|FREQUENTLY USED ABBREVIATIONS AND ACRONYMS|
|BIT or Treaty||Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investments dated July 1, 1996|
|Cl. Mem.||Memorial of Nova Scotia Power Incorporated dated May 14, 2012|
|Cl. C-Mem. Jur.||Counter-Memorial on Jurisdiction of Nova Scotia Power Incorporated dated December 10, 2012|
|Cl. Rej.||Rejoinder on Jurisdiction of Nova Scotia Power Incorporated dated April 22, 2013|
|2007 Confirmation Letters||Confirmation Letter 3 (coal supply for 20082011) and Confirmation Letter 4 (coal supply for 2008), both dated July 13, 2007|
|Coal Supply Agreement||Coal Supply Agreement dated October 18, 2005 between [company X] and NSPI|
|E [CE] [RE]||Exhibit [Claimant] [Respondent]|
|[company X]||[company X]|
|ICSID Additional Facility Rules||Rules Governing the Additional Facility as amended effective April 10, 2006|
|ICSID Convention||Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated March 18, 1965|
|ICSID or the Centre||International Centre for Settlement of Investment Disputes|
|LA [CLA] [RLA]||Legal Authority [Claimant] [Respondent]|
|NSPI or Claimant||Nova Scotia Power Incorporated|
|Request or RFA||Request for Arbitration of Nova Scotia Power Incorporated dated November 2, 2010|
|Resp. Mem. Jur.||Memorial on Jurisdiction of the Bolivarian Republic of Venezuela dated August 27, 2012|
|Resp. Reply||Reply on Jurisdiction of the Bolivarian Republic of Venezuela dated February 19, 2013|
|Schedule C to the ICSID Additional Facility Rules||Arbitration (Additional Facility) Rules (Schedule C), as amended effective April 10, 2006|
|Tr. [Day #], [page/line]||Transcripts of the hearing on jurisdiction held from June 19 through 21, 2013|
|UK-Venezuela BIT||Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Venezuela for the Promotion and Protection of Investments dated March 15, 1995|
|VCLT||Vienna Convention on the Law of Treaties concluded at Vienna on May 23, 1969|
|Venezuela or Respondent||Bolivarian Republic of Venezuela|
This case concerns a dispute submitted to the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") on the basis of the Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investments dated July 1, 1996 (the "BIT" or "Treaty"), which entered into force on January 28, 1998, and the Rules Governing the Additional Facility (the "ICSID Additional Facility Rules") and Schedule C to the ICSID Additional Facility Rules, as amended and in effect from April 10, 2006.1 The dispute relates to the Bolivarian Republic of Venezuela's termination of Nova Scotia Power Incorporated's right to receive up to 1.7 million metric tonnes of coal at fixed prices from the Paso Diablo coal mine in Venezuela.2
For the Claimant:
Mr. John Terry Torys LLP
Mr. Stuart Svonkin Torys LLP
Mr. Geoff Watt Torys LLP
Professor Rudolf Dolzer
Mr. David Landrigan NSPI
Mr. Mark Sidebottom NSPI
For the Respondent:
Dr. Ronald E.M. Goodman Foley Hoag LLP
Mr. Thomas Bevilacqua Foley Hoag LLP
Ms. Melida Hodgson Foley Hoag LLP
Ms. Alexandra Meise Bay Foley Hoag LLP
Mr. Ivan Urzhumov Foley Hoag LLP
Ms. Angelynn Meya Foley Hoag LLP
Mr. Carlos Arrue Montenegro Foley Hoag LLP
Mr. Diego Cadena Foley Hoag LLP
Mr. Rodrigo Tranamil Foley Hoag LLP
Ms. Angélica Villagran Foley Hoag LLP
Mr. Peter Hakim Foley Hoag LLP
Dr. Yarubith Escobar Procuraduria General, Venezuela (on June 19, 2013)
Ms. Mariana Arenas Procuraduria General, Venezuela (on June 19, 2013)
To ascertain whether there is an investment, the Tribunal must look to the terms of the BIT.
For the Tribunal, this is the focus of its enquiries, and is unaltered by what forum the dispute is before. The relevant provisions of the BIT are the following:
For the purpose of this Agreement: [...]
(f) "investment" means any kind of asset owned or controlled by an investor of one Contracting Party either directly or indirectly, including through an investor of a third State, in the territory of the other Contracting Party in accordance with the latter's laws. In particular, though not exclusively, "investment" includes:
(i) movable and immovable property and any related property rights, such as mortgages, liens or pledges;
(ii) shares, stock, bonds and debentures or any other form of participation in a company, business enterprise or joint venture;
(iii) money, claims to money, and claims to performance under contract having a financial value;
(v) intellectual property rights;
(vi) rights, conferred by law or under contract, to undertake any economic and commercial activity, including any rights to search for, cultivate, extract or exploit natural resources.
but does not mean real estate or other property, tangible or intangible, not acquired in the expectation or used for the purpose of economic benefit or other business purposes.
