from foreign investment shall be resolved by the competent court in Montenegro, unless the agreement on investment i.e. decision on establishment stipulates that such disputes are settled before domestic or foreign arbitration, in compliance with international conventions.
If a contracting party is the Government of the Republic of Montenegro, then until the Convention of the International Center [sic] for the Settlement of Investment Disputes (ICSID) is signed, the disputes arising from the foreign investments shall be resolved before domestic or foreign arbitration in accordance with the additional rules of the ICSID Convention for countries that are not signatories of the ICSID Convention.
If the contracting parties are domestic and foreign legal entities and natural persons, then disputes arising from foreign investments shall be resolved before domestic or foreign arbitration in accordance with the United National Commission on International Trade Law (UNCITRAL) Rules.
The final award of the arbitration shall be enforced by a competent court."73
"Any dispute arising from foreign investments shall be resolved before the competent court in Montenegro, unless the investment agreement or the incorporation act stipulates that such disputes shall be resolved in domestic or foreign arbitration in accordance with international conventions.
Where the Government is a contracting party, the disputes arising from the foreign investments shall, until the signature of the ICSID (International Center [sic] for the Settlement of Investment Disputes) Convention, be subject to domestic or foreign arbitration in accordance with the Additional Facility Rules of the ICSID Convention for countries which are not signatories to the ICSID Convention.
Where the contracting parties are domestic and foreign legal entities and natural persons, the disputes arising from the foreign investments shall be subject to domestic or foreign arbitration in accordance with the UNCITRAL (United Nations Commission on International Trade Law) Rules."74
Article 1(b) of the BIT reads:
For the purposes of this Agreement:
b) the term "investors" shall comprise with regard to either
(i) natural persons having the nationality of that Contracting Party;
(ii) legal persons constituted under the law of that Contracting Party;
(iii) legal persons not constituted under the law of that
Contracting Party but controlled, directly or indirectly, by natural persons as defined in (i) or by legal persons as defined in (ii)."76
Article 25(2)(b) of the Washington Convention reads:
(2) "National of another Contracting State" means:
(b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention."
"Where a treaty spells out in detail and with precision the requirements for maintaining a claim, there is no room for implying into the treaty additional requirements, whether based on alleged requirements of general international law in the field of diplomatic protection or otherwise."78
"save for the specific historic breaches [of the Assignor] set out in Part A of the Schedule... they do not have any claim or action against or dispute with the Assignor or the Assignee, whether past, present or future, known or unknown, in relation to or in connection with or arising from any breach, potential breach or alleged breach of the SPA or any documents entered into or any actions taken or not taken pursuant to or as contemplated by the terms of the SPA on or prior to the Effective Time [the date of the SPA] "81
"Since the proceedings envisaged by Article 2 are outside the jurisdiction of the Centre, none of the provisions of the Convention shall be applicable to them or to recommendations, awards, or reports which may be rendered therein."
Nonetheless, this provision cannot be read out of the context of other AF Rules, in particular of AF Rule 4(2) that provides:
"In the case of an application based on Article 2(a), the Secretary-General shall give his approval only if (a) he is satisfied that the requirements of that provision are fulfilled at the time, and (b) both parties give their consent to the jurisdiction of the Centre under Article 25 of the Convention (in lieu of the Additional Facility) in the event that the jurisdictional requirements ratione personae of that Article shall have been met at the time when proceedings are instituted."
The implication of this rule is that the requirement that a "dispute arises directly arising out of an investment" is to be fulfilled at the time of approval by the Secretary-General and that the investment needs to be an investment under the ICSID Convention.
Article 1(a) of the BIT reads:
For the purposes of this Agreement:
a) the term ‘investments' means every kind of asset and more particularly, though not exclusively:
(i) movable and immovable property as well as any other rights in rem, such as leases, mortgages, liens and pledges, in respect of every kind of asset;
(ii) rights derived from shares, bonds and other kinds of interests in companies and joint ventures;
(iii) claims to money, to other assets or to any performance having an economic value;
(iv) rights in the field of intellectual property (such as copyrights and related rights, patents, industrial designs or models, trade marks), technical processes, goodwill and know-how;
(v) rights granted under public law or under contract, including rights to prospect, explore, extract and win natural resources."84
Article 25(1) of the Washington Convention reads:
(1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally.
It is well known that the ICSID Convention does not define what constitutes an investment, but that case law has developed the meaning of the concept.
