International Investment Law Arpit

7/21/2019 International Investment Law Arpit

http://slidepdf.com/reader/full/international-investment-law-arpit 1/16

INTERNATIONAL INVESTMENT LAW

IX Semester

OCCIDENTAL EXPLORATION AND PRODUCTION COMPANY

V

THE R EPUBLIC OF ECUADOR

SUBMITTED TO:SUBMITTED BY:

DR . SHEELA R AI ARPIT MAHESHWARI

ASSOCIATE PROFESSOR OF LAW2011/BBA LL.B/0!

NATIONAL LAW UNIVERSITY ODISHA




TABLE OF CONTENTS

Contents

I"tr#$%&t'#"................................................................................................................................2

BAC()ROU*D........................................................................................................................2

Ar+%me"ts..................................................................................................................................

*,t'#",- Tre,tme"t.....................................................................................................................

F,'r ,"$ E%'t,-e Tre,tme"t ,"$ F%-- Pr#te&t'#" ,"$ Se&%r't................................................

Im3,'rme"t C-,'m 4 Re5e&te$.....................................................................................................

DECISIO*.................................................................................................................................!

De&'s'#" A",-s's.......................................................................................................................6

THE TRIBU*AL AC(*OWLED)ED THAT OCCIDE*TAL BRO(E THE LAW A*D

SHOULD HA7E EXPECTED ECUADOR8S RESPO*SE:.................................................6

THE TRIBU*AL FURTHER EXPA*DED THE SCOPE OF MST/FET OBLI)ATIO*S

BY FABRICATI*) A *EW PROPORTIO*ALITY RE9UIREME*T:..............................6

THE TRIBU*AL SUPPLA*TED ECUADOR8S LE)AL 7ETTI*) PROCESS WITH

ITS OW* SPECULATI7E 7ETTI*) TO DETERMI*E DISPROPORTIO*ALITY:.. .. ..

THE TRIBU*AL SLAPS O* A* EXPROPRIATIO* 7IOLATIO* I* A O*E

PARA)RAPH PRO*OU*CEME*T:.................................................................................10

TRIBU*ALISTS I*CREASED OCCIDE*TAL8S HYPOTHETICAL LOST PROFITS

BYDECIDI*) THAT A TAX WAS ;*OT A MATTER OF TAXATIO*:<.......................11

DAMA)ES..............................................................................................................................1

C#m3e"s,t'#".......................................................................................................................1

Me,s%res t# A=#'$ D#%-e Re&#=er...................................................................................1

C#"&-%s'#"................................................................................................................................1

1 | P A G E




INTRODUCTION

O" O&t#er t>? 2012? , s3-'t ICSID tr'%",- $eterm'"e$ t>,t t>e Re3%-'& #@ E&%,$#r >,$

re,&>e$ t>e US4E&%,$#r '-,ter,- '"=estme"t tre,t ;BIT<? ,"$ ,,r$e$ $,m,+es #@

US1.66 '--'#" US2. '--'#" 't> '"terest ,33-'e$? re3#rte$- t>e -,r+est ,,r$ e=er t#

>,=e ee" 'ss%e$ ," ICSID tr'%",-. T>'s ,,r$ 's rem,r,-e "#t #"- e&,%se #@ t>e

-,r+e %,"t%m #@ $,m,+es ,"$ #@ t>e tr'%",-8s 2!43,+e $e&'s'#"? %t ,-s# e&,%se 't

,$$resses &%tt'"+ e$+e 'ss%es '" '"ter",t'#",- '"=estme"t -,? '"&-%$'"+ t>e 3r'"&'3-e #@

3r#3#rt'#",-'t ,"$ t>e ,ssessme"t #@ $,m,+es. T>e ,,r$ ,-s# $em#"str,tes t>e =,st 3#er

t>,t tr'%",-s 'e-$ ,"$ r,'ses 'm3#rt,"t "#rm,t'=e %est'#"s ,#%t ICSID.

T>,t 's t>e ,m#%"t t>,t E&%,$#r s3e"$s #" >e,-t> &,re e,&> e,r @#r #=er se=e" m'--'#"

E&%,$#r',"s44,-m#st >,-@ t>e 3#3%-,t'#". T>e s%m ,m#%"ts t# 1! 3er&e"t #@ t>e &#%"tr8s

eter",- $et? #r 11 3er&e"t #@ ,-- +##$s e3#rte$ ,""%,--. T>e @'","&',- $r,'" 's e%'=,-e"t

t# t>e &#m'"e$ ,""%,- '"&#me #@ t>e 3##rest 20 3er&e"t #@ E&%,$#re,"s44"e,r- m'--'#"

3e#3-e.

I" , s&,t>'"+? -e"+t> m'"#r't #3'"'#"? Fre"&> 3r#@ess#r Br'+'tte Ster" $et,'-e$ , >#st #@

err#rs &#mm'tte$ t>e m,5#r't t# 'm3#se t>e m,mm#t> 3e",-t. T>ese '"&-%$e t>e'r

$e&'s'#" t>,t O&&'$e"t,- s>#%-$ e &#m3e"s,te$ @#r -#st 3r#@'ts #" 100 3er&e"t #@ ," #'-

'"=estme"t $es3'te ,&"#-e$+'"+ t>,t O&&'$e"t,- '--e+,-- s#-$ 0 3er&e"t #@ t>,t '"=estme"t

t# ,"#t>er @'rm.1

BACKGROUND

I" M, 1? O&&'$e"t,- s'+"e$ , 204e,r &#"tr,&t 't> E&%,$#r t# e3-#re @#r #'-'" B-#& 1? , se+me"t #@ E&%,$#r8s Am,G#"? ,"$ etr,&t @r#m ," $'s&#=ere$ reser=es.2

I"e&>,"+e@#r t,'"+ #" ,-- e3e"ses? O&&'$e"t,- ,s &#"tr,&t%,-- e"t't-e$ t# 60 3er&e"t #@

1 O&&'$e"t,- Petr#-e%m C#r3#r,t'#" ,"$ O&&'$e"t,- E3-#r,t'#" ,"$ Pr#$%&t'#" C#m3," =. T>e

Re3%-'& #@ E&%,$#r? ICSID C,se *#. ARB/0!/11? D'sse"t'"+ O3'"'#" Se3t. 20? 2012? ,t 3,r,. .

2 O&&'$e"t,- Petr#-e%m C#r3#r,t'#" ,"$ O&&'$e"t,- E3-#r,t'#" ,"$ Pr#$%&t'#" C#m3," =. T>e

Re3%-'& #@ E&%,$#r? ICSID C,se *#. ARB/0!/11? A,r$ O&t. ? 2012. Here'",@ter ;O&&'$e"t,- =.E&%,$#r.< ,t 3,r,s 112?11.

| P A G E




t>e #'- 3r#$%&e$? 't>E&%,$#r m,'"t,'"'"+ , r'+>t t# t>e rest. T>e &#"tr,&t ,-s# st'3%-,te$

t>,t >'-e O&&'$e"t,- &#%-$ se--t>e #'-? 't &#%-$ "#t se-- #@@ ," 3#rt'#" #@ 'ts ;r'+>ts ,"$

#-'+,t'#"s< t# 3r#$%&e t>e #'- 't>#%t+#=er"me"t ,%t>#r'G,t'#". T>e &#"tr,&t st,te$ t>,t

tr,"s@err'"+ t>e r'+>ts t# #'- 3r#$%&t'#" 't>#%t,%t>#r'G,t'#" ;s>,-- term'",te< t>e &#"tr,&t.

