Дааафафкафкпфкпфкпфкпфпф

Ala-Too Moot Court Competition 2024 International Digital Law Moot

MEMORANDUM

FOR CLAIMANT

TEAM #105

ON BEHALF OF:	AGAINST:
Aurora Hospitality Group LLC Capital City, Republic of Bugu CLAIMANT	National Security Agency of Tumar Susar, Republic of Tumar RESPONDENT

TABLE OF CONTENTS

LIST OF AUTHORITIES.........................................................................................................................3

STATEMENT OF FACTS.........................................................................................................................4

SUMMARY OF ARGUMENT..................................................................................................................7

ARGUMENT ..............................................................................................................................................9

CONCLUSION…………………………………………………………………………………….........14

REQUEST FOR RELIEF……………………………………………………………………………….15

LIST OF AUTHORITIES

1. Charter for European Security (OSCE 1999)

2. Helsinki Final Act from 1975

3. Vienna Conventions on the Law of Treaties (VCLT)

4. Good Environmental Governance principles

5. 1975 Helsinki Final Act.

6. 1992 Helsinki Document

7. 2003 OSCE Strategy Document for the Economic and Environmental Dimension

8. 2007 Madrid Declaration on Environment and Security

9. 2013 Kyiv Ministerial Council Decision on Improving the Environmental Footprint of Energy-Related Activities in the OSCE Region

10. 2014 Basel Ministerial Council Decision on Enhancing Disaster Risk Reduction

11. International Centre for Settlement of Investment Disputes Convention 1965 (ICSID Convention)

12. General Data Protection Regulation (GDPR)

13. Bilateral Investment Treaty (BIT)

STATEMENT OF FACTS

The Parties to this Arbitration are Aurora Hospitality Group LLC (hereinafter referred to as the "CLAIMANT") and the Republic of Tumar (hereinafter referred to as the "RESPONDENT"). The CLAIMANT is a hospitality company established in the Republic of Bugu, operating hotels internationally. The CLAIMANT is represented by its founder, Mr. Erlan Tynybekov, who holds dual citizenship in the Republic of Tumar and the Republic of Bugu. The RESPONDENT is represented by the National Security Agency of Tumar, responsible for national security within the Republic of Tumar.

1. Background of the Dispute

The CLAIMANT, led by Mr. Erlan Tynybekov, decided to expand its hospitality business into the Republic of Tumar. Mr. Tynybekov established Aurora Hospitality Group LLC in Tumar, where he owns 51% of the shares. The company was registered to operate in the hospitality industry, focusing on hotel construction and management.

The CLAIMANT acquired a prime plot of land in Susar, the capital city of Tumar, to build a hotel. The company successfully obtained all necessary construction and operating licenses from the Susar Municipal Authority and proceeded with the project.

However, the construction site in Susar was home to the rare Aulie-Ata plant, which is listed under Tumar’s national environmental protection laws. Despite initial public opposition and environmental concerns, the CLAIMANT complied with all relevant regulations and continued the construction.

2. Data Access Request and Refusal

In response to escalating political tensions and intelligence reports about a potential coup in Tumar, the National Security Agency of Tumar (NSA) intensified its surveillance activities, including over the hospitality sector. The NSA demanded unrestricted access to all customer data held by the CLAIMANT, including data on both local and international guests.

The CLAIMANT refused to comply with this request, citing concerns over the violation of international privacy standards, specifically the General Data Protection Regulation (GDPR), which governs the protection of personal data and privacy. The CLAIMANT emphasized that granting such access would infringe upon the right to privacy of its customers, including international clients, and would breach international data protection norms.

3. Refusal and License Revocation

The CLAIMANT’s refusal to provide the requested data was based on its commitment to respecting privacy rights and complying with GDPR. The CLAIMANT also proposed to provide only local customer data, rather than global customer data, but this proposal was rejected by the NSA, which insisted on unrestricted access to all customer data.

