applicant ashwini
TRANSCRIPT
The Case Relating to a Nuclear Accident and Sovereign Debt
IN THE INTERNATIONAL COURT OF JUSTICE
LA COUR INTERNATIONALE DE JUSTICE
The Peace Palace, The Hague
Netherlands
Federal States of Amuko
Applicant
v.
Republic of Rentiers
Respondent
ON SUBMISSION TO THE INTERNATIONAL COURT OF JUSTICE
MEMORIAL FOR THE APPLICANT
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CONTENTS
INDEX OF AUTHORITIES ........................................................................................................... 2
STATEMENT OF JURISDICTION ............................................................................................. 10
STATEMENT OF FACTS ........................................................................................................... 11
SUMMARY OF ARGUMENTS .................................................................................................. 13
BODY OF ARGUMENTS ........................................................................................................... 15
I. REPUBLIC OF RENTIERS IS LIABLE TO FULLY REIMBURSE THE FEDERAL
STATES OF AMUKO FOR THE COMPENSATION PROGRAM ESTABLISHED BY
THE AMUKO CONGRESS ..................................................................................................... 15
II. REPUBLIC OF RENTIERS IS LIABLE FOR THE DAMAGE SUFFERED IN THE
TERRITORY OF THE FEDERAL STATES OF AMUKO ..................................................... 18
III. REPUBLIC OF RENTIERS IS LIABLE FOR THE DEATH OF DRIVER AND
SECURITY GUARD, AME EMPLOYEES IN THE ACCIDENT WHO WERE KILLED
DUE TO TRAUMA ASSOCIATED WITH THE ACCIDENT ............................................... 20
IV. DEFAULT OF RENTIERS ON ITS SOVEREIGN BOND IS VIOLATION OF
THE BASIC PRINCIPLE OF INTERNATIONAL LAW ........................................................ 21
V. FAILURE TO PAY A SOVEREIGN BOND ENGAGE THE STATE‟S
INTERNATIONAL RESPONSIBILITY .................................................................................. 23
VI. THE DEFENSE OF THERE EXISTING A STATE OF NECESSITY DOES NOT
APPLY IN THE PRESENT CASE ........................................................................................... 27
CONCLUSION/PRAYER ............................................................................................................ 30
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LIST OF ABBREVIATIONS
1. 1997 Vienna Convention .: Protocol to Amend the 1963 Vienna Convention on Civil
Liability for Nuclear Damage
2. 2004 Paris Convention.: Protocol to Amend The Convention on Third Party Iability in
the Field of Nuclear Energy of 29 July 1960, as Amended by The Additional Protocol
of 28 January 1964 and by The Protocol of 16 November 1982
3. AME.: Amuko Ministry of Energy
4. Amuko.: Federal States of Amuko
5. Brussels Supplementary Convention .:Convention of 31st January 1963
Supplementary to the Paris Convention of 29th July 1960, as amended by the
additional Protocol of 28th January 1964 and by the Protocol of 16th November 1982
6. C.S.C.: The Convention on Supplementary Compensation for Nuclear Damage
7. CBD: Convention on Biological Diversity
8. I.A.E.A.: International Atomic Energy Agency
9. IAEA Assistance Convention.: Convention on Assistance in Case of a Nuclear
Accident or Radiological Emergency
10. IAEA Early Notification Convention.: IAEA Convention on Early Notification of a
Nuclear Accident
11. ICJ: International Court of Justice
12. ICSID .: the Settlement of Investment Disputes between States and Nationals of Other
States
13. Johannesburg Summit.: the 2002 World Summit on Sustainable Development at
Johannesburg
14. Joint Convention on Spent Fuel.: Joint Convention on the Safety of Spent Fuel
Management and on the Safety of Radioactive Waste Management
15. Joint Protocol.: Joint Protocol relating to the application of the Vienna Convention on
civil liability for nuclear damage and the Paris Convention on third party liability in
the field of nuclear energy. Concluded at Vienna on 21 September 1988
16. OECD/NEA.: Organisation for Economic Co-operation and Development/Nuclear
Energy Agency
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17. OECD: Organization for Economic and Social Development
18. Paris Convention.: Paris Convention on Third Party Liability in the Field of Nuclear
Energy
19. RABBIT.: the Rentiers-Amuko Bilateral Business Investment Treaty
20. Rentiers.: The Republic of Rentiers
21. Rio Declaration : United Nations Conference on Environment and Development at Rio
De Janeiro
22. RNRA.: Rentiers Nuclear Regulatory Agency
23. Stockholm declaration : United Nations Conference on Human Environment held at
Stockholm.
24. Vienna Convention.: the 1963 Vienna Convention on Civil Liability for Nuclear
Damage
25. WSSD: World Summit on Sustainable Development
26. Y.B. Int‟l L.C.: Year Book of International Law Commission
27. Yale L.J.: Yale Law Journal
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INDEX OF AUTHORITIES
Serial
No. ARTICLES
REFERENCE
(PAGE) IN
THE BODY
OF
ARGUMENTS
1. Crawford , James; “The International Law Commission‟s Articles
on State Responsibility: Introduction, Text and Commentaries”
(2002) p. 184
29
2. Ernst H. Feilchenfeld, Rights and Remedies of Holders of Foreign
Bonds, in “ BONDS AND BONDHOLDERS, RIGHTS AND
REMEDIES” (Silvester E. Quindry ed., 1934)
25
3. Gallagher, Kevin, “The New Vulture Culture: Sovereign debt
restructuring and trade and investment treaties“. (2011) IDEAs
Working Paper no. 02/2011, IDEAs, New Delhi.
26,27
4. Kaletsky, Anatole. “The costs of default.” (1985 ) Priority Press;
New York
29
5. Michael Waibel, Opening Pandora‟s Box: Sovereign Bonds in
International Arbitration, 101 Am. J. Int‟l L. 711, 746 (2007)
23,25,26,27
6. OECD (2004), Indirect Expropriation and the Right to Regulate in
International Investment Law, Paris: OECD.