T>e &#"tr,&t e3-'&'t- e"@#r&e$ E&%,$#r8s >$r#&,r#"s-,? >'&> st,tes? ;T>e M'"'ster #@

E"er+ ,"$ M'"es m, $e&-,re t>e term'",t'#" ,"$ @#r@e't%re #@&#"tr,&ts? '@ t>e

&#"tr,&t#rJ tr,"s@ers r'+>ts #r e"ters '"t# , 3r'=,te &#"tr,&t #r ,+reeme"t @#r t>e,ss'+"me"t

#@ #"e #r m#re #@ 'ts r'+>ts? 't>#%t t>e M'"'str8s ,%t>#r'G,t'#".< T>e -, 3r#te&ts

t>e+#=er"me"t8s 3rer#+,t'=e t# =et &#m3,"'es see'"+ t# 3r#$%&e #'- '" 'ts terr't#r? >'&>

,s ,3,rt'&%-,r &#"&er" '" t>e Am,G#" re+'#"? '" "# sm,-- 3,rt e&,%se #@ C>e=r#"8s

"#t#r'#%s >'st#r #@$%m3'"+ t#'"s '" t>e &r't'&,- e&#sstem.

O"e e,r ,@ter s'+"'"+ t>e &#"tr,&t? O&&'$e"t,- s#%+>t t# se-- #@@ , 3#rt'#" #@ 'ts '"=estme"t '"

B-#& 1#'- 3r#$%&t'#" s# ,s t# +,'" &,3't,- ,"$ re$%&e e3e"$'t%re r'ss.! I" O&t#er #@

2000? 't s'+"e$ 't> t>e A-ert, E"er+ C#m3," AEC? , C,",$'," @'rm , &#"tr,&t '"

>'&> O&&'$e"t,- e3t ;"#m'",- -e+,- t't-e< t# t>e #'- 3r#$%&t'#" &#"tr,&t 't> t>e

+#=er"me"t? %t t>r#%+> >'&> AEC 3%r&>,se$ 03er&e"t #@ O&&'$e"t,-8s #'- r'+>ts ,"$

,+ree$ t# @##t 0 3er&e"t #@ #"+#'"+ &#sts.6 T>e t# &#m3,"'es @#rme$ , ;M,",+eme"t

C#mm'ttee< &#m3r'se$ #@ #"e AEC re3rese"t,t'=e ,"$ #"e O&&'$e"t,- re3rese"t,t'=e 't> t>e;3#er ,"$ $%t t# ,%t>#r'Ge ,"$ s%3er='se K#'"t O3er,t'#"s.< O&&'$e"t,- me"t'#"e$ t>e $e,-

t# t>e +#=er"me"t? %t "e't>er 3rese"te$ t>e &#"tr,&t "#r s#%+>t +#=er"me"t ,%t>#r'G,t'#" @#r

AEC8s ,&%'s't'#" #@ , s'+"'@'&,"t e&#"#m'& ,"$ #3er,t'#",- st,e '" t>e Am,G#"'," #'-

3r#5e&t.

A@ter ," ,%$'t #@ O&&'$e"t,- '" 200? E&%,$#r8s Att#r"e )e"er,- $eterm'"e$ t>,t t>e

&#"@'$e"t',- O&&'$e"t,-4AEC &#"tr,&t '" 2000 >,$ 3,sse$ "e&ess,r +#=er"me"t

3 O&&'$e"t,- =. E&%,$#r? ,t 3,r,. 116.

4 O&&'$e"t,- =. E&%,$#r? ,t 3,r,. 120.

5 O&&'$e"t,- =. E&%,$#r? ,t 3,r,. 121.

6 O&&'$e"t,- =. E&%,$#r? ,t 3,r,. 12.

7 O&&'$e"t,- =. E&%,$#r? ,t 3,r,s 12?12.

! | P A G E




,%t>#r'G,t'#" ,"$ t>%s ='#-,te$ O&&'$e"t,-8s #'- &#"&ess'#" &#"tr,&t 't> t>e +#=er"me"t?

3r#m3t'"+ '"'t',t'#" #@ , 3r#&ess t# ,""%- 't. I" M, 200!? ,@ter , -#"+ $e-, @'--e$ 't> ,

3res'$e"t',- #%ster ,"$ 3#-'t'&,- t%m%-t? t>e +#=er"me"t term'",te$ t>e &#"tr,&t 't>

O&&'$e"t,- ,"$ re3#ssesse$ t>e -,"$ ,"$ #'- e%'3me"t #@ B-#& 1.

ARGUMENTS

At 'ts &#re? t>e $'s3%te &#"&er"e$ t>e term'",t'#" #@ t>e P,rt'&'3,t'#" C#"tr,&t etee"

O&&'$e"t,- ,"$ E&%,$#r. S3e&'@'&,--? O&&'$e"t,- ,$=,"&e$ t# ,r+%me"ts. F'rst? '"

term'",t'"+ t>e P,rt'&'3,t'#" C#"tr,&t 't>#%t &,%se '.e. '" t>e ,se"&e #@ , term'",t'#"

e=e"t %"$er t>e C#"tr,&t? E&%,$#r re,&>e$ 'ts #-'+,t'#"s %"$er #t> t>e P,rt'&'3,t'#"

C#"tr,&t ,"$ BIT. I" 3,rt'&%-,r? O&&'$e"t,- ,r+%e$ t>,t t>e F,rm#%t A+reeme"t $'$ "#t#3er,te ,s ," ,ss'+"me"t #@ r'+>ts '" ='#-,t'#" #@ E&%,$#r'," -,. Se&#"$? ,ss%m'"+ ,

term'",t'#" e=e"t ,s @#%"$ t# >,=e #&&%rre$? O&&'$e"t,- ,r+%e$ t>,t t>e term'",t'#" #%-$

st'-- e '" re,&> #@ t>e E&%,$#r8s #-'+,t'#"s %"$er t>e BIT ,"$ E&%,$#r'," -, e&,%se 't

,s %"@,'r? ,r'tr,r? $'s&r'm'",t#r ,"$ $'s3r#3#rt'#",te.

I" 'ts $e@e"se? E&%,$#r ,r+%e$ t>,t t>e F,rm#%t A+reeme"t e@@e&te$ ," ,ss'+"me"t ,"$ t>%s

re%'re$ m'"'ster',- ,33r#=,-? ,s re%'re$ E&%,$#r'," -,. It ,-s# ,r+%e$ t>,t O&&'$e"t,-

,s -',-e @#r , "%mer #@ ='#-,t'#"s #@ E&%,$#r8s H$r#&,r#"s Re+%-,t'#"s. F'",--?

E&%,$#r ,r+%e$ t>,t t>e C,$%&'$,$ De&ree &#m3-'e$ @%-- 't> t>e BIT ,"$ '"ter",t'#",- -,?

,"$ t>,t "# e3r#3r',t'#" t## 3-,&e.

NATIONAL TREATMENT

T>e C-,'m,"t ,r+%e$ t>,t E&%,$#r >,$ re,&>e$ 'ts ",t'#",- tre,tme"t #-'+,t'#" +'=e" t>,t

=,r'#%s &#m3,"'es '"=#-=e$ '" t>e e3#rt #@ #t>er +##$s e.+.? @-#ers? m'"'"+? se,@##$

3r#$%&ts? ere st'-- e"t't-e$ t# re&e'=e 7AT re@%"$s.

