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Bilaga 10

IN THE MATTER OF AN ARBITRATION UNDER THE RULES OF THE
ARBITRATION INSTITUTE OF THE STOCKHOLM CHAMBER OF
COMMERCE (2017)

- and -

THE REPUBLIC OF MOLDOVA

the "Respondent"

REPUBLIC OF MOLDOVA'S MEMORIAL ON BIFURCATED JURISDICTIONAL
ISSUES (SCC ARBITRATION 2020/074)

28 MAY 2021

Tribunal
Ms. Jean Kalicki (Chair)
Prof. Philippe Sands QC
Prof. Brigitte Stern

Administrative Secretary to the Chair
Dr. Joel Dahlquist

Counsel for the Respondent
Mihail Buruiana
BURUIANA & PARTNERS
Mihail Kogalniceanu Street No. 81/4, #2
MD-2009 Chisinau
Republic of MOLDOVA

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LIST OF ABBREVIATIONS / DEFINED TERMS

to the Republic of Moldova's Memorial on Bifurcated Jurisdictional Issues
(SCC Arbitration V 2020/074)

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I. INTRODUCTION

1. Pursuant to the Tribunal's Procedural Order No. 5 dated 26 March 2021, as amended by the Tribunal's Procedural Order No. 6 dated 6 May 2021, which was amended by the Tribunal's Letter dated 21 May 2021, the Republic of Moldova hereby submits the Memorial on Bifurcated Jurisdictional Issues.

2. The Republic of Moldova's Application for Revocation of the Emergency Award on Interim Measures Issued by the Emergency Arbitrator in the Arbitration Sec EA 2020/130, and the exhibits thereto, submitted on 27 November 2020 (the "Respondent's Application dated 27 November 2020"), as well as the Republic of Moldova's Reply to Claimant's Response to Respondent's Application for the Revocation of the Emergency Award on Interim Measures Issued by the Emergency Arbitrator in the Arbitration Sec EA 2020/130, and the exhibits thereto, submitted on 4 January 2021 (the "Respondent's Reply dated 4 January 2021"), the Republic of Moldova's Request for Summary Procedure, and the exhibits thereto, submitted on 5 February 2021 (the "Respondent's Request for Summary Procedure dated 5 February 2021") should be treated as incorporated into this Memorial, and the Respondent relies upon the factual and legal arguments put forward therein. Unless otherwise specified herein, the Republic of Moldova adopts the defined terms set in the aforementioned submissions.

3. The Respondent is not aware of the facts and circumstances alleged by the Claimant in its submissions, including the Request for Arbitration (the "RfA") and Statement of Claim (the "SoC"). The Claimant shall be held to the strict standard of proof of the facts and circumstances it refers to in the instant case.

4. The Respondent notes that in the Statement of Claim, the Claimant has completely ignored and failed to engage with the Respondent's arguments raised and the evidence adduced in the Respondent's Application dated 27 November 2020 and the Respondent's Reply dated 4 January 2021.

5. The Republic of Moldova reserves the right to raise further jurisdictional and other objections in the next phases of these proceedings. The Republic of Moldova further reserves all its rights to develop, amend, expand and/or otherwise modify its case and the relief sought.

II. GENERAL PROCEDURAL ISSUES

A. General Remarks

6. Exhibits, statement of fact witnesses / reports of experts and legal authorities will be referenced as set out in sections 13.5, 13.6, 13.7 and 13.8 of the Procedural Order No. 1.

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B. Applicable Law

7. Pursuant to Art. 10.4 of the Agreement Between the Government of the Republic of Moldova and the Government of the Republic of Cyprus for the Reciprocal Promotion and Protection of Investments of 13 September 2007 (the "BIT") [Exhibit RLA-1 bis], the Tribunal should apply:

"- the provisions of this Agreement; and

- the rules and universally accepted principles of international law."

C Level of Substantiation

8. The Claimant shall substantiate its assertion in such detail for evidence to possible to be taken on it. The consequence of insufficient substantiation or evidence is the rejection of the claim.

D. Structure of this Memorial

9. The Respondent will first elaborate on the lack of jurisdiction ratione personae of the Arbitral Tribunal (III.).

10. Thereupon, the Respondent will demonstrate that the Arbitral Tribunal lacks jurisdiction ratione materiae (IV.).

11. The Respondent will then develop on the lack of jurisdiction of the Arbitral Tribunal because of the Claimant's failure to properly request and proceed with the amicable settlement (V.).

12. Finally, the Respondent will delineate the relief sought (VI.).

III. THE TRIBUNAL DOES NOT HAVE JURISDICTION RATIONE PERSONAE

A. Introduction

13. To qualify as an investor under the BIT, the Claimant shall prove that it satisfies the requirements of the BIT Article 1(3)(b)(ii) and, particularly, that apart from being a legal person constituted or incorporated under the law of Cyprus, it had its seat in the territory of Cyprus.

14. The BIT Article 1(3) provides, in relevant part, that:

"3. The term 'investor' means:

a) In respect of the Republic of Moldova:

i) [...]

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ii) Legal persons or any other legal entity incorporated, constituted or otherwise duly organised under the applicable law of the Republic of Moldova, as well as individual entrepreneurs, having its seat and performing real business activity in the territory of the Republic of Moldova.

b) In respect of the Republic of Cyprus:

(i) [...]

(ii) Legal person constituted or incorporated in compliance with law of the Republic of Cyprus and having their seat in the territory of the Republic of Cyprus. "¹

15. Accordingly, the Claimant shall be "constituted or incorporated in compliance with the law of the Republic of Cyprus" and shall have its seat in the territory of the Republic of Cyprus" ² in order to benefit ratione personae from the BIT. Those two criteria must be met cumulatively (simultaneously) in order to qualify as a Cypriot investor under the BIT Article 1(3)(b)(ii).

16. The aim of this cumulative set of nationality of a juridical person was mainly to reduce the practice of treaty shopping. This stricter set of nationality criteria under the BIT Article 1(3)(b)(ii) requires for genuine close links between a legal person and Cyprus, as the State of its nationality, the home State. Furthermore, the combination of those two nationality criteria should render more difficult the possibility of creating a mere "mailbox" subsidiary.

17. The Claimant recognises that "incorporation" and "seat" are two different nationality criteria provided for in the BIT Article 1(3)(b)(ii).³ Specifically, the Claimant recognises "seat" as a separate, distinct criterion that the Claimant should fulfil to be considered an "investor" under the BIT.⁴ To that extent, there is no dispute between the parties.

18. However, in the RfA and SoC, the Claimant merely states that it has its seat in the territory of the Republic of Cyprus, while bringing no evidence that it in fact has its seat in Cyprus and/or that it meets that criterion.⁵ Indeed, it is surprising how little to no evidence has been submitted by the Claimant with its submissions, where it has the burden of proof of what has been alleged by it in those proceedings. Particularly, almost no evidence has been submitted by the Claimant to prove its asserted status of a qualified investor under the BIT. There is evidence that in

¹ Art. 1 para. 3 b) (ii) of the BIT [Exhibit RLA-1 bis]. ↩
² Ibid. ↩
³ See RfA, paras. 1, 18; Claimant's Comments to Respondent's Answer, para. 18, 19, 20; Soc, paras. 1, 32, 35, 36, 37; Claimant's Reply dated 5 March 2021, para. 58. ↩
⁴ See RfA, paras. 1, 18; Claimant's Comments to Respondent's Answer, para. 18, 19, 20; SoC, paras. 1, 32, 35, 36, 37; Claimant's Reply dated 5 March 2021, para. 59. ↩
⁵ See RfA, paras. 1, 18; SoC, paras. 1, 32, 35, 36, 37. ↩

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these proceedings the Claimant has espoused a tactic of post-factum recreation of the reality. ⁶

19. In any event, contrary to the Claimant's assertions, Komaksavia does not have the seat in Cyprus and does not meet that criterion set out in the BIT Article 1(3)(b)(ii). Furthermore, the Claimant does not have its registered office, which is subsumed in the notion of "incorporation", in the territory of the Republic of Cyprus.

20. In both the RfA and Soc, the Claimant asserts that:

"The Claimant is a private limited liability company incorporated and having its seat in the territory of the Republic of Cyprus with the following contact details:

Komaksavia Airport Invest Ltd
Makareiou, 256, EFTAPATON COURT,
Flat/Office C3, 3107, Limassol, Cyprus
Tel: +357 96 675665
Email: and reas. [email protected]"⁷ (emphasis added).

21. Thus, it appears that the Claimant has not provided the address of its purported "seat" in the territory of Cyprus. The Claimant merely provides the Claimant's "contact details" for the purposes of this arbitration.

22. In the SCWS-Menelaou, Menelaou asserts that the Claimant has physical presence in Cyprus, renting the "working space 02" from Andreas Menelaou LLC (ANIJPEAL MENE/\AOY IJ.E.n.E. in Greek characters) at the address: Makarious Avenue, Eftapaton Court, Office C4 [sic], 3105, Limassol, Republic of Cyprus.⁸

23. Further, Menelaou asserts that Claimant has business activity in Cyprus, because it "holds share capital [sic] and shares of another business entity", "is involved in legitimate business, with identifiable ultimate beneficial owner(s) (Mr Tenev and Mr Goncharenko)."⁹

24. He also asserts that Claimant's sole director resides in Cyprus, Claimant's important decisions are taken by the Cypriot director, Claimant's headquarters are in Cyprus, Claimant holds shares in Avia Invest, Claimant can dispose of funds received from

⁶ Such as the issue with the translation by the Claimant of certain documents, inter alia, of the Concession Agreement. The Respondent further notes that the in paras. 4.1. and 11.1. (the 4th line) of the Concession Conditions [Exhibit [SC-24]], the Claimant wrongly and purposefully translated the term "fntreprinderii concesionale" as "concessionaire" instead of "concession enterprise". This is a clear intent by the Claimant to mislead the Tribunal regarding the obligations which were unequivocally and differentially prescribed to the concessionaire, on the one hand, and the concession enterprise, on the other hand. The legal requirements regarding the certified translations in the Republic of Moldova are governed by the Law on the Status, Authorisation and Organisation of the Activity of Interpreter and Translator in the Justice Sector, specifically Art. 19 thereof [Exhibit R-102]. ↩
⁷ RfA, para. 1; Soc, para. 1. ↩
⁸ See SCWS-Menelaou, para. 36.1. [Exhibit [SC-751). ↩
⁹ Ibid., para. 36.2. ↩

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its business activity and has no binding obligations of transferring its income to third parties, Clamant is the actual beneficiary of revenues, Claimant "as a holding company exercises management and control in the territory of the Republic of Cyprus related to holding and protecting the shares of Avia Invest", Claimant can dispose of its income, and Claimant has no due tax arrears. ¹⁰ Except a purported sub-lease agreement,¹¹ no other document has been put forward to prove those assertions.