Any change in the form of an investment does not affect its character as an investment.
(g) "investor" means
in the case of Canada:
(i) any natural person possessing the citizenship of Canada in accordance with its laws; or
(ii) any enterprise incorporated or duly constituted in accordance with applicable laws of Canada,
who makes the investment in the territory of Venezuela and who does not possess the citizenship of Venezuela; and in the case of Venezuela:
(i) any natural person possessing the citizenship of Venezuela in accordance with its laws; or
(ii) any enterprise incorporated or duly constituted in accordance with applicable laws of Venezuela,
who makes the investment in the territory of Canada and who does not possess the citizenship of Canada;
Settlement of Disputes between an Investor and the Host Contracting Party
1. Any dispute between one Contracting Party and an investor of the other Contracting Party, relating to a claim by the investor that a measure taken or not taken by the fanner Contracting Party is in breach of this Agreement, and that the investor or an enterprise owned or controlled directly or indirectly by the investor has incurred loss or damage by reason of, or arising out of, that breach, shall, to the extent possible, be settled amicably between them.
2. If a dispute has not been settled amicably within a period of six months from the date on which it was initiated, it may be submitted by the investor to arbitration in accordance with paragraph (4). [...]
4. The dispute may, by the investor concerned, be submitted to arbitration under:
(a) The International Centre for the Settlement of Investment Disputes (ICSID), established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States, opened for signature at Washington 18 March, 1965 (ICSID Convention), provided that both the disputing Contracting Party and the Contracting Party of the investor are parties to the ICSID Convention; or
(b) the Additional Facility Rules of ICSID, provided that either the disputing Contracting Party or the Contracting Party of the investor, but not both, is a party to the ICSID Convention; or
In case neither of the procedures mentioned above is available, the investor may submit the dispute to an international arbitrator or ad hoc arbitration tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). […]125
First, the list of examples in Article I(f) is clearly non-exhaustive on its own terms.128 The open-ended nature of this part of the purported definition of investment calls for recourse to inherent features. The Tribunal refers here to the awards in Joy Mining and Romak. Whilst this Tribunal does not find it necessary to invoke Article 32(b) of the VCLT as the Romak tribunal did, it finds the problems highlighted by the Romak tribunal to be relevant considerations for ascertaining the ordinary meaning of the term "investment" in "context and in the light of its object and purpose."129 In Romak, the tribunal said (citing Joy Mining):
184. In addition, for a number of reasons the Arbitral Tribunal finds that a mechanical application of the categories listed in Article 1(2) of the BIT would produce "a result which is manifestly absurd or unreasonable." Such an outcome is contrary to Article 32(b) of the Vienna Convention.
185. First, said interpretation would eliminate any practical limitation to the scope of the concept of "investment." In particular, it would render meaningless the distinction between investments, on the one hand, and purely commercial transactions, on the other. As the Joy Mining tribunal explained:
[...] if a distinction is not drawn between ordinary sales contracts, even if complex, and an investment, the result would be that any sales or procurement contract involving a State agency would qualify as an investment. International contracts are today a central feature of international trade and have stimulated far reaching developments in the governing law, among them the United Nations Convention on Contracts for the International Sale of Goods, and significant conceptual contributions. Yet, those contracts are not investment contracts, except in exceptional circumstances, and are to be kept separate and distinct for the sake of a stable legal order. Otherwise, what difference would there be with the many State contracts that are submitted every day to international arbitration in connection with contractual performance, at such bodies as the International Chamber of Commerce and the London Court of International Arbitration?130
This Tribunal considers that the "mechanical application" of the list of examples in Article I(f) here would not suffice for the purposes of Article 31(1) of the VCLT.
Article 2(b) of the ICSID Additional Facility Rules provides that:
The Secretariat of the Centre is hereby authorized to administer, subject to and in accordance with these Rules, proceedings between a State (or a constituent subdivision or agency of a State) and a national of another State, falling within the following categories:
(b) conciliation and arbitration proceedings for the settlement of legal disputes which are not within the jurisdiction of the Centre because they do not arise directly out of an investment, provided that either the State party to the dispute or the State whose national is a party to the dispute is a Contracting State; [...] .
In the case of an application based on Article 2(b), the Secretary-General shall give his approval only if he is satisfied (a) that the requirements of that provision are fulfilled, and (b) that the underlying transaction has features which distinguish it from an ordinary commercial transaction.
Registration of this Request is without prejudice to the powers and functions of the tribunal with regard to jurisdiction, competence and the merits, as provided by Article 5(d) of the Arbitration (Additional Facility) Rules.229
a) The Tribunal does not have jurisdiction over the dispute submitted to it in this arbitration.
b) The Parties shall bear in equal shares the costs of these proceedings comprising the fees and expenses of the Members of the Tribunal and the expenses and charges of the Secretariat, the exact amount of which shall be subsequently notified by the Secretariat. Since the Claimant's third and last advance payment has not been used in this arbitration, it shall be reimbursed in full to the Claimant.
c) Each Party shall bear its own expenses.
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