Following the CLAIMANT’s refusal, the Susar Municipal Authority revoked the operating license of the CLAIMANT’s hotel. The revocation was justified by the local authorities as a consequence of non-compliance with national laws concerning cooperation with security measures. The CLAIMANT argues that the decision was disproportionate and unfair, particularly since a fine could have served as a more appropriate and proportionate sanction.

4. Legal Challenges and ICSID Arbitration

After the revocation of the operating license, the CLAIMANT sought to challenge the decision through the local administrative courts in Tumar. However, the administrative court of Tumar upheld the revocation, citing the broad discretion of local authorities in determining appropriate sanctions. Despite the CLAIMANT’s appeal, the decision remained unchanged, and the hotel’s operations were indefinitely suspended, causing significant financial and reputational harm.

In response to the ongoing legal impasse and the suspension of its operations, the CLAIMANT decided to initiate ICSID arbitration under the Bilateral Investment Treaty (BIT) between the Republic of Bugu and the Republic of Tumar. The CLAIMANT seeks compensation for the financial losses and damage to its reputation caused by the unlawful revocation of its operating license, which it asserts constitutes a violation of its rights under the BIT.

5. International Legal Obligations and Protection of Investments

The Republic of Tumar, as a signatory to the ICSID Convention and several other international agreements, including those related to human rights and data protection, is bound by international obligations to respect the rights of foreign investors. The CLAIMANT contends that its investment in Tumar, protected under the Bilateral Investment Treaty (BIT), was subjected to arbitrary treatment, violating its rights to fair and equitable treatment and protection from expropriation without adequate compensation.

The CLAIMANT maintains that the actions of the RESPONDENT, particularly the wrongful revocation of the operating license, were disproportionate and violated its rights under both the BIT and international law, including the International Covenant on Civil and Political Rights (ICCPR), which guarantees the right to privacy and protection from arbitrary interference.

SUMMARY OF ARGUMENT

The dispute between the Parties arises from the unlawful actions taken by the Republic of Tumar in revoking the operating license of Aurora Hospitality Group LLC and demanding unrestricted access to the customer data collected by the CLAIMANT. The CLAIMANT asserts that these actions were unjust, disproportionate, and in violation of both international law and the protections afforded under the Bilateral Investment Treaty (BIT) between the Republic of Bugu and the Republic of Tumar.

Part I: The ICSID Tribunal has jurisdiction over this dispute

The CLAIMANT asserts that the ICSID Tribunal has jurisdiction to hear the dispute under the ICSID Convention and the Bilateral Investment Treaty (BIT). The dispute concerns a foreign investment made by nationals of the Republic of Bugu in the Republic of Tumar. The CLAIMANT, having fulfilled all necessary legal requirements for foreign investment, is entitled to seek resolution of this dispute through arbitration under the ICSID Convention. The CLAIMANT’s investment in Tumar, including the operation of hotels in Susar, falls squarely within the scope of the BIT's provisions, particularly those concerning the protection of investments from arbitrary measures.

Part II: The demand for unrestricted access to customer data was unlawful and violated international data protection standards

The CLAIMANT contends that the National Security Agency of Tumar's (NSA) request for unrestricted access to all customer data was unlawful and violated internationally recognized data protection principles, specifically GDPR. The CLAIMANT asserts that the right to privacy is a fundamental right, and any interference with that right must be proportionate, necessary, and in accordance with the law. The CLAIMANT refused to comply with the NSA’s demand because it would have violated its obligations under GDPR and other international privacy laws. The CLAIMANT further argues that the request for unrestricted access to customer data was overly broad and unjustified under international law.

