INTERNATIONAL CENTRE FOR THE SETTLEMENT OF INVESTMENT DISPUTES GABRIEL RESOURCES LTD. AND GABRIEL RESOURCES (JERSEY) LTD. Claimants VS. ROMANIA Respondent ICSID CASE NO. ARB/15/31 RESPONDENT’S REJOINDER 24 MAY 2019 Gabriel Resources et al. v. Romania Respondent’s Rejoinder 24 May 2019 TABLE OF CONTENTS 1 INTRODUCTION ..................................................................1 2 THE CLAIMS FALL OUTSIDE THE TRIBUNAL’S JURISDICTION................................................................... 11 2.1 Gabriel Canada’s Claims Fall Outside the Tribunal’s Jurisdiction ................................................................................11 2.1.1 Gabriel Canada Cannot Claim Both on Its Own Behalf and on Behalf of RMGC......................................................11 2.1.2 Gabriel Canada’s Claims Fall Outside the Tribunal’s Jurisdiction to the Extent They Fail to Comply with Articles XIII(2) and (3)(b) of the Canada-Romania BIT .............................................................................................12 2.1.3 Gabriel Canada’s Claims Fall Outside the Tribunal’s Jurisdiction Since They Arise Out of Measures Taken Prior to 30 July 2012 ...........................................................17 2.1.4 Gabriel Canada’s Umbrella Clause Claim Falls Outside the Tribunal’s Jurisdiction ...................................................21 2.1.5 Gabriel Canada’s Claims Are Limited by the Substantive Provisions of the BIT .......................................22 2.1.5.1 Claims Relating to Environmental Measures Are Governed by a Special Regime .....................................22 2.1.5.2 Claims Relating to Taxation Measures are Governed by a Special Regime .....................................25 2.2 Gabriel Jersey’s Claims Fall Outside the Tribunal’s Jurisdiction ................................................................................26 2.2.1 Gabriel Jersey Does Not Have Covered Investments..........26 2.2.2 Gabriel Jersey’s Claims Do Not Satisfy the Notice Provision under Article 7(1) of the UK-Romania BIT ........29 i Gabriel Resources et al. v. Romania Respondent’s Rejoinder 24 May 2019 2.2.3 In Any Event, the Tribunal Does Not Have Jurisdiction Due to the Effects of the Achmea Decision.........................29 2.2.3.1 Gabriel Jersey Must Be Equated to an Investor from an EU Member State and It is Thus Affected by the Achmea Decision...........................................................30 2.2.3.2 Gabriel Jersey Lost the Right to Consent to Arbitrate under the UK-Romania BIT at the Latest when the TFEU Came into Force ..................................33 2.2.3.3 Romania’s Consent to Arbitrate in Article 7 of the UK-Romania BIT Is Incompatible with the TFEU and Accordingly the Provision Does Not Apply ...........36 3 ROMANIA HAS ACCORDED FAIR AND EQUITABLE TREATMENT TO THE CLAIMANTS’ INVESTMENTS ......41 3.1 The Claimants Are Required to Demonstrate Egregious Conduct to Prevail on Their Claim ...........................................41 3.1.1 The Claimants Ignore the Formulation of the FET Standard in the Canada-Romania BIT.................................42 3.1.2 The Claimants Cannot Rely on Article III of the Canada-Romania BIT to Import Article 2(2) of the UK- Romania BIT .......................................................................46 3.1.3 Even Assuming the Claimants’ Extensive Interpretation of the FET standard of the UK-Romania BIT Were Correct, the Claimants Have Failed to Demonstrate Any Breach Thereof ....................................................................48 3.1.3.1 Romania Did Not Act Arbitrarily ..................................49 3.1.3.2 Romania Did Not Frustrate the Claimants’ Alleged Legitimate Expectations ................................................50 3.1.3.3 Romania Has Not Failed to Act Transparently..............54 3.1.3.4 Romania Has Not Failed to Accord Due Process..........54 ii Gabriel Resources et al. v. Romania Respondent’s Rejoinder 24 May 2019 3.1.3.5 Romanian State Organs are Entitled to a Margin of Appreciation in Their Decision-Making........................55 3.2 The Impugned Acts and Omissions of Romania Do Not Taken Together as a Composite Act Amount to a Failure to Provide Fair and Equitable Treatment to the Claimants’ Investments in Breach of Either Article II(2) of the Canada- Romania BIT or Article 2(2) of the UK-Romania BIT .............59 3.3 The Ministry of Environment’s Alleged Failure to Issue the Environmental Permit in 2012 Does Not Amount to a Failure to Provide Fair and Equitable Treatment to the Claimants’ Investments in Breach of Either Article II(2) of the Canada-Romania BIT or Article 2(2) of the UK- Romania BIT.............................................................................64 