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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