THAT THE NATIONALIZATION OF CORPORATION DOES NOT VIOLATES

RIGHTS OF REPUBLIC OF EDEN.

It is submitted that the nationalization of APCL does not violates the rights of Republic of Eden
as :

1.1 THAT ICJ HAS NO JURISDICTION AS TO DECIDE THE DISPUTE RELATING TO

NATIONALIZATION

1. It is humbly submitted by the petitioner state that ICJ has no jurisdiction as to decide the
dispute relating to nationalization of APCL as both the parties are bound by the Dispute
Settlement Clause of the agreement which contemplates that in case if the dispute has not
been settled within six months, the dispute may at the choice of the investor, after notifying
the other party be submitted to the competent court of the party in whose territory the
investment is made i.e. Republic of Ardenia or to arbitration by the ICSID or an Ad-hoc
arbitrational tribunal.1

2. It is submitted that the well recognized principle of pacta sunt servenda of international law
which contemplates that parties should respect the treaty in good faith. Thus, Republic of
Eden is estopped from raising the issue of nationalization before ICJ.
3. It is submitted that in the well-known case of Anglo-Iranian Oil Company2, the dispute
between Iran and the United Kingdom over the nationalisation of the company in question,
was referred to the Court, it declared that it had no jurisdiction on the issue.
4. Further, without prejudice to other arguments, it is also submitted that the Republic of eden
has alternate remedy to challenge the nationalization process in the courts of Ardenia itself

1.2 NATIONALIZATION IS THE EXERCISE OF PERMANENT SOVEREIGNTY OF

NATURAL RESOURCES.

1. It is submitted that states have sovereign rights over their natural resources and the rights
of people and nation to permanent sovereignty over their natural wealth and resources

1
Given in Clarification point 6
2 Anglo-Iranian Oil Company case (United Kingdom v. Iran), Judgment of 22 July 1952, I.e.J. Rep.
(1952) 93 at 114.
 must be exercised in the interest of their national development and of the well being of
the state concerned3 and nationalization of APCL is exercise of that right.
2. The right to PSNR can be defined as the right of all States and/ or peoples to dispose freely
of the natural resources, of any kind, found within their territory, including the maritime
space.4 The term “dispose of” in relation to PSNR means “to have at one’s disposal powers
of decision making as to how natural resources are to be used”5. Thus, the rights that emanate
from the right to PSNR, inter alia, include the right to decide the manner of resource
exploitation; to control the use, conservation and management of natural resources; to grant
license for the exploitation of resources; and to supervise the activities of foreign companies
and take measures to ensure that such activities comply with its laws, rules and regulations6.
3. The right of PSNR is further strengthened upon the passing of the Charter of Economic
Rights and Duties of States in 1974, which addresses the economic relationship of
developing and industrialized States, Art. 2(1) of the Charter of Economic Rights and Duties
of States 1974, also contemplates that state has and self freely exercise, full permanent
sovereignty including possession, use and disposal, over all its wealth, natural resources and
economic activities.7 Clearly the 1974 charter does not mention any public purpose limitation
upon the power to expropriate8.
4. The right to expropriate or nationalise foreign investment is inherent in the sovereignty of
each State and was generally recognized long before the permanent-sovereignty resolutions
were adopted9
5. Stockholm Declaration contemplates that States have, in accordance with the Charter of the
United Nations and the principles of international law, the sovereign right to exploit their
own resources pursuant to their own environmental policies, and the responsibility to ensure