T>e Tr'%",- ,+ree$ 't> O&&'$e"t,-8s ,r+%me"t t>,t 'ts tre,tme"t s>#%-$ e &#m3,re$ t# t>,t

#@ ,&t#rs '" #t>er '.e. "#"4#'- e&#"#m'& se&t#rs? ,"$ e3ress- re5e&te$ , WTO/)ATT4st-e

8 O&&'$e"t,- =. E&%,$#r? ,t 3,r,s 1?200.

9 O&&'$e"t,- =. E&%,$#r? ,t 3,r,. 120.

" | P A G E




,",-s's #@ t>e ",t'#",- tre,tme"t #-'+,t'#"? >'&> #%-$ restr'&t 'ts &#m3,r's#" t# ;$'re&t-

&#m3et't'=e #r s%st't%t,-e 3r#$%&ts<.10

A-t>#%+> t>e Tr'%",- ,s &#"='"&e$ t>,t t>ere >,$ ee" "# $'s&r'm'",t#r '"te"t '"

E&%,$#r8s ,&t'#"s ,+,'"st @#re'+" '"=est#r? ;t>e res%-t #@ t>e 3#-'& e",&te$ ,"$ t>e

'"ter3ret,t'#" @#--#e$ t>e SRI '" @,&t >,s ee" , -ess @,=#r,-e tre,tme"t< #@

O&&'$e"t,-.11 T>%s? t>e ='#-,t'#" #@ t>e ",t'#",- tre,tme"t #-'+,t'#" ,s est,-'s>e$.

FAIR AND E#UITABLE TREATMENT AND FULL PROTECTION AND SECURITY

T>e Tr'%",- '"ter3rete$ t>e F,'r ,"$ E%'t,-e Tre,tme"t ;FET< st,"$,r$ t# re%'re t>e

;st,'-'t #@ -e+,- ,"$ %s'"ess @r,me#r< ,"$ em3>,s'Ge$ t>,t t>e re-e=,"t -e+,- %est'#"

%"$er '"ter",t'#",- -, ,s "#t >et>er t>ere ,s ," #-'+,t'#" t# re@%"$ 7AT? %t >et>er

t>e -e+,- ,"$ %s'"ess @r,me#r met t>e re%'reme"ts #@ st,'-'t ,"$ 3re$'&t,'-'t.12 T>e

Tr'%",- ,-s# "#te$ t>,t t>e FET st,"$,r$ ,s #5e&t'=e ,"$ $'$ "#t $e3e"$ #" >et>er t>e

Res3#"$e"t ,&te$ '" +##$ @,'t> #r "#t.1

O" t>e @,&ts #@ t>e &,se? t>e Tr'%",- &#"&-%$e$ t>,t t>e @r,me#r? %"$er >'&> t>e

'"=estme"t >,$ ee" m,$e ,"$ #3er,te$? ,s &>,"+e$ '" ," 'm3#rt,"t m,""er t>e ,&t'#"s

,$#3te$ t>e SRI: ;t>e t, -, ,s &>,"+e$ 't>#%t 3r#='$'"+ ," &-,r't ,#%t 'ts

me,"'"+ ,"$ ete"t? ,"$ t>e 3r,&t'&e ,"$ re+%-,t'#"s ere ,-s# '"&#"s'ste"t 't> s%&>

&>,"+es.<1 T>e Tr'%",- t>%s &#"&-%$e$ t>,t E&%,$#r re,&>e$ 'ts #-'+,t'#" t# ,&&#r$ FET.

H,='"+ @#%"$ t>,t E&%,$#r ,s '" re,&> #@ t>e FET st,"$,r$? t>e Tr'%",- >e-$ t>,t t>'s >,$

t>e e@@e&t #@ ,-s# &#"st't%t'"+ , re,&> #@ t>e re-,te$ BIT +%,r,"tee #@ F%-- Pr#te&t'#" ,"$

Se&%r't.1

10 O&&'$e"t,- =. E&%,$#r? ,t 3,r,. 16416!.

11 O&&'$e"t,- =. E&%,$#r? ,t 3,r,. 166.

12O&&'$e"t,- =. E&%,$#r? ,t 3,r, 11.

13 O&&'$e"t,- =. E&%,$#r? ,t 3,r, 1!.

14 O&&'$e"t,- =. E&%,$#r? ,t 3,r, 1.

15 O&&'$e"t,- =. E&%,$#r? ,t 3,r, 16.

$ | P A G E




IMPAIRMENT CLAIM % RE&ECTED

Art'&-e II #@ t>e BIT 3r#='$e$ ,s @#--#s:

*e't>er P,rt s>,-- '" ," , 'm3,'r ,r'tr,r #r $'s&r'm'",t#r me,s%res t>e

m,",+eme"t? #3er,t'#"? m,'"te","&e? %se? e"5#me"t? ,&%'s't'#"? e3,"s'#"? #r $'s3#s,- #@

'"=estme"ts...

T>e Tr'%",- @#%"$ t>,t t>e m,",+eme"t? #3er,t'#"? m,'"te","&e? %se? e"5#me"t?

,&%'s't'#"? e3,"s'#" #r $'s3#s,- #@ t>e '"=estme"t >,$ "#t ee" '" ," , 'm3,'re$ t>e

me,s%res ,$#3te$. T>ere@#re t>,t &-,'m ,s re5e&te$.

DECISION

T>e tr'%",- >e-$ t>,t t>e F,rm#%t A+reeme"t e@@e&te$ ," ,ss'+"me"t '" ='#-,t'#" #@

E&%,$#r'," -,? s'"&e 't ,s "#t ,33r#=e$ t>e E&%,$#r'," +#=er"me"t. H#e=er? t>e

tr'%",- >e-$ t>,t t>e term'",t'#" #@ t>e P,rt'&'3,t'#" C#"tr,&t ,s , $'s3r#3#rt'#",te

res3#"se t# O&&'$e"t,-8s ,ss'+"me"t #@ r'+>ts %"$er t>e F,rm#%t A+reeme"t.

As 3,rt #@ 'ts 3r#3#rt'#",-'t ,",-s's? t>e tr'%",- >e-$ t>,t t>ere ere , "%mer #@

,-ter",t'=es t# term'",t'"+ t>e P,rt'&'3,t'#" C#"tr,&t ,"$ t>,t t>e -,tter s>#%-$ >,=e t>%s ee"

, me,s%re #@ -,st res#rt. T>e tr'%",- ,-s# @#%"$ t>,t E&%,$#r $'$ "#t s%@@er ;," %,"t'@',-e

-#ss ,s , $'re&t res%-t #@ AEC t,'"+ ," e&#"#m'& '"terest '" B-#& 1.< 1! T>%s? t>e C,$%&'$,$

De&ree ,s $'s3r#3#rt'#",te t# 'ts #5e&t'=e.

T>e tr'%",- "#te$ t>,t t>e 3r'"&'3-e #@ 3r#3#rt'#",-'t 's #ser=e$ '" , =,r'et #@

'"ter",t'#",- -, sett'"+s? '"&-%$'"+ 'ts ,33-'&,t'#" t# 3#te"t',- re,&>es #@ BIT #-'+,t'#"s?

s%&> ,s @,'r ,"$ e%'t,-e tre,tme"t #-'+,t'#"s.16 T# t>'s e"$? t>e tr'%",- "#te$:

16 O&&'$e"t,- =. E&%,$#r? ,t 3,r, .

17 O&&'$e"t,- =. E&%,$#r? ,t 3,r, 0? see ,-s# MTD E%'t SD*.BHD. ,"$ #t>er =. T>e Re3%-'& #@

C>'-e? ICSID C,se *#. ARB/01/6 2 M, 200 L)NE E"er+ C#r3. ,"$ #t>ers =. T>e Ar+e"t'"e

Re3%-'&? ICSID C,se *#. ARB/02/1 O&t#er 200! Te&me$ S.A. =. T>e U"'te$ Me'&," St,tes?

