Tarazi_Respondent

TEAM TARAZI
INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT

DISPUTES
ICSID Case No. ARB/22/99
Astracommex Regional Satellite Communication Inc.

(Claimant)
v.
The Republic of Celestria

(Respondent)
MEMORIAL FOR THE RESPONDENT

Memorial for the Respondent
LIST OF CONTENTS
List of Authorities......................................................................................................................3
I. List of Treaties, Conventions, and Rules.......................................................................3
II. List of Cases...................................................................................................................4
III. List of Books............................................................................................................17
IV..........................................................................................................................................18
V. List of Academic Articles and Publication(s)..............................................................19
VI. List of Abbrevations.................................................................................................20
Statement of Facts....................................................................................................................22
Summary of the Arguments.....................................................................................................26
Arguments on procedural matters..............................................................................................1
VII. THE TRIBUNAL DOES NOT HAVE JURISDICTION RATIONE TEMPORIS

OVER THE DISPUTE...........................................................................................................1
A. The Bit does not apply to pre-bit disputes................................................1
i. The principle of non-retroactivity applies to the ‘broadly drafted’

Article II of the BIT................................................................................................2
ii. The 2022 declaration restricts any non-retroactive application

3
B. The dispute between the parties crystallized before the signing of

the BIT.............................................................................................................................4
i. The dispute between the parties crystallized pre-BIT...................5
ii. The post-BIT measures are a mere continuation of the

previous dispute..................................................................................................6
A. Marcial ventures ltd and Platonial Investments arethird-party

funders............................................................................................................................8
B. The Existence of Exceptional Circumstances warrants an order

For Security for Costs.............................................................................................11
Arguments on Substantial Matters...........................................................................................15
2
PRAYERS FOR RELIEF........................................................................................................33
LIST OF AUTHORITIES
I. LIST OF TREATIES, CONVENTIONS, AND RULES
Document Title Document Information

ARISWA International Law Commission, Draft Articles on
Responsibility of States for Internationally
Wrongful Acts (2001)
IBA International Bar Association's rules on the Taking
of Evidence in International Arbitration 1999.
ICSID International Centre for Settlement of Investment

Disputes (ICSID) Convention on the Settlement of
Investment Disputes between States and Nationals
of Other States signed on 18 March 1965, entered
into force 14 October 1966
Joint Declaration Declaration concerning the Agreement on
reciprocal promotion and protection of
investments between the Kingdom of Nebuland
and Republic of Celestria dated 10 Oct 2022
Nebuland- Agreement on Reciprocal promotion and
Celestria BIT Protection of Investments between The Kingdom
of Nebuland and The Republic of Celestria Signed
on 1 February 2021
OECD OECD Draft Convention on the Protection of
Foreign Property 1967
Outer Space Treaty on Principles Governing the Activities of

Treaty States in the Exploration and Use of Outer Space,
including the Moon and Other Celestial Bodies. 10
October 1967
3
PCA Permanent Court of Arbitration 1899
Prague Rules Prague Rules on the Efficient Conduct of

Proceedings in International Arbitration 14
December 2018
UNCITRAL United Nations Commission on International Trade

Law 1966
VCLT Vienna Convention on the Law of Treaties 1969 27
January 1980
4
II. LIST OF CASES
CASE CASE & DOCUMENT

INFORMATION
AAPL Asian Agricultural Products Ltd.
(AAPL) v. Republic of Sri Lanka
Award
27 June 1990
ADC ADC Affiliate Limited and ADC &
ADMC Management Limited v.
Republic of Hungary ICSID Case No.
ARB/03/16
Award
2 October 2006
Agility Agility Public Warehousing Company
K.S.C. v. Republic of Iraq,
Decision on Jurisdiction
9 July 2019
Amco Asia Amco Asia Corporation and others v.
Republic of Indonesia
Award
20 Nov 1984
Amoco International Amoco International Finance
Corporation v. The Government of the
5
Islamic Republic of Iran, National

Iranian Oil Company, National
Petrochemical Company and Kharg
Chemical Company Limited, IUSCT
Case No. 56
Partial Award
14 July 1987
Apotex Apotex Holdings Inc. and Apotex Inc.
v. United States of America
ICSID Case No. ARB(AF)/12/1
Award
25 Aug 2014
ATA Constructions ATA Construction, Industrial and
Trading Company v. Hashemite
Kingdom of Jordan, ICSID Case No.
ARB/08/2
Award - 18 May 2010
Azurix Mohammad Ammar Al-Bahloul v. The
Republic of Tajikistan
SCC Case No. 064/2008
Decision on Application for annulment
of the Argentine Republic
1 Sept 2009
Bear Creek Bear Creek Mining Corporation v.
Republic of Peru
Award
30 Nov 2017
Biwater Biwater Gauff (Tanzania) Limited v.
United Republic of Tanzania
Award
24 July 2008
6
Cargill Cargill, Incorporated v. United

Mexican States
Award
18 Sept 2009
Carrizosa Astrida Benita Carrizosa v. Republic
of Colombia
ICDIS Case No. ARB/18/5
Award
19 April 2021
Cavalum Cavalum SGPS, S.A. v. Kingdom of
Spain, ICSID Case No. ARB/15/34
31 Aug 2020
CC/Devas CC/Devas (Mauritius) Ltd., Devas
Employees Mauritius Private Limited,
and Telcom Devas Mauritius Limited
v. Republic of India
PCA Case No. 2013-09
Award on Jurisdiction
25 July 2016
CMS CMS Gas Transmission Company v.
The Republic of Argentina
Award
12 May 2005
Commerce Group Commerce Group Corp. and San
Sebastian Gold Mines, Inc. v. Republic
of El Salvador, ICSID Case No.
ARB/09/17
Decision on El Salvador’s Application
for Security for Cost
20 Sept 2012
7
Compañia del Desarrollo Compañia del Desarrollo de Santa

Elena S.A. v. Republic of Costa
Award
17 February 2000
Concrete Pipe Concrete Pipe & Products of Cal.,
Inc. v. Construction Laborers Pension
Trust for Southern Cal
508 U.S. 602
1993
Crystallex Crystallex International Corporation

v. Bolivarian Republic of Venezuela
Award
4 April 2016
David R. Aven David R. Aven, Samuel D. Aven,
Carolyn J. Park, Eric A. Park, Jeffrey S.
Shioleno, Giacomo A. Buscemi, David
A. Janney and Roger Raguso v. The
Republic of Costa Rica
ICSID Case No. UNCT/15/3
Final Award
18 Sept 2018
Duke Energy Duke Energy International Peru
Investments No. 1 Ltd. v. Republic of
Peru,
ICSID case no. ARB/03/28.
18 Aug 2008
El Paso El Paso Energy International
Company v. Argentine Republic
8
Award
31 Oct 2011
Emilio Emilio Agustín Maffezini v. The
Kingdom of Spain,
Award
Enron Enron Creditors Recovery

Corporation (formerly Enron
Corporation) and Ponderosa Assets,
L.P. v. Argentine Republic, ICSID
Case No. ARB/01/3
Award
22 May 2007
Euro Gas EuroGas Inc. and Belmont Resources
Inc. v. Slovak Republic
Procedural Order No.3
23 June 2015
Feldman Marvin Roy Feldman Ka¶ V. State of
Mexican States
ISCID Case No. ARB(AF)/99/1
Interim decision on Preliminary
Jurisdiction
31 July 2007
Generation Ukraine Generation Ukraine Inc. v. Ukraine
Award
16 Sept 2003
Glamis Glamis Gold Ltd. v. United States of
America
UNCITRAL
8 June 2009
9
Gramercy Gramercy Funds Management LLC,

and Germany Peru Holdings LLC v.
Republic of Peru
ICSID Case No. UNCT 18/2
Award
6 Dec 2022
H.A. Spalding H.A Spalding, Inc. v. Ministry of
Roads and Transport of the Islamic
Republic of Iran and The Islamic
Republic of Iran, IUSCT Case No. 437
Award
24 Feb 1986
Hadacheck Hadacheck v. Sebastian
239 U.S. 394 (1915)
Impreligo Impregilo S.p.A. v. Islamic Republic
of Pakistan (II)
22 Apr 2005
Invesmart Invesmart v. Czech Republic
UNCITRAL
Award
26 June 2009
Ipek Ipek Investment Limited v. Republic
of Turkey
Award
8 Dec 2022
Jacqueline M. Kiaie Jacqueline M. Kiaie and Julia S.
Kiaie v. The Government of the
Islamic Republic of Iran
IUSCT Case No. 164
Award
10
15 May 1996
James James and others v. UK ECtHR
Judgment
February 21, 1986
Jan De Nul Jan de Nul N.V. and Dredging

International N.V. v. Arab Republic of
Egypt
16 June 2008
Kardassopoulos Ioannis Kardassopoulos v. The
Republic of Georgia
Award
3 Mar 2010
Lao Holdings Lao Holdings N.V. v. Lao People’s
Democratic Republic (I),
Award
6 Aug 2019
LG&E LG&E Energy Corp., LG&E Capital
Corp. and LG&E International Inc. v.
Argentine Republic
Award
25 July 2007
Mabco Mabco Constructions SA v. Republic
of Kosovo
30 Oct 2020
11
Maffezini Emilio Agustín Maffezini v. The

Kingdom of Spain
Award
13 Nov 2000
Mainstream Renewable Mainstream Renewable Power, Ltd.,
International Mainstream Renewable
Power, Ltd., Mainstream Renewable
Power Group Finance, Ltd., Horizont I
Development, GmbH, Horizont II
Renewable, GmbH and Horizont III
Power GmbH v. Federal Republic of
Germany
Decision on application under 41(5)
18 Jan 2022
Mamidoil Mamidoil Jetoil Greek
Petroleum Products Societen
Anonyme S.A. v. Republic of Albania
ICSID Case No.ARB/11/24
Award
30 March 2015
MCI MCI Power Group, L.c., and New
Turbine Inc. V. Republic of Ecuador
ISCID Case No. ARB/03/4
Award
31 July 2007
Metalclad Metalclad Corporation v. The United
Mexican States
Award
30 August 2000
Methanax Methanex Corporation v. United
12
States of America Final Award of the

Tribunal on Jurisdiction and Merits
3 August 2005
Micula Ioan Micula Viorel Micula and others

v. Romania (I)
Middle East Cement Middle East Cement Shipping and
Handling Co.
v. Arab Republic of Egypt ICSID Case
No. ARB/99/6 Award
12 April 2002
Mondev Mondev International Ltd. v. United
States of America
Award
11 Oct 2022
MRD
Muszynianka v Slovakia Spółdzielnia Pracy Muszynianka v.

