Applicant Ashwini

31
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

Transcript of Applicant Ashwini

Page 1: Applicant Ashwini

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

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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

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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.

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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

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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.

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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”

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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.

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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

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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

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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).

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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.