26
7. Schreuer, Christoph. The Concept of Expropriation Under the ETC
and Other Investment Protection Treaties, in “INVESTMENT
ARBITRATION AND THE ENERGY CHARTER TREATY”
25
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108, 139 (Clarisse Ribeiro ed., 2006)
8. UNCTAD, “Sovereign Debt Restructuring And International
Investment Agreements” IIA ISSUES NOTE, No. 2, July 2011
27
9. UNCTAD, Fair and Equitable Treatment: A Sequel , New York
and Geneva,< www.unctad.org/iia.> last visited ov 24 Aug 2011
27
10. Kidd, Steve; Liability for nuclear accidents - how is it handled?,
available at < http://www.neimagazine.com/story.asp?storyCode=
2059241 > last visited on : August 24th
, 2011
16
11. Japanese experts discuss nuclear liability post-Fukushima,
available at < http://www.oecd-nea.org/general/mnb/2011/july-
fukushima.html />, last visited on: August 24th
, 2011
17
12. Uranium Information Centre. Civil Liability for Nuclear Damage.
UIC Nuclear Issues Briefing Paper #70. (2006). Available at
<http://www.uic.com.au/nip70.htm> last visited on: Aug, 24, 2011
18
13. Nathalie L.J.T. Horbach, Nuclear liability for international
transport accidents under the modernised nuclear liability
conventions: an assessment, Int. J. Nuclear Law, Vol. 1, No. 2,
2006
20
14. Julia A. Schwartz, International Nuclear Third Party Liability Law:
The Response to Chernobyl
15,16,17,21
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Serial
No. BOOKS
REFERENCE
(PAGE) IN THE
BODY OF
ARGUMENTS
1. Douglas Helman, Nuclear Damage and Liability; An introduction
to the Vienna and Paris Conventions, their Amending Protocols
and Supplementary Conventions
21,22
2. Fitzgerald, P.J.; Salmond on Jurisprudence, 12th edition, Sweet
& Maxwell Ltd., London
17
3. IAEA INTERNATIONAL LAW SERIES NO.3, “The 1997
Vienna Convention On Civil Liability For Nuclear Damage And
The 1997 Convention On Supplementary Compensation For
Nuclear Damage: Explanatory Text”; International Atomic
Energy Agency, Vienna (2007)
17,19,21
4. ILC Commentary 2001 28
5. Newcombe, A. and L. Pradell (2009), Law and Practice of
Investment Treaties – Standards of Treatment, The Hague,
Kluwer Law International.
26
6. Lauterpatch, “Oppenheim International Law” 23
7. Shaw, Malcolm “International Law, Cambridge Uni. Press 5th
edi.”
22
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Serial
No. CASE LAWS
REFERENCE
(PAGE) IN THE
BODY OF
ARGUMENTS
1. C.I.T. v. G.R. Karthikeyan 1993 Supp (3) SCC 222 25
2. Canada Sugar Refining Co v R [1898] AC 735 19
3. Certain Norwegian Loans (Fr. v. Nor.), 1957 ICJ REP. 9 ( July 6) 27
4. CMS Gas Transmission Co. v. Argentine Republic, Award, ICSID
Case No. ARB/01/08, Award (May 12, 2005), 44 ILM 1205 (2005)
28,29
5. Consortium R.F.C.C. v. Kingdom of Morocco, ICSID Case No.
ARB/00/6, Award, para. 65 (Dec. 22, 2003).
26
6. Gabtikovo-Nagymaros Project case, ICJ Reports, 1997, pp. 7, 40 28
7. ICJ‟s Opinion in, Legal Consequences of the Construction of a Wall
in the Occupied Palestinian territory 43 I.L.M. 1009 (2004).
29
8. Impregilo S.p.A. v. Islamic Republic of Pakistan, ICSID Case No.
ARB/03/3, Jurisdiction, para. 261 (Apr. 22, 2005)., para. 276
26
9. Lauder v. Czech Republic, Final Award, para. 200 (UNCITRAL
Arb. Trib. Sept. 3, 2001)
27
10. Metalclad Corp. v. United Mexican States, ICSID Case No.
ARB(AF)/97/1, Award, para. 103 (Aug. 30, 2000),
27
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11. New Zealand v. France (Nuclear Tests Case) ICJ Reports, 1974, pp
253,267; 57 ILR, pp. 398,412.
23
12. R v Loxdale, (1758) 97 ER 394 19
13. Re BIdie{deceased}[1948] 2 ALL ER 995 19
14. Rylands v Fletcher (1868) L.R. 3 H.L. 330 16
15. United States V Eagle Bank, (1829) 7 Connecticut 457 19
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Serial
No.
MISCELLANEOUS (TREATY, DECLARATIONS,
COVENANTS, ETC.)
REFERENCE
(PAGE) IN THE
BODY OF
ARGUMENTS
1. Convention on Third Party Liability in the Field of Nuclear
Energy of 29th July 1960 15
2. Joint Convention On The Safety Of Spent Fuel Management And
On The Safety Of Radioactive Waste Management,1997 15
3.
Declaration on Principles of International Law Concerning
Friendly Relations and Co-operation among States adopted by
the General Assembly in resolution 2625 (XXV), 1970
23
4.
Joint Protocol relating to the application of the Vienna
Convention on civil liability for nuclear damage and the Paris
Convention on third party liability in the field of nuclear energy.
Concluded at Vienna on 21 September 1988
15
5. United Nations Charter 23
6. Vienna Convention on Civil Liability for Nuclear Damage, 1997 20
7. Vienna Convention on the Law of Treaties, 1969, 23
8.
Protocol to Amend The Convention on Third Party Iability in the
Field of Nuclear Energy of 29 July 1960, as Amended by The
Additional Protocol of 28 January 1964 and by The Protocol of
16 November 1982
20
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STATEMENT OF JURISDICTION
The Federal States of Amuko and The Republic of Rentiers have submitted this dispute to the
International Court of Justice pursuant to a Special Agreement, signed at Granada, Spain, on 6 June
2011. This Court‟s jurisdiction is invoked under Article 36(1) read with Article 40(1) of the
Statute of the International Court of Justice, 1950. The Parties shall accept any Judgment of the
Court as final and binding upon them and shall execute it in its entirety and in good faith.
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STATEMENT OF FACTS
The Federal States of Amuko and the Republic of Rentiers share a common territorial border.
Investment companies in Amuko have purchased approximately 3 billion tenge worth of
sovereign bonds issued by Rentiers. The Diablo Canyon Fault is a continental transform fault
that runs through the central portion of the territory of Rentiers. Amuko and Rentiers are
members of the United Nations & I.A.E.A and parties to statutes of I.C.J, Vienna Convention
on the Law of Treaties, IAEA Early Notification Convention, IAEA Assistance Convention,
CBD, Stockholm declaration, Rio Declaration, and Johannesburg Summit, ICSID and
RABBIT. RECORD ¶ 1-14
On 5 February 2010, an earthquake struck the territory of Rentiers along the Diablo Canyon
fault line. The privately-operated Nihon Nuclear Power Plant was affected and the reactor
building was contaminated. RNRA discovered that the pools where spent fuel rods were
stored had ruptured and had developed a leak. In accordance with Article 2.2 of the IAEA
Assistance Convention, Rentiers requested assistance from Amuko. In accordance with
Article 2.3 of the IAEA Assistance Convention, Amuko promptly responded that the Amuko
Ministry of Energy (AME) would remove the fuel rods and transport them via highways in
specially manufactured vehicles. RECORD ¶ 15- 19
On 12 February 2010, one of the vehicles, while in the territory of Amuko, crashed which was
carrying spent fuel rod. The driver and one security guard were killed. As a result of the
accident, the cooling system for the fuel rods failed. The fuel rod casings began to burn,
releasing radioactive gases and particles into the environment. AME ordered the evacuation of
Robelynch, the accident site. The area is now declared off-limits for human habitation.