25. In the Claimant's Reply dated 5 March 2021, the Claimant asserted that it has its "seat being located in the Republic of Cyprus", ¹² because:

25.1. the Claimant was incorporated in Cyprus and no change occurred "in its status at any time since incorporation"; ¹³

25.2. the Claimant provided in its submissions an address and a telephone number in Cyprus; ¹⁴

25.3. the Claimant's managing director, Menelaou, has an address in Cyprus, from where he carries out business operations "including his responsibilities as managing director of the Claimant" [sic]; ¹⁵

25.4. the CSWS-Menelaou "is the evidence of a Cypriot lawyer"¹⁶ and "[t]here is no conceivable basis to contend that he is not telling the truth" [sic] when Menelaou has stated¹⁷ that:

25.4.1. he works predominantly from Cyprus; ¹⁸

25.4.2. the short-lived purchase of 100% of the shares in Komaksavia by NR Investments Limited was carried out from Menelaou's office in Cyprus; ¹⁹

25.4.3. as a practicing lawyer in Cyprus, he is familiar "with the requirements imposed upon Cypriot companies such as the Claimant"; ²⁰

¹⁰ Ibid., para. 36.3. (including sub-paras. 36.3.1. to 36.3.10.). ↩
¹¹ See Exhibit C-8 to the Claimant's Reply dated 5 March 2021; cf. Exhibit [SC-75), as well as Exhibit [C-2) and Exhibit [CA-35) (the latter two being exhibits to the Claimants' Response dated 18 December 2020). ↩
¹² Claimant's Reply dated 5 March 2021, para. 86. ↩
¹³ See ibid., paras. 86.1. and 86.2. ↩
¹⁴ See ibid., para. 86.3. ↩
¹⁵ Ibid., para. 86.4. ↩
¹⁶ The Respondent notes, however, that contrary to this statement, pursuant to para. 1 of the SCWS-Menelaou, Menelaou provides his second witness statement as "the managing director of Komaksavia", rather than as a legal expert or in any other quality. ↩
¹⁷ See Claimant's Reply dated 5 March 2021, para. 86.5. ↩
¹⁸ See Claimant's Reply dated 5 March 2021, para. 86.5.1.; see also SCWS-Menelaou, para. 5 [Exhibit [SC-75]]. ↩
¹⁹ See Claimant's Reply dated 5 March 2021, para. 86.5.2.; see also SCWS-Menelaou, para. 8 [Exhibit [SC-75)]. It shall, however, be noted that Menelaou was not a director of the Claimant at the time of alleged short-lived purchase by NR Investments Limited. ↩
²⁰ Claimant's Reply dated 5 March 2021, para. 86.5.3.; see also SCWS-Menelaou, paras. 28 and 35 [Exhibit [SC-75)]. ↩

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25.4.4. the Claimant complies with anti-money laundering legislation in Cyprus because: ²¹

25.4.4.1. the Claimant has "a physical presence in Cyprus", as evidenced, inter alia, by the Sublease Agreement; ²²

25.4.4.2. "[t]he Claimant has established business activities in Cyprus because it holds shares in another business and it has identifiable ultimate beneficial owners"; ²³

25.4.4.3. the Claimant meets various other 'substance criteria' allegedly provided by the Claimant in its submissions. ²⁴

26. The Claimant considers that for the determination of the Claimant's nationality in the instant case the Tribunal should apply "the narrower/municipal-law" analysis²⁵ developed in Renta 4 S. V.S.A., et al v The Russian Federation ²⁶ and Sanum Investments Limited v Lao People's Democratic Republic. ²⁷ This is to be denied.

27. The Claimant further asserts that it satisfies the relevant factors considered in CEAC v Montenegro ²⁸ for the determination of a company's seat in Cyprus, because Komaksavia has a physical premise - working space 02 - which it rents from the Sublessor; ²⁹ the building is accessible during office hours, and the Claimant accepts notices and services at the address of the premises; ³⁰ books and registers are kept at the Claimant's office; ³¹ the Claimant's name is affixed outside of the main entrance to the office. ³²

28. Most of the Claimant's allegations are simple assertions without any underlying evidence. In fact, a majority of the Claimant's assertions are proved to be wrong.

29. In fact, besides being incorporated in Cyprus, the Claimant has no connection with Cyprus. It does not have business, no place of business, and no employees in Cyprus. The decisions with regard to its purported shareholding in Avia Invest are not taken in Cyprus. Komaksavia has no substantive funds in Cyprus. Furthermore, it has no income and no means of generating funds in Cyprus.

²¹ See Claimant's Reply dated 5 March 2021, para. 86.5.4. ↩
²² See ibid., para. 86.5.4.1. ↩
²³ Ibid., para. 86.5.4.2. ↩
²⁴ See ibid., para. 86.5.4.3. ↩
²⁵ See ibid., paras. 78 and 87. ↩
²⁶ See Renta 4 S V.S.A., et al v The Russian Federation, SCC Arbitration V (24/2007), Award on Preliminary Objections [Exhibit [CLA-9]). ↩
²⁷ See Sanum Investments Limited v Lao People's Democratic Republic, UNCITRAL, PCA Case No. 2013-13, Award on Jurisdiction [Exhibit [CLA- 10]). ↩
²⁸ Central European Aluminum Company {CEAC) v. Montenegro, ICSID Case No. ARB/14/8, Award, dated 26 July 2016, para. 208 [Exhibit RLA-17]. ↩
²⁹ See Claimant's Reply dated 5 March 2021, para. 89.1.(a) and (b). ↩
³⁰ See ibid., para. 89.1.(c). ↩
³¹ See ibid., para. 89.1.(d). ↩
³² See ibid., para. 89.1.(e). ↩

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30. The Claimant has not discharged its burden of proof regarding "their seat in the territory of the Republic of Cyprus" (the second nationality criterion). Furthermore, the Claimant has not discharged its burden of proof that it has its registered office, which is entailed in the "incorporation" (as the first nationality criterion), in the territory of the Republic of Cyprus. ³³ In fact, the Claimant does not have its seat in Cyprus. Furthermore, the Claimant does not have its registered office in Cyprus.

31. In the Respondent's Answer to the Claimant's Request for Arbitration dated 9 July 2020, the Respondent raised the objection that the Claimant had not proved its seat in the territory of the Republic of Cyprus. ³⁴ Furthermore, the Respondent raised the lack of seat's objection in the Respondent's Application dated 27 November 2020 and the Respondent's Reply dated 4 January 2021. Notwithstanding those repeated objections, in the Soc dated 14 January 2021, the Claimant totally failed to tender any evidence to address those objections and to prove that it is duly incorporated, has its registered office, and has its seat in the Republic of Cyprus.

B. No "Seat" in the Territory of Cyprus

32. Contrary to the Claimant's assertion, the Claimant does not have its "seat" in the territory of the Republic of Cyprus and, therefore, may not qualify ratione personae as a Cyprus "investor" under the BIT Article 1(3)(b)(ii). Furthermore, the Claimant does not have its "registered office" - an element of "incorporation" - in the territory of the Republic of Cyprus, because not all elements required under the Cypriot company law are met at the designated address of the registered office indicated by the Claimant.

33. The Respondent will prove in the following paragraphs that:

33.1. the criterion of "seat" in the BIT Article 1(3){b)(ii) should be interpreted as a separate from "incorporation" and, at the same time, cumulative nationality criterion that needs to be satisfied, and that it entails the place of effective management and financial control;

33.2. the Claimant does not have its seat in the territory of Cyprus as it is effectively managed by Shor through agents and proxies, including through a Bulgarian national, Tenev, who resides in Bulgaria, and through a Russian citizen, Goncharenko, who resides in the Russian Federation, and, in any event, it is effectively managed from outside of Cyprus, and, consequently, does not meet the requirements of the BIT Article 1(3)(b)(ii).

³³ In para. 4 of the Respondent's Answer to the Claimant's Request for Arbitration dated 9 July 2020, the Republic of Moldova raised the objection that the Claimant has not proved its nationality [Exhibit SC-9]. ↩
³⁴ Ibid. ↩

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1. The "Seat" Should Be Interpreted Autonomously Under the BIT

34. While the first the criterion in the in the BIT Article 1(3)(b)(ii) - that of "incorporation" (entailing the "registered office") - shall be assessed under the law of the Republic of Cyprus, the criterion of "seat" shall be assessed from the perspective of international law.

35. "Seat" may not represent something that is an inseparable effect of "incorporation". As a matter of fact, the "incorporation" and "seat" of a company may be and often are located in different countries. Certainly, being aware of that fact and to avoid such territorial disconnect between these two places in the interest of achieving the object and purpose of the BIT, Moldova and Cyprus agreed in the BIT Article 1(3)(b)(ii) that both the "incorporation" and "seat" be located in the Republic of Cyprus.

36. Since the Claimant is a company, inevitably the decisions for it have to be and are taken by natural persons as members of the general meeting or Board of Directors of the Claimant. The location where the decisions regarding the central policy core of the whole company of Komaksavia are in substance made by such organs shall be considered the place of the location of Komaksavia's seat.

37. In the instant case, Komaksavia has been controlled by nationals of other States, and Komaksavia has had no business activities in the State of incorporation (Cyprus), and the seat of management and the financial control are both located in another State, in any event, outside Cyprus.

38. It shall be further distinguished between and investigated into, on the one side, a company's statutory organs which the company established in order to achieve compliance with the laws and regulations for the purpose of registration with the registrar of companies, and, on the other side, where the effective, as a matter of substance, not simply as formality, decisions for the company were taken. "Seat" is a real concept and is concerned with where decisions in substance, having "real influence",³⁵ and not as a matter of form, are taken for the company.

39. The "seat" of a legal person is similar to the "residence" of a natural person which is the place where the natural person factually resides, and not the place where it should be residing. That place shall be established based on the particular facts existing in each case with regard to the particular person.

40. The Republic of Moldova submits that the "seat"³⁶ under the BIT Article 1(3)(b)(ii) should ordinarily mean the place of effective management and financial control, which is the place where the organs of direction, management and control of the

³⁵ In many jurisdictions, including Cyprus and Moldova, those with "real influence" in a company are called shadow directors and are treated for liability purposes as the company's appointed directors. ↩
³⁶ "Seat" is called "t6pa" ("edra") in the Greek language text and "sediu" (or "sediul" with definite article) in the Romanian (Moldovan) language text of the BIT. ↩

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company are, in fact, mainly located, that is, where the central policy core of the whole company is in substance made.

41. Where considered as a connecting factor, "seat" in its turn relies on more specific category of connecting factors which are capable of localising a legal person in a specific State. Those are the "decision making within" the legal person and the "internal governance structure". In turn, those latter factors are capable of directly localising a legal person through the "place of effective management and financial control" of the legal person.

42. "Seat", that is, place of effective management and financial control shall be determined by analysing how the affairs of a company were in fact conducted, rather than as it was prescribed under the company's internal regulations. It is the actual place of effective management and financial control of a company that would determine corporate "seat", rather than the place where the company ought to be managed or controlled. This results from the literal meaning of "having their seat" (emphasis added). The factual position of "place of effective management" and "financial control" may only be determined by scrutinising what the company actually does, as this will ascertain how a corporation's actions are directed.

43. Neither the BIT Article 1(3)(b)(ii) nor other BIT's provisions do further define the criterion of "seat". Given the BIT's silence in that regard, in order to define and determine the meaning of "seat" recourse must be had to the interpretative techniques provided for in the Vienna Convention on the Law of Treaties (the "VCLT"). Indeed, the lack of further definition of "seat" in the BIT itself necessitates an analysis of that term grounded in the established rules of treaty interpretation under international law.

a. Interpretation Pursuant to Vienna Convention

44. The starting point of the interpretation inquiry is Art. 31(1) of the VCLT which sets forth the well-known general rule on interpretation of treaties:

"A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose". ³⁷

45. The VCLT clearly gives precedence to the so-called textual (objective) approach. In line with that approach, the premise is that the text of the treaty expresses the genuine intention of the parties, and that the task of interpretation is to determine the true meaning of the text used. Words of the treaty are to be read as they are written, and they will be given their ordinary meaning taking into account the treaty's context, its object and purpose.

46. When reading the term "seat" in the context of the entire BIT Article 1(3)(b)(ii) it is apparent that it shall have its own autonomous meaning, different from the other

³⁷ Vienna Convention on the Law of Treaties, Article 31(1) [Exhibit RLA-13). ↩

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criteria imposed by that provision. That is, "seat" shall not be made an element of "incorporation" or "constitution", because such interpretation would go against the principle of "effectiveness" pursuant to which provisions of a treaty shall be interpreted as to give each such treaty provision "effet utile", that is, "so that they do not become devoid of effect. "³⁸

47. The principle of "effectiveness" ("effet utile") was described as a settled "canon of interpretation in all systems of law" by the tribunal in Cayuga Indians (Great Britain) v. United States:

"Nothing is better settled, as a canon of interpretation in all systems of law, than that a clause must be so interpreted as to give it a meaning rather than deprive it of meaning."³⁹

48. Therefore, the term "seat" as read in the context of the BIT Article 1(3)(b)(ii) may only be understood as something additional to "incorporation" or "constitution" and, therefore, may not be taken to mean "registered office", which is an element of "incorporation".

49. That the term "seat" is intended to mean something additional to the being "constituted or incorporated in compliance with the law of the Republic of Cyprus" also flows from the object and purpose of the BIT, which is set out in the BIT's Preamble - the creation of favourable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party whilst the Contracting Parties desire to extend and intensify the long-term economic cooperation between themselves. ⁴⁰

50. As apparent from the above, the BIT awards protection to investors in order to extend and intensify the long-term economic cooperation between the Republic of Moldova and the Republic of Cyprus. Such economic cooperation can only be promoted when investors who possess a true, genuine connection with one Contracting Party to the BIT, invest in territory of the other Contracting Party. The criterion of "incorporation", which, in its essence, relates to formalistic criteria under the national law (commonly related to registration before relevant state authorities), cannot reliably ensure existence of such genuine link. This is exactly why the additional criterion of "seat" is provided for in the BIT - it serves to counterbalance the formal criterion of "incorporation" with a criterion which presents a substantial connection to the home State. Only when the criteria of "incorporation" and "seat" are taken together, as two distinct criteria of different essential characters, do they create a nationality test that corresponds with the proclaimed goal of the BIT.

