Notice of Arbitration Notice of Arbitration of OOO "Manolium- Processing" Dated 15 November 2017
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TABLE OF CONTENTS LIST OF ABBREVIATIONS .............................................................................................................. 5 I. INTRODUCTION ....................................................................................................................... 10 II. PARTIES TO ARBITRATION AND OTHER COMPANIES INVOLVED .................... 11 2.1. Claimant............................................................................................................................... 11 2.2. Respondent .......................................................................................................................... 12 2.3. Manolium-Engineering ....................................................................................................... 13 III. FACTUAL BACKGROUND ................................................................................................. 14 3.1. Republic of Belarus ............................................................................................................. 14 3.1.1. General Information .................................................................................................... 14 3.1.2. Political System And State Administration ................................................................. 15 3.1.3. Economic System Of The State .................................................................................... 15 3.1.4. Currency System Of The State ..................................................................................... 17 3.1.5. Regulation Of Foreign Investments And Treatment Of Foreign Investors ............... 19 IV. CLAIMANT'S PROJECT ..................................................................................................... 21 4.1. General Information About The Claimant's Project ....................................................... 21 4.2. Amendments To The Amount And Timing Of Investments Under The Investment Contract (2003)................................................................................................................................ 28 4.3. Issues In Performance Of The Investment Contract In 2004-2006 ................................ 32 4.3.1. Change Of The Party To The Investment Contract .................................................... 32 4.3.2. Failure To Issue A Permit To Design And Construct The Land Plot For The Depot .. ....................................................................................................................................... 33 4.3.3. Failure To Make The Land Plot Available For Constructing The Motor Transport Base ....................................................................................................................................... 34 4.4. Execution Of The Amended Investment Contract ........................................................... 35 (i) Right to implement the Investment Object ............................................................................ 36 (ii) Amount of Investments Under the Amended Investment Contract .................................... 38 (iii) Mcec's Obligations Under The Amended Investment Contract ........................................ 39 (iv) Minsktrans' Obligations Under The Amended Investment Contract................................. 40 (v) Procedures for Amendments and Termination of the Amended Investment Contract ...... 40 (vi) Financial Liability of the Claimant and Manolium-Engineering ..................................... 41 4.5. Design And Construction Of The New Communal Facilities And Investment Object After Signing The Amended Investment Contract ...................................................................... 42 4.5.1. Design And Construction Of The "Depot" New Communal Facility ........................ 42 4.5.2. Design And Construction Of The "Road" New Communal Facility ......................... 46 4.5.3. Design And Construction Of The New Communal Facility Pull Station .................. 49 4.5.4. Design Of The Investment Object ................................................................................ 52 4.6. Negotiations Between The Claimant And The Republic Of Belarus. Termination Of The Investment Contract ............................................................................................................... 59 2 4.6.1. First Round Of Negotiations, Administrative Proceedings In The Court Of The Republic Of Belarus ..................................................................................................................... 59 4.6.2. Proceedings With The First Instance Court Of The Republic Of Belarus ................ 61 4.6.3. Proceedings With The Court Of Appeal Of The Republic Of Belarus ...................... 63 4.6.4. Second Round Of Negotiations, Proceedings In The Court Of Cassation Of The Republic Of Belarus ..................................................................................................................... 64 4.6.5. Third Round Of Negotiations, Cao Of The Ministry Of Finance Report And The Second Administrative Proceedings In The Court Of The Republic Of Belarus ...................... 66 4.7. Selling The Land Plot To Another Investor ..................................................................... 68 4.8. Tax Claims Of The Republic Of Belarus Against The Claimant ................................... 69 V. LEGAL FRAMEWORK ............................................................................................................ 74 5.1. Applying The Provisions Of The EEU Treaty .................................................................. 74 5.2. Application Of The Investment Law Of The Republic Of Belarus ................................ 75 5.3. The Claimant Is An Investor In Accordance With The Requirements Set Forth By The EEU Treaty And The Investment Law Of The Republic Of Belarus ........................................ 76 5.4. The Claimant Made Investments On The Territory Of The Republic Of Belarus ....... 78 5.4.1. Requirements In Respect Of Investments Set Forth By The EEU Treaty And The Investment Law Of The Republic Of Belarus ............................................................................. 78 5.4.2. Qualification Of Investments ....................................................................................... 80 5.5. The Claimant's Claims Comply With The Provisions Of The EEU Treaty And The Investment Law Of The Republic Of Belarus .............................................................................. 81 5.6. Legal Protection Of The Claimant Set Forth By The EEU Treaty And The Investment Law Of The Republic Of Belarus .................................................................................................. 82 5.6.1. Guarantees Of The Claimant's Rights In Case Of Expropriation ............................. 82 5.6.2. Guarantees Of The Fair And Equitable Treatment In Respect Of Investments And Investment-Related Activities Of The Claimant .......................................................................... 84 5.6.3. Protection Of The Claimant's Investments On The Territory Of The Republic Of Belarus 85 5.6.4. Other Guarantees ......................................................................................................... 85 VI. VIOLATIONS OF THE REPUBLIC OF BELARUS IN RESPECT OF THE CLAIMANT AND INVESTMENTS ................................................................................................. 87 6.1. Responsibility Of The Republic Of Belarus For Acts Of The State Organs And State- Owned Entitles ................................................................................................................................ 87 (a) Responsibility Of The Republic Of Belarus Before The Claimant For Acts Of MCEC In Respect Of The Claimant And Investments ............................................................................ 88 (b) Responsibility Of The Republic Of Belarus Before The Claimants For Acts Of Minsktrans .................................................................................................................................... 90 (c) Responsibility Of The Republic Of Belarus Before The Claimant For Acts Of The Court Of The Pervomaysky District Of Minsk, Economic Court of Minsk And The Supreme Court Of The Republic Of Belarus .............................................................................................. 90 6.2. Violation By The Republic Of Belarus Of Its Guarantee To Provide The Claimant With The Fair And Equitable Treatment In Respect Of Investments And Investment-Related Activities .......................................................................................................................................... 92 6.2.1. FET Standard In Respect Of Investments And Investment-Related Activities .......... 92 3 6.2.2. The Republic Of Belarus Failed To Perform The Obligation To Act In A Transparent Manner In Respect Of The Claimant ................................................................. 95 6.2.3. The Republic Of Belarus Failed To Perform The Obligation To Act In Good Faith In Respect Of The Claimant ........................................................................................................ 98 (i) MCEC and Minsktrans deliberately protracted the process of issuing construction permits and making available the land plots for constructing the Communal Facilities and the New Communal Facilities ..................................................................................................................