Question for the short mid-term paper

In 2018, Morrison Ltd and Mr. André Jones obtained the mining concessions “Green” and “Blue” from the Government of Australia for ten years. Morrison Ltd and Jones ordered removing the canopy and trees from their respective lots of land to prepare for the mining activities. They jointly conducted mining under the “Green” concession, whereas the “Blue” concession belonged exclusively to Mr. Jones. After two years, the local activist organization “Eagles” published a report where it alleged that Morrison Ltd and Mr. André Jones dumped the toxic waste in the ground. In particular, the “Eagles” identified an abnormal level of toxic waste in the river nearby the “Blue” concession. In addition to this formal complaint, the activist organization organized a series of strikes at the mining sites and subsequently burnt the mining equipment. Local police and municipal authorities refused to intervene. As a result of the elections, a new political party secured the majority of seats in the parliament. The newly formed cabinet made an abrupt decision to withdraw the concessions from Morrison Ltd and Mr. Jones. In the communication with Morrison Ltd and Mr. Jones, one of the public officials, mentioned that the cabinet made a decision to transfer the concessions to the domestic investors – Phillips Inc. The Government’s formal communication letter indicated that the concessions were cancelled due to the breaches of the environmental regulations by Morrison Ltd and Mr. Jones in July 2018.

Morrison Ltd and Mr. Jones lost the profits from the concessions and their contributions to making the land suitable for mining. They are now suing the Government of Australia under the Australia – Hong-Kong BIT (1991) for breaches of fair and equitable treatment, full security and protection, and expropriation. Please note that Morrison Ltd is incorporated in Hong-Kong. Mr. Jones possesses a dual nationality (Hong-Kong and Canada). He spends half of the calendar year in Canada and half of the year in Hong-Kong. The tribunal is constituted pursuant to the UNCITRAL (2010) Rules.

TASK:
As a sole arbitrator, please provide a complete analysis of the facts of this case (including jurisdiction and merits) in light of the legal principles and rules we covered in this course so far. For the purposes of this case-study, the ICSID Convention does not apply.

IMPORTANT INFORMATION:

 In the question above, the case/scenario is fictional but corresponds to the general patterns of the real ISDS (Investor State Dispute Settlements) cases. Hence, there is no single case that would cover the fact-pattern.
 I recommend the writer to review the fact-pattern carefully and try to step in the shoes of the arbitrator.
 The arbitrators must evaluate the facts and apply the law to the facts to reach an informed outcome.
 FIRST STEP THE WRITER SHOULD TAKE is to begin with the BIT PDF document I have attached, analyze the provisions of the treaty and try to distill the most relevant provisions.
 After COMPLETING the FIRST STEP, THEN the writer can analyze the supplementary materials (which I have attached) and decide if any of these materials are relevant for you to assess the facts/ reach your final determination. NOTE: all documents needed to complete the task will be attached therefor no external documents other than those attached should be used!
 Most importantly, you should demonstrate the sharpness of your reasoning i.e., explain why/ how particular cases/ other legal instruments are relevant.
 Important Legal Concept: How do ISDS tribunals establish Jurisdiction?
1. Jurisdiction Ratione Personae/ Personal Jurisdiction:
– Individuals (Natural Persons)
– Juridical Persons (Ex. Corporations)
Objections Arise when:
– Dual Nationality
– When the claimant lacks the nationality of the state-party to the convention
2. Ratione Materiae/ Subject Matter Jurisdiction:
– The ISDS disputes require “investment” to be a subject matter of the dispute
What constitutes an investment?
– The tribunal will look at the definition of investment in the applicable investment treaty.
3. Ratione Temporis/ Temporal Jurisdiction:
– Extends to claims relating to the claimant’s investment, which are founded upon obligations in force and binding upon the host contracting state party at the time of the alleged breach”

ADDITIONAL INFORMATION:
 The assignment invites you to think about the matters of jurisdiction and merits. It means that you have to make sure that as an arbitrator you have jurisdiction to hear the dispute and evaluate the actions of the governments with respect to the investors/ their investments.

You may wish to consult only the following supplementary materials to resolve this case:

• The Australia – Hong-Kong BIT**** (Main pdf which the writer should read FIRST!! as mentioned in the instructions above)
• Salini v Morocco (Final Award)
• Bear Creek Mining Corporation v. Republic of Perú (dissenting Opinion by Professor Sands)
• Metaclad v Mexico (Final Award)
• Hussein Nuaman Soufraki v. United Arab Emirates (Final Award)