Slovak Republic
PCA Case No. 2017-08/AA629
Nord Stream 2 Nord Stream 2 AG v. European

Union, PCA Case No. 2020-07
Procedural Order No. 4
Nordzucker Nordzucker AG v. The Republic of
Poland, a hoc arbitration.
Occidental Occidental Exploration and

Production Company v. Republic of
Ecuador (I), LCIA Case No. UN3467
13
Award
1 July 2004
OEG Olympic Entertainment Group AS v.
Ukraine PCA Case No. 2019-18
Award
15 April 2021
OI European OI European Group B.V v Bolivarian Republic
of Venezuela
Award
10 March 2015
Pay Casado Víctor Pey Casado and President
Allende Foundation v. Republic of
Chile
Judgement of Supreme Court of Chile
16 Aug 2024
Ping Ping An Life Insurance Company of
China, Limited and Ping An Insurance
(Group) Company of China, Limited v.
Kingdom of Belgium
Award
30 Apr 2015
Pope & Talbot Pope & Talbot v. Government of
Canada Ad Hoc Arbitration
Interim Award
26 June 2000
Pressos Pressos Compania Naviera S.A. And
Others V. Belgium
17849/91
20 November 1995
14
PSEG PSEG Global Inc. and Konya Ilgin

Elektrik Üretim ve Ticaret Limited
Sirketi v. Republic of Turkey
4 June 2004
RDC Railroad Development Corporation
(RDC) v. Republic of Guatemala,
Award
29 June 2012
Reza Nemazee Reza Nemazee and Luz Belen
Nemazee v. The Islamic Republic of
Iran
IUSCT Case No. 4
Award
10 Dec 1996
RSM Rachel S. Grynberg, Stephen M.
Grynberg, Miriam Z. Grynberg and
RSM Production Corporation v.
Grenada
Tribunal’s Decision on Respondnet’s
Application for Security for Cost
14 Oct 2010
S.D Myers S.D. Myers, Inc. v. Government of
Canada, Partial Award
IIC 249
13 November 2000
Salini Salini Costruttori S.p.A. and
Italstrade S.p.A. v. Kingdom of
Morocco
15
23 July 2001
Saluka Saluka Investments BV v. The Czech
Republic PCA Case No. 2001-04
Partial
Award
17 March 2006
Sedco Sedco, Inc. v. National Iranian Oil
Company and The Islamic Republic of
Iran, IUSCT Case Nos. 128 and 129
Award
7 July 1987
Sempra Sempra Energy International v.
Argentine Republic, ICSID Case No.
ARB/02/16
Award
28 Sept 2007
SGS SGS Société Générale de Surveillance
S.A. v. Republic of the Philippines
Decision of the Tribunal on Objection
on Jurisdiction
29 Jan 2004
Southern Pacific Properties Southern Pacific Properties (Middle
East) Limited v. Arab Republic of
Egypt, ICSID Case No. ARB/84/3,
Decision on Jurisdiction, 14 April
1988.
Spence Aaron C. Berkowitz, Brett E.
Berkowitz and Trevor B. Berkowitz v.
Republic of Costa Rica
ICSID Case No. UNCT/13/2
Interim Award
16
30 May 2017
Starett Housing Starrett Housing Corporation,
Starrett Systems, Inc. and others v.
The Government of the Islamic
Republic of Iran, Bank Markazi Iran
and others, IUSCT Case No. 24
Award
19 Dec 1983
STEAG STEAG GmbH v. Kingdom of Spain
ISCID Case No. ARB/15/4
Decision on Jurisdiction, liability, and
directions on Quantum
Suez Suez, Sociedad General de Aguas de
Barcelona S.A., and InterAgua
Servicios Integrales del Agua S.A. v.
The Argentine Republic
16 May 2006
Tecmed Técnicas Medioambientales Tecmed,
S.A. v. United Mexican States
Award
29 May 2003
Teinver Teinver S.A., Transportes de
Cercanías S.A. and Autobuses
Urbanos del Sur S.A. v. Argentine
Republic
21 Dec 2012
Telenor Telenor Mobile Communications AS
17
v. Republic of Hungary
Award
13 September 2006
Thunderbird International Thunderbird Gaming
Corporation v. The United Mexican
States, UNCITRAL,
Award, 26 January 2006
Total S.A Total S.A. v. Argentine Republic
Award
27 November 2013
Vento Vento Motorcycles, Inc. v. United
Mexican States
Award
6 July 2020
Village of Euclid Village of Euclid v. Ambler Realty
Co.
272 U.S. 365 (1926)
Vivendi Compañía de Aguas del Aconquija SA
and Vivendi
Universal SA v. Argentina ICSID Case
No ARB/97/3 Award II
20 August 2007
WestWater Resources Westwater Resources, Inc. v.
Republic of Türkiye
Award
3 March 2023
18
III. LIST OF BOOKS
Author(s) Title
DOLZER & SCHREUER Rudolph Dolzer & Christoph Schreuer,

Principles
of International Investment Law, 2nd ed.
2012
ZACHARY Zachary Douglas, The International Law of
Investment Claims
Cambridge University Press, 2009
CHARLES & LUKE Charles T. Kotuby Jr. and Luke A. Sobota,
General Principles of Law and International
Due
Process: Principles and Norms Applicable in
Transnational Disputes, Vol. 6
Oxford University Press
2017
RUBINS & LOVE Rubins, N. and Love, B., The Scope of
Application of International Investments
Agreements: Ratione Temporis, in
Bungenberg, M., Griebel, J., Hobe, S. and
Reinisch, A. (eds.), International Investment
Law: A Handbook, Nomos, 2015.
SCHREUER Schreuer, C., What is a Legal Dispute? in
19
Buffard, I., Crawford, J., Pellet, A. and

Wittich, S. (eds.), International Law between
Universalism and Fragmentation, 2009.
MARISI Marisi, F., Chapter 6: Interpretation
Doctrines, in Environmental Interests in
Investment Arbitration, 2020.
QIAN Qian, X., Cross-Regime Harmonization
Through Proportionality Analysis: Methods of
Review, in Water Services Disputes in
International Arbitration: Reconsidering the
Nexus of Investment Protection,
Environment, and Human Rights,
2020, pp. 115-160.
REINISCH Reinisch, A., Standards of Investment
Protection, Oxford Handbook of International
Investment Law, 2008.
IV.
20
V. LIST OF ACADEMIC ARTICLES AND PUBLICATION(S)
Robert D. Indirect Expropriation and its Valuation in the Bit

Sloane W. Generation
Michael
Reisman
Bishop, R., Foreign Investment Disputes – Cases, Materials and
Crawford, J. Commentary, Kluwer Law International, 2005.
and Reisman,
W.
F. V. Garcia Responsibility of the State for Injuries Caused in Its
Amador Territory to the Person or Property of Aliens-Measures
Affecting Acquired Rights: International
Responsibility. Fourth Report by F. V. Garcia Amador,
26 February 1959, Vol II. Yearbook of the
International Law Commission, para 41, p. 11, UN.
Doc. A/CN.4/119
Henckels, C Indirect Expropriation and the Right to Regulate:
Revisiting Proportionality Analysis and the Standard
of Review in Investor-State Arbitration, 15 Journal of
International Economic Law, 2012, pp. 223–55.
Ranjan Using the Public Law Concept of Proportionality to
Prabhash Balance Investment Protection with Regulation in
Ranjan, International Investment Law: A Critical Reappraisal
Cambridge Journal of International and Comparative
Law, Volume 3, Issue 3 2014
21
VI. LIST OF ABBREVATIONS
ABBREVATION MEANING
¶/¶¶ Paragraph(s)
AS100 Astracommex Regional’s Satellite

involved in the Collision
BIT Bilateral Investment Treaty
Capital Call The Capital Call Notice issued by

Astracommex Global to the two
shareholders; Marcial Ventures Ltd.
and Platonial Investments
DoD Order Department of Defence’s Order
FET Standard Fair and Equitable Treatment

Standard
ICSID International Centre for the

Settlement of Investment Disputes
l./ll. Line(s) Number
p/pp Page(s) Number
Post-BIT After the Signing of the BIT
Pre-BIT Before the Signing of the BIT
Supreme Court Order The order of the Supreme Court of
22
Celestria dated 1 April 2022 ordered

the Claimant to bear the costs of the
proceedings
Valinor Valinor cubesat was developed as a

part of trial missile defense system of
Celestria and was designed to identify
and track hypersonic and ballistic
missile threats and provide critical
data to the Department of Defense’s
Missile Defense System and the
warfighter
WP Proposals for amendments of the

ICSID rules — Working Paper
23
STATEMENT OF FACTS
Parties to the Dispute
1. Astracommex Regional Satellite Communications Inc.

(“Astracommex Regional” or “Claimant”) is a corporation
established in 2015 under the laws of the Kingdom of Nebuland
(“Nebuland”) with its principal place of business in Stelaria,
Nebuland. Astracommex Regional operates as a wholly owned
subsidiary with all the shares held by Astracommex Global Satellite
Communication Inc. (“Astracommex Global”) which is also
organized under the laws of Nebuland. It was established to provide
affordable internet services in rural areas in the Astral Archipelago
Region’s nations outside Nebuland.
2. The Republic of Celestria (“Celestria” or “Respondent”) is a
middle-income island nation with key economic sectors including
traditional manufacturing, agriculture, and fishing. Celestria’s
government adhered to the idea of digitalizing the economy and
channelizing both public and private investments towards the
development of digital infrastructures.
The Investment
3. In 2015, Celestria’s government was vigorously advancing its

digitalization agendas like establishing the digital health project
aimed to create an integrated digital health information system
across Celestria. Eager to become the most investor-friendly regime
for investments in the Telecommunications sector launched a Rural
Digitalization Fund (“RDF”) on 1 January 2016.
4. The RDF aimed to bridge the digital divide in Celestria by providing
rural communities and small businesses with equitable access to
internet services. Celestria allocated USD 1 billion over ten years to
extend fixed broadband to unserved and underserved areas. The
RDF, jointly overseen by Celestria’s National Frequency Agency and
24
the Rural Development Agency invited bids from both domestic and
foreign telecommunications and internet service providers.
5. On 15 February 2016, Astracommex Regional applied to the RDF
with its LEO satellite mega constellation architecture named the
Astra System. The application detailed a network of 5000 satellites,
set to operate at altitudes of 400, 450, 500, and 600 kilometers.
6. On 1 August 2016, the NFA and the RDA announced the
successful applicants for the RDF funding. Among these,
Astracommex Regional was selected as one of the three awardees,
the other two being domestic terrestrial telecommunication
companies.
7. On 1 October 2016, Astracommex Regional entered into a Rural
Digital Fund and Frequency Agreement (the “RDF Agreement”)
with the NFA and the RDA. It was also granted the rights to utilize
specific frequency spectrums within the allocated Ka-bands over the
territory of Celestria and 500 million USD dollars.
The Product
8. Astrocommex regional relied on the Low Earth Orbit (“LEO”)

satellite mega constellation architecture to provide internet services
in the State of Celestria. This technology aims to provide internet
connectivity in areas typically unserved or underserved by
traditional terrestrial infrastructure, such as rural regions, remote
islands, ships, and aircraft.
Change in the Government
9. On 1 April 2020 the Green Party came into power in Celestria to

safeguard the environment and promote sustainable innovations to
protect the future of its citizens. It also enacted the National
Environmental Protection Act, 2020 (“NEPA”) which requires every
governmental agency to take full account of environmental impact
assessments in determining whether the planned activities may
proceed.
25
Conflict in Domestic Legal Framework
10. The Respondent applied NEPA to the Claimant’s investment despite

its non-retroactive provisions and imposed several measures that
caused the Claimant’s eventual loss of all of its operations in
relation to the territory of Celestria.
Reduction in the Communication Reach of Astra Satellites
11. On 1 June 2020 the Celestrian Space Agency implemented radio

silence zones that reduced the Astra System's communication
coverage from 100% to only 40% of Celestria's territory, based on
an investigation under NEPA, which lacked substantial scientific
evidence to justify the decision.
Claimant’s Response to the Respondent’s Measure
12. The Claimant cooperated in good faith and offered new plans to
mitigate any potential impact on astronomy but to implement them
it required a new Ku-Band Spectrum to operate which could be
granted as per Article 6 of the RDF Agreement which allows for the
modification of support from the National Frequency Agency
(“NFA”) and Rural Development Authority (“RDA”) under specific
conditions.
Denial of Ku-Band Spectrum under NEPA
13. On 1 September 2020, Astracommex Regional applied to the NFA

for the required Ku-band frequencies. On 2 October 2020, the NFA
requested additional documentation from Astracommex Regional to
specifically address the atmospheric concerns cited in a study
conducted by a laboratory.
14. On 15 October 2020, Astracommex Regional responded to the
NFA, declining to provide the requested supplementary information.
On 15 December 2020, the NFA rejected Astracommex Regional’s
application to Ku-band frequencies on the basis of NEPA which
26
acted as a hindrance for the Claimant to remove the operational

restrictions.
Collision between Astra Satellite and Valinor CubeSat
15. On 1 January 2021, an unfortunate collision happened between

one of the Claimant’s satellites, AS100, and a CubeSat owned by
Valinor, a private company sponsored by the Respondent’s
Department of Defence (‘DoD”).
The investigation initiated on Astracommex Regional
16. On 5 January 2021, the DoD initiated an investigation and

suspended the Claimant’s operations on Celestria’s territory citing
concerns related to the Autonomous Collision Avoidance System
employed in the Astra Satellite.
Directive Issued and Continuing Suspensions were Imposed
17. On 1 March 2021, the DoD ordered the Claimant to reposition all
of its 400km altitude satellites to new orbits below 350km and until
then continuous suspension on the Claimant’s investment was
imposed. To this, the Claimant immediately objected and filed for
reconsideration.
Claimant’s Response to the Order Issued
18. On 1 April 2021, Astracommex Regional initiated proceedings

against the DoD in the domestic courts in accordance with
Celestrian Administrative Law as the Respondent state refused to
reconsider the directive issue.
Respondent Suspended the Annual Payments under the RDF