³⁸ Tenaris S.A. and Ta/ta - Trading e Marketing Sociedade Unipessoa/ Lda. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/11/26, Award, 29 January 2016, para. 151 [Exhibit RLA-37]. ↩
³⁹ Cayuga Indians {Great Britain) v. United States, Award, 22 January 1926, UN Reports of International Arbitral Awards, 2006, vol. VI, p. 184 [Exhibit RLA-38]. See also Asian Agricultural Products Ltd. v. Republic of Sri Lanka, ICSID Case No. ARB/87/3, Final Award, 27 Jun 1990, para. 40, Rule (E) [Exhibit RLA-39). ↩
⁴⁰ See the Bil's Preamble [Exhibit RLA-1 bis]. ↩

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b. No Renvoi to Cypriot Law

51. The Respondent submits that the term "seat" in the BIT Article 1 para. 3 let. b) (ii) shall be interpreted with reference to international law rather than with renvoi to national law of the Republic of Cyprus. That may plainly be inferred (also in a per a contrario interpretation) from the manner in which the BIT Article 1 para. 3 let. b) (ii) defines "incorporation". Thus, when it comes to that first jurisdictional requirement - "constituted or incorporated" - the text of the BIT Article 1 para. 3 let. b) (ii) expressly requires (that is, renvoi) that it be done "in compliance with law of the Republic of Cyprus".⁴¹ Yet, when it comes to the second jurisdictional requirement - "having their seat in the territory of the Republic of Cyprus" - that provision does not refer (no renvoi) to the application of the national law of Cyprus. It merely requires that the location of the "seat" be in the Republic of Cyprus, with no indication from the perspective of which law the "seat" shall be interpreted.

52. Hence, whilst the first condition is expressly defined and governed by the law of the Republic of Cyprus, the second condition escapes the application of the law of the Republic of Cyprus. This conclusion is reinforced by wording in Cyprus - Bulgaria BIT in which it is explicitly provided that the term "seat" shall be defined and governed by "the Cypriot legislation"⁴². Had the BIT's Contracting Parties intended that the second condition be also defined and governed by the law of the Republic of Cyprus, they would have expressly introduced such specific wording.

53. This interpretation is also underpinned by the contextual approach provided for in Art. 31(1) of the VCLT ("in their context").

54. In addition, the BIT should be interpreted within the normative framework of international law. That is provided in Art. 31(3)(c) of the VCLT which sets forth as follows:

"3. There shall be taken into account, together with the context:

[...]

(c) any relevant rules of international law applicable in the relations between the parties." ⁴³

55. Accordingly, rules stemming from all sources of international law are relevant upon interpretation of the term "seat" as provided in the BIT Article 1 para. 3 let. b) (ii).

⁴¹ Art. 1 para. 3 b) (ii): „Legal person constituted or incorporated in compliance with law of the Republic of Cyprus [...]." [Exhibit RLA-1 bis]. ↩
⁴² Art. 1(3)(8) of the Cyprus - Bulgaria BIT provided:"... legal persons with registration and seat according to the Cypriot legislation, who, in compliance with this Agreement are making investments in the territory of the other Contracting Party" (emphasis added) [Exhibit RLA-40]. ↩
⁴³ Vienna Convention on the Law of Treaties, Art. 31(3)(c) [Exhibit RLA-13]. ↩

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The Respondent will analyse various relevant sources in the paragraphs further below.

56. The relevance of international law for the application of the BIT is also confirmed in the BIT Art. 10 para. 4:

"The arbitration award shall be based on:

- the provision of this Agreement; and

- the rules and universally accepted principles of international law."⁴⁴

57. Consequently, the term "seat" shall be interpreted with reference to international law.

c. BITs Have Recognized "Seat" as a Separate Criterion and Defined It as the "Place of Effective Management"

58. "Seat" as a nationality criterion in BITs has largely been accepted as a criterion separate from "incorporation" and has been understood to mean the effective seat, that is, the "place of effective management".

59. In its analysis of various nationality criteria in investment treaties, the United Nations Conference on Trade and Development ("UNCTAD") noted:

"The seat of a company may not be as easy to determine as the country of organization, but it does reflect a more significant economic relationship between the company and the country of nationality. Generally speaking, "seat of a company" connotes the place where effective management takes place."⁴⁵ (emphasis added).

Accordingly, the "seat" requires something more than the mere "incorporation" and is located at the "place where effective management takes place". The UNCTAD position on "seat" as the place of the "effective management" has been consistent throughout the years. ⁴⁶

⁴⁴ BIT Art. 10 (4) [Exhibit RLA-1 bis]. ↩
It shall be noted that under the customary international law, the claims for shareholder reflective loss, such as the Claimant's claim in the instant case, are not recognized. Should this Tribunal find that the Claimant has an investment under the BIT, which is denied, the Tribunal is invited to interpret the BIT by not departing from the universal no-shareholder reflective loss rule in the international customary law.
Only Claimant's claims for direct loss, which it has none, shall be permitted under the BIT.
⁴⁵ UNCTAD Series on Issues in International Investment Agreements II, Scope and Definition: A Sequel, New York and Geneva, 2011, p. 83 [Exhibit RLA-41]. ↩
⁴⁶ See the United Nations Conference on Trade and Development (UNCTAD), Scope and Definition, 2 UNCTAD Series on Issues in International Investment Agreements, 36, U.N. Doc. UNCTAD/ITE/IIT/11 (1999), p. 39; United Nations Conference on Trade and Development, Dispute Settlement, International Centre for Settlement of Investment ↩

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60. Two senior experts at the World Bank, America Beviglia Zampetti and Pierre Sauve opined that:

"BITs have in recent years tried to address such complexities, often by combining the traditional nationality tests or criteria, namely the place of incorporation; the location of the 'seat' of the corporation (sometimes referred to as the siege social. real seat. or the principal place of management): and the nationality of the shareholders who own or control the corporation [...]

[...] Some BITs combine the place of incorporation test with criteria focusing on a company's 'seat'. This test attributes the nationality of the place where the siege social is located. The 'seat of a company' often refers to the place of effective management decision-making. and as such, while more difficult to determine, reflects a more significant economic relationship between the corporation and the country granting nationality."⁴⁷ (emphasis added).

Accordingly, unlike the place of "incorporation", the "seat" of a company ('siege social') is the place where corporate decisions are effectively made and reflects a stronger economic link between a company and a State. "Seat" also reduces the risk of 'mailbox' companies.

61. M. Sornarajah takes the view that:

"European states have generally favoured the siege social theory, which determines nationality by looking for the place where the seat of its effective management is located. "⁴⁸ (emphasis added).

62. That view is also shared by Professor Franco Ferrari, who recently stated that:

"A second approach seen in IIAs is for a corporation to be deemed a national of the country in which it has its seat, sometimes called the "main office," "residence," or "siege social." [...]

For tribunals determining whether a corporate investor qualifies for protection under a treaty, this formulation typically requires some inquiry into the factual and economic circumstances of the company. since the tribunal is seeking to determine where the company's "effective

Disputes, 2.4 Requirements Ratione Personae, 2003, p. 15 ("seat (siege social), i.e., the State where the headquarters or the centre of its management is located.").
⁴⁷ America Beviglia Zampetti and Pierre Sauve, International investment, in: Andrew T. Guzman and Alan 0. Sykes (eds.), Research Handbook in International Economic Law, Edward Elgar, 2007, p. 219-220 [Exhibit RLA-42]. ↩
⁴⁸ M. Sornarajah, The International Law on Foreign Investment, third edition, Cambridge University Press, 2011, p. 324 [Exhibit RLA-65]. ↩

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management" takes place. The seat of a corporation may also change, which means that a corporation's nationality-when determined by reference to its seat-can be fluid over time.⁴⁹ (emphasis added).

Accordingly, to find out where a company's "seat" is located, a tribunal shall inquire into the factual and economic circumstances of the company. A company is able to transfer its "seat" to another State and thus change the nationality.

63. Consequently, (i) "incorporation" and "seat" are two distinguishable criteria for establishing corporate investor's nationality in the BITs; (ii) "seat", as a criterium for determining corporate investor's nationality in investment treaties, connotes a location where company's 'effective management' takes place.

d. Treaty Practice of Cyprus and Moldova Differentiates Between "Seat" and "Incorporation"

64. Another source providing authority for "seat" and "incorporation" as distinguishable criteria is the treaty practice of the Republic of Cyprus (the alleged home State of the Claimant) and of the Republic of Moldova.

(i) BITs of the Republic of Cyprus

65. An analysis of different Cyprus BITs reveals various definitions of corporate investors' nationality. Cyprus BITs concluded with Albania, China, Egypt, and Qatar require only incorporation. ⁵⁰ A number of Cyprus BITs require that the legal person is both incorporated and has its seat in the territory of the contracting party: such as the BITs concluded with Lebanon, Libya, Montenegro, San Marino, Serbia, Syria, ⁵¹ as well as the Moldova-Cyprus BIT. ⁵² Among those Cyprus BITs, there are

⁴⁹ Franco Ferrari and D. Brian King, International Investment Arbitration in a Nutshell, West Academic Publishing, 2020, p. 146-147 [Exhibit RLA-43]. ↩
⁵⁰ Agreement on the Promotion and the Reciprocal Protection of Investments between the Government of the Republic of Cyprus and the Council of Ministers of the Republic of Albania, Article 2(b) [Exhibit RLA-44]; Agreement between the Government of the Republic of Cyprus and the Government of the People's Republic of China for the Reciprocal Promotion and Protection of Investments, Article 1(2) [Exhibit RLA-45]; Agreement between the Republic of Cyprus and the Arab Republic of Egypt for the Reciprocal Promotion and Reciprocal Protection of Investments, Article 1(3)(b) [Exhibit RLA-46]; Agreement between the Government of the Republic of Cyprus and the Government of the State of Qatar for the reciprocal promotion and protection of investments, Article l(a)(ii) [Exhibit RLA-47]. ↩
⁵¹ Agreement on the Reciprocal Promotion and Protection of Investments between the Republic of Cyprus and the Lebanese Republic, Article 1(1)(b) [Exhibit RLA-48]; Agreement on the promotion and the reciprocal protection of investments between the Government of the Republic of Cyprus and the Great Socialist People's Libyan Arab Jamahiriya, Article 1(2) [Exhibit RLA-49]; Agreement on the reciprocal promotion and protection of investments between the Government of the Republic of Cyprus and the Government of the Republic of San Marino, Article 1(1)(b) [Exhibit RLA-50]; Agreement between the Government of the Republic of Cyprus and the Government of the Syrian Arab Republic on the promotion and reciprocal protection of investments, Article 1(2)(b) [Exhibit RLA-51]; The Agreement between the Republic of Cyprus and Serbia and Montenegro on Reciprocal Promotion and Protection of Investments, Article 1(3)(b) [Exhibit RLA-34]. ↩
⁵² See Exhibit RLA-1 bis. ↩

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some which contain asymmetrical criteria for qualification of investors from either contracting party: Cyprus-China BIT, Cyprus-Qatar BIT and Moldova-Cyprus BIT.

(ii) BITs of the Republic of Moldova

66. The BITs concluded by the Republic of Moldova also reveal various criteria for corporate investor's nationality. The BITs concluded with Canada, Finland, Greece, Hungary, Lithuania, the USA require incorporation for the corporate investors. ⁵³ The BITs concluded with Belgium and Luxembourg, Spain, Romania require both incorporation and the presence of the seat in the territory of the home State. ⁵⁴

(iii) Both Moldova and Cyprus Distinguish Between "Seat" and "Incorporation"

67. Accordingly, each the Republic of Moldova and the Republic of Cyprus has the practice of ascribing clearly distinguishable meanings to the criteria of "incorporation" (which entails the "registered office") and "seat". Had they not distinguished between those two criteria, they would have availed themselves of only one criterion (that of incorporation).

