On 25 January 2017, the Tribunal issued the Award on Jurisdiction, the dispositive part of which provides:

In light of the foregoing discussion, the Tribunal unanimously decides:

a. The objections raised by the Respondent against the jurisdiction of the present Tribunal are dismissed subject to the following exception.

b. The question whether the Claimants qualify as "investors" holding "investments" under the relevant Kyrgyz legislation will be considered in conjunction with the merits of the case.

c. Any decision regarding the costs of the procedure on jurisdiction is deferred to a later stage of the proceedings.⁶³

Mr. Noah Rubins Dr. Daniel Müller
Ms. Mariia Puchyna
Ms. Shirin Chua
Mr. Joshua Kelly Ms. Anna Lanshakova
Ms. Francesca Lionetti
Freshfields Bruckhaus Deringer

Mr. Boris Aryev
Mr. Rodney Irwin
Stans Energy Corp

Dr. Andrei Yakovlev
Mr. Wilson Antoon
Mr. Marco Toracca
Ms. Dina Suliman
Ms. Viktoriya Krasyuk
King & Wood Mallesons

Mr. Mirlan Dordoev
Centre for Court Representation for the Government of the Kyrgyz Republic

Mr. Eldiyar Mukanov
State Agency for Geology and Mineral Resources

The following witnesses and experts gave oral evidence during the Hearing:

Mr. Boris Aryev
Mr. Rodney Irwin
Stans Energy Corp
as Fact Witnesses

Mr. Ermek Beysheyev
as Fact Witness

Mr. Evgenii Shilov
as Mining Expert

Mr. Santiago Dellepiane Avellaneda
Compass Lexecon
as Valuation Expert

Mr. Simon Maxwell Ziff
Ziff-Ivan Associates
as Valuation Expert

On 19 April 2018, the Tribunal issued Procedural Order No. 9, Regarding Post-Hearing Procedures. Among other things, the Tribunal put the following questions to the Parties, which they might address in their post-hearing briefs:

Jurisdiction

1. Assuming that the Tribunal accepts the scheme described by Mr. Beysheyev in his witness testimony as true, what is the evidence on the record that the Claimants (i) were aware or (ii) could have been expected to be aware of it? Based on that evidence, what are the legal consequences for the Claimants' claims in these proceedings?

2. Assuming that the Tribunal concludes that the 29 December 2009 auction at the Central Asian Stock Exchange was contrary to Kyrgyz law, what is the evidence on the record that the Claimants (i) were aware or (ii) could have been expected to be aware of such unlawfulness? What would be the legal consequence if the auction was contrary to Kyrgyz law but the Claimants were unaware of it?

Merits

3. Was the Government legally entitled to revoke License No. 3, as a result of Kutisay Mining LLC's failure to comply with the terms of the Kutessay II License Agreement No. 3? Assuming that the Government was legally entitled to revoke the License, does there remain scope for compensation claims under the 2003 Investment Law in view of the work completed by the Claimants since 2009?

4. Assuming that the Tribunal adopts a market capitalization approach on damages (consistently with the Claimants' submission), what would be the amount of damages on the following hypothetical valuation dates: (i) 25 June 2012; (ii) 14 April 2013; (iii) 16 October 2014.

5. Assuming that the Tribunal adopts an income approach on damages based on DCF analysis (consistently with the Respondent's primary submission), what would be the amount of damages on the following hypothetical valuation dates: (i) 25 June 2012; (ii) 14 April 2013; (iii) 16 October 2014. To demonstrate the sensitivity of their models to particular parameters, the Parties are requested to indicate a value range for each valuation date, explaining how the results would change if the following inputs are used:

Should additional inputs be required, the Parties are requested to base their assessment on the information described in the AsiaRud reports.

6. Assuming that the Tribunal adopts a sunk costs approach on damages (consistently with the Respondent's submission in the alternative), what are the amounts expended by the Claimants by (i) 14 April 2013 and (ii) 16 October 2014? What is the evidence on the record that such expenditures were incurred?