Agreement
19. On 15 October 2021, Astracommex Regional initiated proceedings

against the DoD, the RDA, the NFA, and the Space Agency in the
domestic courts. However, the Supreme Court rejected all the
27
claims imposed against the agencies of the Respondent State and

ordered it to bear the costs of the proceedings.
Submission to ICSID Arbitration
20. Thereafter, Astracommex approached Celestria with a request to

commence conciliation proceedings under the ICSID Convention
however, Celestria declined the request, prompting Astracommex to
initiate arbitration proceedings on 9 September 2022. The case
was registered on 25 September 2022.
28
29
SUMMARY OF THE ARGUMENTS
PROCEDURAL: PROSPECTIVE APPLICATION OF THE BIT AND

RETROACTIVE INTERPRETATION OF THE TREATY.
The Tribunal does not have Jurisdiction Ratione Temporis over the
present dispute as the BIT’s language rules out the scope of retroactive
application and the dispute crystallized before the BIT came into force.
Furthermore, the Declaration signed by both the parties clarifies the
intention regarding the scope of application of the BIT and restricts
retroactivity. The dispute falls outside the tribunal's jurisdiction ratione
temporis because it arose and fully crystallized before the signing of the
BIT. The subsequent measures taken after the BIT's entry into force are
merely a continuation of the pre-existing dispute, and therefore, do not
create a new or separate basis for the tribunal's jurisdiction.
PROCEDURAL: THE TWO ENTITIES ARE THIRD-PARTY FUNDERS

AND SECURITY FOR COSTS SHOULD BE AWARDED.
Marcial Ventures Ltd. and Platonial Investment are the Third-Party

funders as the essentials for the same under Rule 14 of ICSID Arbitration
Rules have been met. The Claimant does not hold the financial capacity
to comply with an adverse cost award and the late payment of the
advance cost and the non-compliance with the cost order of Supreme
Court of Nebuland exemplifies Claimant’s unwillingness and bad conduct
in the proceedings. All these factors coupled with the fact that the
Claimant has pursued third party funding for the arbitration gives rise to
the existence of ‘exceptional circumstances’ and warrant and order for
security for costs.
MERITS: EXPROPRIATION
In light of Art. 7 of the BIT, the measures taken by the Respondent state
on the Claimant’s investment do not amount to Creeping Expropriation
as it did not fulfil the required legal thresholds and were taken under the
garb of regulatory measures to safeguard the environment. In Arguendo,
30
the expropriation was lawful because it served a legitimate public

purpose, was taken in a non- discriminatory manner, in accordance with
due process of law and mere non-payment of compensation does not
make it unlawful. Further, the Respondent’s measures are justified under
the International Law, as the defences advanced by the Respondent,
including Police Powers Doctrine, the Precautionary Principle, and
National Security & Environment concerns, meet the established legal
criteria for their invocation.
MERITS: ADVERSE INFERENCE
In light of the new ICSID Arbitration Rules, 2022 the tribunal does not
have the power to draw Adverse Inference in case of non-compliance
with Document Production. The Claimant has not produced a complete,
consistent and detailed evidence as it is relying on a redacted two-page
document received through an anonymous source. The Respondent has
done reasonable research and producing a specific document whose
existence and veracity is not checked by the Claimant would not be
suitable for them. Furthermore, suchresearch of a specific document is
likely to entail data protection issues as the Respondent is in a long-term
military partnership with Valinor and privilege might also be applied.
31
ARGUMENTS ON PROCEDURAL MATTERS
VII. THE TRIBUNAL DOES NOT HAVE JURISDICTION RATIONE

TEMPORIS OVER THE DISPUTE
21. Ratione temporis refers to the effect of time on the tribunal’s

powers pursuant to the treaty.1 Subsequently, tribunals have
derived such an effect from interpreting relevant provisions of the
treaty and objectively determining the existence of disputes. 2
22. Here, with respect to the Tribunal’s Jurisdiction, the Respondent
respectfully submits that this tribunal does not have jurisdiction
ratione temporis over the dispute. First, (A) the BIT does not apply
to pre-BIT disputes, and second, (B) the dispute between the
parties crystallized pre-BIT.
A. THE BIT DOES NOT APPLY TO PRE-BIT DISPUTES
23. For Jurisdiction ratione temporis, tribunals assess and interpret

provisions for the temporal scope of application of a treaty in
accordance with the basic international principles.3 With regard to
the interpretation, the intention of the BIT signatories is often
looked at while assessing the original meaning of an article of a
treaty.4
24. In this case, Article II of the BIT provides for the scope of
application of a treaty. Article II of the BIT states:
“This agreement shall apply to legal disputes in
relation to investments that existed at the time of
entry into force as well as to investments made or
acquired thereafter.” 5
25. Here, the Claimant contends a retroactive interpretation of the

Celestria-Nebuland BIT on the basis of Article II being drafted in
1 Douglas, Z, The International Law of Investment Claims, Cambridge University Press,

2009.
2 Tecmed, ¶; Impreligo, ¶; Spece International, ¶
3 Salini, ¶ 177; Jan De Nul, ¶132.
4
5 Celestria-Nebuland BIT, art. 2.
1
broad terms.6 However, the Claimant’s contention is wrong on the

point of fact and law.
26. The Respondent proffers a non-retroactive interpretation of the
Celestria-Nebuland BIT for two reasons. First, (i) The principle of
non-retroactivity applies to the ‘broadly drafted’ Article II of the
BIT, second, (ii) The 2022 declaration restricts any retroactive
application.
i. The principle of non-retroactivity applies to the ‘broadly

drafted’ Article II of the BIT
27. With regard to the interpretation of a treaty and its breach, the
rules of treaty law under VCLT and ARISWA also come into play. 7
There shall be taken into account, any relevant rules of
international law applicable between the parties. 8 Article 28 of the
VCLT sets forth one such rule of non-retroactivity of treaties unless
a different intention appears9
28. It is a well-known and accepted principle that treaties do not have a
retroactive effect.10 Tribunals have held that in the absence of an
express language to the contrary, consistent with Article 28 of the
VCLT and Article 13 of the ARISWA,11 a treaty cannot apply to acts
or facts that occurred prior to its entry into force.12
29. Subsequently, numerous tribunals previously have decided that the
‘intention on the contrary’ or the ‘intention to apply the treaty
retroactively’ must be explicit and not vague or broad. Unless it has
been explicitly stated in the treaty that it applies retroactively or in
the absence of an explicit provision for retroactivity, a treaty has to
be interpreted as being non-retroactive.13
6 Record, p.9 ¶25.

7 Sean D Murphy, Temporal Issues Relation to BIT Dispute Resolution, p.54.
8 VCLT, art. 31.
9 VCLT, art. 28.
10 Kardassopoulos v. Georgia, ¶254.
11 ARSIWA, art. 13.
12 Freeport-McMoRan v. Peru, ¶573; SGS v. Philippines, ¶166; OKO v. Estonia, ¶193.
13 Ping v. China, ¶168; Carrizosa v. Columbia, ¶126.; Salini v. Jordan, ¶170.
2
30. Even in the absence of an explicit provision for the exclusion of pre-
BIT disputes, tribunals have applied general principles of
International allow and adopted a presumption of non-
retroactivity.14
31. The burden of proving the existence of opposition to the rule of non-
retroactivity lies upon the party making such a claim15 and the mere
fact that the earlier conduct has gone unremedied or unaddressed
does not justify a tribunal applying the treaty retroactively. 16
Importantly, the constant use of future tense in the BIT must be
inferred as restricting any retroactive application of the BIT. 17
32. Additionally, a treaty must be interpreted in consonance with the
intention of the parties.18
33. In the present case, Article II of the Celestria-Nebuland BIT is not
broad but rather allows for a non-retroactive application. It
prospectively focuses on future legal disputes by stating that “This
agreement shall apply to legal disputes….,” thereby allowing
jurisdiction over only those legal disputes that arose after the BIT’s
signing. Additionally, the constant use of future tense in the BIT
points toward a non-retroactive application.19
34. However, even if this tribunal were to infer Article II of the BIT as
broadly drafted, such is not sufficient to make the treaty
retroactively applicable. For such an inference to be drawn, an
explicit provision must exist addressing the retroactive application
of the BIT. In the absence of such an explicit provision, the rule of
non-retroactivity shall prevail. Moreover, even in the absence of a
provision restricting retroactivity, the presumption of non-
retroactivity prevails.
14 Steag v. Spain, ¶369; Agility v. Iraq; 114; MCI v. Ecuador, ¶61; Generation Ukraine,
¶11.2; ATA Constructions v. Jordan, ¶98.
15 Tecmed v. Mexico, ¶63.
16 Mondev v. USA
17 Tecmed v. Mexico, ¶
18 Gramercy v. Peru, ¶335; Nordzucker v. Poland, ¶113.
19 Record, p.87 & 88.
3
35. Subsequently, there exists no evidence that during the negotiation

of the present BIT, Celestria and Nebuland discussed the scope of
BIT’s temporal application20, thereby restricting any contentions
about the existence of ‘different intentions’ under Article 28 of the
VCLT.
36. Therefore, in the absence of explicit language for retroactive
application and a different intention, the present BIT will not apply
to Legal disputes before the BIT came into force.
ii. The 2022 declaration restricts any non-retroactive

application
37. Most tribunals start by invoking Article 31 of the VCLT when

interpreting treaties.21 Parties may form a subsequent agreement
between themselves regarding the interpretation of a treaty. 22
Subsequent agreements are used to clarify the meaning of a treaty,
resulting in narrowing, widening, or determining a range of
interpretations of a treaty.23 Such agreements are a supplementary
means of interpretation as a recourse to any ambiguity with regard
to interpretation.24
38. Sovereign states are masters of the treaties25 and it is at the very
least their own treaty.26 These sovereign states may issue a joint
interpretative declaration under Article 31(3)(a) of the VCLT, 27 and
has been previously issued under international investment Law, like
20 Record, p.92 ¶2.

21 AAPL v. Sri Lanka, ¶38; MRD v. Chile, ¶112; Enron v. Argentina, ¶32; Methanex v.
US, ¶15; Saluka v. Czech Republic, ¶296.
22 VCLT, Article 31(3)(a).
23 ILC, ‘Draft Conclusions on Subsequent Agreements and Subsequent Practice in
Relation to the Interpretation of Treaties, with Commentaries’ (30 April–1 June and 2
July–10 August 2018) UN Doc A/73/10 Conclusion7(1).
24 VCLT, art.32.
25 CRAWFORD, James Crawford, Brownlie’s Principles of Public International Law, (9th
edition) Oxford University Press 2019.
26 J Crawford, ‘A Consensualist Interpretation of Article 31(3) of the Vienna Convention
on the Law of Treaties’ in G Nolte (ed), Treaties and Subsequent Practice (OUP 2013)
31; A Kulick (ed), Reassertion of Control over the Investment Treaty Regime (CUP 2017)
15 & 18–20.
27 Eskasol, ¶44.
4
the interpretative note by the North American Free Trade

Agreement (NAFTA) Commission.28
39. Such joint interpretative declarations are an authentic means of
interpretation.29 and a rightful use of the powers and privileges by
the BIT signatories and are to be made retroactively applicable on
cases.30
40. In the present case, the 2022 declaration clarifies the original intent
of the parties concerning the temporal scope of the treaty. Such
does not rewrite the rewrites Article II of the BIT, but rather merely
corroborates the international principle of non-retroactivity. 31
Further, it eliminates any ambiguity with regard to the
interpretation of Article II of the BIT.
41. Hence, the 2022 Declaration should be held as an authentic means
of interpretation, thereby corroborating the principle of non-
retroactivity.
B. THE DISPUTE BETWEEN THE PARTIES CRYSTALLIZED BEFORE THE
SIGNING OF THE BIT
42. The date of crystallization of the dispute must be objectively

determined,32 to assess Jurisdiction ratione temporis over such
dispute.33 Subsequent to the non-retroactive interpretation of the
BIT, the BIT does not apply to disputes that arose and crystallized
before the signing of the BIT.34
43. The Respondent with this regard submits that the dispute falls
outside the jurisdiction ratione temporis of the tribunal for two
reasons. First, (i) The dispute between the parties crystallized pre-
28 Pope & Talbot, ¶125; SEAN MURPHY, UNITED STATES PRACTICE IN