68. In that respect, the case KTAsia v Kazakhstan⁵⁵ is relevant. That case concerned the application of the Netherlands-Kazakhstan BIT which defined the term "nationals" inter alia as "legal persons constituted under the law of that Contracting Party". ⁵⁶ Kazakhstan challenged the jurisdiction rationae personae stating that claimant's ultimate owner was a Kazakh national. ⁵⁷ The tribunal ultimately rejected

⁵³ Agreement between the Government of the Republic of Moldova and the Government of Canada for the Promotion and Protection of Investments, concluded on 12 June 2018, Article 1 [Exhibit RLA-52]; Agreement between the Government of the Republic of Moldova and the Government of the Republic of Finland on the Promotion and Protection of Investments, concluded on 25 August 1995, Article 1(3)(b) [Exhibit RLA-53]; Agreement between the Government of the Republic of Moldova and the Government of the Hellenic Republic on the Promotion and reciprocal Protection of Investments, concluded on 23 March 1998, Article 1(3)(b) [Exhibit RLA-54]; Agreement between the Republic of Moldova and the Republic of Hungary for the Promotion and Reciprocal Protection of Investments, concluded on 16 April 1995, Article 1(2)(b) [Exhibit RLA-55]; Agreement between the Government of the Republic of Moldova and the Government of the Republic of Lithuania on the promotion and reciprocal protection of investments, dated 20 September 1999, Article 1(3)(b) [Exhibit RLA-56]; Treaty between the United States of America and the Republic of Moldova Concerning the Encouragement and Reciprocal Protection of Investment, concluded on 21 April 1993, Article I(I)(b) [Exhibit RLA-57]. ↩
⁵⁴ Agreement between the Government of Republic of Moldova, on the one Part, and the Belgian-Luxembourg Economic Union, on the other Part, Concerning the Encouragement and Reciprocal Protection of Investments, Article 1(1)(b) [Exhibit RLA-58]; Agreement on the Promotion and Reciprocal Protection of Investments between the Republic of Moldova and the Kingdom of Spain, concluded on 11 May 2006, Article 1(1)(b) [Exhibit RLA-59]; Agreement concerning the promotion and reciprocal protection on investments between the Government of Romania and the Government of the Republic of Moldova, dated 14 August 1992, as amended by Protocol between the Government of Romania and the Government of the Republic of Moldova on the Agreement concerning the promotion and reciprocal protection of investments between the Government of Romania and the Government of the Republic of Moldova, signed on 14 August 1992, Article 1(3) [Exhibit RLA-60]. ↩
⁵⁵ KT Asia Investment Group B V. v. Republic of Kazakhstan (ICSID Case No. ARB/09/8), Award, 17 October 2013 [Exhibit RLA-61]. ↩
⁵⁶ Ibid., para. 113. ↩
⁵⁷ Ibid., paras. 7 and 95. ↩

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Kazakhstan's challenges on the basis that the criterion of nationality was fulfilled as long as the company was properly incorporated in Netherlands, but it noted as follows:

"[T]he Tribunal's reading of the treaty language is further strengthened if one bears in mind that in twenty-four Kazakh BITs the Respondent has agreed to the same test as in the present one, the place of incorporation, while in ten other BITs it has added a requirement that the siege social or place of business be placed or "real economic activities" be conducted there [...]. When negotiating this BIT, Kazakhstan could have insisted on a more demanding wording of Article I(b)(ii) of the BIT. For example, it could have required additional links to the State of incorporation or insisted on the inclusion of a "denial of benefits" clause. It did not. Kazakhstan has therefore accepted that the nationality of Dutch legal persons be determined by their place of incorporation."⁵⁸ (emphasis added).

69. The tribunal thus found that where different BITs concluded by the same country (Kazakhstan) contained various nationality criteria that was of relevance when assessing the nationality criteria in a particular BIT (the Netherlands - Kazakhstan BIT), because the country (Kazakhstan) deliberately chose and accepted various criteria for the nationality of investors in different BITs and shall be held to its choice in that particular BIT (the Netherlands-Kazakhstan BIT).

70. Consequently, in the Moldova-Cyprus BIT, each Cyprus and Moldova made deliberate choice of determining the nationality of the Cyprus investors based on separate and distinguishable criteria of "creation or incorporation" and "seat".

e. Arbitral Practice Recognizes "Seat" as a Distinct Criterion Which Means "Place of Effective Management"

71. That "incorporation" and "seat" are distinguishable concepts, and that "seat" is understood as the "place of effective management" is further endorsed in investment treaty arbitral practice.

72. In the case AFT v Slovakia, the tribunal found that "incorporation" and "seat" were distinctive criteria, and that a mere "incorporation" of the company did not make it "seated" in that country. In that regard, the tribunal stated:

"The fact that Article 1(1)(b) of the BIT requires a Swiss 'seat' as a distinct element in addition to 'constitution and organization under Swiss law' demonstrates that the mere incorporation in Switzerland is insufficient to constitute a 'seat' in the terms of the BIT." ⁵⁹

⁵⁸ Ibid., para. 123. ↩
⁵⁹ Alps Finance and Trade AG v. The Slovak Republic (UNCITRAL), Award, 5 March 2011, para. 216 [Exhibit RLA-15]. ↩

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73. The AFT v Slovakia's tribunal specifically dealt with the meaning of the term "seat" and found that it entailed "effective center of administration of business operations" and that the proof thereof was dependent on how the affairs of the company were in fact conducted ⁶⁰ (emphasis added). The tribunal stated that:

"Proof of a 'business seat', in the meaning of an effective center of administration of the business operations, requires additional elements, such as the proof that: the place where the company board of directors regularly meets or the shareholders' meetings are held is in Swiss territory; there is a management at the top of the company sitting in Switzerland; the company has a certain number of employees working at the seat; an address with phone and fax numbers are offered to third parties entering in contact with the company; certain general expenses or overhead costs are incurred for the maintenance of the physical location of the seat and related services, which would be a clear indication that a business entity is effectively organized at a given Swiss place." ⁶¹

74. Contrary to the Claimant's unfounded speculations that the tribunal in AFT v Slovakia might have equated, comingled, or confused "seat" with the performance of "real economic activities", ⁶² that tribunal clearly kept those criteria distinctly and analysed them separately⁶³ and explicitly defined the "seat" to be the "effective center of administration of the business operations" separately and independently from the "real economic activities". ⁶⁴

75. The tribunal in that case further found that an excerpt from the company's registry, a tax declaration and/or an assertion that the company registers were kept in Switzerland were all insufficient to prove the existence of "seat". ⁶⁵

76. The tribunal interpreted the "seat" autonomously, with no renvoi to Swiss law. ⁶⁶

77. The tribunal in Tenaris v Venezuela had interpreted the terms 'siege social' in Belgium-Luxembourg Economic Union - Venezuela BIT and 'sede' in Portugal - Venezuela BIT and with express reference to the doctrine of effet utile stated that:

"[I]f 'siege social' and 'sede' are to have any meaning, and not be entirely superfluous, each must connote something different to, or over and above, the purely formal matter of the address of a registered office or statutory seat. And this leads one to apply the other well-accepted meaning of both terms, namely 'effective management', or some sort of

⁶⁰ Ibid., para. 217. ↩
⁶¹ Ibid. ↩
⁶² See Claimant's Reply dated 5 March 2021, paras. 61, 62, 65. ↩
⁶³ See Alps Finance and Trade AG v. The Slovak Republic (UNCITRAL), Award, 5 March 2011, paras. 215 to 218 ("seat") and 219 to 223 ("real economic activities") [Exhibit RLA-15]. ↩
⁶⁴ Ibid., para. 217 (see also paras. 219 to 227). ↩
⁶⁵ Ibid., para. 215. ↩
⁶⁶ Ibid., para. 216. ↩

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actual or genuine corporate activity."⁶⁷ (emphasis added).

78. The tribunal also found that:

"[N]either 'siege social' nor 'sede' can mean simply 'registered office' or 'statutory seat' in a purely narrow and formal sense, since neither term would then have any effective meaning."⁶⁸

79. That tribunal in Tenaris v Venezuela then concluded that:

"[...] both 'siege social' and 'sede' in the Treaties in issue in this case mean the place of actual or effective management. "⁶⁹ (emphasis added).

80. In Tokios Toke/es v Ukraine, the tribunal, when rejecting the jurisdictional objection rationae personae, explained that the jurisdictional objection was ungrounded because Ukraine-Lithuania BIT required only incorporation in accordance with applicable laws of the home State and did not contain any additional criteria:

"[...] the Claimant is an 'investor' of Lithuania if it is a thing of real legal existence that was founded on a secure basis in the territory of Lithuania in conformity with its laws and regulations. The Treaty contains no additional requirements for an entity to qualify as an "investor" of Lithuania."⁷⁰ (emphasis added).

81. Under Moldova-Cyprus BIT, however, there is an additional requirement for a juridical person to qualify as an investor in Cyprus: location of the corporate seat in the territory of Cyprus.

⁶⁷ Tenaris S.A. and Ta/ta - Trading e Marketing Sociedade Unipessoal Lda. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/11/26, Award, 29 January 2016, para. 150 [Exhibit RLA-37). In the relevant part, Art. 1(1) of the Belgium-Luxembourg Economic Union - Venezuela BIT provides as follows: ↩
"1. Le terme «investisseurs>> designe:
A) [...];
B) les «societes», c'est-a-dire toute personne morale constituee conformement a la legislation du Royaume de Belgique, du grand-duche de Luxembourg ou de la Republique du Venezuela et ayant son siege social sur le territoire du Royaume de Belgique; du grand-duche de Luxembourg ou de la Republique du Venezuela respectivement, ainsi que toute personne morale effectivement controlee par un investisseur compris dans le paragraphe 1, a) et b); Qui ont fait un investissement dans le territoire de l'autre Partie contractante." (emphasis added).
⁶⁸ Tenaris S.A. and Ta/ta - Trading e Marketing Sociedade Unipessoal Lda. v. Bo/ivarian Republic of Venezuela, ICSID Case No. ARB/11/26, Award, 29 January 2016, para. 148 [Exhibit RLA-37). ↩
⁶⁹ Tenaris S.A. and Ta/ta - Trading e Marketing Sociedade Unipessoa/ Lda. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/11/26, Award, 29 January 2016, para. 154 [Exhibit RLA-37). ↩
⁷⁰ Tokios Toke/es v. Ukraine (ICSID Case No. ARB/02/18), Decision on Jurisdiction, 29 April 2004, para. 28 [Exhibit Auth-9]; See also Saluka Investments B. V. v. The Czech Republic (UNCITRAL), Partial Award, 17 March 2006, para. 241 [Exhibit Auth-32]; Yukos Universal Limited v. The Russian Federation (UNCITRAL), PCA Case No. AA 227, Interim Award on Jurisdiction and Admissibility, para. 415 [Exhibit RLA-35]. ↩

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82. In CEAC v Montenegro, a case governed by the Cyprus-Serbia and Montenegro BIT,⁷¹ with reference to Flutie cases⁷² and Soufraki v. UAE⁷³ (power of the tribunal to make their own nationality determination) the tribunal found that a certificate of registered office issued under Cypriot was not conclusive evidence of an existing registered office at the address in Cyprus identified by the claimant.⁷⁴ Furthermore, it found that the evidence on record did not support a finding of CEAC's registered office in Cyprus. ⁷⁵ The tribunal concluded that, although incorporated in Cyprus, the CEAC had no registered office in and was not managed and controlled from Cyprus. ⁷⁶

83. The tribunal also stated that the term '"seat' cannot be equated with 'tax residence"'. ⁷⁷

84. Finally, the tribunal CEAC v Montenegro came to the conclusion that "CEAC [did] not meet the definition of 'seat' put forward by Respondent",⁷⁸ that "CEAC [was] not an 'investor' in accordance with the terms [..] of the Treaty", and that the tribunal lacked jurisdiction to hear the case. ⁷⁹

85. The Respondent notes that if such a finding could be made in CEAC v Montenegro, a case governed by the Cyprus-Serbia and Montenegro BIT, where the same, more generic provision was to apply to the companies of both Contracting States, ⁸⁰ the Cyprus-Moldova BIT contains distinct, and customized, provisions for the companies of each Contracting State, as described above. The Moldova-Cyprus BIT is also subsequent,⁸¹ representing increased experience, and maturity, on the part of the Republic of Cyprus's representatives.

