INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES GABRIEL RESOURCES LTD. AND GABRIEL RESOURCES (JERSEY) LTD. Claimants V. ROMANIA Respondent ICSID CASE NO. ARB/15/31 ______________________________________________________________________________ CLAIMANTS’ REPLY AND COUNTER-MEMORIAL ON JURISDICTION ______________________________________________________________________________ November 2, 2018 Ţuca Zbârcea & Asociaţii Counsel for Claimants CLAIMANTS’ REPLY AND COUNTER-MEMORIAL ON JURISDICTION TABLE OF CONTENTS Page INTRODUCTION........................................................................................................1 THE GOVERNMENT COERCIVELY CONDITIONED ITS WILLINGNESS TO ISSUE THE CRITICAL ENVIRONMENTAL PERMIT AND ALLOW THE PROJECT TO PROCEED ON INCREASING ITS SHAREHOLDING IN RMGC AND ITS ROYALTY ...........................................20 RMGC MET ALL OF THE REQUIREMENTS TO OBTAIN THE ENVIRONMENTAL PERMIT ................................................................................26 A. RMGC Met the Requirements to Obtain the Environmental Permit Following the November 29, 2011 TAC Meeting ...........................................................................27 B. RMGC Met the Requirements to Obtain the Environmental Permit Following the July 26, 2013 TAC Reconciliation Meeting .............................................................53 C. Having a “Social License” Is Not a Requirement under Romanian Law and Is Irrelevant to Project Permitting .................................................................................65 D. None of the Technical Issues Now Raised by Respondent’s Experts Was Considered an Impediment to Project Permitting by the Government Contemporaneously and, in Fact, All Issues Were Satisfactorily Addressed ...........67 THE GOVERNMENT IMPOSED THE PARLIAMENTARY ROUTE ON CLAIMANTS AND RMGC IN EARLY 2013 AS THE ONLY WAY FORWARD FOR THE PROJECT ..........................................................................76 A. Claimants and RMGC Believed at All Relevant Times That the Project Enjoyed Strong Support, Particularly in the Local Community But Also Nationally and Thus Had a Social License, Which Contemporaneous Evidence Supports ..............78 B. Claimants and RMGC Did Not Need or Ask for a Special Law; the Government Imposed That Requirement on Them and Conditioned Issuance of the Environmental Permit and Advancement of the Project on Parliament’s Approving the Draft Law ..........................................................................................95 C. The Government’s Submission of the Draft Law to Parliament Triggered Street Protests That Were Fueled by and Part of the Growing Social Movement Against a Perceived Corrupt and Entrenched Political Class and Government .....................99 D. Having Created the Arbitrary Condition of Parliamentary Approval of the Draft Law, Government Leaders Decided for Political Reasons to Reject the Draft Law and Hence the Project before Parliamentary Hearings Even Started, and Parliament Responded to Their Political Call .........................................................104 Page AFTER PARLIAMENT REJECTED THE DRAFT LAW, THE GOVERNMENT ACTED IN ACCORDANCE WITH ITS STATED INTENT NOT TO DO THE PROJECT ................................................................................108 A. The Government Failed to Issue the Environmental Permit Despite Admitting Repeatedly the Project Met All Permitting Requirements ......................................109 B. Actions Taken by the Ministry of Culture Reflect and Confirm the Political Rejection of the Project ...........................................................................................114 On the Basis of Extensive Archaeological Research Conducted by the State, and Funded as Legally Required by RMGC, the Ministry of Culture Issued ADCs for the Majority of the Project Area ..........................................116 The Ministry of Culture Issued the 2004 LHM Reflecting the Knowledge Acquired from the Archaeological Research and Consistent with the ADCs .119 The 2010 LHM Was Issued With Erroneous, Overbroad Descriptions of the Historical Monuments in Roşia Montană ........................................................121 In 2015, Consistent with the Political Rejection of the Project, the Ministry of Culture Took the Position That the 2004 LHM Had Been an Abuse, and That All of Roşia Montană Was an Historical Monument ..............................125 The Ministry of Culture Issued the 2015 LHM and Delineated the Declared Roşia Montană Historical Monument in an Arbitrary and Unlawful Manner 128 After Applying to Have the Roşia Montană Mining Cultural Landscape Listed as a UNESCO World Heritage Site Romania Requested a Postponement of Its