ICSID C,se *#. ARB AF/00/2 2 M, 200 AG%r' C#r3. =. T>e Ar+e"t'"e Re3%-'&? ICSIDC,se *#. ARB/01/12 1 K%- 200!.

' | P A G E




;. . . t>e #=err'$'"+ 3r'"&'3-e #@ 3r#3#rt'#",-'t re%'res t>,t ," ,$m'"'str,t'=e +#,- m%st e

,-,"&e$ ,+,'"st t>e '"=est#r8s #" '"terests ,"$ ,+,'"st t>e tr%e ",t%re ,"$ e@@e&t #@ t>e

&#"$%&t e'"+ &e"s%re$.<1

T>e C,$%&'$,$ De&ree ,s 'ss%e$ '" ='#-,t'#" #@ E&%,$#r'," -,? >'&> re&#+"'Ges t>e

3r#3#rt'#",-'t 3r'"&'3-e? ,"$ '" re,&> #@ t>e BIT ,"$ &%st#m,r '"ter",t'#",- -,. T>e

tr'%",- ,-s# >e-$ t>,t E&%,$#r8s me,s%res ere ;t,"t,m#%"t t# e3r#3r',t'#".< 1

DECISION ANALYSIS

THE TRIBUNAL ACKNOWLEDGED THAT OCCIDENTAL BROKE THE LAW

ANDSHOULD HAVE EXPECTED ECUADOR(S RESPONSE)

T>e tr'%",- ,ssesse$ t>,t O&&'$e"t,-8s &#"tr,&t 't> AEC e@@e&t'=e- tr,"s@erre$ t# AEC

s#me #@ t>e ;e&-%s'=e r'+>ts t# &,rr #%t t>e #'- e3-#'t,t'#" ,&t'='t'es< +r,"te$ t# O&&'$e"t,-

t>e +#=er"me"t &#"tr,&t?20 +'='"+ AEC ;$e @,&t# -e+,- t't-e< t# t>e #'- 3r#5e&t.21 It @%rt>er

st,te$ t>,t s%&> , s%st,"t'=e tr,"s@er re%'re$ ;3r'#r ,%t>#r'G,t'#" #" t>e 3,rt #@ E&%,$#r',"

,%t>#r't'es?< ,s st'3%-,te$ '" O&&'$e"t,-8s +#=er"me"t &#"tr,&t ,"$ '" E&%,$#r'," -,. S'"&e

O&&'$e"t,- @,'-e$ t# see 3erm'ss'#" e@#re se--'"+ 0 3er&e"t #@ 'ts +#=er"me"t #'-

&#"&ess'#"? t>e tr'%",- &#"&-%$e$ t>,t O&&'$e"t,- >,$ re,&>e$ t>e +#=er"me"t &#"tr,&t ,"$='#-,te$ E&%,$#r'," -,. T>e tr'%",- @%rt>er "#te$ t>,t t>e +#=er"me"t8s res%-t'"+

term'",t'#" #@ t>e &#"tr,&t ,"$ @#r@e't%re #@ t>e '"=estme"t ,s "#t #"- 't>'" 'ts -e+,-

#%"$s? %t 's s#met>'"+ t>,t O&&'$e"t,- s>#%-$ >,=e e3e&te$ ,s , 3-,%s'-e res3#"se t# 'ts

'--e+,- m,"e%=er.22

18 O&&'$e"t,- =. E&%,$#r? ,t 3,r, 0. T>e tr'%",- ,-s# "#te$ t>,t t>e 3r'"&'3-e #@ 3r#3#rt'#",-'t

,s re&#+"'Ge$ %"$er t>e E&%,$#r'," &#"st't%t'#".

19 O&&'$e"t,- =. E&%,$#r? ,t 3,r, .

20 Occidental v. Ecuador, at para. 301.



* | P A G E




THE TRIBUNAL FURTHER EXPANDED THE SCOPE OF MST+FET

OBLIGATIONS BY FABRICATING A NEW PROPORTIONALITY

RE#UIREMENT)

A@ter $eterm'"'"+ t>,t O&&'$e"t,- s>#%-$ >,=e e3e&te$ E&%,$#r t# term'",te 'ts &#"tr,&t ,"$

@#r@e't 'ts '"=estme"t +'=e" t>,t O&&'$e"t,- re,&>e$ 'ts &#"tr,&t? ># $'$ t>e tr'%",- t>e"

3r#&ee$ t# @'"$ t>,t E&%,$#r >,$ ='#-,te$ FET #-'+,t'#"s 't #e$ O&&'$e"t,- T# $# s#? t>e

tr'%",- stret&>e$ t>e st,"$,r$ t# "e -e"+t>s? re%'r'"+ t>,t ;," 3e",-t t>e St,te &>##ses t#

'm3#se m%st e,r , 3r#3#rt'#",te re-,t'#"s>'3 t# t>e ='#-,t'#" >'&> 's e'"+ ,$$resse$ ,"$

'ts &#"se%e"&es.<2 T# 'm3#se t>'s "e e 3#st @,&t# #-'+,t'#" #" E&%,$#r? t>e tr'%",-

$'sm'sse$ t>e CIL4,se$ ,",-s's #@ t>e FET #-'+,t'#" &#m'"+ @r#m t>e +e"er,- ,"$

&#"s'ste"t 3r,&t'&e #@ St,tes t>,t t>e @#--# @r#m , se"se #@ -e+,- #-'+,t'#" ,"$ #ser=e$

t>e ;+r#'"+ #$< #@ ,,r$s ,se$ #" 3r#3#rt'#",-'t #-'+,t'#"s +e"er,te$ 3,st

'"=est#r4st,te tr'%",-s. T>e ,,r$ &'tes @#%r '"=est#r4st,te &,ses '" >'&> tr'%",-s?

eer&'s'"+ e%,-- ,m3-e @ree$#m t# e3,"$ %3#" est,-'s>e$ '"=est#r 3r#te&t'#"s? -'ste$

3r#3#rt'#",-'t ,s ," ,$$'t'#",- #-'+,t'#" #@ St,tes.

T# @%rt>er 5%st'@ t>'s $'s&%rs'#"? t>e tr'%",- re-'e$ #" , s'"+-e e3ert? Dr. PereG L##se?

&,--e$ O&&'$e"t,-? t# '"ter3ret t>e >#-e #@ E&%,$#r'," -,. L##se &'te$ se=er,- -e+,-

@r,+me"ts? '"&-%$'"+ t>e C#"st't%t'#"8s r#,$ &,-- @#r ;$%e 3r#3#rt'#",-'t etee" #@@e"&es

,"$ 3e",-t'es?< ,"$ &#"&-%$e$ '" t>e tr'%",-8s #r$s ;t>,t t>e 3r'"&'3-e #@ 3r#3#rt'#",-'t

,33-'es +e"er,-- '" E&%,$#r'," -,.<2 A @##t"#te '" t>e ,,r$ '"$'&,tes t>,t E&%,$#r

&>,--e"+e$ t>e &re$''-'t #@ L##se8s '"ter3ret,t'#"? +'=e" ," ,33,re"t &#"@-'&t #@ '"terest:

L##se re&e"t- 3,rt"ere$ 't> O&&'$e"t,-8s >e,$ -e+,- &#%"se- '" , se3,r,te &,se ,+,'"st

E&%,$#r. T>e tr'%",- re5e&te$ t>e &>,--e"+e? ,r+%'"+ t>,t L##se8s e3ert 't"ess 3re&e$e$

t>e #t>er &,se? ,"$ t>%s ,$#3te$ L##se8s '"ter3ret,t'#" #@ t>e -, ,s &#"&-%s'=e.