⁷¹ See the Exhibit RLA-34. Pursuant to Art. 1(3)(b) of that Cyprus-Serbia and Montenegro BIT, an investor is "a legal entity incorporated, constituted or otherwise duly organised according to the laws and regulations of one Contracting Party having its seat in the territory of that same Contracting Party[...]" (emphasis added). ↩
⁷² See Flutie cases, 1903-1905, Volume IX, Reports of International Arbitral Awards, pp., 151, 152 [Exhibit RLA-32]. ↩
⁷³ See Houssein Nuaman Soufraki v. The United Arab Emirates (ICSID Case No. ARB/02/7), Decision of the ad hoc Committee on the Application for Annulment of Mr. Soufraki, 5 June 2007, paras. 62, 64, 76, 78 [Exhibit RLA-33). ↩
⁷⁴ See Central European Aluminum Company {CEAC) v. Montenegro, ICSID Case No. ARB/14/8, Award, dated 26 July 2016, paras. 160-169 [Exhibit RLA-17). ↩
⁷⁵ See Central European Aluminum Company {CEAC) v. Montenegro, ICSID Case No. ARB/14/8, Award, dated 26 July 2016, paras. 170-200 [Exhibit RLA-17). ↩
⁷⁶ Central European Aluminum Company (CEAC) v. Montenegro, ICSID Case No. ARB/14/8, Award, dated 26 July 2016, para. 148 [Exhibit RLA-17). ↩
⁷⁷ Ibid., 209. ↩
⁷⁸ Central European Aluminum Company {CEAC) v. Montenegro, ICSID Case No. ARB/14/8, Award, dated 26 July 2016, para. 208 [Exhibit RLA-17). ↩
⁷⁹ Ibid., para. 212. ↩
⁸⁰ Pursuant to Art. 1(3)(b) of that Cyprus-Serbia and Montenegro BIT [Exhibit RLA-34), an investor is "a legal entity incorporated, constituted or otherwise duly organised according to the laws and regulations of one Contracting Party having its seat in the territory of that same Contracting Party [...]". ↩
⁸¹ Cyprus-Serbia and Montenegro BIT was concluded on 21 July 2005. Moldova-Cyprus BIT was concluded on 13 September 2007. ↩

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86. The Respondent also notes that, just as it is not up to a tribunal to "add other requirements"⁸² or to "write new, additional requirements"⁸³ for jurisdiction ratione personae, it is also equally true that it is not open to a tribunal to disregard those requirements, which have been agreed by the contracting parties. The BIT Article 1(3)(b)(ii) requires both "incorporation" and "seat" in the territory of the Republic of Cyprus, and both requirements shall be fulfilled in respect to the Claimant.

f. The Notion of "Effective", "Management", "Control" in the English Language Dictionaries

87. As analysed above, the "seat" should be understood as the place of effective management and financial control.

88. For the ordinary and plain meaning of "effective", "management", "control" reference can be made to the English language dictionaries. The Cambridge online dictionary defines the term "management" as (i) "the control and organisation of something"; and (ii) "the group of people responsible for controlling and organising a company". ⁸⁴ The term "effective" is defined as "in fact, although not officially."⁸⁵ The term "control" is defined as (i) "to order, limit, or rule something, or someone's actions or behaviour"; and (ii) "the act of controlling something or someone, or the power to do this". ⁸⁶

89. Accordingly, the phrase "effective management" can only be understood to refer to those people in an organization (juridical person) who are actually responsible for controlling and organizing the organization, and who actually manage its business and operations. Based on the above, the "seat" represents a substantial, not a formal criterion. Under that substantial criterion, of paramount importance are the persons, who actually, genuinely manage the business affairs of a company, even where they do not have an official capacity in the company.

2. Cypriot Law Recognizes "Seat" as a Distinguishable Criterion

90. Should the Arbitral Tribunal find that for the interpretation of "seat" under the BIT Art. 1(3) recourse shall be had to municipal law for the reason that it is within the realm of each Contracting Party's sovereignty to determine the nationality of its

⁸² Sa/uka Investments B. V. v. The Czech Republic (UNCITRAL), Partial Award, 17 March 2006, para. 241 [Exhibit Auth- 32). ↩
⁸³ Yukos Universal Limited v. The Russian Federation (UNCITRAL), PCA Case No. AA 227, Interim Award on Jurisdiction and Admissibility, para. 415 [Exhibit RLA-35). ↩
⁸⁴ Definition of "management" from the Cambridge Dictionary [Exhibit R-110), available online at https://dictionary.cambridge.org/dictionary/english/management (last visited on 22 March 2021). ↩
⁸⁵ Definition of "effective" from the Cambridge Dictionary [Exhibit R-111), available online at https://dictionary.cambridge.org/dictionary/english/effective (last visited on 22 March 2021). ↩
⁸⁶ Definition of "control" from the Cambridge Dictionary [Exhibit R-112), available online at https://dictionary.cambridge.org/dictionary/english/control (last visited on 26 March 2021). ↩

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own investors ⁸⁷ or for any other reasons, the term "seat" retains the meaning of the effective management and financial control also under the municipal law of the Republic of Cyprus. ⁸⁸This has also been in detail explained by the Expert Report of Dr. Thomas Papadopoulos (the "RER-Papadopoulos").

91. Cyprus has a mixed legal system, and its company law is mainly based on the English company law. ⁸⁹ Nonetheless, despite ascribing for the most part the "incorporation theory", the concept of "seat" is well known in Cypriot company law and used, inter alia, in the Companies Law of the Republic of Cyprus. ⁹⁰ Thus, various provisions of the Companies Law make use of "seat" to regulate issues such as transfer of company seat from abroad to Cyprus or the status of foreign companies in Cyprus.⁹¹

92. The incorporation test has not been adopted in its absolute form in Cyprus, and it allows for the simultaneous coexistence of the "seat" and "registered office" in various legislative and regulatory acts pertaining to company law. ⁹² And the fact that private international law (conflicts of law rules) uses the "registered office" as the connecting factor does not interfere with "seat" having a different meaning as compared to "registered office" in the company law of Cyprus. ⁹³

93. The concept of "seat" has been introduced in the company law of Cyprus starting the year 2000, as the country had been preparing to adhere to the European Union. ⁹⁴ The concept of "seat" has further been introduced into Cypriot legal system by the application of the Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European Company (SE) (the "SE Regulation") [Exhibit RLA-68], which adopts the "real seat" theory in that SE Regulation ⁹⁵ requires that a Societas Europea have both the registered office and the head office in the same EU Member State. Thus, Art. 7 of the SE Regulation provides as follows:

"The registered office of an SE shall be located within the Community, in the same Member State as its head office. A Member State may in addition impose on SEs registered in its territory the obligation of locating their head office and their registered office in the same place."⁹⁶ (emphasis added).

⁸⁷ This reason, however, may be at odds with the specific wording in the BIT Article 1 para. 3 let. b} (ii} "having their seat in the territory of the Republic of Cyprus", which does not explicitly provide that municipal law of the Republic of Cyprus should be applied in order to determine / find "seat" in the territory of the Republic of Cyprus. ↩
⁸⁸ See RER-Papadopoulos, pp. 7, 13, 15, 18. ↩
⁸⁹ See RER-Papadopoulos, p. 20 ↩
⁹⁰ See Companies Law of the Republic of Cyprus [Exhibit R-52 bis]. ↩
⁹¹ See RER-Papadopoulos, p. 19, 27. ↩
⁹² See RER-Papadopoulos, p. 9, 12, 27. ↩
⁹³ Ibid. ↩
⁹⁴ Ibid., p. 16. ↩
⁹⁵ See Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European Company (SE} [10.11.2001) OJ L 294/1 [Exhibit RLA-68), available at EUR-Lex - 32001R2157 - EN - EUR-Lex (europa.eu), last accessed on 23.04.2021. ↩
⁹⁶ Ibid., Art. 7. See also RER-Papadopoulos, para. 7}, p. 18-20. ↩

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94. Therefore, the term "seat" under the BIT should have and should be construed to have a similar meaning with that term under the SE Regulation as applied in Cypriot legal system.

95. Under Cypriot law, that term "seat" does not mean and does not correspond to the term "statutory seat". ⁹⁷ And as a matter of fact, "seat" and "statutory seat" are not the same. ⁹⁸

96. "Seat" should not be equated with and should not be construed to equate "incorporation", which would effectively make redundant the letter - as well as negate the spirit - of the provision in BIT Art. 1(3)(b)(ii). "Seat" refers to the decision making within the company and internal governance of a company, whereas "incorporation" refers to creation of the company as a legal person.

97. As explained in the RER-Papadopoulos, under Cypriot company law the "registered office" and "seat" are two different legal concepts, with distinct meaning. ⁹⁹ On the one part, "seat" denotes the place of the effective management and financial control,¹⁰⁰ the "central administration".¹⁰¹ On the other part, the "registered office" denotes the place where the official address is located, as a matter of fact, where communications and notices are addressed, where records and documents are kept.¹⁰²

98. A further difference is that of the "registered office" being related to procedural company law and of the "seat" being related to the substantive company law.¹⁰³

99. A distinction between the "registered office" and "seat" may be made along the lines of the existing distinction between "domicile" and "residence". On the one side, as mentioned in the RER-Papadopoulos, the /ex domicilii of a legal person is the law of the country where the company has its "registered office".¹⁰⁴ On the other side, "residence" is a substantive concept and denotes the location with which a legal person has a real connection, that is, the place of the effective management and control. When applying these concepts to the BIT Art. 1(3), the "incorporation" designates the "domicile", whereas the "seat" denotes the "residence" of a legal person, that is, the place of the effective management and control.¹⁰⁵

100. As analysed in the RER-Papadopoulos, the Notification of the Address of the Registered office of a Company or Change in Address dated 4 July 2018 filed by the

⁹⁷ See RER-Papadopoulos, p. 19. ↩
⁹⁸ Ibid. ↩
⁹⁹ See RER-Papadopoulos, p. 9, 12, 16, 27. ↩
¹⁰⁰ See RER-Papadopoulos, para. 3), p. 7; para. 5), pp. 12-15. ↩
¹⁰¹ Ibid., pp. 7-8; 12-15. ↩
¹⁰² Ibid., pp. 9, 13. ↩
¹⁰³ See RER-Papadopoulos, para. 4), pp. 8-11; para. 7), pp. 17-18. ↩
¹⁰⁴ See RER-Papadopoulos, pp. 6, 18. ↩
¹⁰⁵ See RER-Papadopoulos, p.18. ↩

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Claimant with the Registrar of Companies on 31 October 2018 ¹⁰⁶ (the "Notification of the Address of the Registered Office") [Exhibit R-61] attests only the address indicated therein and on record with the Registrar of Companies as such has been indicated by the Claimant. The Notification of the Address of the Registered Office does not attest the actual existence of a registered office located at the address indicated therein. This is because the Registrar of Companies only records the notifications when and as received from the companies, and it itself does not make any independent investigation of whether the address indicated in the notification is correct or actual, or whether a company actually maintains a registered office. ¹⁰⁷

101. As further explained in the RER-Papadopoulos, a company could potentially even mislead the Registrar of Companies by negligently or erroneously indicating a wrong address in the notification filed with the Registrar of Companies. ¹⁰⁸ The result of such action would be a discrepancy between, on the one side, the actual address and, on the other side, the recorded address of the registered office. A company potentially may move to a new address without filing a notification for a period of time (as it was the case with the Claimant, who allegedly moved to a new address on 4 July 2018, but only filed the Notification of the Address of the Registered Office with the Registrar of Companies on 31 October 2018 [Exhibit R-61]). Accordingly, the timing of filing of the notification of the address with the Registrar of Companies is under a company's control and not under the control of the Registrar of Companies. Furthermore, the address, as well as other relevant information, indicated in the notification of the address is under a company's control and not under the control of the Registrar of Companies. Therefore, that much evidentiary weight shall be attributed to the Notification of the Address of the Registered Office [Exhibit R-61].

102. Accordingly, a company with of the registered office at a designated address may in fact not have the registered office there, at the designated address, but at a different address. ¹⁰⁹

103. It was precisely aher Cyprus had introduced the term "seat" into its legislation that Moldova-Cyprus BIT was signed, in 2007. The reference to "seat" in the BIT was a

¹⁰⁶ There is a 4-month time discrepancy between the date indicated on the Notification of the Address of the Registered Office of a Company or Change in Address and the date of filing of the said Notification with the Registrar of Companies. The Claimant claims that it changed its address of the registered office on 4 July 2018, but in fact it filed that change in address on 31 October 2018 only. So, the Claimant allegedly moved to a new address without however recording it for the next four months. This actually proves that the address on file with the Registrar of Companies might not be actual, that it might be outdated at any one time (assuming that it was correctly indicated in the first place). Accordingly, one should make a distinction between the address of the registered office on file with the Registrar of Companies and the actual existence of a registered office at the address on file with the Registrar of Companies. See also RER-Papadopoulos, p. 7 et seqq. ↩
¹⁰⁷ See RER-Papadopoulos, paras. 3, 4, 5, 6. ↩
¹⁰⁸ Ibid. ↩
¹⁰⁹ See RER-Papadopoulos, p.8. ↩

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logical and assumed stance of the Republic of Cyprus after it had introduced the concept of "seat" in its municipal law.