Part III: Arbitrary Revocation of License and Entitlement to Compensation

As a result of the RESPONDENT’s unlawful actions, the CLAIMANT has suffered significant financial and reputational losses. The revocation of the operating license and the arbitrary demands for data access have disrupted the CLAIMANT’s business operations, resulting in considerable economic harm. Under the BIT, the CLAIMANT is entitled to compensation for these damages. The CLAIMANT argues that the actions of the RESPONDENT not only violated the principles of fair and equitable treatment and protection from expropriation under the BIT, but also disregarded international norms regarding data protection and human rights.

ARGUMENT

PART I: Jurisdiction of the ICSID Tribunal

The Claimants respectfully submit that the ICSID Tribunal possesses full jurisdiction to hear this dispute, as it unquestionably falls within the ambit of the Bilateral Investment Treaty (BIT) between the Republic of Bugu and the Republic of Tumar. The dispute centers around actions taken by the Republic of Tumar that directly impact the Claimants' foreign investment in Tumar, invoking protections granted under the BIT. The Republic of Tumar, while attempting to rely on national security exceptions, cannot override its binding obligations under the BIT, especially when such actions, as in the present case, are clearly disproportionate and unjustifiable.

1. BIT (Article 1): Definition of Investments.

The Claimants’ investment in the Republic of Tumar, including land acquisition, construction of the hotel, and subsequent operational activities, unequivocally fits the definition of "investment" under the BIT. This forms the very basis for jurisdiction as guaranteed by the treaty.

1. BIT (Article 8): Dispute Resolution.

The BIT stipulates the possibility of resorting to ICSID arbitration when disputes arise between an investor and the host state. This provision is designed to ensure that foreign investors can effectively protect their investments from arbitrary state actions, such as those at issue in the present case.

1. BIT (Article 7): National Security Exceptions.

Tumar's attempt to justify its actions under national security exceptions is flawed. The BIT explicitly provides for national security exceptions, but these are meant to address situations where such measures are necessary and proportionate. Here, Tumar's actions were neither necessary nor proportional, and therefore cannot justify a breach of the Claimants' rights under the BIT.

1. Vienna Convention on the Law of Treaties (VCLT, Article 31): Interpretation of Treaties.

According to the Vienna Convention, the BIT must be interpreted in good faith, considering the ordinary meaning of its terms and the object and purpose of the treaty. The purpose of the BIT is to protect foreign investments, and thus any interpretation that undermines this protection would be contrary to the treaty’s purpose.

1. Charter for European Security (OSCE 1999)

"States have the responsibility to ensure that their policies, including those regarding foreign investments, are in harmony with the protection of the environment, human rights, and social standards." Tumar’s failure to balance the environmental concerns related to the Aulie-Ata plant—a protected species in the area where the hotel was built—violates these principles.

PART II: Violation of the Right to Privacy

The Claimants assert that the Republic of Tumar’s actions—specifically its demand for unrestricted access to customer data—constitute a direct violation of internationally recognized data protection norms and human rights standards. The claim that national security concerns justify such actions fails to meet the strict proportionality and necessity tests required under international law. The Claimants’ refusal to comply with Tumar's demands was not only reasonable but legally required, given the protections guaranteed under GDPR and ICCPR. The Respondent’s actions have unlawfully interfered with the Claimants' rights to privacy and data protection, as enshrined in both domestic and international law.

1. BIT (Article 5): Protection of Human Rights and Privacy.

The BIT mandates that both parties respect international human rights standards, including privacy protections. Tumar’s actions to demand unfettered access to all customer data breach these protections, infringing on the Claimants' right to protect personal data.

1. GDPR (Article 5): Principles Relating to Processing of Personal Data.

The General Data Protection Regulation (GDPR), which governs data processing and privacy in the European Union, applies here due to the international nature of the Claimants’ business. Tumar’s request for unrestricted access to all data, including international clients, violates key GDPR principles such as data minimization, consent, and the requirement for a legitimate basis for processing.