T>e tr'%",-8s r,Ge" re$e@'"'t'#" #@ t>e FET #-'+,t'#" >'+>-'+>ts , +r#'"+? etreme-

#rr'"+ tre"$. W>'-e St,tes >,=e -#"+ ,r+%e$ t>,t MST/FET #-'+,t'#"s m%st e $e@'"e$

,&&#r$'"+ t# , CIL St,te 3r,&t'&e/#3'"'# 5%r's ,",-s's? t>e 3,"e- 3res%me$ t# &re,te 'ts #"

=ers'#" #@ &%st#m,r '"ter",t'#",- -, ,se$ #" 'ts 5%$+me"ts ,"$ t>,t #@ 3,st tr'%",-s. B

=eer'"+ @r#m t>e MST/FET $e@'"'t'#" ,se$ #" CIL? tr'%",-s >,=e ee" '"&re,s'"+-

23 Occidental v. Ecuador, at para 416.

24 Occidental v. Ecuador, at para 397.

, | P A G E




'm3#s'"+ ," e=er4e3,"$'"+ set #@ #-'+,t'#"s #" St,tes. F#r '"st,"&e? '" t>e K%"e 2012 RDC

=. )%,tem,-, r%-'"+? t>e tr'%",- re5e&te$ t>e #3'"'#"s #@ )%,tem,-,? t>e U"'te$ St,tes? E-

S,-=,$#r? ,"$ H#"$%r,s t>,t t>e CIL st,"$,r$ @#r MST/FET 's $e@'"e$ St,te 3r,&t'&e?

'"ste,$ #rr#'"+ , r#,$ MST/FET '"ter3ret,t'#" @r#m ,"#t>er tr'%",-8s ,,r$ '" , *#rt>

Amer'&," Free Tr,$e A+reeme"t *AFTA &,se.2 T>e #rr#'"+ #@ $e@'"'t'#"s ,"$ &#"&e3ts

+e"er,te$ '" #t>er tr'%",-s8 ,,r$s? ,s '@ t>e ere CIL? 's etreme- tr#%-'"+.

;I'"ter",t'#",- tr'%",-s $# "#t &re,te &%st#m,r '"ter",t'#",- -,. O"- ",t'#"s &re,te

&%st#m,r '"ter",t'#",- -,?< "#te$ t>e U"'te$ St,tes ,s res3#"$e"t '" t>e *AFTA &,se

Glamis Gold, Ltd. v. The United States of America.26

W#rr'"+-? t>e ,,r$ '" t>e )-,m's &,se 's '"&re,s'"+- e&#m'"+ ," #%t-'er? '" t>,t 't ,s

,se$ #" , st,"$,r$ CIL ,",-s's. T>ere t>e tr'%",- 3r#"#%"&e$ t>,t FET ='#-,t'#"s m%st e

;e+re+'#%s ,"$ s>#&'"+?< s%&> ,s ;, +r#ss $e"',- #@ 5%st'&e? m,"'@est ,r'tr,r'"ess? -,t,"t

%"@,'r"ess? , &#m3-ete -,& #@ $%e 3r#&essJ< A33-'"+ t>'s CIL4,se$ $e@'"'t'#" t# t>e

O&&'$e"t,- &,se8s @,&ts? E&%,$#r8s $e&'s'#" t# term'",te , &#"tr,&t re,&>e$ O&&'$e"t,-

>e" t>e &#"tr,&t ,"$ E&%,$#r'," -, 3-,'"- &#"tem3-,tes s%&> term'",t'#" &,""#t e

$es&r'e$ ,s ;e+re+'#%s?< ;%"@,'r?< #r ;, +r#ss $e"',- #@ 5%st'&e.< It 's "e't>er ;,r'tr,r< "#r

;s>#&'"+?< s'"&e? ,s t>e tr'%",- 'tse-@ "#te$? O&&'$e"t,- s>#%-$ >,=e e3e&te$ &#"tr,&t

term'",t'#" ,s , 3-,%s'-e res3#"se t# &#"tr,&t re,&>. A"$ t>e #"- $e"',- #@ ;$%e 3r#&ess<&,me @r#m O&&'$e"t,-? "#t E&%,$#r. I" res3#"se t# O&&'$e"t,-8s %">,33'"ess ,#%t E&%,$#r8s

$e&'s'#"? t>e E&%,$#r'," +#=er"me"t re%este$ t>,t O&&'$e"t,- 3%rs%e , &,se '" E&%,$#r8s

&#%rts. B%t O&&'$e"t,- re5e&te$ t>e $#mest'& $%e 3r#&ess ,=,'-,-e t# 't t# &>,--e"+e t>e

+#=er"me"t $e&'s'#"? '"ste,$ res#rt'"+ t# ," '"=est#r4st,te tr'%",-.26

25 See Public iti!en"# anal$#i# o% t&e '( v. )uate*ala ca#e+ ori -allac& and

en eac&$, / nve#tor #tate 'ulin+ nne on ini*u* Standard o%

reat*ent, Propo#ed %or PP, Prove# n#ucient a# ribunal nore# u#to*ar$

nternational a Standard, pplie# S (e:nition %ro* Pa#t ; ard to

'ule aain#t )uate*ala,< =ul$ 19, 2012.

26)la*i# )old, td. v. >nited State# o% *erica, ard, d &oc?>;'

rbitration 'ule# @2009A, at para. 543.

27 Occidental v. Ecuador, at para. 291

- | P A G E




THE TRIBUNAL SUPPLANTED ECUADOR(S LEGAL VETTING PROCESS WITH

ITSOWN SPECULATIVE VETTING TO DETERMINE DISPROPORTIONALITY)

T>e O&&'$e"t,- =. E&%,$#r tr'%",- $'$ "#t st#3 ,t 'ts #=er4e3,"s'=e '"ter3ret,t'#" #@ FET

,"$ retr#,&t'=e ,$$'t'#" t# t>e BIT8s #-'+,t'#"s #@ , "#t'#" t>,t t>e St,te >,s ," #-'+,t'#" t#

,&t 3r#3#rt'#",--. T>e tr'%",- t>e" ,ss%me$ 5%r's$'&t'#" @#r $eterm'"'"+ E&%,$#r8s

,$>ere"&e t# t>e "e ,"$ ,m#r3>#%s #-'+,t'#". T>e tr'%",-'sts $eterm'"e$ t>,t E&%,$#r8s

res3#"se t# O&&'$e"t,-8s ='#-,t'#" #@ t>e -, ,s #%t #@ 3r#3#rt'#".2

O"e #@ t>e tr'%",-8s e ,r+%me"ts ,s t>,t E&%,$#r >,$ "#t s%@@ere$ m,ter',-- ,s , res%-t

#@ O&&'$e"t,-8s $e&'s'#" t# &'r&%m=e"t +#=er"me"t ,33r#=,- '" tr,"s@err'"+ res3#"s''-'t @#r

0 3er&e"t #@ 'ts Am,G#" #'- 3r#$%&t'#".2 A&&#r$'"+ t# t>e tr'%",-? t>e +#=er"me"t8s

eer&'se #@ 'ts -e+,- r'+>t t# term'",te t>e &#"tr,&t ,s t>%s $'s3r#3#rt'#",te t# t>e '"5%r 't

s%@@ere$. T# m,e t>'s $eterm'",t'#"? t>e tr'%",- em3-#e$ , ",rr# $e@'"'t'#" #@

3r#3#rt'#",-'t t>,t @#&%se$ #"- #" ,&t%,- m#"et,r -#sses '"&%rre$ t# t>e t'me #@ t>e

&#"tr,&t term'",t'#" E&%,$#r.