104. Cypriot BITs are part of the Cypriot law on foreign economic relations, that is, part of Cypriot legal system. Cypriot BITs practice is not an area of practice that is separated from developments in domestic law of Cyprus. Cypriot BITs should be and are mirroring the rules of Cypriot company law and the practice in their approach to establishing when a legal person qualifies as a Cypriot investor. As analysed in the paragraphs above, under the Cypriot BITs, both the "incorporation theory" and the "seat theory" are accepted for the purposes of determining the corporate nationality of the Cypriot investors who would benefit of protection under those BITs. ¹¹⁰ Where, as in the Moldova-Cyprus BIT, both the "incorporation" and the "seat" in Cyprus are required in order to be considered a qualified Cypriot investor, both those criteria must be fully met.

105. It is obvious that under the law of the Republic of Cyprus the term "seat" entails more than the existence of "registered office". ¹¹¹ The tribunal in Mera v. Serbia found that "seat" in the territory of Cyprus is a distinct and separate criterion from the criterion of "incorporation" in Cyprus under Article 1(3)(b) of the Cyprus-Serbia and Montenegro BIT. ¹¹² However, that tribunal equated "seat" with "registered office" under Cypriot law. ¹¹³ The Respondent respectfully submits that the characterisation of "seat" to mean "registered office" was erroneous for at least two main reasons.

106. Firstly, the reasoning of the tribunal ignored the fact that, under the law of Cyprus, a company cannot be lawfully established without a registered office. ¹¹⁴ The existence of a registered office (Greek: syysypaµµtvo ypacpsio) is a precondition for

¹¹⁰ A similar trend, albeit inversed, is taking place in German law. Until 2009, Germany followed in its BITs, as well as in its corporate law, conflicts of law, constitutional law, and law of foreign economic relations and policy exclusively the "seat theory" for determination of corporate nationality to qualify as an investor for protection under German BITs (see Stephan W. Schill, Linking Private and Public International Law: The Example of Determining Corporate Nationality in German's Investment Treaty Network, Amsterdam Centre for International Law No. 2020-07, 2020, p. 9 et seqq. [Exhibit RLA-20]). The situation changed in with the advent of Germany's 2008 Model BIT in which "Germany indicated that it would change its future BIT practice, under the influence of EU law and accompanying changes to its corporate law, towards accepting the theory of incorporation" {Ibid., p. 16). ↩
¹¹¹ See RER-Papadopoulos, paras. 3, 4, 5, 6. ↩
¹¹² See Mera Investment Fund Limited v. The Republic of Serbia, ICISID Case No. ARB/17/2, Decision on Jurisdiction, 30 November 2018, para. 91 [Exhibit RLA-62]. See also Cyprus-Serbia and Montenegro BIT [Exhibit RLA-34]. For convenience, Article 1(3){b) of the Cyprus-Serbia and Montenegro BIT provides, in relevant part, as follows: ↩
"The term 'investor' shall mean:
[...]
b) a legal entity incorporated, constituted or otherwise duly organised according to the laws and regulations of one Contracting Party having its seat in the territory of that same Contracting Party and investing in the territory of the other Contracting Party."
¹¹³ See Mera Investment Fund Limited v. The Republic of Serbia, ICISID Case No. ARB/17/2, Decision on Jurisdiction, 30 November 2018, para. 91 [Exhibit RLA-62]. RER-Papadopoulos, para. 11. ↩
¹¹⁴ RER-Papadopoulos, paras. 11. ↩

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the constitution of a company in Cyprus. Since a designation and maintenance of a registered office is an element of a company's incorporation, the condition of "registered office" cannot at the same time be deemed as a second condition ("seat") for establishing the nationality of an investor under Article 1(3)(b) of the Cyprus-Serbia and Montenegro BIT.

107. A company incorporated in Cyprus shall have the "registered office" in the territory of the Republic of Cyprus under the Companies Law. A company incorporated in Cyprus may not have its registered office outside the territory of Cyprus. Pursuant to Art. 102(1) of the Companies Law (as amended in 2015):

"Art. 102 Registered office of company

(1) A company shall, as from the date of the issuance of the certificate mentioned in Article 15 [i.e. the Certificate of Incorporation], have a registered office in the Republic, to which all communications and notices may be addressed."¹¹⁵ (emphasis added).

108. It had long been universal practice for the Registrar of Companies to require a declaration of registered office in order to incorporate the company. The Registrar of Companies does not independently investigate whether the declaration is actually correct or whether the company keeps it registered office at the designated addressed.

109. Therefore, the phrase in Art. 1(3)(b) of Cyprus-Serbia and Montenegro BIT "having its seat in the territory of that same Contracting Party"¹¹⁶ (emphasis added) should have not meant, did not mean, and should have not been equated to having its registered office in the territory of the same Contracting Party, because the latter was already. as a matter of Cypriot law, included in the "incorporation". Since a company incorporated in Cyprus was under the duty to have the "registered office" in the territory of Cyprus and could not have the "registered office" outside the territory of Cyprus, it was manifestly unreasonable to read, and the tribunal in Mera v. Serbia erred in that it read and interpreted, the phrase in Art. 1(3)(b) of Cyprus-Serbia and Montenegro BIT "having its seat in the territory of that same Contracting Party" to mean having its registered office in the territory of the Republic of Cyprus. Consequently, the phrase "having its seat in the territory of that same Contracting Party"¹¹⁷ did mean and should have meant something different, that is, having the effective management and control in the territory of Cyprus.

¹¹⁵ In Greek language, Art. 102(1), as amended in 2015, has the following content: "Kcx8E EtatpEla an6 rr1v 1-ίμEpa EKOocrric; rou mcrtoTtOLI']tLKou nou avacpEpEtm crto cxp8po 15, OLatl']pEl EyyEypaμμEvo ypacpElo crrri riuoKpatla, crto onolo Mvarm va anEu8uvovrm 6;\E<; ot Kotvonot crEL<; Km ELOonm crEt<;". Art. 102(1) of the Companies Law of the Republic of Cyprus [Exhibit R-52 bis]. ↩
¹¹⁶ Art. 1(3)(b) of the Cyprus-Serbia and Montenegro BIT [Exhibit RLA-34). ↩
¹¹⁷ Ibid. ↩

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110. Secondly, the tribunal in Mera v. Serbia effectively omitted to deal with the argument that "registered office" and "seat" cannot be characterized as synonyms since both terms were used in various and distinct instances in the Companies Law, in other laws and regulations of the Republic of Cyprus, and in the practice of the Republic of Cyprus. ¹¹⁸ The distinction that the Cypriot legislator made between those two notions was evidently intentional, and the tribunal should have not neglected it. ¹¹⁹ The finding of the tribunal that the term "seat" was "essentially a concept of civil law tradition that d[id] not have its origins in Cypriot law" ¹²⁰ did not in any way imply that it could not have a distinct meaning. Rather, the opposite was true - the term was introduced in the Cypriot legal system starting from year 2000 with full awareness that it denoted criteria substantially different from "registered office."¹²¹

111. In the instant case, the Respondent notes that a company incorporated in Cyprus shall have from the day of its incorporation the "registered office" in the territory of the Republic of Cyprus under the Companies Law of the Republic of Cyprus. ¹²² A company incorporated in Cyprus may not have its registered office outside the territory of Cyprus. Accordingly, the phrase in Art. 1(3)(b)(ii) of the BIT "having their seat in the territory of the Republic of Cyprus"¹²³ (emphasis added) shall not mean, does not mean, and shall not be equated to having their registered office in the territory of the Republic of Cyprus, because the latter is already. as a matter of Cypriot law. entailed in the "incorporation". Since a company incorporated in Cyprus has the legal obligation to set up the "registered office" in the territory of Cyprus and may not have the "registered office" outside the territory of Cyprus, it would be manifestly unreasonable if the phrase in Art. 1(3)(b)(ii) of the BIT "having their seat in the territory of the Republic of Cyprus" ¹²⁴ (emphasis added) would be read and/or interpreted to mean having their registered office in the territory of the Republic of Cyprus. Accordingly, the phrase "having their seat in the territory of the Republic of Cyprus" (emphasis added) does and shall mean something different, specifically, having the effective management and control in the territory of Cyprus.

112. In conclusion, the law of the Republic of Cyprus recognizes the existence and the distinct meaning of the concepts of "incorporation" (entailing "registered office")

¹¹⁸ See Mera Investment Fund Limited v. The Republic of Serbia, ICISID Case No. ARB/17/2, Decision on Jurisdiction, 30 November 2018, paras. 85-97 [Exhibit RLA-62). RER-Papadopoulos, paras. 11. ↩
¹¹⁹ RER-Papadopoulos, paras. 11. ↩
¹²⁰ Mera Investment Fund Limited v. The Republic of Serbia, ICISID Case No. ARB/17/2, Decision on Jurisdiction, 30 November 2018, para. 96 [Exhibit RLA-62). ↩
¹²¹ RER-Papadopoulos, para. 6. ↩
¹²² See Art. 102(1) of the Companies Law of the Republic of Cyprus (as amended in 2002): ↩
"Art. 102 Registered office of company
(1) A company shall, as from the date of the issuance of the certificate mentioned in Article 15 [i.e. the Certificate of Incorporation], have a registered office in the Republic, to which all communications and notices may be addressed." [Exhibit R-52 bis].
¹²³ Art. 1 para. 3 b) (ii) of the BIT [Exhibit RLA-1 bis]. ↩
¹²⁴ Ibid. ↩

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and "seat". Furthermore, "seat" denotes the place of the effective management and control, the "central administration". Finally, the Cypriot law does not characterize "seat" as "registered office".

3. Komaksavia Has No Seat and No Registered Office in Cyprus

113. Applying the Tenaris v Venezuela test to the instant case, if the term "seat" in the BIT Article 1(3)(b)(ii) is to be given any meaning at all it must signify something different than "the purely formal matter of the address of a registered office or statutory seat [...] namely 'effective management', or some sort of actual or genuine corporate activity."¹²⁵ There is no evidence that the effective management or control of Komaksavia occurred in the territory of Cyprus. In fact, there is plenty of evidence that the effective management and control occurred outside the territory of Cyprus.

114. With regard to its business activities, the Claimant's various statements are in direct contradiction with each other. Thus, on the one part, the Claimant claims to have business activities in Cyprus and that it is "a Cypriot company with its place of business firmly rooted in Cyprus". ¹²⁶ On the other part, the Claimant demonstrates that it is "a holding company". ¹²⁷ The Respondent notes that pursuant to Clause 3 (sub-clauses 1 to 37) of the Memorandum of Association, the objects for which Komaksavia has been established are enormously various [Exhibit R-127 part I].

115. It is not enough for the Claimant to demonstrate that it has an address in Cyprus to which the correspondence addressed to the company can be delivered. The Claimant should prove that Komaksavia is effectively managed and financially controlled from Cyprus.

a. Komaksavia's Effective Management and Control by Shareholders Exercised Outside Cyprus

116. All the Claimant's shareholders, except the first one, ¹²⁸ were and are foreign citizens residing outside the Republic of Cyprus, and the effective management and control by the shareholders over the Claimant has been exercised throughout from outside the territory of the Republic of Cyprus. No management or control by the shareholders of the Claimant has been exercised in the territory of the Republic of Cyprus. This substantiates the Respondent's argument that Komaksavia's seat has not been located in Cyprus.

¹²⁵ Tenaris S.A. and Ta/ta - Trading e Marketing Sociedade Unipessoa/ Lda. v. Bo/ivarian Republic of Venezuela, ICSID Case No. ARB/11/26, Award, 29 January 2016, para. 150 [Exhibit RLA-37]. ↩
¹²⁶ Para. 77 of the Claimant's Reply dated 5 March 2021. ↩
¹²⁷ Para. 36.3. (including sub-paras. 36.3.1. to 36.3.10.) of SCWS-Menelaou [Exhibit [SC-75])]. Cf. para. 86.5.4. (including sub-paras. 86.5.4.1. to 86.5.4.3.) of the Claimant's Reply dated 5 March 2021. ↩
¹²⁸ Kyriakos Y. Panagos was the nominee shareholder for three days, from 19.08.2016 to 22.08.2016, for the purpose of Komaksavia's incorporation. ↩

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117. Komaksavia, "a private limited liability company" in Cyprus, ¹²⁹ was a single-member company from its incorporation until 23 December 2019. From 23 December 2019 to present, Komaksavia is alleged to be a two-member company. ¹³⁰ As a matter of both principle and practice, the shareholders in a private company are more closely and directly involved in the management of the company's business than is the case in a public company. This is more so in a single-member or two-member private company. In the instant case, Komaksavia's shareholders have directly and intimately exercised the effective management and control of Komaksavia at any given time throughout its lifetime.