INTERNATIONAL LAW, VOL. I, 1999-2000, at 239-41 (2002).
29 ILC, ‘Draft Conclusions on Subsequent Agreements and Subsequent Practice in
Relation to the Interpretation of Treaties, with Commentaries’ (30 April–1 June and 2
July–10 August 2018) UN Doc A/73/10 Conclusion4(1).
30 Pope and Talbot, ¶.
31 Muszynianka v Slovakia, ¶289.
32 Lao Holdings v. Loas, ¶124; El Paso v. Argentina, ¶60; SGS v. Philippines, ¶1.
33 Ipek v. Turkey, ¶278, EuroGas v. Solvakai, ¶290; ABCI Investments v. Tunsania,
¶168.
34 LSF-KEB v. Korea, ¶251; Micula v. Romania, ¶ 143; Duke Energy v. Peru, ¶146.
5
BIT, and second, (ii) The post-BIT events are a mere continuation of
the previous dispute.
i. The dispute between the parties crystallized pre-BIT
44. Article II of the BIT states that it applies to ‘legal disputes. 35 Article
25(1) of the ICSID Convention restricts the scope of disputes that
could be brought before it to disputes that are legal in nature. 36 It is
important to objectively determine the date of crystallization of a
legal dispute. In the absence of a clear definition for legal disputes
under the treaty, tribunals have referred to the generally accepted
definition of a ‘dispute.’, which refers to a dispute as a
disagreement on a point of law or fact, a conflict of legal views or
interests between two parties37 The Permanent Court of
International Justice and the ICJ has taken a position of defining a
dispute as a “conflict of legal views or interests between the
parties”.38 Legal dispute refers to a conflict of legal rights or
views.39 It is a situation in which two sides hold clearly opposite
views concerning the question of performance and non-
performance.40 It is with clear articulation and sufficient
communication of opposition between the two parties that a dispute
crystallizes.41
45. The Tribunals’ jurisdiction does not extend ratione temporis to
alleged breaches that took place prior to the making of an
investment,42 even if the effects continue.43 With respect to the non-
retroactive application, strands of isolated acts pre-BIT do not make
35 Celestria-Nebuland BIT, art.2.

36 ICSID Convention, art. 25(1).
37 Suez, ¶ 62; El Paso, ¶ 240; Impreligo, ¶ 309; Westwater Resources v. Türkiye, ¶158;
Crystallex v. Venezuela, ¶447.
38 Mavrommatis Palestine Concessions, Judgment No. 2, 1924, P.C.J.I. Series A, No. 2,
p. 11; Northern Cameroons, Judgment, I.C.J. Reports 1963, p. 27
39 ICSID report of executive directors.
40 Luccehti v. Peru, ¶223.
41 Pay Casado v. Chile, ¶441; RDC v. Guetemala, ¶57.
42 ConcoPhillips v. Venezuela, ¶287; phoenix Action v. Czech Republic, ¶68; GEA v.
Ukraine, ¶170.
43 ST-AD v. Bulgaria, ¶98.
6
a part of the tribunal's jurisdiction,44 for the mere fact they

remained unaddressed.45
46. Here, in the instant case, the dispute between the parties
crystallized only at a point in time when both of the parties held a
clearly articulated opposing stance with respect to the legal rights
of the parties arising out of the investment in question. Additionally,
each act/measure by the Respondent states before the date of
collision on 1 Jan 2021 is an isolated act with no continuity, the
tribunal does not have jurisdiction over which.
47. Astracommex Regional on 2 Jan 2021 contented and articulated
their legal right to operate in the republic of Celestria by the
company’s CEO, Jefferey Myskin stating on its behalf that ‘the
collision was not their fault’, ‘there is no close proximity alert from
the Space Surveillance Network, nor were there any public records
of a CubeSat operating in the same orbit’, and ‘unusual solar
radiation storm affected the onboard computation’.46
48. The Republic of Celestria on 5 Jan 2021 contented their legal right
to regulate and put restrictions by an executive order against
Astracommex Regional.47
49. The dispute between the parties crystallized on 5 Jan 2021, once
there existed a clear articulation of opposition in terms of legal
rights from an investment. While the Claimant articulated their
right to operate freely and confidence in their system, the
Respondent contended their right to regulate and laid down
suspension on the operations of the Claimant.
50. Additionally, in arguendo, there already existed a clear articulation
of opposition in terms of legal rights when the Claimant refused to
submit further documents with regard to their request for the new
Ku band frequency.48
44 Tecmed v. Mexico
45 Mondev v. USA, ¶
46 Record, p.23.
47 Record, p.25.
48 Record, p.7, ¶14.
7
51. In conclusion, the dispute between the parties has already

crystallized pre-BIT on 5 Jan 2021.
ii. The post-BIT measures are a mere continuation of the previous

dispute
52. The cause of action of the dispute must be looked at while assessing
the jurisdiction over a dispute.49 A tribunal does not have
jurisdiction over a dispute that is not separate but rather a mere
continuation of an already crystallized pre-BIT dispute. 50 The critical
element is determining whether two separate disputes is whether or
not they pertain to the different subject matter. 51 While assessing
the subject matter, it is important to determine that facts or
considerations that gave rise to an earlier dispute continued to be
central to the later dispute.52
53. The test while assessing jurisdiction over post-BIT measures, is as
to whether they change the pre-BIT ‘status quo’.53
54. In the present case, any post-BIT measure including the Executive
order dated 1 March,54 cannot be the date of consideration for
temporal jurisdiction because it pertains to the same subject matter
as the Executive order dated 5 Jan 2021. With regard to the subject
matter, it is the security and protection concerns that led to both
executive orders by the Republic of Celestria, thereby not triggering
a new dispute.55
55. Additionally, the real cause of action is the continuous suspension
laid down on the Claimant’s operation on 5 Jan 2021. Moreover,
post-BIT acts or measures change the pre-BIT status quo of
continuous suspension for there to be a new dispute. The Order
49 Generation Ukraine v. Ukraine, ¶70.

50 Maffezini v. Spain, ¶90, Luccheti v. Peru, ¶59; Mabco v. Kosova, ¶466; Micula v.
Romania, ¶295; PSEG v. Turkey, ¶186.
51 CMS v. Argentina, ¶109.
52 Luccheti v. Peru, ¶50.
53 Spence International v. Costa Rica, ¶246; Corona Materials v. Domanician Republic,
¶212; Eurogas v. Solvakai, ¶ 455.
54 Record, p.27.
55 Phosphates in Morrocco, PCIJ series A/B. No. 74, p.18.
8
dated 1 March 2021 did not alter the ‘subject matter’ or ‘the real
cause of the dispute’, and is not an independent actionable breach
of the BIT.56
56. The mere fact that the order dated 1 March 2021 did not annul the
continuous suspensions laid down by the executive order dated 5
Jan 2021 does not place it under the jurisdiction of this tribunal. 57
57. Importantly, the date of seeking domestic litigation or arbitration
cannot be held as the date of crystallization of the dispute because
such would defy the purpose of temporal restrictions and give
unlimited powers to the Claimant by allowing them to seek
jurisdiction ratione temporis by simply filing for domestic litigation
or arbitration.
58. In conclusion, the dispute is outside the jurisdiction ratione
temporis of the tribunal as the BIT operates within the principle of
non-retroactivity and the present dispute crystallized before the
signing of the BIT. The post-BIT acts or disputes do not come under
the tribunal's jurisdiction as the dispute has already crystallized on
5 Jan 2021, and any such act is a mere continuation of the previous
dispute without triggering a new dispute.
VIII. MARCIAL VENTURES LTD AND PLATONIAL INVESTMENTS

ARE THIRD-PARTY FUNDERS AND THE TRIBUNAL SHOULD
ORDER SECURITY FOR COSTS IN FAVOUR OF THE
RESPONDENT
59. With respect to the issue of the third-party funding and the grant of
security for costs the Respondent submits that, First, [A] Marcial
Ventures Ltd and Platonial Investments are Third-Party Funders;
Second, [B] There exist exceptional circumstances in the present
scenario which warrants an order for security for costs.
56 Carrizosa v. Columbia, ¶111.

57 Carrizosa v. Columbia, ¶157; Mondev, ¶70.
9
A. MARCIAL VENTURES LTD AND PLATONIAL INVESTMENTS ARETHIRD-
PARTY FUNDERS
60. Rule 14 of the ICSID Arbitration Rules 2022 mandates the

disclosure of any third-party funding arrangements.58 While the rule
does not provide an explicit definition of a third-party funder, a
careful interpretation of Rule 14 (1) reveals that three essential
elements must be satisfied for an entity to be called as third-party
funder.59
61. Firstly, the entity providing funds must be a non-party to the
dispute. Secondly, the entity must have provided financial support
directly or indirectly to a party in the arbitration specifically for the
purpose of pursuing or defending the proceedings. Thirdly, the
funding must be ‘contingent’ on the outcome of the proceedings,
meaning that the funder’s financial return or remuneration depends
on the arbitration’s resolution.
62. The Respondent contend that these two entities are the third-party
funders to the present proceedings because, [i] the two entities
merely being the equity holder in the parent company are non-party
to the dispute.; [ii] the Issue of Capital Call was an attempt to
indirectly secure arbitration fundings of the Claimant. [iii] the two
entities are getting indirect remuneration
i. The two entities merely being the equity holders in the parent
company are non-party to the dispute
63. The Respondent submits these two entities are merely shareholders
in the parent company of the Claimant, Astracommex Global, and
are not parties to the arbitration.60 The only party to the arbitration
is Astracommex Regional.
64. The term ‘non-party’ in Rule 14 has been present since the
publication of the First Working Paper. The definitions of third-party
58 ICSID, Rule 14.

59 ICSID, Rule 14 (1).
60 Record, p.76, ¶7.
10
funding, upon which the ICSID relied in Working Paper 1, also

shared a common element: all included the term ‘non-party.to
describe a third-party funder’ 61
The Working Paper 1 clarified that
it proposes to define TPF in a manner similar to the definitions in
the above texts for the purposes of the ICSID Rules.62
65. The phrase “directly and indirectly” in ICSID Rule 14(1)
encompasses funding given through affiliates, representatives, and
the ultimate beneficial owner.63 The ICCA-TPF Report recognizes
the role a parent company can play in financing arbitration, 64
stating,
“Arbitrations may also be funded through
traditional loans, corporate finance, equity-based
investments, or some hybrid structures. For
example, a parent company may make a loan to a
subsidiary to enable it to pursue a claim, or
shareholders, creditors, or beneficial owners may
provide the necessary funding.”
66. Hence, despite having the vested economic interest in the
arbitration, these two entities not being the party to the
proceedings satisfying the first criterion of third-party funding.
ii. The Issue of Capital Call was an attempt to indirectly secure

arbitration fundings of the Claimant
67. The Respondent asserts that the Claimant indirectly secured funds
for these proceedings through Marcial Ventures Ltd and Platonial
Investments. The fact that the Claimant was experiencing
significant financial losses, combined with the close timing between
the capital call and the initiation of arbitration, suggests a
deliberate effort to secure funding specifically for these legal
proceedings.
61 WP#1, ¶¶ 245-252, p(s) 131-135.