3
Article 1, Resolution on Permanent Sovereignty and Natural Resources 1962; Gess 1964 (13 ICLQ 398); O’Keefe
(1974) 8 JWTL 239
4
UNGA Res. 1803(n 1), para. 1.
5
Nico J. Schrijver, Sovereignty over Natural Resources: Balancing Rights and Duties (Cambridge University Press,
(1997), 36.
6
UNGA Res. 3281 (XXIX), Charter of Economic Rights and Duties of States (1974), Art. 2(2)(b)
7
Art. 2(1)
8
David Harris, Cases and Material on International Law, 7th edn, page 476
9
Schrijver, op. cit., at 285.
 that activities within their jurisdiction or control do not cause damage to the environment of
other States or of areas beyond the limits of national jurisdiction.10
6. Subsequent international treaties have also recognized the sovereign right of all coastal States
over marine resources. For example, in its various provisions the United Nations Convention
on the Law of the Sea (LOSC)11 expressly recognizes the sovereign rights of all coastal
States to exploit their marine resources. Article 193 of the LOSC provides a general
provision stating that: “States have the sovereign right to exploit their natural resources
pursuant to their environmental policies and in accordance with their duty to protect and
preserve the marine environment”.
7. Similarly, the Convention on Biological Diversity (CBD), which regulates both terrestrial
and marine resources, explicitly recognizes the sovereign right of all States “to exploit their
own resources pursuant to their own environmental policies”12.
8. The right to PSNR, which originally emerged as a political claim by colonized peoples and
newly independent States attempting to control their natural resources, has later become a
recognized principle of international law applicable to all States.13
9. Permanent sovereignty could be regarded as jus cogens that is, a peremptory norm similar to
the prohibition on slavery or the general prohibition on the use of force, making it unlawful
for states to derogate from that norm in future agreements14
10. The State’s definitive, indisputable, and uncontested supremacy over its territory involves a
reality which is beyond discussion: permanent sovereignty over the resources of that
territory15.
11. Various arbitral tribunals have supported this view. The tribunal in Libyan American Oil Co.
("LIAMCO") v Libya, for example, opined that, "the said Resolutions, if not a unanimous
source of law, are evidence of the recent dominant trend of international opinion concerning
the sovereign right of States over natural resources."16

10
Principle 21 of the Declaration of the United Nations Conference on the Human Environment, Stockholm, 1972
11
United Nations Convention on the Law of the Sea (LOSC), 1833 UNTS 3 (1982).
12
Convention on Biological Diversity, 1760 UNTS 79 (1992), Art.3.
13
Lillian A. Miranda, “The Role of International Law in Intrastate Natural Resource Allocation: Sovereignty, Human
Rights and Peoples-Based Development”, Vanderbilt Journal of Transnational Law 45 (2012): 798
14
Pereira, ‘Exploration and Exploitation of Energy Resources’, above n 16, 207.
15
George Elian, The Principle of Sovereignty over Natural Resources (Sijthoff & Noordhoff, 1979), 12.
16
Libyan Am. Oil Co. (LIAMCO) v. Gov't of Libyan Arab Republic, 20 I.L.M. 1, 53 (1981).
12. This position was reaffirmed in Texaco v Libya, where the tribunal held that Resolution 1803
reflected the tenets of customary international law.17 Their rationale was based on the said
Resolution's reference to international law when it addresses nationalization.18 Moreover, the
principle has been accepted by the International Court of Justice ("ICJ"), as is clearly
reflected in the East Timor Case19.
13. In Congo v Uganda,20 the ICJ explicitly recognized the principle permanent sovereignty over
natural resources as "a principle of customary international law."21
14. In the Aminoil case,22 the tribunal held that the sovereign right of a State to nationalise
foreign property prevailed even over an express stabilisation clause. A further illustration of
this recognition is found in the Agip case, the arbitration under the auspices of the
International Centre for the Settlement of Investment Disputes, (,ICSID'), the tribunal held
that the right of a State to nationalize is beyond doubt today by reason of concordant and
"constant international practice”.23
15. Further, it is also submitted that the most well-known doctrine concerning the law of State
responsibility for injuries to aliens is the ‘Calvo doctrine’24, which is based on two cardinal
principles: (l) the 'non-intervention' principle, according to which a sovereign independent
State, by reason of the principle of equality, enjoys the right to freedom from foreign
interference in any form, whether by diplomacy or by force; and (2) the 'equality of
treatment' principle, under which aliens could not claim any greater measure of protection
than nationals.25
16. The duty not to intervene implies that the choice of policies of another state cannot give a
state the right to intervene, whether directly or indirectly, e.g. by exercising economic or