F%rt>er? t>e tr'%",-8s @#&%s #" >et>er E&%,$#r ,s #t,'"'"+ -ess m#"e %"$er

O&&'$e"t,-8s re,&>e$ &#"tr,&t $'sre+,r$s t>e =er re,- e"='r#"me"t,- ,"$ s#&'et,- &#sts t>,t

&#%-$ res%-t >e" , +#=er"me"t 's $e"'e$ 'ts s#=ere'+" #33#rt%"'t t# $eterm'"e >'&> @'rms

#3er,te 't>'" 'ts #r$ers. E&%,$#r 's st'-- str%++-'"+ t# +,'" &#m3e"s,t'#" @r#m C>e=r#" @#r

$e&,$es #@ &#"t,m'",t'#" #@ , R>#$e Is-,"$4s'Ge$ s,t> #@ t>e Am,G#". 0I" t>e ,e #@ s%&>

e"='r#"me"t,- &,-,m't? E&%,$#r 's %"$erst,"$,- &,%t'#%s ,#%t t>e ,rr,"+eme"ts 't m,es

't> res3e&t t# etr,&t'#" #@ #'- @r#m t>e &#%"tr8s Am,G#" re+'#". F'",--? t>e tr'%",-

'+"#re$ , s#=ere'+" St,te8s '"terest '" ,&t'"+ t# est,-'s> , &-e,r 3re&e$e"t t>,t $e"',-s #@ t>e

St,te8s 3rer#+,t'=e t# =et @#re'+" '"=est#rs? ,"$ term'",t'#"4-e=e- re,&>es #@ #'- &#"&ess'#"

&#"tr,&ts? '-- "#t e t#-er,te$.


29 Occidental v. Ecuador, at para. 444, 445.

30 Steven (on!ier, aura )arr, and aron arr Pae, /'ain%ore#t &ernob$l

'evi#ited+ &e la#& o% Bu*an 'i&t# and nve#tor lai*#+ &evron"# bu#ive

itiation in Ecuador"# *a!on,< Bu*an 'i&t# rie%. vailable at+

&ttp+CC.citi!en.orCdocu*ent#CBu*an'i&t#rie%rticleD20D282010D29.pd%

1. | P A G E




As @%rt>er 5%st'@'&,t'#" #@ 'ts $eterm'",t'#" #@ $'s3r#3#rt'#",-'t? t>e tr'%",- "#te$ t>,t t>e

+#=er"me"t >,$ 3re='#%s- ,33r#=e$ AEC? t>e @'rm t# >'&> O&&'$e"t,- >,$ s#-$ t>e 0

3er&e"t s>,re? t# #3er,te '" #t>er &#"&ess'#"s. T>'s -e$ t>e tr'%",-'sts t# s3e&%-,te t>,t t>e

&#m3," #%-$ >,=e -'e- ee" ,33r#=e$ t>e +#=er"me"t '@ O&&'$e"t,- >,$ &#m3-'e$

't> t>e -e+,- #-'+,t'#" t# re%est ,33r#=,-.1 P#s't'"+ s%&> 3#"t'@'&,t'#" ,s e='$e"&e? t>e

tr'%",- e@@e&t'=e- '"serte$ 'ts s3e&%-,t'=e &#"&-%s'#" #@ AEC8s =','-'t ,s , s%st't%te @#r

E&%,$#r8s -e+,- 3r#&ess t# $eterm'"e s,'$ =','-'t.

THE TRIBUNAL SLAPS ON AN EXPROPRIATION VIOLATION IN A ONE

PARAGRAPH PRONOUNCEMENT)

T>e tr'%",- 3er@%"&t#r'- ,$$e$ , @'"$'"+ #@ '"$'re&t e3r#3r',t'#" 't>#%t 3rese"t'"+ ,",",-s's #@ t>e BIT8s E3r#3r',t'#" #-'+,t'#" #r ># E&%,$#r8s ,&t'#" ='#-,te$ 't. I"ste,$?

t>e tr'%",- #3'"e$ '" #"e 3,r,+r,3> t>,t 't >,$ ;"# >es't,t'#"< '" $eterm'"'"+ t>,t E&%,$#r8

s,"&t'#" ,-s# ,s ;t,"t,m#%"t t# e3r#3r',t'#"< &'t'"+ 'ts 3r'#r? e-,st'& @'"$'"+ #@ , FET

='#-,t'#" ,s t>e ,s's @#r ,-s# @'"$'"+ ," '"$'re&t e3r#3r',t'#". 2 T>e 3,"e- s'm3- ,""#%"&e$

t>,t ," FET ='#-,t'#" ,-s# &#"st't%te$ ," E3r#3r',t'#" ='#-,t'#".

Pe&%-',r-? +'=e" t>e @,'-%re t# &#"$%&t ," E3r#3r',t'#" ,",-s's? t>e 3,"e- $'$ ,$$ ,

se"te"&e "#t'"+ t>e $e@'"'t'#" #@ ;t,"t,m#%"t t# e3r#3r',t'#"< %se$ t>e "#t#r'#%s *AFTA

Metalclad v. Mexico,,r$. It $'$ "#t &#""e&t t>e @,&ts #@ t>e O&&'$e"t,- &,se t# t>e Met,-&-,$

$e@'"'t'#"? %t r,t>er 5%st '"serte$ , %#te @r#m 't $es&r''"+ ;t,"t,m#%"t t# e3r#3r',t'#"< ,s

'"&-%$'"+ ;'"&'$e"t,- '"ter@ere"&e 't> t>e %se #@ 3r#3ert >'&> >,s t>e e@@e&t #@ $e3r'='"+

t>e #"er? '" >#-e #r '" s'+"'@'&,"t 3,rt? #@ t>e %se #r re,s#",-4t#4e4e3e&te$ e&#"#m'&

e"e@'t #@ 3r#3ert e=e" '@ "#t "e&ess,r'- t# t>e #='#%s e"e@'t #@ t>e >#st St,te.< O@ &#%rse?

t>e *AFTA Met,-&-,$ ,,r$ ,s s# r#,$- &,st'+,te$ t>,t 't -e$ t>e *AFTA Free Tr,$e

C#mm'ss'#" &#m3r'se$ #@ t>e t>ree *AFTA P,rt'es t# 'ss%e , @#rm,- K%- 2001'"ter3ret,t'=e "#te #" *AFTA8s I"=estme"t C>,3ter? ,"$ 3r#m3te$ t>e '"&#r3#r,t'#" #@ t>e

s%st,"&e #@ t>e '"ter3ret'=e "#te '"t# t>e Ce"tr,- Amer'&, Free Tr,$e A+reeme"t ,"$ @%t%re

U.S. FTAs. Yet? t>e O&&'$e"t,- tr'%",- "#t #"- %se$ ,"#t>er tr'%",-8s ,,r$ t# $e@'"e

E&%,$#r8s #-'+,t'#" r,t>er t>," &#"$%&t'"+ 'ts #" CIL ,",-s's #@ t>e BIT8s E3r#3r',t'#"

31Occidental v. Ecuador, at para. 445

32Id.