RECORD ¶ 20-24
On 26 February 2010, in an emergency session, the Amuko Congress established a
compensation fund for the families of the deceased driver and security guard and the former
residents of Robelynch for the loss of their property and established a lifetime medical
monitoring program. RECORD ¶ 25-26
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On 10 March 2010, a diplomatic note was forwarded to Rentiers by Amuko. In which, it
requested that Rentiers should take all the necessary measures to fully reimburse Amuko for
the compensation program established by the Amuko Congress in accordance with Article 10
of the IAEA Assistance Convention and general principles of international law. In response of
the note, Rentiers cleared its position that no reimbursement or compensation is owed.
RECORD ¶ 27-29
On 17 September 2010, RNRA ordered a rapid closure of five nuclear power plants near the
Diablo Canyon fault. Rentiers President Niall Ferguson issued a statement that the economy
of Rentiers had suffered greatly and that Rentiers would default on its sovereign bonds. The
Rentiers stock market declined 20% after the announcement. On 1 December 2010, in an
emergency session, the Rentiers Parliament enacted Fresh Start Act which provided that
Rentiers sovereign bonds were to be restructured such that investors would receive 10% of
what they would otherwise be entitled to. RECORD ¶ 30-31
On 8 December 2010, a diplomatic note was forwarded to Rentiers by Amuko and requested
that Rentiers should enter into negotiations with Amuko to arrive at a just rate of
compensation for this expropriation. But, Rentiers rejected that request. The Amuko
investment companies affected by the Fresh Start Act sought compensation in the domestic
courts of Rentiers. These claims were denied. Additional negotiations between the Federal
States of Amuko and the Republic of Rentiers failed to resolve the disputes regarding both the
nuclear accident and sovereign debt but the parties agreed to submit these matters to the I.C.J.
RECORD ¶ 32-38
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SUMMARY OF ARGUMENTS
I. RENTIERS IS LIABLE TO FULLY REIMBURSE AMUKO FOR THE
COMPENSATION PROGRAM ESTABLISHED BY THE AMUKO
CONGRESS
1. The sending Operator is strictly and exclusively liable for damage during the transport
of nuclear material to and from nuclear installation unless otherwise provided.
2. Those who carried out mischievous nuclear activities shall be fully responsible for
consequences arise from the accident of those activities irrespective of whether whose
fault was.
3. The whole liability of third party arises out of nuclear accident shall be fall on and
only on operator of nuclear installation.
4. The accident due to driver‟s negligence was an only overt act but the main act was the
leakage of pool where spent fuel rods were kept. The accident in Robelynch was only
furtherance of the accident occurred in Nuclear Power Plant.
II. RENTIERS IS LIABLE FOR THE DAMAGE SUFFERED IN THE
TERRITORY OF AMUKO
The compensation programme of Amuko Government was an economic expenditure
and burden on the national economy. it is measure of reinstatement of impaired
environment. The lifetime medical monitoring program is a preventive measure for the
further loss or damage. Therefore, these should be compensated by the Rentiers.
III. RENTIERS IS LIABLE FOR THE DEATH OF DRIVER AND SECURITY
GUARD
The deceased driver and guard was a third party and came for rendering assistance.
The strict liability of operator could not be exonerated due to negligence of driver as
against gross negligence.
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IV. DEFAULT OF RENTIERS ON ITS SOVEREIGN BON IS VIOLATION OF
THE BASIC PRINCIPLE OF INTERNATIONAL LAW
1. In Arguendo, unilateral structuring of sovereign bond was in violation of pacta sunt
servanda, because agreement including contract must be honoured in good faith.
2. In Arguendo, unilateral debt restructuring by Rentiers was not performed in good
faith, as the request for renegotiation was refused.
V. FAILURE TO PAY SOVEREIGN BOND ENGAGE STATES’
INTERNATIONAL RESPONSIBILITY.
1. “Substantial deprivation” shows the existence of expropriation.
2. In Arguendo, unilateral restructuring measure tantamount to expropriation.
3. In Arguendo, restructuring of sovereign bond has violated the treaty obligation of „fair
and equitable treatment”.
VI. DEFENCE OF “STATE OF NECESSITY” DOES NOT APPLY IN THE
PRESENT CASE.
1. Nuclear damage of “level 4 of the IAEA nuclear event scale” cannot be considered as
“grave and imminent peril”.
2. Negligence in construction of nuclear power reactor waives the plea of “force
majeure”.
3. Extra-ordinary circumstances ware artificially created by the Rentiers.
4. Defence of “force majeure” cannot be pleaded where there is an existence of
“conventional obligation”
5. In Arguendo, the state of necessity under domestic law would not offer an excuse to
preclude State from fulfilling its contractual obligation.
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BODY OF ARGUMENTS
I. REPUBLIC OF RENTIERS IS LIABLE TO FULLY REIMBURSE THE
FEDERAL STATES OF AMUKO FOR THE COMPENSATION
PROGRAM ESTABLISHED BY THE AMUKO CONGRESS
Nuclear liability in International regime is based on the certain concepts namely „nuclear
installation‟, „operator‟, „nuclear incident‟ and „nuclear damage‟. As per the fact of case, the
accidents happened during the transportation of spent fuel which is also a type of nuclear
fuel1. When any occurrence which causes damages results from the hazardous properties of
nuclear fuel or radioactive products or waste is called nuclear incident.2
In International Nuclear Law, operators are strictly and exclusively liable for damage
resulting from a nuclear incident or during the transport of nuclear material to and from
nuclear installation.3 Liability for such damage rests with the sending operator of a nuclear
installation.4 Only exceptionally and in accordance with a defined procedure may the carrier
replace the operator and be held liable.5 The transfer of liability from one operator to another
will normally be regulated by a contract in writing. 6
1 Art 2(n) of 42. Joint Protocol as “"spent fuel" means nuclear fuel that has been irradiated in and permanently
removed from a reactor core”. 2 Art 1 (a) I of Convention on Third Party Liability in the Field of Nuclear Energy of 29
th July 1960, as amended
by the Additional Protocol of 28th January 1964 and by the Protocol of 16th November 1982, Art. 1(1)(12) of
the 1997 Vienna Convention on Civil Liability for Nuclear Damage as “Nuclear incident means any occurrence
or series of occurrences having the same origin which causes nuclear damage”. And art 1(1)(11) define nuclear
damage as "Nuclear damage" means - loss of life, any personal injury or any loss of, or damage to, property
which arises out of or results from the radioactive properties or a combination of radioactive properties with
toxic, explosive or other hazardous properties of nuclear fuel or radioactive products or waste in, or of nuclear
material coming from, originating in, or sent to, a nuclear installation; 3 Julia A. Schwartz, International Nuclear Third Party Liability Law: The Response to Chernobyl