17
Id. at 29-30.
18
Id. at 29; see also Stephen M. Schwebel, The Story of the U.N.'s Declaration on Permanent Sovereignty over Natural
Resources, 49 A.B.A. J. 463, 469 (1963).
19
East Timor (Port. v Austrl.), 1995 I.C.J. 90 (June 30) (dissenting opinion of Judge Weeramantry).
20
(Dem. Rep. Congo v. Uganda), Report of Judgment, 2005 I.C.J. 168 (Dec. 19).
21
Id. at para. 244
22
The Government of Kuwait v. American Independent Oil Company (Aminoil), Award of 24 March 1982, reprinted in
21 LL.M. (1982) 976 at 1012 and 1025.
23
Agip Co. v. The Republic of Congo, (ICSID), Award of 30 November 1979, reprinted in 21 I.L.M. (1982) 726 at 735,
para. 81.
24
Garcia-Amador (1980: 2-5).
25
F. W. Garcia-Amador, "Calvo Doctrine, Calvo Clause ", Vol. 8, Encycl. P.LL., at 62-65; and - Bring, op. cit., at 111-113.
 political coercion. On the contrary, states are rather under the duty to cooperate with one
another inter alia in order to maintain international peace and security
17. It is vehemently submitted by the petitioner state that APCL is a legal person which was
registered and incorporated under the law of Republic of Ardenia. 26 And it is the settled
jurisprudence that the State has unfettered right over its properety and persons. Domestic law
governs the companies registered under it.
18. In view of the foregoing considerations, the court may safely conclude that the right of States
to expropriate or nationalise foreign property is unanimously accepted. This right is an
attribute of sovereignty of the State, as well as its jurisdiction in internal matters. Thus
clearly establishing that Ardenia has every right to nationalize the APCL.

1.3 THAT THE NATIONALIZATION WAS DONE FOR PUBLIC PURPOSE AND
NATIONAL INTEREST.

1. It is submitted that the petitioner state has observed the agreement in good faith and that the
nationalization of the APCL does not vitiate the bilateral agreement as nationalization does
not violate any of the terms of the agreement.
2. As reflected in the TOPCO v. Libya case, under customary international law a ‘lawful’
expropriation must be, at a minimum, for a public purpose, non-discriminatory and
accompanied by appropriate or fair compensation.27 It is submitted that in the instant case all
these requisites have been duly satisfied by the petitioner state.
3. In the German Interests in Polish Upper Silesia case, the PCIJ held that international law
permits the expropriation of alien property for reasons of "public utility”.28
4. Public utility or public purpose has not been defined however, expropriation for public utility
purposes means, Expropriation the aim and result of which was to benefit the community as a
whole rather than any particular person.29
5. Further various jurists have opined that as a rule, the State concerned will be held to be the
best judge of its public interest.30

26
Para. 9, pg 2 of the moot prop.
27
Id. at ¶ 87
28
(1926) P.c.I.J. Series. A, No.7, at 22.
29
White, op. cit., at 146. See also the observations of Verwey and Schrijver in this regard in Verwey and Schrijver, op.
cit., at 9.
30
I. Seidl-Hohenveldem, International Economic Law (2nd ed.), MartIllus NIJhoff. Dordrecht (1992) at 138
6. It is up to the State itself to determine what its public purpose requires, and such a
determination is likely to be overruled by an international tribunal only in very exceptional
circumstances.31
7. The court in the case of James et al. v. The United Kingdom opined that “ Because of their
direct knowledge of their society and its needs, the national authorities are in principle better
placed than the international judge to appreciate what is 'in the public interest”.32
8. It is vehemently submitted that nationalization presupposes a taking of property in the public
interest.33 This view was endorsed by the statement in the Liamco case, when the Arbitrator
stated that there was no authority to support the application of the public purpose criterion to
the measures of nationalization.34
9. It is submitted that in the Liamco case, Arbitrator Mahmassani stated that there was no
separate public purpose criterion in international law, and motives are irrelevant to this law it
is the general opinion in international law theory that the public utility principle is not a
necessary requisite for the legality of nationalization.35
10. The petitioner state most humbly submits that the nationalization of the APCL was done
solely for the purpose of public welfare and in national interest as the erstwhile management
of Ardenia Power Corporation Ltd. under the control of Govt. of Eden was not releasing the
amount of water for its people which led to the Oxenberg Water Crisis.
11. In the year 2017, the city of Oxenberg faced one of its worst water crisis. The experts,
environmentalists, policy makers and scientists attributed one of the main causes to such
crisis as the climate change and change in ecosystem caused due to implementation of 'Mega
Hydro-Electricity Project' by the Republic of Ardenia.36
12. The nationalization was done to tackle the most dire social crisis of the 21st century and to
save a city having population of approximately 4 million from water scarcity.37 It was done