"Loans as such are therefore not excluded from the notion of an investment under Article 1(1) of the BIT. It does not follow therefrom, however, that any loan and, in particular, the loan granted by CSOB to the Slovak Collection Company meets the requirements of an investment under Article 25(1) of the Convention or, for that matter, under Article 1(1) of the BIT, which speaks of an ‘asset invested or obtained by an investor of one Party in the territory of the other Party.'
The contractual scheme embodied in the Consolidation Agreement shows, however, that the CSOB loan to the Slovak Collection Company is closely related to and cannot be disassociated from all other transactions involving the restructuring of CSOB.
The basic feature of the Consolidation Agreement was not the financial consolidation of CSOB as such, but the development of the role and activities of CSOB in both Republics."94
"Under the broad definition of investment contained in the Treaty, loans are generally to be considered as a protected investment. The Tribunal has carefully considered whether in the light of the Joy Mining case, in which a distinction was drawn between a purely commercial operation and an investment, there could here be a situation in which the loans might, as argued by the Respondent, be considered a commercial operation not different from those normally made by financial institutions, and which would result in the loans not qualifying as a part of the investment. Despite the fact that the commercial papers, notes, bonds and negotiable instruments, as the instruments have been variously described, are not different from any other issuance of obligations, they were still made by a qualifying investor as a substitute for financial obligations previously undertaken in the context of the financing of the same investment. Such loans were in fact part of the investment's continuing financing arrangements, and were interposed at a moment when only the investor was available to make them. To the extent that the loans were made in connection with a legitimate business purpose, as they in fact were, there is no reason to exclude them from the protected investment."95
"An investment, in the economic sense, is linked with a process of creation of value, which distinguishes it clearly from a sale, which is a process of exchange of values or a subscription to sovereign bonds which is also a process of exchange of values i.e. a process of providing money for a given amount of money in return."96
"The amounts drawn down by ZN under the First Loan Agreement for capital expenditures were interest free, while the amounts drawn down for working capital purposes were interest-bearing. As a result of the Prva Banka episode (whereby €20.9 million of MNSS' CAPEX funds was redirected to settle ZN's unsecured liabilities to Prva Banka) ZN drew down on the interestbearing working capital facility under the First Loan more than double what was intended under the First Loan agreement. This increased the tax exposure of MNSS."100
"In such instances, an international tribunal may deem that the failure to seek redress from national authorities disqualifies the international claim, not because there is a requirement of exhaustion of local remedies but because the very reality of conduct tantamount to expropriation is doubtful in the absence of a reasonable - not necessarily exhaustive - effort by the investor to obtain correction."103
The tribunal in EnCana was also careful to note that the holding in the narrow point relied on by the Respondent in the instant case did not "amount to reimposing a requirement of the exhaustion of local remedies which the BIT does not as a general matter require."104
"A requirement to pursue local court remedies would have the effect of disentitling a claimant from pursuing its direct treaty claim for failure by the Executive to afford fair and equitable treatment, even where the decision was taken at the highest level of government within the host State. It would leave the investor only with a complaint of unfair treatment based upon denial of justice in the event that the process of judicial review of the Ministerial decision was itself unfair. Such a consequence would be contrary to the express provisions of Article 26, incorporated into the parties' compromis, since it would have the effect of substituting another remedy for that provided under the BIT and the ICSID Convention... Such a requirement would also have the effect of leading to the dismissal of claims precisely on the ground that they should have been submitted to a national court. It was the unjustified imposition of such a requirement which led to the annulment of the first Award in Vivendi v. Argentina, cited above."105
"(i) the Claimants and their investments completely exposed to the invasion and occupation of ZN by the Union and workers; and (ii) ZN's CEO completely exposed to the physical attack that he was subjected to during his escape from the hostile crowd of Union leaders and workers within ZN's management building and premises on 13 December 2010, with all the fundamentally adverse consequences on the future management and operation of ZN that these events necessarily entailed."108
"Mr. Vujovic, the former Minister of Economy, who had stamped the prior instructions, had recently been replaced in this function by Mr. Kavaric. The latter, however, had not deposited his signature with Erste Bank and therefore could not approve the payment. On 6 April 2011, Mr. A Jacobson then notified Erste Bank of the change in the signing authority. The latter then signed and stamped the payment instruction on 7 April 2011."113
The Respondent claims that this delay of a few days is wholly irrelevant. At most, the delay in approval would be a mere breach of contract.