118. Furthermore, as the real ultimate beneficial owner (the "UBO") ¹³¹ of the investment in Avia Invest [Exhibit R-132], Shor has had the ultimate power and control of Komaksavia. Shor changed Komaksavia's shareholders and directors in a cyclical manner.

119. The Republic of Moldova notes that Shor was elected as a member of the Board of Directors and the Chairman of the Board of Directors of Avia Invest on 17 July 2014 [Exhibit R-129], and he held that office until 11 October 2019 [Exhibit C-14]. Ilona Shor, Ilan Shor's stepmother, was elected as a member of the Board of Directors and the Deputy Chairman of the Board of Directors of Avia Invest at the extraordinary general shareholders' meeting of Avia Invest dated 26 September 2016 [Exhibit R-131]. The Republic of Moldova tendered sufficient proof on how Shor through Dufremol and other affiliates and proxies¹³² had acquired the control over the shares in Avia Invest, ¹³³ and he has been controlling the shares in Avia Invest ever since. The Republic of Moldova notes that Shor is also the real UBO of Habarov Airport Invest Ltd, a limited liability company registered in Cyprus, registration No. 324796, on 02 September 2013¹³⁴ [Exhibit R-150; cf. Exhibit R-94 - Eurosell's transfers of EURI000.00 on 13.09.2013, of EURI,250,000.00 on 18.11.2013, of EURI,250,500.00 on 18.12.2013].

¹²⁹ Cf. para. 1 of the Soc. ↩
¹³⁰ Cf. SCWS-Menelaou, pdf page 68-69 [Exhibit [SC-75]]. Cf. Exhibits R-2; R-115. ↩
¹³¹ That is, the person who otherwise exercises a decisive influence on the Claimant. ↩
¹³² Apart from acting through its affiliates and proxies already indicated by the Respondent, Shor acted, inter alia, through Ghenadie Gheorghita, a citizen of the Republic of Moldova, identity card A02093015 (who also was the founder and director of the limited liability company "Avia Trade" SRL, registration number 1014600022181, with the registered address at Blvd Dacia 80/3, MD-2026 Chisinau, Republic of Moldova) by PoAs issued by Dufremol SRL, inter alia, on 05.05.2015; Vadim Fotescu (a citizen of the Republic of Moldova, identity card B42013353 issued on 06.03.2014) by PoAs issued by Dufremol SRL, inter alia, on 15.04.2014, 23.07.2015. ↩
¹³³ See paras. 71-131 of the Respondents' Reply dated 4 January 2021 (and the respective exhibits). ↩
¹³⁴ The Republic of Moldova notes that Habarov Airport Invest Ltd issued a Power of Attorney to Ilan Shor on 16.09.2013, Cyprus apostille No. 254561/13, dated 17.09.2013. Habarov Airport Invest Ltd also issued a Power of Attorney to Sokirko Oleg on 16.09.2013, Cyprus apostille No. 254562/13, dated 17.09.2013. It shall be reminded that Sokirko Oleg, a citizen of the Russian Federation, was the first General Director of 000 Komaksavia, from 10.01.2014 to 05.02.2015 [Exhibits R-37; R-103; R-104]. There is little doubt that Shor has incorporated Habarov Airport Invest Ltd simultaneously with the participation in the tender competition for the concession of the assets of SECIA for purposes related to the shares in Avia Invest, as well as to the Concession Agreement. ↩

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120. The instant case is a case where management and control of Komaksavia has been exercised independently of, and without regard to, the corporate bodies of Komaksavia.

121. The shareholders of Komaksavia, as well as Shor, have exercised real influence in the corporate governance of Komaksavia. They have influenced at least a certain category of board decisions on a continuing basis and, therefore, shall be deemed shadow directors of Komaksavia under the Cypriot law.¹³⁵

122. In the following paragraphs, the Respondent will analyse the current and former shareholders of Komaksavia.

(i) Current Nominal Shareholders: Goncharenko and Tenev

123. The Respondent received copies of the Forms HE57 "Transfer of Private Company Shares" from the file of the Registrar of Companies which have been filed by the Claimant and are currently on record with the Registrar of Companies. ¹³⁶ The following paragraphs in this subsection are based on the information contained in those Forms HE57 on file with the Registrar of Companies and are not statements made by the Republic of Moldova, except as otherwise specifically stated.

124. The current Claimant's nominal shareholders are:

124.1. Marin Mihov Tenev [aka Map111H M111xos TeHes], born 24 December 1957, a citizen of Bulgaria, passport No. 384936603, address: Ivan Bogrov 7, Of./ Ap. 9, BG-8000 Burgas, Bulgaria (hereinafter referred to as "Tenev") [Exhibit R-62 bis], holding 700 ordinary shares; and

124.2. Andrey Nikolaevich Goncharenko [aka Andrey Goncharenko; AHApei'.1 H111Konaes1114 roH4apeHKo], born 27 December 1965, a citizen of Russian Federation, passport No. 713152007, address: Profsouznaya Street 91, Of./ Ap. 128, RU-117279 Moscow, Russian Federation (hereinafter referred to as "Goncharenko") [Exhibit R-107], holding 300 ordinary shares [Exhibits R-2; R-115].

¹³⁵ See RER-Papadopoulos, pp. 53-57. See also Art. 118(4) of the Companies Law [Exhibit R-52 bis] sets forts as follows: "For the purposes of this section and of Part I of the Sixth Schedule, the expressions "director" and "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act." (emphasis added). See also Art. 2 of the Law Regulating Companies Providing Administrative Services and Related Matters of 21 December 2012 [Exhibit R-136] (that catches also "shadow directors"): ↩
"Article 2
"Interpretation
[-]
"director" means a person occupying the position of director in a company or who has the power to effectively exercise the same powers as those exercised by a director in a company, and includes a person on whose instructions a director or directors usually act;" (emphasis added}.
¹³⁶ See Exhibits R-2, R-3, R-5, R-7, R-9, R-115. ↩

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125. Accordingly, the current shareholders of Komaksavia are both foreign citizens residing outside the territory of the Republic of Cyprus. Their decisions and resolutions regarding the business and affairs of Komaksavia are not located / taken in the territory of the Republic of Cyprus.

126. Goncharenko became the nominal holder of 300 ordinary shares of Claimant on 23 December 2019 [Exhibit R-2]. The 300 ordinary shares have been transferred to him by Tenev on 23 December 2019. The Form HE57 "Transfer of Private Company Shares" filed with the Registrar of Companies dated 23 December 2019 was signed by the Claimant's Secretary, Lydia Menelaou, who was appointed as the Claimant's Secretary on the same day of 23 December 2019 [Exhibit R-11]. The Registrar received the Form HE57 and registered the transfer on 28 January 2020 [Exhibits R-2; R-115].

127. The last time Tenev became the nominal holder of all 1000 Claimant's ordinary shares was on 12 December 2019 [Exhibit R-3]. The 1000 ordinary shares had been transferred to him by NR Investments Limited, a company incorporated in Guernsey on 30 April 2007, incorporation No. 46839, with the registered office at Trafalgar Court 2nd Floor, East Wing Admiral Park, St Peter Port, GY1 3EL Guernsey, which itself became holder of those shares on 28 August 2019 [Exhibit R-4]. The Form HE57 "Transfer of Private Company Shares" filed to the Registrar of Companies had been signed by Claimant's Director, Andreas Menelaou, on 12 December 2019 [Exhibit R-3]. Thus, the 1000 shares were transferred back to Tenev. This was the second time that Tenev nominally held the shares in Komaksavia.

128. The first time Tenev nominally held the 1000 ordinary shares in the Claimant was from 04 April 2018 to 28 August 2019 [Exhibit R-7]. At that latter date (of 28 August 2019) he transferred the shares to NR Investments Limited [Exhibit R-4], which then transferred them all back to Tenev on 12 December 2019 [Exhibit R-3] (this is addressed further below).

(ii) Former Nominal Shareholders

129. During the time from 19 August 2016 to 23 December 2019, the nominal ownership of the shares in the Claimant changed a number of hands, however, it was held by one sole nominal shareholder at any one time within that period. Starting 23 December 2019, the shares in the Claimant have been nominally held by two shareholders [Exhibit R-2]. Also, starting 23 December 2019, two separate individuals - Andreas Menelaou, the member of the law firm Andreas Menelaou LLC, and Lydia Menelaou, an employee / legal consultant thereof - provide their professional services of nominal director and nominal secretary to the Claimant.

(aa) Kyriakos Y. Panagos - 19.08.-22.08.2016

130. Kyriakos Y. Panagos, a Cyprus lawyer, born 12.05.1986, a citizen of Cyprus, ID number 1025140, with the address at Masaoria 29, Nea Ledra, Dali, CY-2549

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Nicosia, Cyprus, phone number +357 70001033, was registered the first sole nominal holder of the 1000 common / ordinary shares of the Claimant upon the Claimant's incorporation on 19 August 2016. ¹³⁷ Kyriakos Y. Panagos had also been registered as Komaksavia's first director and secretary. The Republic of Moldova notes that the reason of having Kyriakos Y. Panagos registered as the first Claimant's nominal shareholder was the fact that, under the Cyprus law, upon a company's incorporation the original signature of the subscriber of the shares was needed in the Memorandum of Association, as well as in the Articles of Association, and Kyriakos Y. Panagos was obviously available to put his signature.

131. Kyriakos Y. Panagos acted upon the instructions of Tenev, Karklinsh, Shor. This was, inter alia, substantiated by the fact that the main word in the name of the Claimant - "Komaksavia" - was the same with the name of the company 000 Komaksavia [Exhibits R-37; R-103; R-104], which was incorporated in the Russian Federation, and from which Komaksavia allegedly agreed to purchase - of the shares in Avia Invest. ¹³⁸ Those who managed and controlled 000 Komaksavia - Tenev, Karklinsh, Shor - also managed and controlled Komaksavia.

132. Already on 22 August 2016, that is, three days after the Claimant's incorporation, Kyriakos Y. Panagos transferred all - ordinary shares of Claimant to Modris Karklinsh, a citizen of the Russian Federation [Exhibit R-5]. The Form HE57 "Transfer of Private Company Shares" filed with the Registrar of Companies was signed by Claimant's new Director, Tenev, who himself was registered as the Claimant's Director and Secretary on the same day of 22 August 2016 [Exhibit R- 6]. As evidenced in the Form HES7, the Registrar of Companies received and registered the Form HE57 on 29 August 2016.

133. Furthermore, on the fourth day of Komaksavia's incorporation, that is, on 23 August 2016, with Shor as the Chairman of Avia Invest's Board of Directors [Exhibit R-129], and Karklinsh as the General Director of 000 Komaksavia [Exhibits R-37; R-103; R-104; R-151], the general shareholders' meeting of Avia Invest adopted the decision to approve the sale of the - of the shares in Avia Invest by 000 Komaksavia to Komaksavia Airport Invest Ltd [Exhibit R-130].

134. The Claimant does not allege that at the time of Kyriakos Y. Panagos holding the shares in Komaksavia, the Claimant was a qualified investor under the BIT. The Claimant alleges that it became a qualified investor under the BIT on 6 September 2016, the date Komaksavia allegedly agreed to purchase- of the shares in Avia Invest. ¹³⁹ At that latter date, Komaksavia was under the full control and management of Shor, Karklinsh, and Tenev - each residing outside Cyprus.

¹³⁷ It shall be noted that Panagiotis Panagos was the lawyer who provided the corporate services of incorporating Komaksavia [Exhibit R-1]. ↩
¹³⁸ Cf. paras. 30 (30.1.), 92 of the Soc. ↩
¹³⁹ Cf. paras. 30 (30.1.), 92 of the SoC. ↩

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(bb) Modris Karklinsh - 22.08.2016-04.04.2018

135. Modris Karklinsh (aka Modris Zigmundovich Karklinsh; M0Ap1t1c 31t1rMYHAOB1t14 KapKn1t1HbW), born on 15 October 1954, a citizen of the Russian Federation, passport No. 713112121, with the address at Lane Kazarmenyi (Pereulok Kazarmennyi) 10/1, Ap. 2, RU-109028 Moscow, Russian Federation, ("Karklinsh") [Exhibit R-76 bis] became the sole nominal holder of the [Redacted] of Claimant on 22 August 2016 [Exhibit R-5]. The �hares [Redacted] had been transferred to him by Kyriakos Y. Panagos on 22 August 2016. The Form HE57 "Transfer of Private Company Shares" filed with the Registrar of Companies was signed by Claimant's Director, Tenev, on 22 August 2016 [Exhibit R-5]. In his turn, Karklinsh transferred the- ordinary shares to Tenev on 04 April 2018 [Exhibit R-7], and on the same day, Tenev transferred the directorship in the Claimant to Karklinsh [Exhibit R-8]. Both Tenev and Karklinsh were acting upon instructions, and for the interest of Shor, who held the control of Komaksavia.