4 Ibid .
5 Article II (2) of the 1997 Vienna Convention on Civil Liability for Nuclear Damage; the Installation State may
provide by legislation that, in accordance with such terms as may be specified therein, a carrier of nuclear
material or a person handling radioactive waste may, at his request and with the consent of the operator
concerned, be designated or recognized as operator in the place of that operator in respect of such nuclear
material or radioactive waste respectively. In this case such carrier or such person shall be considered, for all the
purposes of this Convention, as an operator of a nuclear installation situated within the territory of that State. 6 Article II of the 1997 Vienna Convention on Civil Liability for Nuclear Damage, article 4 of the 1960 Paris
Convention on Third Party Liability in the Field of Nuclear Energy
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In the present case, Rentiers had requested assistance from Amuko to remove spent fuel rods
and transportation of them under Article 2.2 of the IAEA Assistance Convention. There was
no such agreement between two States for the transfer of liability in case of any nuclear
incident. So, it is not a case of transfer of liability from one operator to another and thus,
liability falls on the sender operator.
1.1. In Arguendo, Nuclear damages are covered by Principle of Strict Liability
A person who, for his own purposes, brought on his land and collected and kept there
anything likely to do mischief if it escaped, had to keep it in at his peril; and if he did not do
so, he was prima facie answerable for all the damage which was the natural consequence of its
escape.7 It is liability for a wrong that is imposed without the claimant having to prove that
the defendant was at fault8. In layman‟s terms: strict liability means a claimant does not need
to prove how an accident occurred.9 Due to the unusual risks associated with the operation of
nuclear installations or the transport of nuclear substances, it was clear that those who carried
out those activities should be fully responsible for any injurious consequences resulting
therefrom.10
Strict liability relieves a claimant of the burden of proving fault or negligence,
and imposes liability, together with the obligation to compensate the damage suffered, merely
on proof of a causal link between the damage and the nuclear accident in issue.11
1.2.Operators remains exclusively liable for under „Theory of Exclusive Liability‟
Exclusive liability of the operator means that in the case of an accident, all claims are to be
brought against the nuclear operator12
. Two primary factors have motivated this exclusive
liability of the operator, as distinct from the position under ordinary law of torts. Firstly, it is
desirable to avoid difficult and lengthy questions of complicated legal cross-actions to
establish in individual cases who is legally liable. Secondly, such exclusion liability obviates
the necessity for all those who might be associated with the construction or operation of a
7 Rylands v Fletcher (1868) L.R. 3 H.L. 330
8 Oxford law Dictionary, FIFTH EDITION, (ed. ELIZABETH A. MARTIN)
9 Kidd, Steve; Liability for nuclear accidents - how is it handled?, available at <
http://www.neimagazine.com/story.asp?storyCode= 2059241 > last visited on : August 24th, 2011 10
Julia A. Schwartz, International Nuclear Third Party Liability Law: The Response to Chernobyl 11
ibid 12
Supra 9
17 | P a g e
nuclear installation capacity available.13 The advantages enjoyed by suppliers are extended to
carriers who are not responsible for the packaging of the nuclear substances being transported,
who do not necessarily have the specialised knowledge of how to handle them and who would
otherwise also be required to purchase costly third party liability insurance to cover their
liability exposure.14
On 15 June, Japanese experts attending the NEA Nuclear Law Committee meeting described
Japan‟s nuclear liability system and its application to the accident at the Fukushima Daiichi
nuclear power plant.15
According to the Act on Compensation for Nuclear Damage, the
operator of the installation, in this case Tokyo Electric Power Company (TEPCO), is
exclusively liable to compensate victims who only need to demonstrate a causal link between
the accident and the damage suffered16
.
1.3. Negligence of driver does not break causal link
A system of law may hold a man liable either for performing acts which are dangerous in
tendency or for causing actual damage or injury.17
In this present situation, the Rentiers knew
of the existence of the Diablo Canyon Fault and even thereafter, permitted the nuclear power
plants to be built nevertheless18
. The nuclear incident happen when as earthquake stuck and
affected the reactor 2 of Nihon Nuclear Power Plant.19
In order to avoid greater damage, the
Rentier requested assistance to the Amuko for the transfer of spent fuel rod from his territory
to a safer place in his territory.20
Then, in response of that request, the Amuko had sent two
vehicles in which one met with accident. Ordinarily, any event results from the combination
of factors, namely abnormal factors and human acts. Here, the presence of nuclear material on
the vehicles was abnormal factor and vehicle accident due to the negligence of driver was
13
IAEA INTERNATIONAL LAW SERIES NO.3, “The 1997 Vienna Convention On Civil Liability For
Nuclear Damage And The 1997 Convention On Supplementary Compensation For Nuclear Damage:
Explanatory Text”; International Atomic Energy Agency, Vienna (2007) 14
Julia A. Schwartz, International Nuclear Third Party Liability Law: The Response to Chernobyl 15
Japanese experts discuss nuclear liability post-Fukushima, available at < http://www.oecd-
nea.org/general/mnb/2011/july-fukushima.html/>, last visited on: August 24th
, 2011 16
ibid 17
Fitzgerald, P.J.; Salmond on Jurisprudence, 12th
edition, Sweet & Maxwell Ltd., London 18
See, Special Agreement Annexure A para 34 19
Ibid, Annexure A , para 15-16 20
Ibid, Annexure A, para 18
18 | P a g e
human act. The nuclear accident in Robelynch was resulted from a combination of factors, of
which is the presence of nuclear material. This accident would not be nuclear accident which
caused nuclear damage, unless the presence of nuclear material was abnormal in the
circumstances. In absence of such nuclear material, it would be a simple vehicle accident.