"[t]he Commercial Court in Podgorica expeditiously ruled on the matter and rendered a judgment on 30 December 2011 adopting MNSS' claims and determining that the GoM's claim for approximately EUR 1.6 million was ungrounded, while in fact MNSS is the holder of this claim. This decision was also upheld by the Appellate Court on 4 September 2012. The acknowledgment of MNSS' claim of EUR 1.6 million was registered in the corrected final list of claims in bankruptcy which served as a basis for compiling the draft decision on division of the bankruptcy estate."114
"Respondent's police forces took all measures they could within the few hours available to organise their operations at the plant. Within the little time left they did everything that was reasonably possible and sent police to the plant who were present when the strikers entered the management offices and able to deter any acts of violence against Claimant's [sic] representatives."118
As to the second strike on 13 December 2010, the Respondent could not have taken any measures because Mr. Jacobson wrongly stated to Minister Vujovic that the police had been informed of the strike when in fact the police had not been informed.
"the reason for the State's act or omission is irrelevant in terms of whether the act or omission constitutes a breach by the State of its international obligation, thereby engaging the State's responsibility. The only question is whether the act or omission constitutes a breach by the State of its obligation under international law. The fact that an act or omission may be committed by a State pursuant to a contract is irrelevant where the consequence of that act or omission is to place the State in breach of pre-existing obligation under international law."121
1. Each Contracting Party shall ensure fair and equitable treatment of the investments of investors of the other Contracting Party and shall not impair, by unreasonable or discriminatory measures, the operation, management, maintenance, use, enjoyment or disposal thereof by those investors. Each Contracting Party shall accord to such investments the most constant protection and security."128
On 12 November 2008, MNSS wrote to the Central Bank about the non-executed payment orders.134
On 26 November of 2008, Prva Banka sought the financial assistance of the Government to improve its liquidity.135
On 1 December 2008, the Ministry of Finance wrote to the Central Bank to enquire about the situation of Prva Banka.136
On 3 December 2008, the Central Bank confirmed Prva Banka's inability to operate because of its liquidity problems.137
On 3 December 2008, Mr. Vujovic, then President of the Privatization Authority, wrote to MNSS noting that it had forwarded to Prva Banka MNSS' request for payment of obligations under the investment program and that Prva Banka promised to pay by 5 December 2008.138
On 4 December 2008, Mr. Alan Jacobson met with the Vice-Governor of the Central Bank. He advised Mr. Jacobson that "Prva Banka would be put in funds and would be able to action MNSS' payment requests."139
On 9 December 2008, Prva Banka settled the CVS instruction of 7 November 2008 and the payment instruction of 31 July 2008. It did not pay €363,000 from the foreign exchange account of MNSS because of mutual business problems.140
On 11 December 2008, Prva Banka informed MNSS that it was suspending execution of new payment orders because of unpaid obligations to Prva Banka.141
On 12 December 2008, the Respondent granted a loan to Prva Banka of €44 million. On the same day, the Central Bank issued a new decision ordering Prva Banka to prepare a detailed plan for the use of those funds. The Central Bank kept Prva Banka under comprehensive supervision thereafter as detailed in the Counter-Memorial.142
On 18 December 2008, Prva Banka requested ZN to pay immediately its outstanding debt of €3,549,949.30, which included 13 overdue repayment instalments of the social loan in an aggregate amount of €1.7 million, plus fees and interest for October-November, and a deficit of €1.8 million in the foreign exchange account.143
During January 2009, Prva Banka reiterated on various occasions that it would not honor payment instructions of MNSS until the issues addressed in the letter of 11 December 2008 were solved.144
On 13 February 2009, MNSS wrote to the Central Bank alleging that the Prva Banka had defrauded it.145
On 16 February 2009, the Central Bank replied that it "performs the supervision of banks on the basis of determining the risk profile of the bank, without specific powers to perform mediation and the settlement of the disputes between the clients and the banks."146
"deposit in a Bank with the seat in Montenegro the amount of 14 million Euro into a cash collateral account (the "Cash Collateral Account") to cover the investment for the first Investment Period. The Bank will issue a Performance Bond in the full amount in favour of the GoM substantially in the form set out in Annex 8a hereto, on such terms that as, if and when the GoM approves that, the Investment Liabilities are reduced the principle amount of the Performance Bond reduces accordingly."150
"What, in your view, at the time would have happened to ZN if Prva Banka had foreclosed on these assets [movable property, raw materials, inventories]?