62 WP#1, ¶ 253, p. 135.
63 WP#4, p.295, ¶ 53.
64 ICCA-TPF Report, p.35
11
68. According to report of the quantum expert of Claimant, Mr. Damus,

the Claimant incurred US$ 9 million in legal expenses from
November 2021 to November 2022. Additionally, the Claimant
suffered significant financial losses totalling US$ 650 million from
November 2018 to November 2021, with consecutive losses of US$
350 million in both the 2018-2019 and 2019-2020 periods.65
69. Given these substantial financial losses, it is evident that the
Claimant lacked the means to independently fund the legal costs. As
such, the Claimant relied on its parent company, Astracommex
Global, for financial support.
70. The Respondent also notes that Astracommex Global issued the
capital call on 13 July 2022,66 in accordance with Article VIII of its
Bylaws, which authorizes the company to raise funds when the
manager anticipates payment obligations exceeding available
resources within the following 90-day period.67
71. The Claimant initiated the arbitration on 9 September 2022, within
the 90-day period following the capital call. 68 This close timing
suggests that the funds raised through the capital call were
specifically intended to cover the legal expenses associated with the
arbitration.
72. While the Respondent acknowledges that issuing capital call notices
is generally a standard practice for companies, it submits that in
this case, it was an unusual step. Astracommex Global had not
issued any capital call prior to the one on 13 July 2022. 69
73. The proximity of the capital call to the arbitration filing indicates a
deliberate effort to secure necessary funding for these legal
proceedings. This, the Respondent argues, reflects an atypical use
of the capital call mechanism, designed specifically to finance the
arbitration rather than a routine corporate financing measure.
65 Record, p.61.
66 Record, p.(s), 59 & 60.
67 Record, p.64, l. 1563.
68 Record, p.4.
69 Record, p.96.
12
iii. The two entities are receiving indirect remuneration
74. The Respondent submits that Marcial Ventures Ltd and Platonial
Investments would indirectly receive remuneration for their
financial contributions, as outlined in Article XII of the Bylaws of
Nebuland. These contributions were made to cover Astracommex
Global’s immediate financial obligations, including the costs of
arbitration.
75. The bylaws clearly state that any remaining earnings, after tax
obligations, will be distributed as dividends to the members,
including Marcial Ventures Ltd and Platonial Investments.
76. Therefore, if the arbitration results in a financial settlement or
award in favor of the Claimant, Astracommex Global’s financial
position would likely improve, enhancing its ability to distribute
dividends. As a result, these entities would benefit financially from
any successful outcome of the arbitration, thereby satisfying the
third criterion of third-party funding under the ICSID Arbitration
Rules.
77. The prospect of receiving dividends provides a significant financial
incentive for Marcial Ventures Ltd and Platonial Investments to
fund the arbitration proceedings. This indirect remuneration
mechanism aligns with the typical characteristics of third-party
funding, where funders invest in legal proceedings with the
expectation of a return based on the outcome.
78. In this case, the return is embedded within the corporate structure
through potential dividend payouts, rather than a direct payment
contingent on the arbitration’s result.
79. Given that these two entities collectively hold 25% of the equity in
Astracommex Global and have been shareholders since 2014, it is
likely they were aware of the reasons behind the capital call.
80. This is especially significant since it was the first capital call issued
by Astracommex Global since these entities acquired their equity
stake. This suggests the possibility that Marcial Ventures Ltd and
13
Platonial Investments had some form of arrangement with the

Claimant, indirectly facilitating the funding of the arbitration.
81. While the Respondent acknowledges that there is no explicit
contract or agreement between Marcial Ventures Ltd and Platonial
Investments and Astracommex Global specifically referencing the
arbitration proceedings, the circumstances raise legitimate
concerns.
B. THE EXISTENCE OF EXCEPTIONAL CIRCUMSTANCES WARRANTS AN
ORDER FOR SECURITY FOR COSTS
82. Rule 53 of the ICSID Arbitration Rules 2022 empowers the tribunal
to order security for costs.70 The Respondent acknowledges that the
threshold for granting such an order is significantly high and the
grant of an order for security for cost requires the existence of
exceptional circumstances.
83. The Respondent seeks to rely on the factors listed in Rule 53(3),
which include the party’s ability and willingness to comply with an
adverse costs decision, the impact of providing security on pursuing
the claim, and the conduct of the parties, to assert that these do
meet the required standard of existence of ‘exceptional
circumstance’ ‘for imposing security for costs in this instance.71
84. The Claimant submits that the circumstances of the present case do
not warrant an order of security in favor of the Respondent
because; [i] The Claimant Lacks the Financial Ability to Comply
with an Adverse Costs Award [ii] The Claimant's Unwillingness to
Pay and History of Non-Compliance Warrant Security for Costs [iii]
The Existence of Third-Party Funding, Along with Other Factors,
Justifies an Order for Security for Costs
70 ICSID, Rule 53.

71 ICSID, Rule 53 (3).
14
i. The Claimant Lacks the Financial Ability to Comply with an

Adverse Costs Award
85. The Respondent asserts that there is substantial uncertainty

regarding the Claimant's ability to comply with an adverse decision
on costs due to their precarious financial position.
86. The risk of non-payment is a concern that poses a systemic risk to
the arbitration of international investment disputes.’ 72
In Nord
Stream 2, the PCA ordered security for costs in response to the
Respondent's concerns regarding the Claimant's financial stability.
Despite the Claimant’s assurances and reliance on a definitive
composition moratorium, the tribunal found these measures
insufficient to mitigate the risk of non-recovery of costs if the
Respondent prevailed.73
87. The Claimant’s financial arrangements, including reliance on a
guarantor, were deemed inadequate to address the reasonable risk
of non-payment. Consequently, the tribunal ordered security for
costs in the amount of EUR 5.65 million, to protect the
Respondent’s rights and avoid the undue burden of unrecoverable
costs.
88. The Respondent submits that the Claimant has sustained significant
financial losses and relied on third-party funding to finance the
arbitration. This dependence raises legitimate concerns about their
ability to cover the costs if the tribunal rules against them.
89. The term ‘ability’ Rule 53(3)(a) would also encompass
circumstances in which another third party, such as a parent
company, has undertaken to cover a potential cost award. 74
90. The Respondent further argues notwithstanding the Claimant's

assertions of its asset availability and financial support from their
parent company to showcase its ability to comply with any adverse
72 Burumi, ¶49.
73 Nord Stream 2, ¶93.
74 WP#2, ¶355, p. 234.
15
cost order, a significant risk remains as there are certain challenges

with the alternative arrangement.75
91. Firstly, the Claimant’s citation of assets such as satellites as
potential sources for covering a cost award is problematic, as the
liquidity and actual availability of these assets to satisfy a financial
judgment are highly uncertain.
92. Secondly, the Claimant's reliance on the domestic law of the Code
of Civil Procedure to contest the request for security for costs is
flawed due to several inconsistencies. While Article 68 permits asset
seizure for unpaid obligations, it does not provide clarity on
international enforcement, raising doubts about the practicality of
seizing the Claimant' or their affiliates’ assets. 76
93. Thirdly, while art. 69 recognizes arbitral awards as final judgments,

but it fails to address challenges related to cross-jurisdictional
enforcement, particularly in Nebuland. Additionally, the bylaws do
77
not specify the extent to which a parent company’s assets are liable
for its subsidiary’s debts, and the location of assets abroad
complicates the Respondent's ability to realize them.
94. In conclusion, the Respondent respectfully submits that, given the
Claimant’s financial instability and reliance on third-party funding,
an order for security for costs is both necessary and appropriate to
safeguard their right to recover expenses in the event they prevail.
95. The Respondent notes that the Claimant's financial statements and
projections offer insufficient assurance of immediate asset
convertibility or readiness to cover the arbitration costs.
ii. The Claimant's Unwillingness to Pay along with the History of

Non-Compliance Warrant Security for Costs
96. The Respondent argues that the Claimant’s delay in paying the
advance costs by three months,78 as well as the Claimant’s failure to
75 Record, p.63, ¶3.

76 Record, p.65, l. 1593.
77 Record, p.65, l. 1595.
78 Record, p.56, l. 1396.
16
pay the costs award ordered by the Supreme Court of Nebuland,

raise serious concerns.79 The Claimant has defended its actions by
stating that the Respondent’s conduct caused the financial
hardships it faced, 80
and therefore, the late payment was a direct
consequence of the Respondent’s actions.81
97. In practice, Tribunals have found that “abuse” or “serious
misconduct” by a party could weigh in favor of ordering that party
to provide security for costs.82 In RSM, an ICSID tribunal, for the
first time in its history, issued an order for security for costs. The
Respondent in that case argued that while no ICSID tribunal had
previously ordered security, the circumstances justified such a
measure.83
98. In reaching its decision, the tribunal considered the fact that the
Claimant was impecunious and funded by a third party, which could
presumably not be held responsible for any adverse costs award.
The tribunal emphasized that it would be unjustified to burden the
Respondent with the risk associated with the uncertainty of whether
the third party would comply with a potential cost award. The key
factor for the tribunal in granting the security for costs was the
Claimant’s proven history of failing to comply with prior cost
awards.
99. The Respondent, therefore, submits that the Claimant’s actions in
the present case—especially the bad faith demonstrated through the
delayed payment and non-compliance with the Supreme Court of
Nebuland’s order—warrant the issuance of a security for costs.
Given the Claimant’s financial difficulties and third-party funding,
there is a legitimate risk that any costs awarded in favor of the
Respondent may not be recoverable.
79 Record, p.83, ¶45.

80 Record, p.63, ¶3.
81 Record, p.62, ¶1.
82 Eurogas, ¶121, Commerce Group, ¶45.
83 RSM.
17
100. Furthermore, the Respondent contends that the tribunal should not
prejudge the underlying issues of the dispute. The Claimant’s
explanation of delayed payment, which implicates the Respondent’s
conduct and its effect on the Claimant’s financial position, risks
prejudging the substantive matters at hand, as was held in the
Rurelec case.
101. Consequently, the tribunal should consider these facts without
assuming fault on the part of the Respondent prior to fully hearing
the merits of the case.84
iii. The Existence of Third-Party Funding, Along with Other

Factors, Justifies an Order for Security for Costs
102. In response to the Respondent’s request for security for costs, the
Claimant argues that third-party funding alone is insufficient to
demonstrate "exceptional circumstances.’ 85
The Respondent
acknowledges the established principle that the mere existence of
TPF does not, by itself, constitute exceptional circumstances.
103. The existence of TPF coupled with other relevant circumstances
may form part of the relevant factual circumstances considered by a
Tribunal in ordering security for costs. This will be a fact-based
determination in each case. Including third-party funding among
the listed factors in Rule 53(3) would suggest that third-party
funding is relevant in every case.86
104. The Respondent has established that these two entities are the
Claimant's third-party funders. The Claimant is impecunious, and
there is significant uncertainty as to whether the Claimant would be
able to satisfy an adverse cost award. Additionally, the Respondent
has raised concerns regarding procedural uncertainties.
105. The Respondent further alleges bad faith on the part of the
Claimant, citing delayed payment of the advance costs and failure to
84
85
86 Working Paper 2, ¶45.
18
comply with a Supreme Court cost order. Taken together, these

factors warrant an order for security for costs.
ARGUMENTS ON SUBSTANTIAL MATTERS
IX. THE MEASURES OF THE RESPONDENT STATE DO NOT VIOLATE
ARTICLE 7 OF THE BIT.
106. The Respondent proffers that it has not breached Article 7 of the
BIT because [A] The measures do not amount to creeping
expropriation; [B] The requirements for lawful expropriation under
Article 7(1) have been met; [C] The measures are justified under
the applicable International Law.
A. THE MEASURES DO NOT AMOUNT TO CREEPING EXPROPRIATION
107. Claimant contends that Respondent has expropriated Claimant’s

investment by imposing a series of measures. In this regard,
Respondent submits that the measures taken by the Republic of
Celestria, starting from April 2020, i.e, after the enactment of the
National Environmental Protection Act, 2020 (“NEPA”) 87, do not
lead to an effective neutralization of the benefits derived from
Astracommex Regional’s investment in Celestria, thereby no case
for a Creeping Expropriation can be made which is a form of
Indirect Expropriation, as defined in the BIT.
Article 7(3) of the BIT defines Indirect Expropriation88
“Indirect expropriation occurs if a measure or a
series of measures of a Contracting Party has an
effect tantamount to direct expropriation, in
that it substantially deprives the investor of the
economic value of its investment, or of the
fundamental attributes of property in its
investment, without formal transfer of title or
outright seizure.”
87 Record, p.21.
88 Nebuland-Celestria BIT, Article 7(3).
19
108. Creeping expropriation is a form of indirect expropriation with a

distinctive temporal quality in the sense that it encapsulates the
situation whereby a series of acts attributable to the state over a
period of time culminate in the expropriatory taking of such
property.89
109. In the case of an indirect taking or an act tantamount to
expropriation such as a regulatory taking, it often involves two
questions: the severity of the economic impact and the duration of
that impact.90 Respondent argues that the measures do not amount
to Creeping Expropriation because [i] There is no Substantial
Deprivation of the value and benefit of the Claimant’s investment;
[ii] The measures do not have a permanent and adverse effect.
i. The measures do not fulfill the Substantial Deprivation Test
110. The Substantial Deprivation Test is applied in cases alleging

Creeping Expropriation,91 by determining whether the enjoyment of
the property has been effectively neutralized and whether such
deprivation has a permanent or lasting effect.92
111. To be expropriatory, the effect of the challenged measures must
amount to a total or near total destruction of the value of the
investment.93 Mere diminution in the value of property is insufficient
to constitute expropriation.94 The Tribunals, in Total,95 held that an
86% decrease in value of investment was not sufficient to meet the
criteria of substantial deprivation.
112. In the present case, the purpose of the new government of
Celestria that came in 2020 was to address environmental concerns
and to safeguard the future of its citizens. 96 For this, they enacted
89 Generation Ukraine, ¶20.