11 | P A G E




3r#='s'#"? %t re-'e$ #" ," ,,r$ t>,t >,s ee" '$e- &r't'&'Ge$ @#r #=er- e-,st'&

'"ter3ret,t'#"s #@ *AFTA #-'+,t'#"s.

A"$? t>e tr'%",- re@ere"&e$ , $e@'"'t'#" t>,t 's "#t re-e=,"t t# t>e @,&ts #@ t>'s &,se. At 'ss%e

'" Met,-&-,$ ,s >et>er $e"',- #@ +#=er"me"t &#"str%&t'#" ,"$ #3er,t'"+ 3erm'ts t>,t

$'m'"'s>e$ t>e =,-%e #@ , t#'& ,ste @,&'-'t >#se t't-e rem,'"e$ '" t>e >,"$s #@ t>e

'"=est#r &#m3r'se$ ," '"$'re&t t,'"+. B%t E&%,$#r8s res3#"se t# O&&'$e"t,-8s ='#-,t'#" #@

E&%,$#r'," -, ,"$ re,&> #@ 'ts &#"tr,&t ,s "#t ;'"&'$e"t,-.< E&%,$#r re&-,'me$ 3>s'&,-

&#"tr#- #@ t>e -,"$ ,"$ @,&'-'t'es ,s ,s e3-'&'t- &,--e$ @#r E&%,$#r8s >$r#&,r#"s -,.

T>%s? '@ ,"t>'"+ t>e tr'%",- m'+>t >,=e &#"$%&te$ ," ,",-s's #@ >et>er E&%,$#r8s ,&t'#"

res%-te$ '" , $'re&t e3r#3r',t'#". Yet? , @'"$'"+ #@ $'re&t e3r#3r',t'#" ,se$ #" ,"

'"$e3e"$e"t ,",-s's #@ t>,t BIT 3r#='s'#" #%-$ >,=e @,&e$ t>e @,&t t>,t t>e &#"tr,&t t>,t

O&&'$e"t,- s'+"e$ 't> t>e +#=er"me"t &#"t,'"e$ , &-e,r &#mm'tme"t t# e"@#r&e t>e

>$r#&,r#" -,8s 3r#='s'#" t>,t t>e +#=er"me"t &#%-$ ;term'",te ,"$ @#r@e't< ," '"=estme"t

'@ 't ='#-,te$ t>e re%'reme"t t# s#-'&'t ,%t>#r'G,t'#" e@#re '"=#-='"+ #%ts'$e @'rms.

TRIBUNALISTS INCREASED OCCIDENTAL(S HYPOTHETICAL LOST PROFITS

BYDECIDING THAT A TAX WAS /NOT A MATTER OF TAXATION)0

I" est'm,t'"+ t>e ,m#%"t #@ 3r#@'ts t>,t O&&'$e"t,- m'+>t >,=e m,$e >,$ 'ts &#"tr,&t

rem,'"e$ '" e@@e&t? t>e tr'%",- m,5#r't >,$ t# $eterm'"e ># E&%,$#r8s t, 3#-'&'es #%-$

>,=e 'm3,&te$ @%t%re re=e"%es. I" t>e m#"t> 3r'#r t# t>e &,"&e--,t'#" #@ O&&'$e"t,-8s

&#"tr,&t? E&%,$#r 3,sse$ , "e r#,$4,se$ #'- t,L, 2t>,t -,s &-,'m t# , 3#rt'#" #@

#'- 3r#@'ts t>,t res%-t @r#m '"&re,ses '" t>e #'- 3r'&e. H#e=er? t>e t# m,5#r't tr'%",-'sts

$e&'$e$ t# ,&t ,s '@ t>e t, ,s "e=er 'm3#se$ '" &,-&%-,t'"+ O&&'$e"t,-8s >3#t>et'&,- @%t%re

3r#@'ts. T>e re,s#"? t>e ,r+%e$? 's t>,t t>e "e t, #%-$ >,=e &#"st't%te$ et ,"#t>er

re,&> #@ E&%,$#r8s FET #-'+,t'#" t# t>e &#r3#r,t'#".

T# &#me t# t>'s &#"&-%s'#"? t>e m,5#r't >,$ t# @'rst s'$e ste3 t>e @,&t t>,t t>e U.S.4E&%,$#r

BIT ,&t%,-- reser=es 3#-'& s3,&e @#r #t> +#=er"me"ts t# e",&t ;m,tters #@ t,,t'#"?<

'"$'&,t'"+ t>e'r eem3t'#" @r#m FET &>,--e"+es. T# &'r&%m=e"t t>'s BIT 3r#='s'#"? t>e

m,5#r't $e&'$e$ t# $e&-,re t>e "e t, t# "#t e , ;m,tter #@ t,,t'#".< De&-'"'"+ t# +'=e t>e



1 | P A G E




me,s%re , ",me? t>e m,5#r't tr'%",-'sts '"ste,$ $es&r'e$ 't ,s ;, %"'-,ter,- $e&'s'#" #@ t>e

E&%,$#r'," C#"+ress t# ,--#&,te t# t>e E&%,$#r'," St,te , $e@'"e$ 3er&e"t,+e #@ t>e re=e"%es

e,r"e$ &#"tr,&t#r &#m3,"'es.< T>e st,"$,r$ $e@'"'t'#" #@ , t, 's ;, &#m3%-s#r

&#"tr'%t'#" t# st,te re=e"%e? -e='e$ t>e +#=er"me"t #" #rersQ '"&#me ,"$ %s'"ess

3r#@'tsJ< T>%s? '" see'"+ t# ,=#'$ ",m'"+ L, 2 ,s , t,? t>ere 3-,&'"+ 't %"$er t>e

t,,t'#" s,@e+%,r$ ,+,'"st FET &-,'ms? t>e m,5#r't '"ste,$ s'm3- $es&r'e$ t>e me,s%re

%s'"+ t>e st,"$,r$ $e@'"'t'#" #@ , t,.

Be#"$ 'ts -%$'&r#%s ,ttem3t t# re$e@'"e &#mm#" E"+-'s> ,"$ S3,"'s> -,"+%,+e terms? t>e

m,5#r't8s r,t'#",-e @#r &,--'"+ t>e t, , FET ='#-,t'#" 's #rr's#me. T>e ,tt#r"es ,r+%e$

t>,t L, 2 ='#-,te$ E&%,$#r8s FET #-'+,t'#" %"$er t>e BIT e&,%se 't ;'s '" re,&> #@ t>e

P,rt'&'3,t'#" C#"tr,&t ,"$ @-#%ts t>e C-,'m,"ts8 -e+'t'm,te e3e&t,t'#"s.< F'rst? ,s me"t'#"e$?

t>e '$e, t>,t +#=er"me"ts ,re #-'+e$ t# @%-@'-- '"=est#rs8 e3e&t,t'#"s 's ," '"=e"t'=e

'"ter3ret,t'#" #@ FET t>,t $e3,rts @r#m CIL ,"$ t>e #3'"'#"s @'-e$ t>e U"'te$ St,tes ,"$

#t>er St,tes '" 3re='#%s '"=est#r4st,te &,ses.! Se&#"$? t>e m,5#r't8s -#+'& 's &#"tr,$'&t#r:

>e" O&&'$e"t,- ;re,&>e$< 'ts &#"tr,&t ,"$ ;@-#%te$< t>e +#=er"me"t8s e3e&t,t'#" t# =et

#'- &#m3,"'es #3er,t'"+ '" 'ts terr't#r? t>e tr'%",- $'$ "#t "%--'@ O&&'$e"t,-8s &#"tr,&t%,-

&-,'m t# @%t%re #'- re=e"%e. B%t '" ,ssess'"+ t>,t E&%,$#r8s t, -, ;re,&>e$< t>e =er s,me

&#"tr,&t ,"$ ;@-#%te$< O&&'$e"t,-8s e3e&t,t'#" #@ 3r#@'t? t>e @e-t &#m@#rt,-e "%--'@'"+ t>e+#=er"me"t8s -e+,- &-,'m t# t, re=e"%e.