Gross negligence is a conscious and voluntary disregard of the need to use reasonable care,
which is likely to cause foreseeable grave injury or harm to persons, property, or both21
whereas, negligence is the failure to exercise ordinary or reasonable care; that is: what would
be the conduct of an ordinarily prudent, careful person in the same or similar circumstances as
the defendant found himself.22
It is conduct that is extreme when compared with ordinary
Negligence, which is a mere failure to exercise reasonable care and it differ in degree of
inattention, while both differ from willful and wanton conduct, which is conduct that is
reasonably considered to cause injury.23
Gross negligence occurs on the continuum between
ordinary negligence and intentional misconduct.24
Moreover, The Vienna Convention is generally viewed as only applying to damage suffered
within the territory of a Contracting Party and on or over the high seas. The Vienna
Convention Protocol significantly extends that geographic scope so that the revised
convention will apply to nuclear damage wherever suffered,25
subject to a permitted exclusion
for a non-Contracting State which has a nuclear installation on its territory and does not
provide equivalent reciprocal benefits.
II. REPUBLIC OF RENTIERS IS LIABLE FOR THE DAMAGE SUFFERED
IN THE TERRITORY OF THE FEDERAL STATES OF AMUKO
It is a basic principle of International Nuclear law that compensation must not discriminate on
the basis of nationality, domicile or residence.26
Under article II (1)(2)(1)-(3) of Vienna
convention, the word „another nuclear installation‟ would also include the nuclear installation
21
West's Encyclopedia of American Law, edition 2 22
http://www.judiciary.state.nj.us/civil/charges/5.12.pdf. Last visited on 24 Aug 2011 23
ibid 24
Ibid 25
See Article 3 of the Vienna Convention Protocol. Technically, this means damage suffered anywhere in the
world, including in non-Contracting States. 26
Uranium Information Centre. (2006). Civil Liability for Nuclear Damage. UIC Nuclear Issues Briefing Paper
#70. Available online at http://www.uic.com.au/nip70.htm Last viewed 20/12/2006.
19 | P a g e
situated in the territory of the other contracting State. The use of words „non-contracting
State‟ in clause 4 of the same article clearly shows the intention of the signatory.27
Thus, the
convention may be applicable even if the incident occurs outside the territory of a Contracting
Party, in particular if it occurs during the transport of nuclear material originating from, or
sent to, a nuclear installation situated in the territory of a Contracting Party.28
The two conventions i.e. The 1963 Vienna Convention on Civil Liability for Nuclear Damage
and Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency,
1986 are adopted by the International Atomic Energy Agency and are pari materia29
in
nuclear law. Thus, article 10 of Convention on Assistance must be construed in the light of
article II (1) (2) of Vienna Convention.30
The kind of nuclear damage that would be compensated under the Paris Convention31
and
Vienna Convention32
were confined to damage directly linked to that suffered by individuals
or their property, as well as damage that cannot be reasonably separated from nuclear damage,
which, in case of transport accidents, arises out of or results from the radioactive properties
(or a combination of radioactive properties with toxic, explosive or other hazardous
properties) of nuclear fuel or radioactive products or waste coming from, originating in, or
sent to a nuclear installation33
. In the present situation, the former residents of Robelynch
were required to leave their homes and abandon their possessions due to nuclear incident.
27
According to Lord Davey: Every clause of a statute should be construed with reference to the context and
other clauses of the act, so as, as far as possible, to make a consistent enactment of the whole statute or series of
statutes relating to the subject-matter.(Canada Sugar Refining Co v R [1898] AC 735, p 742), according to Lord
Green: to ascertain the meaning of a clause in the statute the court must look at the whole statute, at what
precedes and at what succeeds and not merely at the clause itself.(Re BIdie{deceased}[1948] 2 ALL ER 995 , p
998{CA}) 28
IAEA INTERNATIONAL LAW SERIES NO.3, p 15 (The 1997 Vienna Convention On Civil Liability For
Nuclear Damage And The 1997 Convention On Supplementary Compensation For Nuclear Damage:
Explanatory Text – Vienna : International Atomic Energy Agency, 2007) 29
Statutes are in pari materia which relate to the same person or thing, or to the same class of persons or things.
The words per must not confused with the word simlis. It is used in opposition to it-- intimating not likeness
merely but identity. It is a phrased applicable to public statute or general laws made at different times and in
relation to same subject [United States V Eagle Bank, (1829) 7 Connecticut 457, P 470]. 30
As stated by Lord Mansfield : where there are different statutes in pari materia though at different times, or
even expired, and not reffering to each other, they shall be taken and construed together, as one system and
explanatory of each other. [ r v loxdale, (1758) 97 ER 394, p, 395] 31
Article 3 Vienna Convention 32
Article I(1)(k)(i) Vienna Convention 33
Article 1(a)(v) Paris Convention and Article I(1)(h) Vienna Convention
20 | P a g e
Moreover, both the 2004 Paris Convention and 1997 Vienna Convention extended the narrow
definition of „nuclear damage‟ to explicitly also include:
A. costs of measures of reinstatement of impaired environment if actually taken or to be
taken34
B. certain loss of income resulting from an (a direct) economic interest in any use or
enjoyment of the environment resulting from a significant impairment of the
environment35
C. costs of preventive measures and further loss or damage caused by such measures36
,
The compensation fund programme organised by the Amuko to cover all the medical
expenses and a lifetime medical monitoring programme is a preventive measure37
for further
loss.
III. REPUBLIC OF RENTIERS IS LIABLE FOR THE DEATH OF DRIVER
AND SECURITY GUARD, AME EMPLOYEES IN THE ACCIDENT WHO
WERE KILLED DUE TO TRAUMA ASSOCIATED WITH THE
ACCIDENT
A person suffering damage due to a transport accident may have two rights of action, i.e. one
against the operator under the Vienna Convention or Paris Convention in case of
transportation of nuclear material and one against the carrier liable under such existing
agreement38
. Under the principle of Exclusive Liability39
, the operator of a nuclear installation
is exclusively liable for damage to third parties resulting from a nuclear incident at its
installation or during the course of transport of nuclear substances to or from that
34
Artcle 1(a) (vii) (4) 2004 Paris Convention and Article 1(1)(k)(iv) 1997 Vienna Convention 35
Ibid, Article 1(a) (vii) (5) and Article 1(1)(k)(v) 36
Ibid, Article 1(a) (vii) (6) and Article 1(1)(k)(vi) 37
Ibid, Article 1(a) (ix) and Article 1(1)(n) 38
Nathalie L.J.T. Horbach, Nuclear liability for international transport accidents under the modernised nuclear
liability conventions: an assessment, Int. J. Nuclear Law, Vol. 1, No. 2, 2006 39
Article II (5) Vienna Convention; 5 except as otherwise provided in this Convention, no person other than the
operator shall be liable for nuclear damage. This, however, shall not affect the application of any international
convention in the field of transport in force or open for signature, ratification or accession at the date on which
this Convention is opened for signature and Article 6(b) Paris Convention; Except as otherwise provided in this
Article, no other person shall be liable for damage caused by a nuclear incident, but this provision shall not affect
the application of any international agreement in the field of transport in force or open for signature, ratification
or accession at the date of this Convention.