I think the production at ZN would have stopped totally."152
"when granting the loan, [it] was acting in its function as a party to the Privatisation Agreement and as commercial party. It was seeking to facilitate the ongoing negotiations between the union and its contract partner MNSS. In order to do so in [sic] adopted measures that were also available to any private party: it concluded a loan agreement with the union. Its acts did not include any margin of the exercise of sovereign authority."154
"[...] the minimum standard of treatment of fair and equitable treatment is infringed by conduct attributable to the State and harmful to the claimant if the conduct is arbitrary, grossly unfair, unjust or idiosyncratic, is discriminatory and exposes the claimant to sectional or racial prejudice, or involves a lack of due process leading to an outcome which offends judicial propriety - as might be the case with a manifest failure of natural justice in judicial proceedings or a complete lack of transparency and candor in an administrative process. In applying this standard it is relevant that the treatment is in breach of representations made by the host State which were reasonably relied on by the claimant."167
"On 3 November 2008, the Central Bank started direct control of [Prva Banka's] operations. aimed at determining whether the Bank has removed the irregularities identified by the Report on control (the act strictly confidential 03-26/1 of 29 August 2008). During the control, in the first two weeks already, the Central Bank has established that the Bank's liquidity was critically insufficient due to the Bank's incapacity to meet all of its due liabilities, and that the liquidity risk of the Bank is high due to mismatch between maturities and cash flows of assets and liabilities."173
"the situation of the Claimant, CSR and its employees was such that the judicial proceedings seemed to be the only solution to an otherwise insoluble situation. Bearing in mind the interests of the approximately 4,000 employees who depended on CSR and their prospects at that time, the initiation of the proceedings was neither unfair nor inequitable. This conclusion is reinforced by the consideration that the Respondent is not to be blamed for having violated any obligations under international law in connection with the indisputably dramatic economic situation at that time. Therefore, no violation of Art. II(2)(a) and its fair and equitable treatment standard has occurred."188
2. More particularly, each Contracting Party shall accord to such investments treatment which in any case shall not be less favourable than that accorded either to investments of its own investors or to investments of investors of any third State, whichever is more favourable to the investor concerned."193
1. Each Contracting Party shall guarantee to the investors of the other Contracting Party the free transfer of payments related to their investments. The transfers shall be made in a freely convertible currency, without restriction or delay. Such transfers include in particular though not exclusively:
a) capital and additional amounts to maintain or increase investments;
b) profits, interests, dividends and other current income;
c) funds in repayment of loans;
d) the proceeds of sale or liquidation of the investment;
e) royalties or fees;
f) unspent earnings of persons working in connection with the investment in the territory of the Contracting Party;
g) payments arising under Article 7."196
1. Investments by investors of either Contracting Party shall not be nationalized, expropriated or subjected to any other measure having effect equivalent to nationalization or expropriation (hereinafter referred to as "expropriation") in the territory of the other Contracting Party except where expropriation is:
a) for a purpose which is in the public interest;
b) carried out under due process of law;
c) non-discriminatory, and
d) against prompt, adequate and effective compensation, which shall be effected without delay."197
Arbitrators' fees and expenses:
Andrés Rigo Sureda $207,611.11
Emmanuel Gaillard $134,325.00
Brigitte Stern $128,165.90
Christoph Schreuer $3562.50
ICSID's administrative fees and $223,409.13 expenses (estimated)202
1. To uphold the objections to its jurisdiction in respect of contract claims arising from the Privatization Agreement and the Assignment Agreement.
2. To uphold the objection to its jurisdiction for lack of consent under the 2000 and 2011 MFI Laws.
3. To dismiss all other objections to its jurisdiction.
4. To uphold the claim that the Respondent failed to ensure the protection of persons and property, but without granting any compensation, as the Claimants have failed to show that they suffered damages as a result.
5. At a majority, to dismiss the claim that the Respondent's failure to warn MNSS of the financial condition of Prva Banka breached the Respondent's obligations of fair and equitable treatment and nonimpairment of the Claimants' investment.
6. To dismiss all other claims on the merits or, at a majority, because they fall outside its jurisdiction.
7. To apportion the cost of the proceedings as follows: each Party shall pay for its own costs, and the Claimants shall pay for the fees and expenses of the members of the Tribunal and for the expenses and charges of the ICSID Secretariat.
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