90 Glamis Gold, ¶591; Cargill, ¶360; Middle East Cement, ¶107.
91 CMS, ¶ 262; Metaclad, ¶ 103; LG&E, ¶191.
92 Ibid.
93 Sempra, ¶285.
94 Concrete Pipe, ¶643; Village of Euclid, ¶365, Hadacheck, ¶239; Lucas, ¶1019.
95 Total S.A, ¶185.
96 Record, p.80.
20
the National Environmental Protection Act to implement

environmental impact assessments on all the actions of the
governmental agencies before they proceed. 97
113. The Claimant in the present case contends that, despite stating
that NEPA would not apply retroactively it was applied on the
Claimant’s investment. However, we submit that it is important to
check the legislative intent of the lawmakers of Celestria which can
be seen through Article II of the Act which talks about the Scope of
Application.
Article II reads as follows:98
“This Act mandates all governmental agencies to
use all practicable means and measures,
including financial and technical assistance, in a
manner calculated to foster and promote the
general welfare, to create and maintain
conditions under which man and nature can exist
in productive harmony, and fulfill the social,
economic, and other requirements of present
and future generations of Celestrians.”
114. It is very important to look at the purpose of the Act which was to
guide all the governmental agencies in fulfilling the social,
economic, and other requirements of present and future
generations of Celestria. Moreover, reference should be made on
Article IV of the NEPA which talks about due process;
Article IV reads as follows:99
“This Act does not apply retroactively. It shall
guide future actions of governmental agencies,
particularly when authorizing new activities.”
115. In the present case, the Respondent initiated an investigation into
the Astra System under NEPA on the basis of a scientific study
published in the Celestria Journal of Astrophysics released by the
97 Record, p.21.
98 Ibid.
99 Record, p.22.
21
Celestrian Space Agency which highlighted the negative impact of

the Astracommex Satellites on Astronomy.100
116. Furthermore, the Respondent imposed a temporary halt to
Astracommex Regional’s uplink and downlink communications near
its ten radio observatories which reduced the communication reach
of Astra Satellites to covering 40 percent of Celestria’s territory. 101
117. The Respondent also gave the chance to the Claimant for
implementing the new proposals and the lifting of operational
restrictions was contingent on its successful implementation. 102 It is
important to note that for implementing the proposals a new kind of
spectrum was required and for that the Claimant applied to NFA to
grant the Ku-Band Spectrum.103
118. However, we submit that the Respondent came to know about a
scientific study that stated that atmospheric re-entries of Astra
Satellites could lead to environmental harm104 and therefore, NFA
requested additional documentation from Astracommex Regional to
specifically address these atmospheric concerns as a part of the
Environmental Impact Assessment given under NEPA. The Claimant
did not comply with such an order and the application was
rejected.105
119. The Respondent-state submits that a 60% loss of value is not
sufficient to constitute a near total destruction, emphasizing the
high threshold for the same.106 Moreover, such a 60% loss of value
is also based on the Claimant’s failure to address the environmental
concerns linked with Astra Satellites.
120. The Claimant asserts that the Respondent's order dated 1 March
2021, requiring the relocation of their satellites from a 400 Km orbit
to a lower 350 Km orbit, has substantially deprived the Claimant of
100 Record, p.81.

101 Ibid.
102 Record, p.81, ¶34.
103 Record, p.82.
104 Record, p.43.
105 Record, p.82, ¶37.
106 Occidental Exploration ¶85, Pope & Talbot, ¶¶159, 160.
22
investment.107 It is assumed, without conceding, that such an order

was issued following a proper investigation post-collision, which
identified certain software and hardware flaws in the Astra
Satellites and aimed to prevent any further collisions in outer
space.108
121. The Respondent submitted that in order to lift the continuous
suspensions, the Claimant’s job was to reposition their satellites
which they did not comply with and the only reason for the
suspension was their unwillingness to co-operate with the
Respondent state.
122. Regulations that reduce the profitability of an investment, but do
not shut it down completely and leave the investor in control, will
generally not qualify as indirect expropriations. 109 In the present
case, The repositioning order cannot be termed to have a significant
deprivation of the Claimant’s investment as the Claimant retains the
ownership, operation, and control over all its satellites and
continues to provide services in other territories.110
123. In conclusion, the measures taken by the Respondent state were to
regulate the environmental concerns and did not lead to substantial
deprivation of the Claimant’s investment.
ii. The Respondent’s measures are temporary
124. The measures enacted by the Respondent lack permanence and are
temporary in nature.
125. In order to constitute an expropriation, the measure should be
definitive and permanent.111 Further, a measure may be said to be
permanent if, due to it, the reasonable prospects of resumption of
107 Record, p.27.

108 Ibid.
109 El Paso, ¶255; Mamidoil, ¶572.
110 Record, ¶32.
111 United Nations Conference On Trade and Development, Expropriation, UNCTAD
Series on Issues in International Investment Agreements II, 2012, p. 69; SD Myers,
¶¶287–288.
23
business activity are lost.112 Moreover, in LG&E, Argentina enacted

a new regulation that caused an adverse effect on the Claimant’s
investment. However, the regulation did not permanently decrease
the value of the shares, and the Claimant's investment continues to
exist. Hence, the tribunal concluded that this circumstance did not
constitute expropriation.113
126. In the present case, the Respondent’s order is just a temporary
move that would be done away with after the repositioning of the
satellites is completed. There exists a reasonable prospect of
resumption of business activities and the investment can be
continued if the Claimant complies with such an order.
127. The Claimant contends that such a repositioning of satellites would
cost USD 1 billion and authorization from the NFA to use the new
spectrums due to the adjusted configuration.114 The Claimant
asserts that the request for the new spectrum was rejected earlier
also and thus repositioning looks impossible making it a permanent
measure. Assuming but not conceding, that such an estimation of
the cost cannot be considered as bonafide as it lacks supporting
evidence. Moreover, the Claimant did not even apply for the new
spectrum and assumed that it would not be granted.
128. In conclusion, there is no indirect expropriation as the measure
demonstrates that it is not permanent in nature and the investment
retains its value.
B. THE REQUIREMENTS FOR LAWFUL EXPROPRIATION UNDER ARTICLE

7(1) HAVE BEEN MET
129. Article 7(1) of the BIT reads as follows:115

“Neither Contracting Party shall expropriate
or nationalize a covered investment either
directly or indirectly through measures
112 Starrett Housing, ¶17.

113 LG&E, ¶200.
114 Record, ¶8.
115 Record, p.88.
24
tantamount to expropriation or nationalization,

unless the following conditions are complied with:
(a) the measure is taken for a public purpose; (b)
the measure is taken under due process of law;
(c) the measure is taken in a non-discriminatory
manner; and (d) the measure is taken against
prompt, adequate and effective
compensation.”
130. Even though the Respondent maintains that its actions are not
expropriatory as they are a non-compensable regulatory act, the
requirements laid down in Article 7(1) have been complied with.
Article 7(1) allows Parties to take measures that may amount to
expropriation if the measures are for a public purpose, in
accordance with due process of law, non-discriminatory, upon
payment of compensation.
131. The Respondent submits that the measures undertaken by it were:
(i) for a public purpose; (ii) in accordance with due process; (iii)
taken in a non-discriminatory manner; (iv) mere non-payment of
compensation does not make the measures unlawful. Thus, the
measures are not in violation of Article 7(1) of the BIT.
i. The measures taken were in pursuance of public purpose
132. International law recognizes the right of the states, as a natural

protector of the nation’s public welfare,116 to adopt measures that
serve a genuine public interest even if they override purely
individual or private interests.117 Such interests include public
safety and public order.118 This requirement is additionally
examined with reference to the time of the expropriation.119
116 Amco Asia Corporation ¶188.

117 Rudolph Dolzer & Christoph Schreuer, Principles of International Investment Law
(2nd ed., 2012), p.120.
118 Bear Creek Mining Corporation, ¶460.
Series on Issues in International Investment Agreements II, 2012, p. 31.
25
133. Investment tribunals have also consistently upheld the broad

discretion of host states120 in assessing how to best advance its
public interest within its own borders. 121 These tribunals do not
have the mandate to second-guess government decision-making 122
and give ‘due deference ’to states in recognition of the fact that
states are the best judges of their country’s needs. 123 The reason
this deference is accorded to states is because of tribunals' limited
expertise in addressing domestic matters. 124 Consequently, states
have a reasonable margin of appreciation when legislating to
determine their own public policy interests, 125 and actions premised
on a public purpose are prima facie valid in international law. 126
134. In the present case, the Respondent ordered the Claimant to
reposition their satellites from 400 km orbit to below 350 km orbit
on the grounds that DoD’s assets operate in the same altitude and
there is a risk of another collision in space due to the Kessler
Syndrome.127 It is also important to note that certain flaws were
found in the Astra Satellites and the order of repositioning along
with continuous suspensions was important at that point in time to
safeguard the wellbeing of its citizens and the environment.
135. Thus, in light of these extreme circumstances, the measure taken
by the Respondent State was a bona fide regulatory measure with a
legitimate public interest.
ii. The measures were taken in accordance with the due process of
law
136. The due process of law requirement refers to the expropriating

State’s internal procedural framework governing the expropriation
120 Amoco International Finance, ¶145; Antoine Goetz, ¶126.
121 Teinver S.A, ¶985; S.D. Myers, ¶263.
122 Invesmart, ¶501.
123 Emilio Agustín, ¶67.
124 Tsai-fang Chen, The Standard of Review and the Roles of ICSID Arbitral Tribunals
in Investor-State Dispute Settlement, Contemporary Asia Arbitration Journal (2012), p.
260.
125 Glamis Gold, ¶625; James and others, ¶46.
126 James and others, ¶47; Pressos Compania, ¶37.
127 Record, p.27.
26
and the legal remedies that should be made available to an

aggrieved investor to challenge these expropriating measures. 128
137. In ADC, the tribunal agrees that due process of law requires some
basic legal mechanisms such as reasonable advance notice, a fair
hearing, and an unbiased and impartial adjudicator to assess the
actions in dispute.129 However, the need to give prior notice of the
expropriation as part of the due process requirement is not well
established.130
138. As quoted by the tribunal in OI European, the requirements of due
process in the expropriation of property owned by foreigners fall
more within a grey area: they do not require ex ante notification,
but rather the possibility of being able to resort ex post to an
independent authority.131
139. In the present case, the Respondent adhered to the due process of
law requirement as it was specifically stated in the notice that was
issued in line with the initiation of the investigation as a post-
collision measure that the Claimant retains the right to appeal the
decision to the Department of Defense 132 and also the directive that
was issued to the Claimant post the investigation mentioned the
right to appeal in accordance with the Celestrian Administrative
Law.133
140. Furthermore, the Claimant also had the right to appeal in the
Domestic Courts of Celestria which they duly exhausted by
initiating proceedings against all the agencies of the Respondent
State.134
141. Thus, the Respondent imposed the measures by keeping in mind
the Due process of Law requirement and gave the investor the right
to challenge each and every decision of the State.
128 Apotex, ¶9.43; Glamis Gold, ¶22, Thunderbird, ¶200, CC/Devas, ¶416.
129 ADC, ¶435.
130 UNCTAD Investment Series, p.40.
131 OI European, ¶392.
132 Record, p.25.
133 Record, p.28.
134 Record, p.83.
27
iii. The measures were taken in a non-discriminatory manner
142. State discriminates when the subject investor is treated less

favorably than others, placed in like circumstances, and such a
treatment is without any reasonable justification.135 ‘Like
circumstances’ is defined as investors being in the same economic
or business sector.136 In Saluka, state conduct is discriminatory if
similar cases are treated differently without reasonable
justification.137
143. In the present case, the Respondent asserts that the directive
issued to the Claimant was on the basis of a proper investigation
post-collision and was issued as the Claimant’s satellites had certain
flaws that need to be rectified in order to prevent further collisions
in the outer space.
144. The Claimant contends that there was a differential treatment in a
like circumstance as there was no post-collision measure taken on
the Domestic Investor i.e., Valinor which was also part of the
collision. However, in the present case the Respondent submits that
there was no like circumstance as even though Astracommex and
Valinor operate in the same business sector or the space industry,
the scope and framework of their investments are different.138
145. It is important to note that Astracommex Satellite’s main work was
to provide internet services across the state of Celestria. 139 On the
other hand, Valinor cubesat was developed as a part of the trial
missile defense system of Celestria and was designed to identify and
track hypersonic and ballistic missile threats and provide critical
data to the Department of Defense’s Missile Defense System and
the warfighter.140 It was believed to have launched this system as a
135 Crystallex, ¶ 616; Saluka, ¶313; Cavalum ¶416.