7. The Parties' experts have conceded that each of them had less then optimal information for valuation purposes, which seems to have been a main reason for rejecting the methodology of the opposing side's expert (namely that the opposing methodology was inappropriate given the lack of information). If the Tribunal were to consider that in this case there is insufficient information for conventional valuation methodologies, what principles, if any, exist in international law to award damages for the loss of the investment and the chance to achieve its objective that a claimant has suffered as a result of a taking? If there are any such principles, how are they to be applied, and is there a difference in measurement of damages between lawful expropriation and unlawful expropriation?

The Claimants, in their Statement of Claim, requested that the Tribunal:

(a) DECLARE that:

(i) The Kyrgyz Republic has breached its obligations toward Claimants under the Kyrgyz Investment Law, the Moscow Convention, the Investment Protection Decree and international law by expropriating the Claimants' investments in the Kyrgyz Republic; and

(ii) The Kyrgyz Republic has breached its obligations toward Claimants under the Kyrgyz Investment Law, the Moscow Convention, the Investment Protection Decree and international law by failing to accord the Claimants' investments fair and equitable treatment, and full protection and security;[⁶⁹]

(b) ORDER the Kyrgyz Republic to pay the Claimants compensation for the injury caused by its breaches of the Kyrgyz Investment Law, the Moscow Convention, the Investment Protection Decree and international law in the amount of US$128.23 million;

(c) ORDER the Kyrgyz Republic to pay pre-award interest on (b) above, calculated from 25 June 2012 at the rate of 15.5%, accruing on a compounded basis until the date of the Tribunal's Award or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(d) ORDER the Kyrgyz Republic to pay post-award interest on (b) and (c) above, at a rate of 15.5% per annum from the date of the Tribunal's Award, compounded semi-annually, or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(e) DECLARE that:

(i) The award of damages and interest in (b), (c) and (d) is made net of applicable Kyrgyz taxes; and

(ii) The Kyrgyz Republic may not deduct taxes in respect of the payment of the award of damages and interest in (b), (c) or (d);

(f) ORDER the Kyrgyz Republic to compensate the Claimants in respect of any double taxation liability that would arise in Canada or elsewhere that would not have arisen but for the Kyrgyz Republic's adverse measures;

(g) AWARD such other relief as the Tribunal considers appropriate; and

(h) ORDER the Kyrgyz Republic to pay all of the costs and expenses of this arbitration, including the Claimants' legal and expert fees, the fees and expenses of any experts appointed by the Tribunal, the fees and expenses of the Tribunal, and the administrative costs of the PCA.⁷⁰

In their Reply to the Statement of Defence on the Merits and Counter-Memorial on Jurisdiction, the Claimants requested that the Tribunal:

(a) REJECT the objections to jurisdiction and admissibility made by the Kyrgyz Republic;

(b) DECLARE that:

(i) The Kyrgyz Republic has breached its obligations toward Claimants under the 2003 Investment Law and international law by expropriating the Claimants' investments in the Kyrgyz Republic; and

(ii) The Kyrgyz Republic has breached its obligations toward Claimants under the 2003 Investment Law and international law by failing to accord the Claimants' investments fair and equitable treatment;[⁷¹]

(c) ORDER the Kyrgyz Republic to pay the Claimants compensation for the injury caused by its breaches of the 2003 Investment Law and international law in the amount of US$128.23 million;

(d) ORDER the Kyrgyz Republic to pay pre-award interest on (c) above, calculated from 25 June 2012 at the rate of 15.5% per annum, accruing on a compounded basis until the date of the Tribunal's Award or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(e) ORDER the Kyrgyz Republic to pay post-award interest on (c) and (d) above, at a rate of 15.5% per annum from the date of the Tribunal's Award, compounded semi-annually, or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(f) DECLARE that:

(i) The award of damages and interest in (c), (d) and (e) is made net of applicable Kyrgyz taxes; and

(ii) The Kyrgyz Republic may not deduct taxes in respect of the payment of the award of damages and interest in (c), (d) or (e);

(g) ORDER the Kyrgyz Republic to compensate the Claimants in respect of any double taxation liability that would arise in Canada or elsewhere that would not have arisen but for the Kyrgyz Republic's adverse measures;