Application Pending Completion of This Arbitration ....131 The 2015 LHM and the State’s UNESCO Application Render Any Construction Permit for the Project Legally Impossible .................................133 C. At the State’s Direction and in Breach of its Obligations as a Shareholder of RMGC, Minvest Stopped Cooperating in Recapitalizing RMGC and Refused to Contribute to Maintaining RMGC’s Share Capital .................................................134 D. The State Launched Retaliatory and Abusive Investigations That Are Still On- Going .......................................................................................................................136 NAMR FAILED TO ACT ON RMGC’S REQUESTS FOR EXPLOITATION LICENSES FOR THE BUCIUM DEPOSITS ......................................................138 THE TRIBUNAL HAS JURISDICTION OVER THIS DISPUTE ....................144 A. The Tribunal Has Jurisdiction over the Claims Presented by Gabriel Canada .......144 Gabriel Canada Is an “Investor” Within the Meaning of the Canada BIT ......144 Gabriel Canada Presents Claims on Its Own Behalf and Seeks Compensation for Its Own Losses ...................................................................148 The Dispute Submitted to Arbitration by Gabriel Canada Complies with Article XIII(2) and (3) of the Canada BIT ......................................................150 a. The Notice Required by Article XIII(2) Was Satisfied .......................... 151 -ii- Page b. The Waiver Required by Article XIII(3) Was Satisfied ......................... 157 Gabriel Canada’s Claims Arose Within the Three-Year Limitations Period Set Forth in Article XIII(3)(d) of the Canada BIT ..........................................158 a. The Three-Year Period Is Triggered by Knowledge of Both the Breach and the Resulting Loss ............................................................................ 158 b. Gabriel Did Not Incur and In Any Event Did Not Acquire Knowledge of Loss Prior to July 30, 2012 ................................................................ 160 c. Gabriel Acquired Knowledge of the Breach at Issue and Resulting Loss after July 30, 2012 .................................................................................. 162 d. Prior Conduct Is Not Claimed as a Stand-Alone Breach ....................... 164 e. The Temporal Considerations Are the Same in Relation to Gabriel’s Claims Relating to Bucium .................................................................... 166 The Tribunal Has Jurisdiction over Gabriel Canada’s MFN Claims under Article III(1) of the BIT ...................................................................................167 Gabriel Canada’s Claims Fall within the Substantive Protections of the BIT 168 a. Environmental Measures ........................................................................ 168 b. Tax Measures.......................................................................................... 173 B. The Tribunal Has Jurisdiction over the Claims Presented by Gabriel Jersey .........174 Gabriel Jersey Is a Covered Company with Covered Investments .................174 Gabriel Jersey’s Claims Satisfy the Notice Provision and Otherwise Fall within the Tribunal’s Jurisdiction under the UK BIT .....................................180 The Achmea Judgment Does Not Nullify this Tribunal’s Jurisdiction ...........181 a. The Achmea Judgment Is a Decision on the Interpretation of the TFEU182 b. Gabriel Jersey Is Not an Investor from an EU Member State ................ 183 c. Respondent’s Objection in Relation to Gabriel Jersey’s Eligibility to Consent Is without Basis ........................................................................ 186 d. Respondent’s Objection that Romania’s Consent Became Inapplicable Is without Merit ...................................................................................... 189 VCLT Article 30(3) Applies in Very Limited Circumstances ........ 189 The Achmea Judgment Did Not Rule that the Conditions for Applying VCLT Article 30(3) Were Met ....................................... 192 The TFEU and the UK BIT Do Not Relate to the Same Subject Matter .............................................................................................. 193 Article 7 of the UK BIT Is Not Incompatible with the TFEU ........ 195 e. Romania Gave Its Consent in Article 7 of the UK BIT ......................... 197 C. Claimants’ Claims Fall within the Tribunal’s Jurisdiction under the ICSID Convention ..............................................................................................................198 -iii- Page ROMANIA DID NOT ACCORD FAIR AND EQUITABLE TREATMENT ...198 A. Observations Regarding the Standard .....................................................................198