136 Crystallex, ¶616.
137 Saluka, ¶337.
138 Vento Motorcycles, ¶¶241, 249.
139 Record, ¶6.
140 Record, p.23.
28
covert operation in response to diplomatic tensions with

Cosmosis.141
146. Thus, the Respondent asserts that the measures imposed on the
Claimant’s investment had a reasonable justification and there was
no discrimination as like circumstance is not there in the present
case as both the parties have different kinds of investments.
iv. Mere non-payment of compensation does not make the

measures unlawful
147. It is not disputed that the Respondent has not paid any
compensation to the Claimant for any loss suffered by it. However,
it is submitted that the mere non-payment of compensation does not
render the act of the Respondent unlawful as all other requirements
have been met.142
148. Furthermore, in the present case, since the very expropriatory
nature of the measure is opposed by the Respondent, it cannot be
expected to make a pre-emptive payment of compensation. 143
149. In any case, if the Tribunal is of the opinion that the measure is in
fact expropriatory, it may award compensation to the Claimant as
per its valuation on 1 st March 2021 when the directive was issued
post-collision.
C. THE MEASURES ARE JUSTIFIED UNDER THE APPLICABLE INTERNATIONAL LAW
150. The claimant asserts that the Respondent’s measures are not
justified under the applicable International Law. In this regard,
Respondent submits that the measures taken by the state were a
part of their non-compensable regulatory acts to address the
environmental concerns of their territory as (i) the measures taken
were under the garb of Police Power Doctrine, (ii) in line with the
141 Ibid.
142 Compañia del Desarrollo, ¶67; Southern Pacific Properties, ¶23.
Series on Issues in International Investment Agreements II, 2012, p.43.
29
Precautionary Principle and (iii) to safeguard the National Security

and Environmental Concerns.
i. The measures taken were under the garb of Police Power

Doctrine
151. The Celestrian Space Agency’s action is a legitimate exercise of

police power for public welfare and thus do not entail the
international responsibility of the Respondent.144
152. Under customary international law, States have a ‘clear right to
regulate commercial and business activities’145 within their
territory. States’ rights to regulate are recognized by investment
case law,146 which shows that these rights are also to be considered
in the investment treaty context.147
153. As a defense against a claim of expropriation, the doctrine of police
powers is well established under international law. 148 In AWG, a
measure that falls within the state’s police powers resulting in loss
of property does not constitute an indirect expropriation, 149 and
therefore, does not give rise to an obligation to compensate the
investor for economic loss.150 Any regulation that is bona fide, non-
discriminatory, and in the interests of public health, safety, morals,
or welfare is within the police power. 151
154. The Respondent contends that the reduction in the communication

reach of Claimant’s satellites to 40% of the territory was done on
the basis of a proper investigation under NEPA as there were
studies that revealed the negative impact of Astra Satellites on
144 Record, ¶33.

145 Inaamul Haque & Ruxandra Burdescu, ‘Monterrey Consensus on Financing for
Development: Response Sought from International Economic Law’ (2004) 27 Boston
College International and Comparative Law Review 219 at 249.
146 Saluka Investments, ¶306; LG&E, ¶195; Tecnicas Medioambientales, ¶115.
147 Azurix Corp, ¶310; Vivendi Universal, ¶7.5.21.
148 TITI, p.281; NEWCOMBE & PARADELL, p.385; HENRY CAMPBELL, p.1156;
Harvard State Responsibility Draft, Art. 10(5).
149 AWG, ¶140.
150 Feldman, ¶103; Methanex, ¶15; Tecmed, ¶119; Suez, ¶148.
151 Sedco Inc, ¶275; Methanex, ¶1456.
30
Astronomy. This was done to prevent the light pollution created by

the satellites and was a bona fide regulation.152
155. There was no discrimination or arbitrariness when such a measure
was imposed on the Claimant’s investment as it was backed with a
reasonable justification.153
156. The measure was taken in line with the due process of law
requirement as the Claimant was given a fair chance of hearing, to
implement mitigation proposals suggested by them for the removal
of such operational restrictions.154
157. Lastly, the measures were taken considering the proportionality
test as they were Suitable for achieving a legitimate public
purpose.155 The CSA’s actions were in line with the concerns
generated by the astronomy community and were necessary to
relieve their concerns and save the future of astronomy. There were
no less burdensome measures available as in order to halt the
satellite pollution in the night sky, the measures taken by the CSA
to establish radio silence zones were necessary. The measures were
not excessive as the orders were based on serious concerns raised
by agencies or labs associated with the government and the steps
that were suitable to preserve Celestria’s national security were
undertaken by the agencies.
158. In conclusion, the measures taken by the Respondent state were to
safeguard the environment and well-being of its citizens.
ii. The measure taken was in line with the Precautionary Principle
159. The Respondent-State has also used the Precautionary Principle to

justify the National Frequency Agency’s rejection of the application
for the Ku-band spectrum.156
152 Record, ¶39.

153 Record, p.81, ¶32.
154 Record, p.81, ¶33.
155 Tecnicas Medioambientales, ¶122; Thomas Waelde, Abba Kolo, Environmental
Regulation, Investment Protection and ‘Regulatory Taking ’in International Law,
International and Comparative Law Quarterly (2001), p. 828.; James and others, ¶50;
Azurix, ¶311; OEG, ¶97.
156 Record, p.33, ¶19.
31
160. The Precautionary Principle157 adopted by the United Nations

Conference on Environment and Development in Rio de Janeiro,
Brazil, 1992, under Article 15 of the Rio Declaration states:
“In order to protect the environment, the
precautionary approach shall be widely applied by
States according to their capabilities. Where there
are threats of serious or irreversible damage, lack
of full scientific certainty shall not be used as a
reason for postponing cost-effective measures to
prevent environmental degradation.”
161. The Respondent contends that the Denial of Ku-Band Spectrum was
done as the Claimant failed to provide any additional documentation
to meet the Environmental Impact Assessment under NEPA to
address the specific atmospheric concerns raised by the National
Frequency Agency of the State.158
162. The Respondent relies on the evidence produced in the study which
states atmospheric rentry and the metals used in satellites including
aluminum could have harmful effects on the stratosphere.159 Now, it
is important to know that even if the evidence is not substantial
enough to show a direct link between the satellites and the
environmental harm, the Respondent can invoke this principle cited
in NEPA.160
163. The measure was taken to prevent the serious and irreversible
environmental harm that could be caused if such re-entries were
allowed by the Respondent state, and it was a preventive measure
that justifies the use of the Precautionary Principle.161
157 Wagner, Markus. 2012. Taking Interdependence Seriously: The Need for a
Reassessment of the Precautionary Principle in International Trade Law. Cardozo
Journal of International and Comparative Law 20: 713.
158 Record, p.82.
159 Record, p.43.
160 Record, p.22.
161 DE SADELEER, NICOLAS, 'The Precautionary Principle', Environmental Principles:
From Political Slogans to Legal Rules (Oxford, 2002; online edn, Oxford Academic, 1
Jan. 2010), p.110.
32
164. In conclusion, the action taken by the National Frequency Agency

of the Respondent state is justified under the Precautionary
Principle.
iii. The measures were taken to safeguard the National Security

and Environmental Concerns.
165. The DoD’s measures address concerns about environmental

impacts from space debris and national security, including potential
collision with DoD’s military assets in adjacent orbits. 162
166. In the present case, The DoD’s investigation post-collision revealed

both software and hardware flaws in the Claimant’s system,
threatening Celestria’s essential security. The Respondent asserts
that the repositioning of satellites from 400 Km orbit to 350 Km
orbit was ordered as there is a heightened risk of collision in space,
particularly due to the potential onset of Kessler Syndrome and the
risk of satellite collisions presents a national security concern in
400km altitude orbit as the DoD’s assets operate in the same orbit.
167. We submit that such an order was issued to address the
environmental concerns that a collision poses as they are a primary
source of space debris, i.e., space junk. 163 The Respondent asserts
that when two satellites collide, they can smash apart into
thousands of new pieces, creating lots of new debris. 164 Moreover, a
collision could set off a chain reaction that destroys the entire space
infrastructure.165
168. The Claimant contends that the Respondent has no authority to
enforce such an order because the Claimant’s 400km satellites were
launched from the Kingdom of Cosmosis before the diplomatic
relationship between the Respondent and Cosmosis broke down
following the climate migration crisis and as per the Outer Space
162 Record, ¶34.
163 Anelí Bongers, José L. Torres, ‘Orbital debris and the market for satellites’ (Science
Direct Volume 209, July 2023), p.3.
164 Jonathan O'Callaghan, ‘What is space junk and why is it a problem?’(Natural
History Museum), p. 13.
165 Sophie Kaineg, The Growing Problem of Space Debris, 26 Hastings Envt'l L.J. 277
(2019 p. 286.
33
Treaty of 1967 and the Registration Convention of 1974, Cosmosis

has quasi-territorial jurisdiction over the 400km satellites. 166
169. The Respondent submits that such a repositioning order was issued
under NEPA which does not extent jurisdiction to outer space per
se, but only seeks to ensure that outer space concerns do not
adversely impact Celestria’s environment over which it has the
jurisdiction to regulate as stated in Article I of the Act;167
“Human environment is not limited to those which
are subject to Celestria’s national jurisdiction, and
for greater certainty, the human environment
includes the outer space environment.”
170. We contend that under the Outer Space Treaty, a state can
regulate the use of outer space orbits and the Respondent is at no
point in time claiming jurisdiction over the celestial bodies and
rather regulating the satellites launched within its jurisdiction.
Outer space is consistently identified as a Global Commons as
designated under Article I which states;168
“Outer space, including the Moon and other
celestial bodies, shall be free for exploration and
use by all States without discrimination of any
kind […] and there shall be free access to all areas
of celestial bodies.”
171. In conclusion, such a repositioning order was issued to safeguard
the National Security of the State and to curb the space debris
caused by such collisions in Outer Space.
X. THE TRIBUNAL HAS THE POWER TO DRAW ADVERSE INFERENCE FROM
NON-COMPLIANCE WITH THE DOCUMENT PRODUCTION ORDER
AND/OR ORDER CELESTRIA TO REPEAT THE SEARCH AND PRODUCE
ANY NEWLY IDENTIFIED RESPONSIBLE DOCUMENTS
166 Record, p.8, ¶19.

167 Record, p.21.
168 Record, p.34, ¶20.
34
172. The tribunal in its Procedural Order No. 2 has explicitly stated that
the Request relates to matters potentially relevant to this
arbitration and is granted, unless said documents are privileged or
confidential under PO2. Valinor is in a long-term partnership with
Celestria’s military, the search will likely entail data protection
issues. Thus, Celestria should not have to incur such a risk.
173. The Respondent has thus not submitted the document without
commenting upon the prejudice of the veracity and existence of the
document, the Kingdom of Celestia could not submit the document
on the grounds [A]. The tribunal cannot draw adverse inferences
under the ICSID Arbitration Rules, 2022 [B]. The Respondent has
done a reasonable search [C] The tribunal may exclude the
production of evidence that can be burdensome and confidential for
a party [D]. In arguendo, the tribunal’s power is to decide the
probative and admissibility value of the document.
A. THE TRIBUNAL DOES NOT HAVE THE POWER TO DRAW ADVERSE

INFERENCE UNDER ICSID ARBITRATION RULES, 2022
174. The ICSID Arbitration Rules, 2022 has omitted Rule 34(1) of the
ICSID Arbitration Rules 2006 which states that the tribunal can
make a formal note of noncompliance with the document
production. The rule has been specifically omitted into the revised
ICSID Arbitration Rules, 2022 for initiation of fairer and more
justiciable proceedings for both parties.
175. Further, the arbitral tribunals have also refrained from drawing
adverse inferences if the requesting party has failed to introduce
evidence that is, under the circumstances, not reasonably (i)
consistent and complete and (ii) detailed.
i. Astracommex Regional has not produced reasonably consistent and

complete evidence
176. Tribunals need not draw adverse inferences from a responding

party's failure to produce evidence if the requesting party has failed
35
to present a consistent story and produce consistent evidence.