(h) AWARD such other relief as the Tribunal considers appropriate; and

(i) ORDER the Kyrgyz Republic to pay all of the costs and expenses of this arbitration, including the Claimants' legal and expert fees, the fees and expenses of any experts appointed by the Tribunal, the fees and expenses of the Tribunal, and the administrative costs of the PCA.⁷²

In their Rejoinder on Jurisdiction, the Claimants requested that the Tribunal:

(a) REJECT the objections to jurisdiction and admissibility made by the Kyrgyz Republic;

(b) DECLARE that:

(i) The Kyrgyz Republic has breached its obligations toward Claimants under the 2003 Investment Law and international law by expropriating the Claimants' investments in the Kyrgyz Republic; and

(ii) The Kyrgyz Republic has breached its obligations toward Claimants under the 2003 Investment Law and international law by failing to accord the Claimants' investments fair and equitable treatment;

(c) ORDER the Kyrgyz Republic to pay the Claimants compensation for the injury caused by its breaches of the 2003 Investment Law and international law in the amount of US$128.23 million;

(d) ORDER the Kyrgyz Republic to pay pre-award interest on (c) above, calculated from 25 June 2012 at the rate of 15.5% per annum, accruing on a compounded basis until the date of the Tribunal's Award or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(e) ORDER the Kyrgyz Republic to pay post-award interest on (c) and (d) above, at a rate of 15.5% per annum from the date of the Tribunal's Award, compounded semi-annually, or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(f) DECLARE that:

(i) The award of damages and interest in (c), (d) and (e) is made net of applicable Kyrgyz taxes; and

(ii) The Kyrgyz Republic may not deduct taxes in respect of the payment of the award of damages and interest in (c), (d) or (e);

(g) ORDER the Kyrgyz Republic to compensate the Claimants in respect of any double taxation liability that would arise in Canada or elsewhere that would not have arisen but for the Kyrgyz Republic's adverse measures;

(h) AWARD such other relief as the Tribunal considers appropriate; and

(i) ORDER the Kyrgyz Republic to pay all of the costs and expenses of this arbitration, including the Claimants' legal and expert fees, the fees and expenses of any experts appointed by the Tribunal, the fees and expenses of the Tribunal, and the administrative costs of the PCA.⁷³

In their Post-Hearing Brief, the Claimants requested that the Tribunal:

(a) REJECT the objections to jurisdiction and admissibility made by the Kyrgyz Republic;

(b) DECLARE that:

(i) The Kyrgyz Republic breached its obligations toward the Claimants under the 2003 Investment Law and international law by expropriating the Claimants' investments in the Kyrgyz Republic; and

(ii) The Kyrgyz Republic breached its obligations toward the Claimants under the 2003 Investment Law and international law by failing to accord the Claimants' investments fair and equitable treatment;

(c) ORDER the Kyrgyz Republic to pay the Claimants compensation for the injury caused by its breaches of the 2003 Investment Law and international law in the amount of US$128.23 million;

(d) ORDER the Kyrgyz Republic to pay pre-award interest on (c) above, calculated from 25 June 2012 at the rate of 15.5% per annum, accruing on a compounded basis until the date of the Tribunal's Award or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(e) ORDER the Kyrgyz Republic to pay post-award interest on (c) and (d) above, at a rate of 15.5% per annum from the date of the Tribunal's Award, compounded semi-annually, or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(f) DECLARE that:

(i) The award of damages and interest in (c), (d) and (e) is made net of applicable Kyrgyz taxes; and

(ii) The Kyrgyz Republic may not deduct taxes in respect of the payment of the award of damages and interest in (c), (d) or (e);

(g) ORDER the Kyrgyz Republic to indemnify the Claimants in respect of any tax imposed on the Tribunal's award;

(h) AWARD such other relief as the Tribunal considers appropriate; and

(i) ORDER the Kyrgyz Republic to pay all of the costs and expenses of this arbitration, including the Claimants' legal and expert fees, the fees and expenses of any experts appointed by the Tribunal, the fees and expenses of the Tribunal, and the administrative costs of the PCA.⁷⁴

In their Reply Post-Hearing Brief, the Claimants requested that the Tribunal:

(a) REJECT the objections to jurisdiction and admissibility made by the Kyrgyz Republic;

(b) DECLARE that:

(i) The Kyrgyz Republic breached its obligations toward the Claimants under the 2003 Investment Law and international law by expropriating the Claimants' investments in the Kyrgyz Republic; and

(ii) The Kyrgyz Republic breached its obligations toward the Claimants under the 2003 Investment Law and international law by failing to accord the Claimants' investments fair and equitable treatment;

(c) ORDER the Kyrgyz Republic to pay the Claimants compensation for the injury caused by its breaches of the 2003 Investment Law and international law in the amount of US$128.23 million;

(d) ORDER the Kyrgyz Republic to pay pre-award interest on (c) above, calculated from 25 June 2012 at the rate of 15.5% per annum, accruing on a compounded basis until the date of the Tribunal's Award or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(e) ORDER the Kyrgyz Republic to pay post-award interest on (c) and (d) above, at a rate of 15.5% per annum from the date of the Tribunal's Award, compounded semi-annually, or at such other rate and compounding period as the Tribunal determines will ensure full reparation;

(f) DECLARE that:

(i) The award of damages and interest in (c), (d) and (e) is made net of applicable Kyrgyz taxes; and

(ii) The Kyrgyz Republic may not deduct taxes in respect of the payment of the award of damages and interest in (c), (d) or (e);

(g) ORDER the Kyrgyz Republic to indemnify the Claimants in respect of any tax imposed on the Tribunal's award;

(h) AWARD such other relief as the Tribunal considers appropriate; and

(i) ORDER the Kyrgyz Republic to pay all of the costs and expenses of this arbitration, including the Claimants' legal and expert fees, the fees and expenses of any experts appointed by the Tribunal, the fees and expenses of the Tribunal, and the administrative costs of the PCA⁷⁵.

In its Statement of Defence on the Merits and Memorial on Jurisdiction, the Respondent requested the following relief:

830.1 a declaration and order that the Tribunal lacks jurisdiction over the Claimants' claims;

830.2 further or in the alternative, a declaration and order that the Claimants' claims are inadmissible;

830.3 further or in the alternative, an order that the Claimants' claims be dismissed on the merits;

830.4 an order awarding the Respondent the costs associated with this arbitration, including, but not limited to, fees and expenses of the arbitral tribunal, costs of expert advice, costs of legal representation, fees and expenses of the appointing authority and expenses of the Secretary General of the Permanent Court of Arbitration, and all other professional fees, disbursements and expenses, plus interest thereon;

830.5 an order apportioning any remaining costs of arbitration in a manner such that one hundred per cent of such costs are borne by the Claimants; and

830.6 such further and other relief as the Tribunal sees fit.⁷⁶

In its Rejoinder on the Merits and Reply on Jurisdiction, the Respondent requested the following relief:

702.1 a declaration and order that the Tribunal lacks jurisdiction over the Claimants' claims;

702.2 further or in the alternative, a declaration and order that the Claimants' claims are inadmissible;

702.3 further or in the alternative, an order that the Claimants' claims be dismissed on the merits;

702.4 an order awarding the Respondent the costs associated with this arbitration, including, but not limited to, fees and expenses of the arbitral tribunal, costs of expert advice, costs of legal representation, fees and expenses of the appointing authority and expenses of the Secretary General of the Permanent Court of Arbitration, and all other professional fees, disbursements and expenses, plus interest thereon;

702.5 an order apportioning any remaining costs of arbitration in a manner such that one hundred per cent of such costs are borne by the Claimants; and

702.6 such further and other relief as the Tribunal sees fit.⁷⁷

The global production of REEs started increasing in the 1950s and 1960s.⁸² According to the US Geological Survey Factsheet 087-02,⁸³ at that time, countries other than the United States and China dominantly supplied REEs produced from Monazite-placers.⁸⁴ In the mid-1960s, Mountain Pass, mine in California, the United States, began REEs production and remained as the largest REEs mine until the mid-1980s, when China began increasing its REEs production.⁸⁵ China became the largest REEs supplier in the early 1990s, and established its dominant position in the early 2000s.⁸⁶

Source: Statement of Claim, after para. 22.

