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Paushok, Golden East, Vostokneftegaz v. Mongolia

Type of decisionAward
Date of decision28 April 2011
Tribunal
Marc Lalonde (President)
Brigitte Stern
Horacio A. Grigera Naón
Legal instrumentBIT between Mongolia and Russian Federation (1995)
Further information

Statements from this decision

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Potential abuse of process by a claimant is a matter of the merits and neither deprives a tribunal from its jurisdiction nor renders a claim inadmissible
Even if an act by a state entity is impermissible under local law, it can be attributed to the state
Actions by a state's legislative assembly can constitute a treaty violation, unless provided otherwise in the treaty
Even if an institution is not an organ of a state, its actions are attributable to the state if they are de jure imperii
Minority shareholdings can constitute investments
A company the shares of which are owned 100% by the claimant constitutes an investment; as a shareholder, he or she can exercise his or her own treaty rights regarding this investment
An IIT is not necessarily applicable to disputes arising prior to its entry into force
If a FET clause explicitly prohibits discriminatory measures by a state, this does not mean that the protection by the clause is restricted to discriminatory measures only
A state's legislation being ill-conceived does not necessarily amount to a treaty breach
Even if a legislature passes a law in short time and without consultation of the industry, this does not constitute a lack of transparency
An investor has to be aware that modifications of taxation levels represent a risk for his or her investment; without a stabilization agreement, he or she cannot establish a legitimate expectation that a state will refrain from increasing taxes
A state's ban on foreign workers is not discriminatory, even if it is limited to a specific industry
A state is not prohibited from imposing different tax regimes on different industries and on different products
The full protection and security standard is not a strict liability standard
An MFN clause relating to a single standard of protection only cannot justify the introduction of new and different standards of protection
Even if the investor fails to abide by a negotiation period, the jurisdiction of a tribunal is not concerned as long as the delay has expired at the time of the decision
Even if a dispute settlement clause appears to apply to all disputes arising out of an investment, the jurisdiction of a tribunal is still limited to disputes either concerning actions occurring after the treaty's entry into force or continuing or composite acts
An investor has to be aware that modifications of taxation levels represent a risk for his or her investment; without a stabilization agreement, he or she cannot establish a legitimate expectation that a state will refrain from increasing taxes
Definition of stability agreement
Failure to apply for a stability agreement does not render a treaty based claim inadmissible
Potential abuse of process by a claimant is a matter of the merits and neither deprives a tribunal from its jurisdiction nor renders a claim inadmissible
Failure to apply for a stability agreement does not render a treaty based claim inadmissible
Potential abuse of process by a claimant is a matter of the merits and neither deprives a tribunal from its jurisdiction nor renders a claim inadmissible
In case the local company controlled by the claimant does not exhaust its contractual remedies, this does not influence the standing of the claimant regarding his or her treaty rights
Counterclaims based on the respondent's national public law lack a reasonable nexus to the claimant's treaty claims; otherwise, the respondent could achieve an extraterritorial effect of its public law
Although Article 19(3) UNCITRAL Arbitration Rules relates to contractual relationships, a state can invoke a counterclaim under an IIT if there is a close connection to the primary claim
An IIT is not necessarily applicable to disputes arising prior to its entry into force
Counterclaims based on the respondent's national public law lack a reasonable nexus to the claimant's treaty claims; otherwise, the respondent could achieve an extraterritorial effect of its public law
Although Article 19(3) UNCITRAL Arbitration Rules relates to contractual relationships, a state can invoke a counterclaim under an IIT if there is a close connection to the primary claim

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