3.3.1 The EIA Review Process Was Not Finalized by 29 November 2011 ...................................................................67 3.3.2 In 2012, RMGC Had Not Met Permitting Requirements and the Ministry of Environment Was Not in a Position to Issue the Environmental Permit.......................................69 3.3.2.1 RMGC Needed, But Had Not Yet Obtained, the Ministry of Culture’s Endorsement of the Project ........70 3.3.2.2 RMGC Had Not Secured the Approval of the Waste Management Plan ..........................................................74 3.3.2.3 RMGC Needed, but Did Not Have in Place, Valid Urban Plans ...................................................................76 3.3.2.4 RMGC Needed, but Did Not Have in Place, a Valid Urban Certificate ...........................................................79 3.3.2.5 RMGC Was Not in Compliance with the Water Framework Directive.....................................................82 3.3.2.6 RMGC Needed, but Did Not Have, the Surface Rights to the Project Area..............................................88 iii Gabriel Resources et al. v. Romania Respondent’s Rejoinder 24 May 2019 3.3.2.7 RMGC Needed, but Had Not Obtained, all Archaeological Discharge Certificates ..........................94 3.3.3 Contemporaneous Evidence Demonstrates that State Officials Considered that the EIA Review Process was Ongoing ...............................................................................96 3.3.4 Gabriel Canada’s Public Disclosures and RMGC’s Annual Reports from Late 2011 and 2012 Show that the EIA Review Process Was Ongoing....................................100 3.3.5 RMGC Did Not File an Administrative or Court Complaint Concerning the Ministry of Environment’s Alleged Failure to Issue the Environmental Permit...........103 3.4 The Government’s Allegedly Coercive Attempt to Amend the State’s Level of Participation in the Project Does Not Amount to Failure to Provide Fair and Equitable Treatment to the Claimants’ Investments in Breach of Either Article II(2) of the Canada-Romania BIT or Article 2(2) of the UK- Romania BIT...........................................................................105 3.4.1 State Officials’ Public Statements between August 2011 and December 2011 Did Not Reflect an Intent to Coerce RMGC into Amending the Existing Contracts ..................109 3.4.2 The Claimants’ Representatives Freely and Willingly Negotiated with the Ministry of Economy in Late 2011 ...118 3.4.3 Gabriel Canada’s Public Disclosures from Late 2011 and 2012 Confirm that RMGC’s Representatives Freely and Willingly Negotiated with the Ministry of Economy ...........................................................................................131 3.4.4 The Government’s Alleged Failure to Issue the Environmental Permit following RMGC’s January 2012 Offer Confirms that the EIA Review Process Was Ongoing and that It Was Separate from the Economic Negotiations.......................................................................134 iv Gabriel Resources et al. v. Romania Respondent’s Rejoinder 24 May 2019 3.5 The Government’s Submission and Parliament’s Rejection of the Roşia Montană Law to Parliament Does Not Amount to Failure to Provide Fair and Equitable Treatment to the Claimants’ Investments in Breach of Either Article II(2) of the Canada-Romania BIT or Article 2(2) of the UK- Romania BIT...........................................................................135 3.5.1 RMGC Actively Sought the Legislative Changes Included in the Roşia Montană Law..................................138 3.5.2 By Introducing the Roşia Montană Law, the Government Was Implementing the Legislative Amendments that the Claimants Had Requested ..............145 3.5.3 The Claimants Supported the Roşia Montană Law and Never Contemporaneously Objected to Its Introduction ...........................................................................................157 3.5.4 The Government Did Not Call on Parliament to Reject the Roşia Montană Law.....................................................160 3.5.5 Parliament’s Review and Rejection of the Roşia Montană Law Complied with Romanian law....................163 3.6 Following the Rejection of the Roşia Montană Law, the State Did Not Fail to Provide Fair and Equitable Treatment to the Claimants’ Investments in Breach of Either Article II(2) of the Canada-Romania BIT or Article 2(2) of the UK- Romania BIT...........................................................................168 3.6.1 The Ministry of Environment Was under No Obligation to Issue the Environmental Permit.....................................168 3.6.1.1 RMGC Did Not Submit the Requisite Waste Management Plan until March 2013 ...........................171 3.6.1.2 The