"The principle of good faith, codified by Article 18 of the First Vienna Convention, is a rule of customary international law whose existence is recognized by the International Court of Justice and is therefore binding on the Community. The principle is the corollary in public international law of the principle of protection of legitimate expectations, which forms part of the Community legal order and on which an economic operator to whom an institution has given justified hopes may rely".7
"The principle of legal certainty requires Community legislation to be certain and its application foreseeable by individuals and that every Community measure having legal effects must be clear and precise and must be brought to the notice of the person concerned in such a way that he can ascertain exactly the time at which the measure comes into being and starts to have legal effects. That requirement must be observed all the more strictly in the case of a measure liable to have financial consequences in order that those concerned may know precisely the extent of the obligations which it imposes on them"8.
"The result of the general principle here advanced is therefore that the public authority may be exempt from performing its contract according to its strict expression, but that where this exemption results in a loss to the individual contractor compensation should be payable save where that payment would offend the principle. Such cases should arise only where the burden of payment would be such that it could not be borne by the public authority"37.
There is nothing in the record of this arbitration indicating or even suggesting that Colombia would not be able to bear the payment of the compensation due and payable to the investor in the present case.
(i) The Measures retroactively impose a delimitation on the Santurbán Páramo, with direct and adverse impact on the Angostura deposit, and with the effect of substantially depriving the Claimant of the economic value of its acquired rights under the Concession without compensation, and thus constitute a violation of Treaty Article 811(1) and its Annex 811(2)(b).
(ii) By retroactively imposing the Santurbán Páramo delimitation but at the same time undermining the accuracy and reliability of such delimitation, and thus creating uncertainty as to the very scope of the Measures and their effects, the Respondent has violated the concessionaire's acquired rights under the Concession, deprived the concessionaire's rights of their economic value, and thus are part and parcel of the violation by the Respondent of Treaty Article 811(1) and Annex 811(2)(b).
(iii) The Measures infringe Colombian constitutional law rules precluding the retroactive application of the law without compensation, the constitutional duties of the Colombian State regarding the delimitation of the Páramo and the acquisition of Páramo covered areas, and Colombian and international law principles precluding the violation both of legitimate expectations and contractual acquired rights under the Concession covered by the investment definition of the Treaty and protected under its provisions and international law.
(iv) Even if the Measures' purposes were considered in isolation, the fulfilment of such purposes is not jeopardized since the enforcement of the Measures is not prevented nor is it rendered impossible or impracticable. For that reason, also in light of the considerations set out in paras. 5-30 above, not paying compensation as required by Treaty Article 811(1) would inflict severe and unwarranted damages to the investor, precisely in a rare circumstance situation pursuant to Treaty Annex 811(2)(b) in which compensation is warranted.
(v) The above is confirmed by a weighing and balancing exercise carried out by taking into account the Measure's purposes and the harm suffered by the Claimant occasioned by the Measures. As a result of this exercise, the comparative severity of the harm and deprivation suffered by the Claimant and its investment resulting from the Measures outweighs the severity of the Respondent's obligation to compensate under the Treaty.
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