Public Version INTERNATIONAL CENTRE FOR ICSID Case No. ARB/16/16 SETTLEMENT OF INVESTMENT DISPUTES BETWEEN GLOBAL TELECOM HOLDING S.A.E. Claimant and GOVERNMENT OF CANADA Respondent CLAIMANT’S MEMORIAL ON THE MERITS AND DAMAGES 29 September 2017 GIBSON, DUNN & CRUTCHER LLP Telephone House 2-4 Temple Avenue London EC4Y 0HB United Kingdom GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, NY 10166 United States of America Public Version TABLE OF CONTENTS I. Introduction ............................................................................................................................ 1 II. Executive Summary ............................................................................................................... 3 III. Canada’s Wireless Telecommunications Market And Framework For The 2008 AWS Auction................................................................................................................................. 17 A. Overview Of Canada’s Wireless Telecommunications Market Leading Up To The 2008 AWS Auction.............................................................................................. 17 1. Introduction to Wireless Telecommunications .................................................. 17 2. Canada’s Wireless Telecommunications Market At The Time Of The 2008 AWS Auction ............................................................................................ 20 B. The 2008 AWS Auction Framework And Its Key Conditions ................................... 23 1. The Terms Of The AWS Auction Consultation ................................................ 26 2. The Terms Of The Spectrum Policy Framework ............................................... 30 3. The Terms Of The Spectrum Licensing Procedure ........................................... 32 4. The Terms Of The AWS Auction Policy Framework ....................................... 34 5. The Terms Of The AWS Auction Licensing Framework .................................. 39 6. The Mandatory Roaming & Tower/Site Sharing Policies ................................. 40 7. The Ownership & Control Rules ....................................................................... 44 IV. GTH Invests In Canada In Reliance On The 2008 AWS Auction Framework ................... 48 A. Background To GTH’s Decision To Invest In Wind Mobile ..................................... 48 B. GTH Structures Wind Mobile To Take Advantage Of The Anticipated Relaxation Of The O&C Rules ................................................................................... 54 1. The Structure Of GTH’s Investment In Wind Mobile ....................................... 54 2. GTH’s Equity Contribution And Loans ............................................................. 58 C. Overview Of GTH’s Key Expectations At The Time GTH Begins Its Investment In Canada ................................................................................................. 59 i i Public Version V. Canada’s Wrongful Acts that cumulatively prevented GTH from benefiting from its C$ 1.3 Billion Investment.......................................................................................................... 71 A. The Duplicative And Inconsistent Ownership & Control Reviews ............................ 73 1. Industry Canada Confirms Wind Mobile’s Compliance With The O&C Rules .................................................................................................................. 74 2. The CRTC Conducts A Duplicative, Targeted, & Public Second Review Of Wind Mobile’s Compliance With The O&C Rules, And Reaches A Conflicting And Incorrect Decision ................................................................... 76 B. Canada Fails To Address Key Barriers To Market Entry In Contradiction of Prior Representations To Encourage Investment ........................................................ 85 1. Canada Ignored Repeated Requests To Enforce A Fair Regulatory Environment ....................................................................................................... 87 2. Canada Only Began To Address The Regulatory Environment When the Five-Year Rollout Period Neared Expiration .................................................... 96 C. Canada Repudiates The 2008 AWS Auction Framework And Implements Measures That Destroy The Value Of GTH’s Investment ......................................... 97 1. Canada Relaxes The O&C Rules .............................................................................................................. 98 The Relaxation Of The O&C Rules .......................................................... 98 On Vague Unspecified “National Security” Grounds .............................................. 105 2. GTH’s Attempts To Sell Wind Mobile To An Incumbent Are Blocked By The Establishment And Implementation Of A New Transfer Framework ....................................................................................................... 119 Incumbents Offer To Purchase Wind Mobile ......................................... 119 Canada Announces Its 2013 Transfer Consultation................................ 123 The Negotiations With Incumbents Continue......................................... 127 Canada Releases The 2013 Transfer Framework Effectively Prohibiting GTH’s Sale Of Wind Mobile To An Incumbent ................. 133 D. Owing To The Wrongful Acts Committed By Canada, GTH Is Left With No Commercially Reasonable Alternative Other Than To Exit The Canadian Market ....................................................................................................................... 139 ii Public Version E. After GTH’s Forced Exit, Canada Facilitates Wind Mobile’s Sale To Shaw .......... 145 VI. The Tribunal Has Jurisdiction To Decide The Dispute ..................................................... 149 A. The Tribunal Has Jurisdiction Over This Dispute In Accordance With The BIT And Article 25 Of The ICSID Convention........................................................ 149 1. The Requirements Of The BIT Have Been Met .............................................. 151 GTH Is A Protected Investor That Has Made An Investment For The Purposes Of The BIT ....................................................................... 151 There Is A Qualifying Dispute For the Purposes Of The BIT ................ 153 The Parties Have Provided Their Written Consent To ICSID’s Jurisdiction For the Purposes Of The BIT .............................................. 154 All Remaining Requirements Of The BIT Have Been Met .................... 154 2. The Requirements Of Article 25 Of The ICSID Convention Have Been Met ................................................................................................................... 155 3. The Tribunal Has Jurisdiction To Decide The Dispute ................................... 156 B. The Applicable Law Of This Dispute Is The BIT And Applicable Rules of International Law ...................................................................................................... 156 VII. Canada Has Breached Fundamental Obligations Under the BIT ...................................... 158 A. Canada Has Failed To Afford GTH’s Investment Fair And Equitable Treatment .................................................................................................................. 161 1. The Fair And Equitable Treatment Standard ................................................... 161 2. Canada Breached The Fair And Equitable Treatment Standard When It Blocked GTH From Transferring Wind Mobile’s Licenses To An Incumbent After The Five-Year Rollout Period .............................................. 172 Canada Breached Its Obligation To Afford Fair And Equitable Treatment By Frustrating GTH’s Legitimate Expectation That It Would Be Permitted To Transfer Wind Mobile’s Licenses To An Incumbent After The Five-Year Rollout Period ..................................... 173 i. GTH Had The Legitimate Expectation That It Would Be Permitted To Transfer Wind Mobile’s Licenses To An Incumbent After The Five-Year Rollout Period ............................ 173 ii. GTH Relied On Canada’s Representations In Making Its Decision To Invest ......................................................................... 180 iii Public Version iii. Canada Frustrated GTH’s Legitimate Expectations When It Revised The Transfer Framework And Blocked The Sale Of Wind Mobile’s Licenses To An Incumbent ................................... 183 Canada Breached Its Obligation To Afford Fair And Equitable Treatment By Unreasonably and Arbitrarily Blocking GTH From Transferring Wind Mobile’s Licenses To An Incumbent After Five Years ....................................................................................................... 190 3. Canada Breached The Fair And Equitable Treatment Standard On The Pretext Of An Arbitrary National Security Review ................................................................ 196 4. Canada’s Wrongful Measures Cumulatively Amount To A Breach Of The FET Standard ............................................................................................ 204 B. GTH’s Investment Has Not Been Accorded Full Protection And Security.............. 214 C. Canada Has Breached The Guarantee Of Unrestricted Transfer of Investments ..... 218 D. GTH’s Investment Has Not Been Accorded National Treatment Protection ........... 220 VIII. GTH Is Entitled To Full Reparation .................................................................................