The Parties have different views regarding the prospect of REEs business of today. The Claimants allege that, because China dominates the worldwide REEs supply, "there continues to be significant strategic value in non-Chinese deposits capable of commercial production of REEs".⁹⁰ The Respondent, on the contrary, alleges that the REEs business is no longer profitable as the global REEs market is expected to continue to decline until at least 2018.⁹¹

Source: Statement of Defence on the Merits and Memorial on Jurisdiction, after para. 26.

Retreating from the uranium sector, Stans Energy was looking for another investment target in the Kyrgyz Republic.¹²¹ The Claimants aver that, being aware that the REEs prices were increasing, and following advice from Dr. Savchenko, Former Deputy Director of the Geology and Investment Department of the Kyrgyz State Agency for Geology and Mineral Reserves, Stans began to review the potential for rare earth exploration of the Aktyuz Ore Field, where Kutessay II rare earth deposit ("Kutessay II") and Kalesay beryllium deposit ("Kalesay") were located.¹²² In contrast, the Respondent defines the Claimants' activity as "speculative license grabbing"¹²³ and asserts that Stans Energy:

never constructed, developed or operated a mine in the Kyrgyz Republic or anywhere else in the world. It has also received no revenue to date from exploration or development […] if the Claimants are awarded even a small fraction of this sum [of their damages request], this arbitration will represent the only successful business venture in Stans Energy's corporate history.¹²⁴

The Subsoil Law of the Kyrgyz Republic of 24 June 1997, as in effect in December 2009 ("Subsoil Law"), established two possible procedures for granting subsoil licenses: (1) tenders; and (2) direct negotiations.¹⁵⁵ Article 16 of the Subsoil Law provided:

The Claimants contend that the Respondent's position that it re-issued the Licenses as a gesture of generosity "begs credulity".²³⁶ On the other hand, the Respondent contends that the granting of such extensions in circumstances in which the Licenses were subject to automatic termination pursuant to Article 18 of the Subsoil Law was contrary to Kyrgyz law and resulted in the criminal conviction of the SAGMR employees that granted them.²³⁷ Article 18 of the Subsoil Law provided as follows:

Kutessay II License Agreement No.1, signed on 21 December 2009 and valid until 31 December 2010, set out four key requirements for activities under the Kutessay II License providing, in relevant part:

After the conclusion of the License Agreements No. 1, Stans Energy proceeded with its preparations for the operation of the mines which, according to the Claimants, included:

(1). Stans Energy added three REE experts in its advisory board: Mr. James Hedrick and Mr., James Allan in January 2010;²⁵⁹ and Dr. Valey Kosynkin in April 2010.²⁶⁰

(2). In February 2010, Stans Energy raised C$ 1.5 million by a private placement.²⁶¹

(3). In February 2010, Stans Energy entered into an exclusive option agreement with the Kyrgyz Chemical and Metallurgical Plant ("KCMP") to purchase the processing plants and the railway terminal at Kashka.²⁶²

(4). From February 2010, Stans Energy engaged a number of contractors to verify the existing data from the Soviet era.²⁶³

(5). By the end of April 2010, Stans Energy announced its plant of the summer geophysical drilling program.²⁶⁴

The Claimants also argue that they never had the opportunity to challenge such allegations at the time nor to invoke Article 356(1) of the Kyrgyz Civil Code:

which excuses non-compliance with a contractual obligation where the breaching party can show that he or she took "all necessary measures for proper performance of the obligation with the degree of care and prudence required by the nature of the obligation and by the conditions of the transaction[…]"²⁶⁹

The Respondent denies that Article 356(1) of the Civil Code could have been invoked. According to the Respondent, the Civil Code "does not apply to subsoil licensing, including license agreements granted under the Subsoil Law." Rather, the termination of a subsoil license is regulated only by the Subsoil Law.²⁷⁰

Kutessay II License Agreement No. 2 set out the key requirements for Kutisay Mining LLC to exercise its Kutessay II License, providing that, in relevant part:

License Agreement No. 3 set out the requirements for Stans KG and Kutisay Mining LLC to exercise the Kutessay II License and provides, in relevant part, as follows:

The Respondent alleges that the Kutisay II License Agreement No. 3 required a technical plan in accordance with the Subsoil Law.³⁸⁰ According to the Respondent:

[t]he original TP [Technical Plan] was split into four parts: (i) a TP for the mine with a capacity of 300,000 tpa; (ii) a TP for the mine with 1 million tpa capacity; (iii) a TP to refurbish the existing plant, tailing facility and related infrastructure, which were to be submitted to SAGMR by 31 March 2013 ; and (iv) a TP to build a new processing plant, tailing facility and related infrastructure, which was to be submitted by 1 January 2014.³⁸¹

The Claimants contend that, not having received a response to these letters, concerns about their ability to still fulfil the deadlines set forth in License Agreement No. 3 led Kutisay Mining LLC to request, on 12 February 2013, that the SAGMR consider an addendum to Kutessay II License Agreement No. 3 extending the deadlines for certain tasks.⁴⁴² In this letter, Kutisay Mining LLC argued that, due to the one-month suspension order:

we and our contractors were forced to stop all preparatory and design works on Kutessay II […] we were forced to abandon a project that provided for the use of an old mill plant and tailings pond in Aktyuz, because […] long-lasting legal proceedings between previous owners have led to the loss of the opportunity to purchase the mill plant.⁴⁴³

This decision was upheld by the Bishkek City Court on 30 July 2014⁴⁹⁰ and by the Supreme Court of Kyrgyzstan on 24 March 2015.⁴⁹¹ Following a detailed exposition of relevant provisions of Kyrgyz law, the Supreme Court explained, inter alia :

[…] the judicial panel has reached a conclusion that the decisions of the trial court and the appellate court invalidating Minutes No 1736-N-09 of direct negotiations between the State Agency of Geology and Mineral Resources of the Government of the Kyrgyz Republic and Kutisay Mining OJSC dated 21 December 2009 were well founded.

[…]

The judicial panel agrees with court findings that the Kyrgyz Republic Government Resolution [No. 725] was not in force as of the date of license issue as it was officially published in Erkin-Too newspaper only on 25 December 2009. Pursuant to Article 30 of the Law of the Kyrgyz Republic "On Regulatory Legal Acts of the Kyrgyz Republic", the official publication of regulatory legal acts is a mandatory condition for acts to come into force. Pursuant to Part 3 Article 30 of the Law of the Kyrgyz Republic "On Regulatory Legal Acts of the Kyrgyz Republic", regulatory legal acts shall come into force 15 days after the official publication, unless otherwise provided by the relevant act itself. Kyrgyz Republic Government Resolution No 725 dated 1 December 2009 does not provide for specific effective date and, therefore, pursuant to the above-mentioned Law, the Resolution came into force on 9 January 2010, i.e. the license was issued 19 days before the effective date of Kyrgyz Republic Government Resolution No 725 dated 1 December 2009.

[…]

Based on above, the judicial panel of the supervisory instance is of opinion that courts reasonably reached a conclusion that the State Agency of Geology and Mineral Resources of the Government of the Kyrgyz Republic had violated the law in force in the Kyrgyz Republic by issuing licenses Nos. 2488ME and 2489ME for Kutessay and Kalesay, respectively, through direct negotiations, as indicated in the Minutes No. 1736-H-09 dated 21 December 2009 […]⁴⁹²

On 17 October 2014, the SAGMR's Subsoil Use Licensing Commission decided to terminate Kutisay Mining LLC's Licenses, referring to the decisions of the Kyrgyz courts in favour of the GPO.⁵⁰⁹ According to the extract of the minutes provided by the Claimants ("17 October 2014 Minutes"), the SAGMR decided as follows:

Having exchanged opinions, the Committee DECIDES:

To take note of the decision of the Inter-District Court of Bishkek dated 14 March 2014 that has entered into force and been upheld by the decision of the Bishkek City Court dated 30 July 2014 and to deem the subsoil use rights under Licenses Nos 2488 ME and 2489 ME terminated pursuant to Article 27, Part 5, of the Kyrgyz Republic Law "On Subsoil", and to deliver to Kutisay Mining LLC a relevant notice of termination of subsoil use rights under:

- Subsoil License No 2488 ME issued to Kutisay Mining LLC on 20 September 2010 for a term until 21 December 2029 for the right of subsoil use at the Kutessay II deposit for the purpose of development of rare earth elements, bismuth, molybdenum and silver. Decision is carried unanimously. U.D. Ryskulov and K.K. Zhumabekov were absent.