Further, the tribunals have also refused to draw adverse inferences
when the party requesting the inference fails to produce evidence
that, a tribunal ordinarily would expect to find in evidence. 169
177. That is, in addition to producing all available evidence
corroborative of the inference sought, the party requesting an
inference, must produce reasonably complete and thus reasonably
compelling evidence.
178. In “Jacqueline M. Kiaie”170, the Claimant introduced the affidavits
from one of the company's officers and requested the Respondent to
produce the register. Herein, the Respondent refused, despite the
fact that its witness had cited the share register in his affidavit and
the tribunal also refused to draw adverse inference acknowledging
the inconsistencies of the Claimant.
179. The tribunal in “H.A. Spalding, Inc.”171, the Tribunal found that a
party's evidence fell short of expectations and the Claimant have
principally introduced correspondence 'generally reflecting
solicitation and negotiation rather than actual contractual relations
or the rendering of compensable service documents and accordingly
no adverse inference were drawn.
180. In the present case, the investigation by the Department of Defense
has highlighted that AS100 satellite collisions were identified to be
both software and hardware malfunctioning in the collision
avoidance system of the Astra satellites. Regarding the software,
the algorithm of Astracommex used to predict relied predominantly
on data collected by the Space Surveillance Network of Cosmosis.
Secondly, regarding the hardware, the onboard sensors of Astra
satellites have an error rate from 5% to 10% in detecting and
avoiding objects smaller than 20 centimeters approaching from
certain angles172.
169 United States v. United Mexican States, ¶223.

170 Jacquline M. Kiaie, ¶109.
171 H.A. Spalding, ¶21.
172 Record, p.16.
36
181. This flaw cannot be rectified with software updates as previously

suggested by Astracommex and thus, the collision occurred. The
Claimant has refused to accept their fault in the satellites and
adversely has questioned the suspension of the operations which
was done by the Kingdom of Celestria in compliance to Articles I
and II of the NEPA, 2015173.
182. The Respondent has complied to the order of the tribunal under
Procedural Order 2 by submitting more than 300 documents across
all granted requests and over 200 documents being added to the
Privilege Log. The redacted two-page document attested by the
Claimant is from an “anonymous source”, questioning the veracity
and raising many presumptions regarding the provision of the third-
party leak.
183. In conclusion, Astracommex has failed to produce reasonably
consistent and complete evidence and no adverse inference shall be
drawn.
ii. Astracommex has failed to submit reasonably formal and detailed

evidence
184. The tribunals have declined to draw adverse inferences when the
requesting party's evidence is, in the context of the particular case,
deemed insufficiently formal or detailed.
185. In “Reza Nemazee”174, the Claimant's principal evidence consisted
of photocopies of various letters to substantiate their case and the
tribunal refused to draw any adverse inference stating that the
inconsistency and the extreme informality of the Claimant's critical
evidence militated against drawing adverse inferences and thus the
tribunal refused to draw any inferences sought by the Claimant.
186. In the present case, the redacted two-page document does not
reflect a detailed version of the report and has been received by
them through an anonymous source to which the Claimant has
relied. Further, the Respondent has complied with the order of the
173 Record, p.21.

174 Reza Nemazee, ¶62.
37
tribunal under Procedural Order 2 by submitting more than 300

documents across all granted requests and over 200 documents
being added to the Privilege Log. The redacted two-page document
attested by the Claimant is from an “anonymous source”,
questioning the veracity and raising many presumptions regarding
the provision of the third-party leak.175
187. Therefore, Astracommex has failed to produce formal and detailed
evidence and no adverse inference shall be drawn.
B. THE RESPONDENT HAS DONE A REASONABLE SEARCH AND

SUBMITTED ALL RESPONSIVE DOCUMENTS
188. The document production in international arbitration is not an

exhaustive exercise. The parties are required to conduct a
reasonable search, not a limitless one. It is bound by the principles
of reasonableness and proportionality to ensure fair and efficient
proceedings. The doctrine of proportionality in arbitration ensures
that the demands of the arbitration process do not become overly
burdensome or unfair to the parties involved.
189. The tribunal in the case of Biwater” 176 held that the need for
document requests to be "relevant and material" to the outcome of
the case and if a reasonable search has been done by the parties
then the request for an overly burdensome or excessive document
shall not be made.
190. In the present case, the Kingdom of Celestria has already produced
15 documents under Request No. 23, with additional 48 being
submitted into the privilege log. Celestria conducted a reasonable
search, which is proven by providing more than 300 documents
across all granted requests and over 200 documents being added to
the Privilege Log.177
191. In conclusion, the kingdom of Celestria has complied with the
document production by conducting reasonable research and has
175 Record, p. 55.
176 Biwater, ¶293.
177 Record, p. 55.
38
already submitted more than 300 documents across all granted

requests and 200 being added to the Privilege Log.
C. THE TRIBUNAL MAY EXCLUDE THE PRODUCTION OF EVIDENCE

WHICH CAN BE BURDENSOME CONFIDENTIAL FOR A PARTY
192. The tribunals have refrained from asking the parties to produce
evidence which can be burdensome on a party either by the its
sheer quantity or difficulty in extracting them out. This also finds an
explicit mention under IBA Rules, Article 9(2)(c)178 and Article 9(2)
(f)179 which states the documents being classified as “State Secrets”
constituting political or institutional sensitivity. Further, the arbitral
tribunals have refused to draw adverse inferences from a party’s
failure to produce evidence that is confidential.
193. The tribunal in the recent case of “Mainstream Renewable Power
Ltd”180 (2023) have held that 20 so-identified documents withheld by
the Respondent due to data privacy do not have to be produced to
the Claimant by relying on Article 9(2)(a) that the Tribunal may
exclude evidence or production of any document by reason of legal
impediment or privilege determined by them.
194. Also, the tribunal in the case of “David R. Aven et al” 181 has
accepted that Costa Rica’s contention for non-production of the
document as protected information was justified as the information
was indeed confidential to the Respondent state security.
195. In the present case, the AS100 and Valinor’s collision report is
protected from disclosure under the laws of Celestria. Without
prejudice to the existence and/or veracity of said document, the
compliance with the request is likely to entail data protection
issues.
196. The Valinor is in a long-term partnership with Celestria’s military,
the search will entail data protection issues. Further, the
178 IBA Rules, art. 9(2)(c).

179 IBA Rules, art. 9(2)(f).
180 Mainstream Renewable, ¶21.
181 David R., ¶276.
39
cumulative series of events that have happened with Celestria in the

past i.e., the Celestrian Climate Crisis, the aftermath of the AS
Valinor Collision, and the country is not in the state of undergoing
any major issues risking the stake of its citizens including the data
protection issue. Thus, Celestria should not have to incur such a
risk.182
197. Thus, the tribunal has the power to exclude the production of the
documents which can be burdensome or confidential to the party.
Data privacy laws may also necessitate such confidentiality.
D. IN ARGUENDO, THE TRIBUNAL HAS THE POWER TO DECIDE THE ADMISSIBILITY AND
PROBATIVE VALUE OF THE DOCUMENT
198. Rule 36(3) of the ICSID Arbitration Rules, 2022 183 states that “The
Tribunal shall be the judge of the admissibility of any evidence
adduced and of its probative value”. The rule encourages and
considers that the tribunal should aim at doing justice for both
parties. Thus, if the tribunal wishes to see the privileged
documents, to establish the best idea of the truth, they have the
power to appoint experts.
199. The tribunal in “United Kingdom”,184 refused to draw an adverse
inference when the United Kingdom declined to produce certain
naval orders on grounds of military secrecy.
200. Herein, a third-party leak led to the information entering the
arbitration, thus, the tribunal should consider it as an unfair on the
part of the Respondent legal impediment.
201. Therefore, the tribunal in the instant case, shall exclude the
admissibility of the AS100 Valinor collision report considering the
backlash it may create on the Respondent’s state data protections.
182 Record, p 55.

183ICSID arbitration Rules, ¶rule 36(3).
184UK, ¶54.
40
41
PRAYERS FOR RELIEF
For the foregoing reasons, Respondent respectfully requests this

Tribunal to render an award in favour of Respondent, as follows:
To declare that it does not have jurisdiction Ratione Temporis over the
present dispute;
II
To declare that Marcial Ventures Ltd. and Platonial investments are

Third Party Funders and Security For Costs should be awarded in the
present case;
III
To declare that the Respondent has not violated Article 7 of the BIT;
IV
To declare that the Tribunal does not have the power to draw adverse
inference in the present case and should not order Celestria to repeat its
search.
42

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TEAM TARAZI

INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT

ICSID Case No. ARB/22/99

Astracommex Regional Satellite Communication Inc.

The Republic of Celestria

MEMORIAL FOR THE RESPONDENT

I. List of Treaties, Conventions, and Rules.......................................................................3

II. List of Cases...................................................................................................................4

III. List of Books............................................................................................................17

V. List of Academic Articles and Publication(s)..............................................................19

VI. List of Abbrevations.................................................................................................20

Summary of the Arguments.....................................................................................................26

Arguments on procedural matters..............................................................................................1

VII. THE TRIBUNAL DOES NOT HAVE JURISDICTION RATIONE TEMPORIS

A. The Bit does not apply to pre-bit disputes................................................1

i. The principle of non-retroactivity applies to the ‘broadly drafted’

ii. The 2022 declaration restricts any non-retroactive application

B. The dispute between the parties crystallized before the signing of

i. The dispute between the parties crystallized pre-BIT...................5

ii. The post-BIT measures are a mere continuation of the

A. Marcial ventures ltd and Platonial Investments arethird-party

B. The Existence of Exceptional Circumstances warrants an order

Arguments on Substantial Matters...........................................................................................15

PRAYERS FOR RELIEF........................................................................................................33

I. LIST OF TREATIES, CONVENTIONS, AND RULES

Document Title Document Information

ICSID International Centre for Settlement of Investment

Outer Space Treaty on Principles Governing the Activities of

PCA Permanent Court of Arbitration 1899

Prague Rules Prague Rules on the Efficient Conduct of

UNCITRAL United Nations Commission on International Trade

II. LIST OF CASES

CASE CASE & DOCUMENT

Islamic Republic of Iran, National

Cargill Cargill, Incorporated v. United

Compañia del Desarrollo Compañia del Desarrollo de Santa

Crystallex Crystallex International Corporation

Enron Enron Creditors Recovery

Gramercy Gramercy Funds Management LLC,

Jan De Nul Jan de Nul N.V. and Dredging

Maffezini Emilio Agustín Maffezini v. The

States of America Final Award of the

Micula Ioan Micula Viorel Micula and others

Muszynianka v Slovakia Spółdzielnia Pracy Muszynianka v.

Nord Stream 2 Nord Stream 2 AG v. European

Occidental Occidental Exploration and

PSEG PSEG Global Inc. and Konya Ilgin

Telenor Telenor Mobile Communications AS

III. LIST OF BOOKS

DOLZER & SCHREUER Rudolph Dolzer & Christoph Schreuer,

Buffard, I., Crawford, J., Pellet, A. and

V. LIST OF ACADEMIC ARTICLES AND PUBLICATION(S)

Robert D. Indirect Expropriation and its Valuation in the Bit

VI. LIST OF ABBREVATIONS

AS100 Astracommex Regional’s Satellite

BIT Bilateral Investment Treaty

Capital Call The Capital Call Notice issued by

DoD Order Department of Defence’s Order

FET Standard Fair and Equitable Treatment

ICSID International Centre for the