DAMAGES

COMPENSATION

T>e Tr'%",- $'$ "#t $'s&%ss t>e ,33-'&,-e st,"$,r$ #@ &#m3e"s,t'#". F'rst? t>e Tr'%",- >e-$

t>,t t>e '"=est#r ,s "#t #-'+e$ t# ret%r" t>e ,m#%"ts #@ 7AT re@%"$e$ t# >'m '" 200042001?,"$ t>,t t>e res#-%t'#"s #@ t>e SRI re%'r'"+ >'m t# $# s# ere 't>#%t -e+,- e@@e&t.

Se&#"$-? t>e Tr'%",- ,,r$e$ t>e @#--#'"+ $,m,+es ,s &,%s,-- -'"e$ t# BITre,&>es:

1 Am#%"ts #@ 7AT 3,'$ O&&'$e"t,-? >#se re@%"$ ,s re%este$ ,"$ $e"'e$ SRI US

12.! m'--'#"


36 See, %or ea*ple, )la*i# v. >S, at para. 576.

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2 Am#%"ts #@ 7AT 3,'$ O&&'$e"t,-? >#se re@%"$ ,s "#t re%este$ US!0. m'--'#".

E=e" t>#%+> t>e Res3#"$e"t #5e&te$? ,r+%'"+ 't> re@ere"&e t# Fe-$m,"? t>,t ,m#%"ts #@

7AT? >'&> >,$ "#t ee" &-,'me$? &#%-$ "#t e +r,"te$? t>e Tr'%",- ,&&e3te$ t>e C-,'m,"t8s

,r+%me"t? t>,t ," ,33-'&,t'#" @#r re@%"$ #%-$ >,=e ee" @%t'-e '" ='e #@ t>e e,r-'er

re@%s,-s #@ re@%"$.

T>ese t# >e,$s #@ $,m,+es t#t,-e$ US 6.1 m'--'#". T>e Tr'%",- ,$5%ste$ t>'s @'+%re #"

t>e @#--#'"+ ,s's. T>e Res3#"$e"t #5e&te$ t# t>e ,m#%"t #@ US ?000'" &#""e&t'#" 't>

t>e 7AT e@@e&t'=e- s%m'tte$ @#r re'm%rseme"t 3#'"t'"+ t# 'm3r#3r'et #@ '"=#'&es ,"$

#t>er ,s3e&ts. T>'s +,=e , &#rre&t'#" @,&t#r #@ 0.006? >'&>? '@ ,33-'e$ t# t>e t#t,- ,m#%"t #@

US 6.1 m'--'#"? ,s e%'=,-e"t t# US0?000. As ," ,$$'t'#",- ;&#"ser=,t'=e me,s%re<?

>'&> t>e Tr'%",- t## t# e"s%re t>,t &#m3e"s,t'#" ;$#es "#t e&ee$ t>e ,m#%"t #@ 7AT

>'&> O&&'$e"t,- '" @,&t s>#%-$ >,=e ee" re@%"$e$<? t>e Tr'%",- re$%&e$ &#m3e"s,t'#"

US 6.1 m'--'#" , @%rt>er 1. ? #r ,33r#. US 1 m'--'#". A&&#r$'"+-? t>e t#t,-

,m#%"t #@ 7AT ,,r$e$ t# O&&'$e"t,- ,s ,33r#. US 61. m'--'#".

MEASURES TO AVOID DOUBLE R ECOVERY

At t>e t'me #@ t>e ,r'tr,t'#"? O&&'$e"t,- >,$ se=er,- &-,'ms @#r 7AT re@%"$s 3e"$'"+ ,t -#&,-

&#%rts '" E&%,$#r. T# ,=#'$ $#%-e re&#=er? t>e Tr'%",-

1 >e-$ t>,t O&&'$e"t,- s>,-- "#t e"e@'t @r#m ," ,$$'t'#",- re&#=er

2 $'re&te$ t>e C-,'m,"t ;t# &e,se ,"$ $es'st @r#m ," -#&,- &#%rt ,&t'#"s? ,$m'"'str,t'=e

3r#&ee$'"+s #r #t>er ,&t'#"s see'"+ re@%"$ #@ ," 7AT 3,'$ t>r#%+> 1 De&emer 200<

,"$

>e-$ t>,t ;," ,"$ ,-- s%&> ,&t'#"s ,"$ 3r#&ee$'"+s s>,-- >,=e "# -e+,- e@@e&t<.

CONCLUSION

W>e" , >#st St,te &>,"+es t>e t, re+'me ,33-'&,-e t# ," e"er+ 3r#5e&t? '"ter",t'#",-

,r'tr,t'#" m, #@@er , "e%tr,- @#r%m @#r t>e '"=est#r t# &>,--e"+e t>e me,s%re. T>e s%&&ess

#@ s%&> , &>,--e"+e '-- #@te" t%r" #" >et>er t>e '"=est#r #t,'"e$ , s3e&'@'& st,'-'G,t'#"

&#mm'tme"t @r#m t>e >#st St,te ,t t>e t'me 't e"tere$ '"t# t>e '"=estme"t.

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U-t'm,te-? O&&'$e"t,- ,ss m#re %est'#"s t>," 't ,"sers ,#%t t>e r'+>ts '" '"=estme"t

tre,t'es. It ser=es ,s , ='t,- rem'"$er t>,t tr'%",-s s>#%-$ e m'"$@%- #@ t>e "ee$ #t> t#

,rt'&%-,te t>#se &#"s'$er,t'#"s t>,t @#rm t>e ratio decidendi #@ t>e'r ,,r$s ,"$ t# &#"s'$er

't> +re,t &,re >et>er t# ete"$ ," ,",-s's #@ #"e &,se t# ,"#t>er &,se >ere t>e @,&ts #r

t>e -e+,- &#"tet ,re s%st,"t',-- $'ss'm'-,r. Per>,3s m#re 'm3#rt,"t-? O&&'$e"t,- m#=es t#

&e"ter st,+e t>e %est'#" #@ ># , st,te m, ,"$ m, "#t res3#"$ >e" ,ttem3t'"+ t# ,$$ress

%"@,=#r,-e ,,r$s. A-t>#%+> '"=estme"t4tre,t ,r'tr,t'#" m, >,=e ee" &re,te$? '" 3,rt? t#

3r'=,t'Ge t>e $e=e-#3me"t #@ '"ter",t'#",- '"=estme"t -,? t>e >r'$ ",t%re #@ t>e

me&>,"'sm ,"$ t>e st,te #@ &%rre"t 5%r's3r%$e"&e s%++est t>,t s%&> ,r'tr,t'#" 's "#? @#r

etter #r #rse? 3,rt #@ , -,r+er @#re'+" re-,t'#"s $',-#+%e.

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