21 | P a g e
installation.40 The operator is legally liable regardless of whose acts or omissions were the
actual cause of the accident.41
Article IV. (2) provides that, if the operator proves that the damage resulted wholly or partly
form the gross negligence of the person suffering such damage, or from an act or omission of
such person done with intend to cause damage, the competent caurt may relieve him wholly
or partly from his obligation to pay compensation for the damage suffered by that person.42
3.1. AME employees have claim against Rentier as „third party‟
A third party is anyone other than the nuclear operator itself and other than a supplier of
goods, services or technology for use in connection with a nuclear installation43
. A third party
may be inside or outside of the nuclear installation and as such the term includes employees
of the operator of the nuclear installation at which an accident occurs44
. Third parties are
anyone that is not the plant operator or associated suppliers of goods, services or
technologies.45
In most countries, employees of the nuclear operator will also have a right to
claim compensation under a system of public health insurance, social security, workers or
occupational disease compensation.46
It is submitted, therefore, that AME employees have claim against Rentier as „third party‟.
IV. DEFAULT OF RENTIERS ON ITS SOVEREIGN BOND IS VIOLATION
OF THE BASIC PRINCIPLE OF INTERNATIONAL LAW
It is submitted on behalf of applicant that the default or restructuring of sovereign bonds by
the republic of rentiers is a violation of a basic principle of international law, viz. pacta sunt
40
Douglas Helman, Nuclear Damage and Liability; An introduction to the Vienna and Paris Conventions, their
Amending Protocols and Supplementary Conventions 41
Julia A. Schwartz, International Nuclear Third Party Liability Law: The Response to Chernobyl 42
IAEA INTERNATIONAL LAW SERIES NO.3, “The 1997 Vienna Convention On Civil Liability For
Nuclear Damage And The 1997 Convention On Supplementary Compensation For Nuclear Damage:
Explanatory Text”; International Atomic Energy Agency, Vienna (2007) 43
Supra- 36 44
Ibid 45
Douglas Helman, “Nuclear Damage and Liability; An introduction to the Vienna and Paris Conventions, their
Amending Protocols and Supplementary Conventions” 46
Supra-36”
22 | P a g e
servanda. The fundamental principle of treaty law is undoubtedly the proposition that treaties
are binding upon the parties to them and must be performed in good faiths.
4.1. In Arguendo, unilateral restructuring of Sovereign bond was in violation of „pacta
sunt servanda‟
By virtue of principle of „pacta sunt servanda’ , i.e., agreements are to be honoured; state
party is incompetent to alter unilaterally the terms of a relevant international agreement,
because the contract itself by its very nature becomes 'internationalised' and thus subject to
international law.47
In the instant case, unilateral restructuring of sovereign debt is the violation of the basic
principle of international law as well as Article 26 of the Vienna Convention on the Law of
Treaties, 1969.48
4.2. In Arguendo, unilateral debt restructuring by Rentiers was not performed in good
faith
It is submitted that unilateral debt restructuring by Rentiers was not performed in good faith.
Perhaps the most important general principle, underpinning many international legal rules49
, is
that of good faith, which is “of overriding importance”.50
The International Court declared in
the Nuclear Tests cases51
that “One of the basic principles governing the creation and
performance of legal obligations, whatever their source, is the principle of good faith. Trust
and confidence are inherent in international co-operation, in particular in an age when this co-
operation in many fields is becoming increasingly essential.”
47
Shaw, Malcolm “International Law, Cambridge Uni. Press 5th edi.” , p 739 48
The rule of pacta sunt servanda was reaffirmed in Article 26 of the Vienna Convention on the Law of Treaties,
1969 which states that “”. 49
This principle is enshrined in the United Nations Charter, which provides in article 2(2) that 'all Members, in
order to ensure to all of them the rights and benefits resulting from membership, shall fulfil in good faith the
obligations assumed by them in accordance with the present Charter', and the elaboration of this provision in
the Declaration on Principles of International Law Concerning Friendly Relations and Co-operation among
States adopted by the General Assembly in resolution 2625 (XXV), 1970, referred to the obligations upon states
to fulfil in good faith their obligations resulting from international law generally, including treaties. 50
Lauterpatch, “Oppenheim International Law”, p 38 51
New Zealand v. France (Nuclear Tests Case) ICJ Reports, 1974, p p 253,267; 57 ILR, pp. 398,412.
23 | P a g e
Whether the performance of an act by a State is in good faith or not, it can be determined by
the interpretation of the act performed.52
In the instant case, when a diplomatic note was
forwarded by the State of Amuko, on 8 December 2010, to the Republic of Rentiers
requesting negotiation for debt restructuring; then in response the Republic of Rentiers has
denied any responsibility and expressed the intention of invoking force majeure.53
Whereas;
negotiation is an essential pre-requisite for sovereign debt restructuring.54
The omission of
renegotiation clearly indicates that unilateral debt restructuring by Rentiers was not performed
in good faith.
V. FAILURE TO PAY A SOVEREIGN BOND ENGAGE THE STATE’S
INTERNATIONAL RESPONSIBILITY
In the diplomatic note forwarded by the Rentiers‟ ambassador, Yuri Nium, to the Government
of the federal States of Amuko it was stated with reference to Michael Waibel, Opening
Pandora’s Box: Sovereign Bonds in International Arbitration,55
that “there is ample authority
that failure to pay a sovereign bond does not engage the state‟s international responsibility,
even if it constitutes a default under the bond.” But, here it is notable that in the same piece of
literature, Michael Waibel has pointed out four specific treatment standards, departure from
which may engage the state‟s international responsibility, namely; MFN treatment, national
treatment, expropriation, and fair and equitable treatment.56
It was observed by him that
unilateral measures specifically exercised by public authority could give rise to
expropriation.57
Additionally, forceful restructuring and repudiation of sovereign bonds would
amount to expropriation.58
5.1.In Arguendo, the restructuring of the sovereign bonds is an expropriation in
violation of the “RABBIT”
52
Ibid 53
See Special Agreement Annexure „A‟ para 32-33 54
Michael Waibel, Opening Pandora‟s Box: Sovereign Bonds in International Arbitration, 101 Am. J. Int‟l L.
711, 746 (2007) p 735 55
Ibid 56
Ibid p. 738 57
Ibid p. 745 58
Ibid p. 747
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It is submitted that unilateral restructuring of sovereign debt by Rentiers amounts to
expropriation against the investment by companies of Amuko. The Rentiers Parliament
enacted a debt restructuring law, called the Fresh Start Act. The Fresh Start Act specifically
provided that Rentiers sovereign bonds were to be restructured such that investors would
receive 10% of what they would otherwise be entitled to.