- Subsoil License No 2489 ME issued on 20 September 2010 for a term until 21 December 2029 for the right of subsoil use at the Kalesay deposit for the purpose of development of beryllium and lead. Decision is carried unanimously. U.D. Ryskulov and K.K. Zhumabekov were absent.⁵¹⁰

Article 18 of the 2003 Investment Law provides:

The Respondent argues that the material scope of jurisdiction of tribunals under the 2003 Investment Law is limited to breaches of the substantive provisions of that Law. Accordingly, any claims that an investor may file must be strictly limited to breaches of the provisions of the 2003 Investment Law. This jurisdictional objection is based on Article 3(1) of the 2003 Investment Law, which provides:

Finally, the Respondent submits that it would be unreasonable to conclude that the Respondent had intended to offer an "unqualified jurisdictional regime" to investors by enacting the 2003 Investment Law.⁵⁵⁴ It notes that accepting the Claimants' broad interpretation of that clause would go against the restrictive interpretation predicable of unilateral declarations.⁵⁵⁵ Furthermore, the Respondent rejects the Claimants' contention that by only establishing certain substantive protections under the 2003 Investment Law, the State would be abrogating its international obligations through national legislation.⁵⁵⁶ In this respect, the Respondent underscores that:

[l]imiting the claims that an investor can bring to specific causes of action does not in any way infringe this principle. A State may be under an obligation not to breach the customary international standards on investment protection. However, a State is not under an obligation to consent to arbitrate all investment disputes […] Such a limited consent to jurisdiction is perfectly consistent with international law.⁵⁵⁷

At the outset, the Tribunal recalls that the dispositif of its Award on Jurisdiction of 25 January 2017 decided as follows:

a. The objections raised by the Respondent against the jurisdiction of the present Tribunal are dismissed subject to the following exception.

b. The question whether the Claimants qualify as "investors" holding "investments" under the relevant Kyrgyz legislation will be considered in conjunction with the merits of the case.

Irrespective thereof, in the view of the Tribunal, the wording of Article 18 of the 2003 Investment Law is clear as it provides in the Respondent's own translation:

Article 18

(1) An investment dispute shall be resolved in accordance with any applicable procedure agreed in advance between the investor and the state agencies of the Kyrgyz Republic, which shall not exclude the use by the investor of other legal remedies in accordance with the legislation of the Kyrgyz Republic.

(2) In the absence of such an agreement, an investment dispute between authorized state agencies of the Kyrgyz Republic and an investor shall be settled, if possible, through consultations between the parties. If the parties do not reach an amicable settlement of the dispute within three months from the day of the initial written request for such consultations, any investment dispute between an investor and state agencies of the Kyrgyz Republic shall be resolved in the judicial authorities of the Kyrgyz Republic, unless, in the case of a dispute between a foreign investor and a state agency, one of the parties asks for the dispute to be considered in accordance with one of the following procedures, by applying to:

(a) to the International Centre for Settlement of Investment Disputes (ICSID) based on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States or Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the Centre; or

(b) to arbitration or an international ad hoc arbitral tribunal (commercial court) formed in accordance with the arbitration rules of the United Nations Commission on International Trade Law.

(3) If an investment dispute is referred to arbitration in sub-paragraphs (a) and (b) of paragraph 2 of this article, the Kyrgyz Republic shall waive the right to demand the prior exhaustion of all internal administrative or judicial procedures before referring the dispute to international arbitration.⁵⁵⁹

And subparagraph (4) of Article 18 (of which only a translation by the Claimants has been provided), provides:

4. Any investment dispute between foreign and domestic investors shall be considered by the judicial bodies of the Kyrgyz Republic unless the parties agree on any other dispute settlement procedure, including national and international arbitration.⁵⁶⁰

The Tribunal notes that, in the above provisions, the terms "an investment dispute" and "any investment dispute" are used. Article 1(6) of the 2003 Investment Law provides the following definition of the term: "Investment dispute" means any dispute between an investor and government bodies, officials of the Kyrgyz Republic and other participants of investment activity, arising in the process of investment.⁵⁶¹