1. ICCPR (Article 17): Protection Against Arbitrary Interference.

According to the International Covenant on Civil and Political Rights (ICCPR), no one shall be subjected to arbitrary interference with their privacy, family, home, or correspondence. The Claimants’ data, especially that of international guests, constitutes private information that should not be accessed without a compelling, legally justified, and proportionate reason.

1. Helsinki Final Act (1975): Human Rights and Fundamental Freedoms.

Tumar's demands violate its obligations under the Helsinki Final Act, which stresses the importance of upholding fundamental freedoms, including the right to privacy and the protection of personal data.

PART III: Arbitrary Revocation of License and Entitlement to Compensation

The Claimants submit that the revocation of their operating license by the Republic of Tumar was an arbitrary, disproportionate, and discriminatory measure. This action, taken without regard for the proper legal procedures, constitutes a clear violation of the BIT and international investment law principles. The revocation, which occurred after the Claimants lawfully refused to comply with an unjust demand for personal data, was not based on any legitimate legal or regulatory foundation but rather as an act of retaliation. The Claimants suffered severe financial and reputational harm as a result, and are thus entitled to appropriate compensation under the BIT.

1. BIT (Article 3): Fair and Equitable Treatment.

The principle of fair and equitable treatment under the BIT mandates that investors be protected from arbitrary or discriminatory actions by the host state. Tumar's decision to revoke the Claimants' license without exploring other, less severe alternatives (such as a fine) constitutes an arbitrary act that breaches this principle.

1. BIT (Article 4): Expropriation.

The revocation of the operating license amounts to indirect expropriation, as it deprives the Claimants of their ability to operate their business and derive any economic benefit from their investment. Under the BIT, such actions require prompt, adequate, and effective compensation.

1. VCLT (Article 31): Proportionality of Measures.

The actions taken by Tumar were disproportionate in relation to the Claimants' refusal to comply with data requests. The revocation of the operating license was an extreme measure that violated the principle of proportionality and fairness in international law.

1. Helsinki Final Act (1975): Economic Cooperation.

Arbitrarily halting the Claimants’ investment and business operations contradicts the economic cooperation principles in the Helsinki Act, which emphasize the need for predictable and fair treatment of foreign investments.

1. GDPR (Article 83): Proportionality of Sanctions.

The revocation of the operating license, as a sanction, was neither proportionate nor justified, especially considering that no breach of data protection laws occurred. The GDPR requires that any penalties imposed must be commensurate with the gravity of the offense.

CONCLUSION

The CLAIMANT asserts that the actions taken by the RESPONDENT were unjustified, disproportionate, and in violation of international law, including GDPR, the International Covenant on Civil and Political Rights (ICCPR), and the Bilateral Investment Treaty (BIT). The CLAIMANT seeks compensation for the financial and reputational damage caused by the unlawful revocation of its operating license, as well as relief for the unlawful interference with its business operations. The CLAIMANT respectfully requests the Tribunal to recognize that the RESPONDENT’s conduct violated its obligations under international law and the BIT, and to award the appropriate relief.

REQUEST FOR RELIEF

Based on the above, the Claimants respectfully request the Tribunal to grant the following relief:

1. To declare that the ICSID Tribunal has jurisdiction to hear the case, as it concerns a dispute regarding the Claimants' investment under the Bilateral Investment Treaty (BIT) between the Republic of Bugu and the Republic of Tumar.

2. To declare that the actions taken by the Republic of Tumar, including the unlawful revocation of the operating license of Aurora Hospitality Group LLC, violated the BIT, international law, and the Claimants' rights to privacy and data protection.

3. To order the Republic of Tumar to provide compensation to the Claimants for the financial and reputational damages incurred as a result of the revocation of the operating license and the violation of international standards regarding privacy and data protection.

The Claimants respectfully submit that the actions of the Republic of Tumar were unlawful and in violation of the Bilateral Investment Treaty (BIT), international law, and the Claimants' rights. The Claimants request the Tribunal to uphold their claims and grant the requested relief in full.