5.1.1. Purchase of sovereign bond by Amuko‟s investors is an “investment”
It is submitted on behalf of Applicant that the purchase by investment companies of Amuko,
of approximately 3 billion tenge of worth of sovereign bond issued by Rentiers, is an
investment, as defined in Article 1 of the RABBIT.59
Sovereign debts fall under the category
of “title or claim to money or to any contract having a financial value”. Even if it will not fall
under the said category, still then it would constitute investment, because Article 1 of
RABBIT provides an inclusive definition of “investment” by using the phrase “including
though not exclusively”.
It would be a wrong approach to try to place a given investment under one or the other sub-
clause in Article 1(1) of RABBIT and if it does not fall under any of the sub-clause, to say
that it does not constitute investment. Even if an investment does not fall within the ambit of
any of the sub-clause in Article 1(1) of RABBIT, it may still be investment if it partakes of
the nature of the investment. The idea behind providing inclusive definition in Article 1(1) of
RABBIT is not to limit its meaning but to widen its net.60
The relationship of “investment” with a commercial undertaking, interlinks “expropriation”
with “investment”. Schreuer highlighted that the “law of expropriation proceeds not from a
traditional concept of tangible property but from a broad concept of economic rights that are
necessary for the investor to pursue its business successfully.”61 Expropriation covers tangible
59
Article 1 of the RABBIT : “For the purposes of this Agreement: The term ―investments means all kinds of
assets that have been invested in accordance with the laws of the Contracting Party receiving them including
though not exclusively any: (a) movable and immovable property and other property rights such as mortgage,
usufruct, lien, or pledge; (b) title or claim to money or to any contract having a financial value”. See, Special
Agreement, Annexure- A, Para- 13 60
See C.I.T. v. G.R. Karthikeyan 1993 Supp (3) SCC 222, where B.P. JEEVAN REDDY, J. observed this
approach of interpretation of an inclusive definition. In this case the approach was applied for the interpretation
of definition of Income. 61
Schreuer, Christoph. The Concept of Expropriation Under the ETC and Other Investment Protection Treaties,
in INVESTMENT ARBITRATION AND THE ENERGY CHARTER TREATY 108, 139 (Clarisse Ribeiro ed.,
2006) p 24
25 | P a g e
and intangible rights. Moreover, “[d]ebts are property rights; as property rights they are
protected by the general rule of maintenance recognized in international law; . . . this rule is
not restricted to tangible property.” 62
In the light of scholars‟ view and the provisions of RABBIT, it is submitted that purchase of
sovereign bond constitutes „investment‟ which was expropriated by Rentiers.
5.1.2. Test of “Substantial Deprivation” is satisfied
Sovereign debt restructuring or default could be interpreted as constituting a direct or indirect
expropriation.63
Expropriation is commonly defined and seen in IIAs as “wealth deprivation”
where “substantial deprivation” occurs that could be direct where an investment is “taken” in
the form of a title or physical seizure, or indirect whereby the title or physical nature of the
investment is not changed, but its value may be diminished.64
Both defaults and restructuring
obviously diminish the value of an asset, and under a “take-it-or-leave-it” swap arrangement a
bondholder has the choice to either lose a bond altogether or to accept a new bond with a
haircut. Tribunals perform a “substantial deprivation” test to examine the level of diminished
value in a restructuring, and would thus in this case be examining the size of the haircut in a
bond exchange.65
It was held that among the claims levied by Italian bondholders under the Italy-Argentina BIT
is the alleged expropriation of their investments through restructuring.66
It is, therefore,
submitted on behalf of applicant that sovereign bonds were restructured such that the
investors could receive only 10% of what they would otherwise be entitled to. Such a huge
haircut in bond exchange would definitely constitute expropriation.67
5.1.3. In Arguendo, unilateral restructuring measure is tantamount to expropriation.
62
Ernst H. Feilchenfeld, Rights and Remedies of Holders of Foreign Bonds, in “ BONDS AND
BONDHOLDERS, RIGHTS AND REMEDIES” (Silvester E. Quindry ed., 1934) pp. 130, 203 63
Supra note 54. P 742 64
OECD (2004), Indirect Expropriation and the Right to Regulate in International Investment Law, Paris:
OECD. 65
Newcombe, A. and L. Pradell (2009), Law and Practice of Investment Treaties – Standards of Treatment, The
Hague, Kluwer Law International. 66
Gallagher, Kevin, “The New Vulture Culture: Sovereign debt restructuring and trade and investment treaties“.
(2011) IDEAs Working Paper no. 02/2011, IDEAs, New Delhi. P 19 67
As per changes made by Fresh Start Act, 2010. See, Special Agreement.
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It is submitted that unilateral restructuring measure gives rise to expropriation. In Consortium
R.F.C.C. v. Morocco, it was held that only unilateral measures taken specifically as an
exercise of public authority could give rise to expropriation. A host state acting as a
contractual party does not interfere with the normal exercise of the investors‟ rights, but rather
fails to perform the contract.68
Amuko, therefore, submits that interference with the rights of
bond holder is a direct failure to perform Rentiers‟ contractual obligation.
Lack of performance does not amount to a treaty breach unless it is proven that the state has
gone beyond its role as a mere party to the contract and has exercised the specific functions of
a sovereign authority.69
It is submitted that enactment of fresh start act is the conclusive proof
of the exercise of sovereign authority by the Rentiers and, therefore, restructuring was
expropriation.
5.2.In Arguendo, restructuring of sovereign bonds has violated the treaty obligation of
“fair and equitable treatment”
The principle of fair and equitable treatment is often interpreted as inter alia protecting
investors‟ legitimate expectations, guaranteeing freedom from harassment and coercion, and
incorporating fundamental principles of due process.70
It is argued on behalf of Amuko that debt restructuring is undermining the State‟s contractual
promises and the associated legal framework, thereby destroys investors‟ legitimate
expectations.71
It is also argued that process of restructuring lacks transparency and that it is coercive.
Rentiers‟ intention for invocation of force majeure is coercive in nature.72
The “take-it-or-
leave-it” nature of exchanges is the violation of due process and is not in good faith, because
there was no genuine restructuring negotiations.73
Additionally, forceful or coercive
68
Consortium R.F.C.C. v. Kingdom of Morocco, ICSID Case No. ARB/00/6, Award, para. 65 (Dec. 22, 2003).