31
M. Pellonpaa. and M. Fitzmaurice. "Taking of Property ... III the PractIce of the Iran-Umted States Claims Tribunal",
19 N.Y.I.L. (1988) 53 at 63.
32
James et al. v. The United Kingdom,Judgment of 21 February 1986, E.C.H.Rep. (1986) Series A,No. 98, 9 at 32, para.
46.
33
Amerasinghe, op. cit., at 137.
34
Libyan American Oil Co. (“LIAMCO”) v. Libya, 17 I.L.M. 3 (1978), 4 Y.B. COM. ARB. 177 (1979) at 58-59
35
Liamco Award, op. cit., at 58-59.
36
Para. 42 pg. 9
37
Moot prop.
 as the last resort of the crisis as the city of Oxenberg and its residents as well as authorities
prepared themselves by adopting several adaptive and precautionary measures. 38

1.4 THAT REPUBLIC OF ARDENIA HAS NO OBLIGATION AS TO COMPENSATE

REPUBLIC OF EDEN

1. That the nationalization of APCL was done for public purpose and national interest39 and
it is submitted that the nationalization was lawful, even when no compensation was paid.
This was also held by the Tribunal in Exxonmobil v. Venezuela, concluding that: “the
mere fact that an investor has not received compensation does not in itself render an
expropriation unlawful.”40
2. Under customary international law, host States have a recognized right to regulate,
without many duty to compensate, in order to protect or promote the public interest (a
broad concept that includes public order, public health, national security, human rights,
public morals and environmental protection).
3. that In the absence of specific treaties or other contractual or quasi-contractual obligation
to the contrary, there is no general principle of international law prohibiting a State from
expropriating foreign property without compensation.41 In the instant case at hand there is
no such treaty between Eden and Ardenia.
4. that the legality and justification of expropriation are not subject to the payment of
compensation, but rather it is justified by the fact of its being the exercise of a
jurisdiction, which the State is recognised to possess by international law.42
5. The principle of permanent sovereignty over natural resources implies that compensation
is not a sine qua non for the legality of a nationalization.43 And nationalization of foreign
property without compensation may possibly be "a legitimate step justified by
international law.44

38
Moot prop.
39
Para 45 pg. 10 of moot prop.
40
Exxonmobil v. Venezuela, Award, 9 Oct. 2014, ICSID Case No. ARB/07/27, ¶ 301
41
1. F. Williams, "International Law and the Property of Aliens", 9 B.Y.I.L. (1928) 1 at 28.
42
Friedman, op. cit., at 204.
43
Bring, op. cit., at 131.
44
Foighel, op. cit., at 40-41.
 6. Further it is also submitted that in cases where the state chooses to nationalize,
expropriate or requisition property, it must limit this to sole instances for public purposes,
and compensation shall occur in accordance with national legislation.45
7. It is also submitted that, in any case where the question of compensation gives rise to a
controversy, the national jurisdiction of the State taking such measures shall be
exhausted. However, upon agreement by sovereign States and other parties concerned,
settlement of the dispute should be made through arbitration or international
adjudication.46
8. Property rights are neither absolute nor universal: they are defined by the laws of each
sovereign state. When a government decides, in the public interest, to reassign property
rights in a specific instance there is no obligation for it to compensate those
disadvantaged by the change. Public interest in a sovereign country is paramount in
decisions on compensation: there is no fixed formula and compensation is ‘determined in
each case by Parliament’47
9. In the case of Banco Nacional de Cuba v. Chase Manhattan Bank48 held that It may well
be the consensus of nations that full compensation need not be paid "in all circumstances,"
and that requiring an expropriating state to pay "appropriate compensation," - even
considering the lack of precise definition of that term - would come closest to reflecting
what international law requires. It is submitted that the compensation under the natrtional
law can be only be decided before the national courts.
10. Appropriate compensation’ can range from full to no compensation. Case law indicates
that full compensation may be relevant where a foreign investor was invited to undertake
a project and where alternative sources of investment were not available, however, it
need not be paid where there is full scale nationalisation ‘as part of economic reform.49

45
Stephan Zamora, “Economic Relations and Development” In the United Nations and International Law, (Cambridge
University Press, 1997) ,p. 259.
46
Art. 4, UNGA – Res. 1803 (XVII).
47
( Hall, D. (2017) ‘The economics of ending PFI’ The Mint Magazine Dec 10, 2017:
48
Banco Nacional de Cuba v. Chase Manhattan Bank, 658 F.2d 875 (2d Cir. 1981).
49
Sornarajah International Law p.448.