(quoted approvingly in Waibel, Michael; Opening Pandora’s Box: Sovereign Bonds in International Arbitration,
101 Am. J. Int‟l L. (2007). P 748) 69
Impregilo S.p.A. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/3, Jurisdiction, para. 261 (Apr. 22,
2005)., para. 276. 70
UNCTAD, Fair and Equitable Treatment: A Sequel , New York and Geneva, <www.unctad.org/iia.> last
visited on 24thAugust 2011 71
Supra note 66, P 19 72
Ibid p. 19 73
UNCTAD, “Sovereign Debt Restructuring And International Investment Agreements” IIA ISSUES NOTE,
No. 2, July 2011, p. 5
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restructuring measures constitute expropriation.74
Again, Repudiation of sovereign bonds would
amount to expropriation, as it aims at extinguishing bondholders‟ claims permanently.75
In this vein,
Lauder v. Czech Republic affirmed that effective neutralization of the enjoyment of property amounts
to indirect expropriation.76
A leading ICSID case on the predictability of the investment framework in economic crises is
CMS v. Argentina, in which the tribunal upheld CMS‟s claim for violation of the fair and
equitable standard. The tribunal noted: “There can be no doubt . . . that a stable legal and
business environment is an essential element of fair and equitable treatment.”77
It is
submitted, therefore, on behalf of Amuko that the respondent has in fact entirely transformed
and altered the legal and business environment under which the investment was decided and
made. Thus, it is submitted that Rentiers has not provided „fair and equitable treatment‟ to the
Amuko‟s investors.
VI. THE DEFENSE OF THERE EXISTING A STATE OF NECESSITY DOES
NOT APPLY IN THE PRESENT CASE
Article 25 of ILC provides that necessity may not be invoked unless the act was the only
means for the state to safeguard an essential interest against a „grave and imminent peril‟ and
the act does not seriously impair an essential interest of the other state or states or of the
international community as a whole. Further, necessity may not be invoked if the international
obligation in question excludes the possibility or the state has itself contributed to the
situation of necessity.78
6.1.Nuclear damage of “Level 4 on the IAEA Nuclear Event Scale” cannot be
considered as a „grave and imminent peril‟
74
Supra note 54, P 747 75
Certain Norwegian Loans (Fr. v. Nor.), 1957 ICJ REP. 9 ( July 6). In dissent, id. at 90, Judge Read cited the
French position that sovereign bonds issued abroad “cannot be repudiated without giving rise to a breach of
international law.” 76
Lauder v. Czech Republic, Final Award, para. 200 (UNCITRAL Arb. Trib. Sept. 3, 2001). See Metalclad
Corp. v. United Mexican States, ICSID Case No. ARB(AF)/97/1, Award, para. 103 (Aug. 30, 2000), where the
tribunal held that indirect expropriation takes place if “the effect of depriving the owner, in whole or in
significant part, of the use or reasonably-to-be-expected economic benefits of property even if not necessarily to
the obvious benefit of the host State.” 77
CMS Gas Transmission Co. v. Argentine Republic, Award, ICSID Case No. ARB/01/08, Award (May 12,
2005), 44 ILM 1205 (2005) paras. 274–75 78
See ILC Commentary 2001, p. 194
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In this case it cannot be said that there is existence of a „grave and imminent peril‟. The
damage suffered in the „Nihon‟ was due to earth quake and not due to nuclear damage.
Damage suffer to nuclear reactor was classified as “Level 4 on the IAEA Nuclear Event Scale”,
(accident with local consequences). The minimum damage suffered with an earthquake measuring
9.2 on the Richter scale clearly point out non-existence of „grave and imminent peril‟ which is
essential for taking of precautionary measure or plea of necessity. The International Court in the
Gabtikovo-Nagymaros Project case considered that it was „a ground recognised in customary
international law for precluding the wrongfulness of an act not in conformity with an
international obligation‟, although it could only be accepted „on an exceptional basis‟.79
In
this case, ICJ has affirmed that the doctrine of necessity is not a general rule of international
law stated that the conditions given in Article 25 must be cumulatively satisfied. Thus, it is
submitted on behalf of applicant that plea of necessity is not available to Rentiers.
Moreover, as noted by the International Law Commission the plea of necessity is “excluded if
there are other (otherwise lawful) means available, even if they may be more costly or less
convenient.”80
Rentiers, therefore, may have additional safety measures for running nuclear
power plants.
6.2.Artificial extra-ordinary circumstances waived the plea of „force majeure‟
Debt default and restructuring cannot be excused as on the basis of principle of force majeure
or doctrine of necessity, as Rentiers knew of the existence of the Diablo Canyon Fault and
permitted the nuclear power plants to be built nevertheless.
Moreover, sovereign debt restructuring cannot be said as prudent action by Rentiers, because
according to economic theory of debt restructuring, cost of default had turned the situation
from bad to worst.81
6.3.In Arguendo, the state of necessity under domestic law would not offer an excuse to
preclude State from fulfilling its contractual obligations
79
Gabtikovo-Nagymaros Project case, ICJ Reports, 1997, pp. 7, 40; 116 ILR, p. 1. 80
Crawford , James; “The International Law Commission‟s Articles on State Responsibility: Introduction, Text
and Commentaries” (2002) p. 184. See ICJ‟s Opinion in, Legal Consequences of the Construction of a Wall in
the Occupied Palestinian territory 43 I.L.M. 1009 (2004). 81
Kaletsky, Anatole. “The costs of default.” (1985 ) Priority Press; New York
29 | P a g e
In CMS Gas Transmission Company v. The Argentine Republic82
, the facts of which are very
similar to the instant case, a national emergency was declared in Argentina due to an internal
crisis. However the tribunal maintained that the state of necessity under domestic law would
not offer an excuse to preclude the Argentine Republic from fulfilling its contractual
obligations. It was also observed that even if elements of necessity are „partially present‟ here
and there, but as a whole do not meet the „cumulative Test‟ the inevitable conclusion would
be that the requirements of necessity under customary international law have not been fully
met so as to preclude the wrongfulness of the acts of the State, as is the case with Rentiers in
the instant case.
82
CMS Gas Transmission Company v. The Argentine Republic, 44 I.L.M. 1205 (2005).
30 | P a g e
CONCLUSION/PRAYER
Therefore in light of the facts of the case, arguments advanced and authorities cited, the
Applicant respectfully requests that this Hon‟ble Court:
1. Delare that the Rentiers is liable for the nuclear accident which occurred in the
territory of Amuko.
2. Declare that default of Rentiers on its sovereign bond is violation of pacta sunt
servanda.
3. Declare that unilateral debt restructuring on its sovereign bond amounts to
expropriation.
4. To pass an order of full reimbursement for the compensation programme stated by the
Amuko government.
5. To pass an order, a just compensation should be granted for sovereign bond default
and debt restructuring.
All of which is respectfully submitted
Agents for the Applicant.