136. The Respondent notes that Karklinsh applied for and was issued on 03.04.2017 with a provisional residence permit for a foreign citizen in the Republic of Moldova No. B 41028445, personal code 2016802659160, with the domicile at: MD- 2001, Lev Tolstoy Street 27, Ap. 7, Chisinau, Republic of Moldova.

137. The Respondent further notes that Karklinsh and Tenev have been the shareholders (each with [Redacted] of the shares) and codirectors of "Euro Partners Consulting" SRL, a limited liability company incorporated on 23 January 2017 and existing under the law of the Republic of Moldova, state registration number 1017600002892, with the registered address at Blvd Dacia 80/3, MD-2026 Chisinau, Republic of Moldova.

(cc) Marin Mihov Tenev - 04.04.2018-28.08.2019

138. Marin Mihov Tenev (aka Map1t1H M1t1xos TeHes) [Exhibit R-62 bis] became the sole nominal holder of all 1000 ordinary shares of Claimant on 04 April 2018 [Exhibit R-7]. The 1000 ordinary shares were transferred to him by Karklinsh on the same day of 04 April 2018. The Form HE57 "Transfer of Private Company Shares" for the 1000 ordinary shares' transfer filed with the Registrar of Companies was signed by Claimant's Director, Karklinsh (who took over from Tenev as both Claimant's Director and Secretary), on 04 April 2018 [Exhibit R-8]. The Registrar received the Form HE57 on 16 May 2018. Tenev in his turn transferred the [Redacted] - to NR Investment Limited on 28 August 2019 [Exhibit R-9].

139. The Respondent notes that the rotation between Karklinsh and Tenev (that is, between the sole shareholder and sole individual director of Komaksavia) was effectively controlled and operated by Shor, who exercised the actual control of the Claimant.

140. The Respondent further notes that Tenev applied for and was issued on 17.03.2017 with a provisional residence permit for a foreign citizen in the Republic of Moldova No. B 41028152, personal code 2012802490972, with the domicile at: MD- 2001, Lev Tolstoy Street 27, Ap. 8, Chisinau, Republic of Moldova.

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(dd) NR Investments Limited - 28.08.-12.12.2019

141. NR Investments Limited, a company incorporated in Guernsey on 30 April 2007, incorporation No. 46839, with the registered office at Trafalgar Court 2nd Floor, East Wing Admiral Park, St Peter Port, GY1 3EL Guernsey [Exhibit R-4], became the sole shareholder of all [Redacted] in Komaksavia on 28 August 2019 [Exhibit R-9]. The [Redacted] had been transferred to NR Investments Limited by Tenev on the same day of 28 August 2019 [Exhibit R-9]. The Form HE57 "Transfer of Private Company Shares" had been signed by the Claimant's Director, Karklinsh, dated 28 August 2019 [Exhibit R-9]. The Registrar of Companies received and registered the Form HE57 on 29 August 2019.

142. It shall be noted that Tenev, as the Seller, and NR Investments Limited, as the Buyer, entered into a share sale-purchase agreement for the sale of 100% shares in Komaksavia on 28 August 2019. The price of the [Redacted] shares was established at [Redacted]. This fact denotes that the sale of the shares in Komaksavia to NR Investments Limited pursued a different purpose than the real change of the sole shareholder.

143. NR Investments Limited transferred the- shares back to Tenev on 12 December 2019 [Exhibit R-3].

144. It shall be noted that both Tenev and NR Investments Limited were acting under the instructions, control, and for the interest of Shor and Goncharenko.

(ee) Marin Mihov Tenev - 12.12.-23.12.2019

145. Tenev [Exhibit R-62 bis] became again the sole nominal shareholder of al [Redacted] ordinary shares in the Claimant on 12 December 2019[Exhibit R-3]. The [Redacted] ordinary shares had been transferred back to him by NR Investments Limited on the same day of 12 December 2019. The Form HE57 "Transfer of Private Company Shares" for the - ordinary/common shares filed with the Registrar of Companies was signed by the Claimant's Director Andreas Menelaou on 12 December 2019 [Exhibit R-3]. As in a relay race, Tenev gave way to NR Investments Limited on 28 August 2019 which then returned the shares in Komaksavia back to Tenev on 12 December 2019. All those changes were effectively controlled and operated by Shor who ultimately and effectively owned and controlled the Claimant and Avia Invest to achieve their pursued goals.

146. Tenev in his turn transferred - ut [Redacted] of the total of ◆rdinary [Redacted] shares to Goncharenko on 23 December 2019 [Exhibit R-2]. Accordingly, as of 23 December 2019, Tenev and Goncharenko were the two nominal stockholders of the ordinary shares in the Claimant. As of the day of this Memorial, the data from the Registrar of Companies evidence no further changes in Komaksavia's shareholders.

147. The following table summarises the dates of nominal shareholding in Claimant:

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(iii) Situs of Management and Control by Shareholders is Outside Cyprus

148. The circumstance of this case indicate that the effective management and control of the Claimant has been exercised by the shareholders, and in any event the situs of the effective management and control of the Claimant has been throughout outside Cyprus.

149. Komaksavia's shareholders were and are neither citizens nor residents of Cyprus. Thus, Karklinsh was a citizen and resident of the Russian Federation [Exhibit R- 76 bis]. Tenev was and is a citizen and resident of Bulgaria [Exhibits R-62 bis]. NR Investments Limited was a foreign company with no presence in Cyprus [Exhibit R-3; R-4]. Goncharenko was and is a citizen and resident of the Russian Federation [Exhibit R-107]. Accordingly, shareholders' decisions had been taken exclusively outside Cyprus.

150. Thus, the Resolution of the sole shareholder of Komaksavia on the acquisition of the - [Redacted] of the shares in Avia Invest dated 5 September 2016 (the "Resolution dated 5 September 2016") was taken in Chisinau, the Republic of Moldova [Exhibit R-75]. This was the paramount and ultimate decision ever taken by Komaksavia. This supreme corporate opportunity came to the Claimant through the shareholders and the real UBO of Komaksavia, and not through the board or management. The Republic of Moldova submits that the Resolution dated 5 September 2016 refers to Komaksavia's business affairs and, as such, should have been taken by Komaksavia's Board of Directors, because pursuant to para. 87 of the Articles of Association [Exhibit R-127 part I]:

"The business of the company shall be managed by the directors, who may pay all expenses incurred in promoting and registering the company, and may exercise all such powers of the company as are not, by the Law or by these regulations, required to be exercised by the company in general meeting, subject, nevertheless, to any of these regulations, to the provisions of the Law and to such regulations, being not inconsistent with the aforesaid regulations or provisions as may

[Page 35]

be prescribed by the company in general meeting but no regulation made by the company in general meeting shall invalidate any prior act of the directors which would have been valid if that regulation had not been made."¹⁴⁰

151. However, despite the provisions of the Articles of Association which attributes such decisions to the power of the Board of Directors, the Resolution dated 5 September 2016 was adopted by Komaksavia's sole shareholder, and that fact proves that the pivotal business decisions of Komaksavia were as a matter of fact taken by the shareholders, with the Board of Directors playing no role in Komaksavia's purported business.

152. In a highly coordinated manner, with the involvement of Avia Invest, Khabarovsky, 000 Komaksavia, and Komaksavia, on 23 August 2016, that is, on the day following the formal transfer of the shareholding in Komaksavia from Kyriakos Y. Panagos to Karklinsh:

152.1. Avia Invest allegedly received "the offer of 000 Komaksavia to sell - f the shares in the share capital" of Avia Invest to Komaksavia Airport Invest Ltd [Exhibit R-130]. It shall be noted that "the offer", which allegedly was brought to the knowledge of Avia Invest, presupposed the existence of a preliminary agreement between 000 Komaksavia and Komaksavia Airport Invest Ltd to buy/sell the - [Redacted] of the shares in Avia Invest, as well as the approval by each 000 Komaksavia and Komaksavia Airport Invest Ltd of such a sale and purchase. That decision to adopt the approval of purchase by Komaksavia was not taken in Cyprus;

152.2. On the same day, Avia Invest forwarded the offer of 000 Komaksavia to the second shareholder, Khabarovsky [Exhibit R-130];

152.3. On the same day, Khabarovsky executed a declaration in a public notary office in Moscow renouncing its pre-emptive right to acquire the - [Redacted] of the shares in Avia Invest from 000 Komaksavia [Exhibit R-130];

152.4. On the same day, an extraordinary general members' meeting of Avia Invest was held in Moscow at which, inter alia, the sale o- [Redacted] of the shares in Avia Invest by 000 Komaksavia to Komaksavia Airport Invest Ltd was debated and unanimously approved by the shareholders [Exhibit R-130].

153. 000 Komaksavia was represented at the extraordinary general members' meeting of Avia Invest SRL dated 23 August 2016 "by the general director Karklinsh Modris, acting pursuant to the Articles of Incorporation" of 000 Komaksavia [Exhibit R-130]. Further and important, Karklinsh also represented TB Team Management LLP ¹⁴¹ (which was the sole shareholder of 000 Komaksavia ¹⁴²) by the Power of Attorney issued before a Moldovan public notary on 10 June 2016 by

¹⁴⁰ Para. 87 of Komaksavia's Articles of Association [Exhibit R-127 part I]. ↩
¹⁴¹ See Exhibit R-38. ↩
¹⁴² See Exhibit R-37, R-103, R-104. ↩

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...TB Team Management ILLPs proxy, Azizbekian Karlen Nersesovich ¹⁴³((aka
A31136EKRH Kaрпен Нерсесōaw-1), born 21.02.1965, a citizen of the Russian
Federation, passport No. 72 16708970.¹⁴⁴

154. In light of this and other evidence, the Claimant's assertion that "[w]hen the
opportunity arose, Komaksavia was willing to invest in Avia Invest..."¹⁴⁵ is a
contradiction in terms, because Komaksavia itself was conceived and implemented
through Tenev, Karklinsh and others as a vehicle to be bestowed with the
title of the shares in Avia Invest in order to acquire Cyprus nationality for the
purported investment. The opportunity did not arise, as wrongly alleged by the
Claimant. That opportunity was brought to Komaksavia by Shor through Tenev,
Karklinsh and other affiliates. It was transferred from one of their vehicles to
another of their vehicles without any payment being made between those vehicles,
as none had been shown on the balance sheet of the 000 Komaksavia [Exhibit R-
37, see pages 10 to 23] for the year 2016 to the following years.

155. The Respondent notes that holding the [Redacted] the shares in Avia Invest was the
only business of 000 Komaksavia and selling it would not have been in the interest
of 000 Komaksavia, had 000 Komaksavia decided for itself, in an arm's length
transaction. However, the Share Sale-Purchase Contract dated 6 September 2016
was not an arm's length transaction. This is so, moreover, as 000 Komaksavia has

[Redacted]

¹⁴³ [Redacted] ↩

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received no payment for selling the [Redacted] of the shares. The Share Sale-Purchase
Contract dated 6 September 2016 was part and parcel of a larger scam operation
conceived and implemented by Shor through various individuals (i.e., Tenev,
Karklinsh) and companies.

156. Such a precise coordination and cooperation among four various actors, in addition
to the unanimous vote at the extraordinary general members' meeting of Avia
Invest, were impossible without the preliminary knowledge, common intention,
common purpose, and direction, as well as without those actors being ordered or
commanded by Shor to carry out those measures and actions.

157. The above coordinated measures and actions were the elements of a larger planned
operation of acquiring the Cypriot nationality for the purported investment.
Komaksavia's decisions in that respect were not taken in Cyprus.

158. The decision to distribute dividends to the shareholders of Avia Invest were
allegedly taken in Moscow, Russian Federation [Exhibit [SC-11]].

159. The decision on the issuance of the purported Notice of Dispute dated 2 October
2019 [Exhibit [SC-5]] was taken outside Cyprus. It was allegedly signed by a
non-resident of Cyprus purportedly on behalf of Komaksavia.¹⁴⁶ It is not disputed
that neither NR Investments Limited nor Nat Rothschild was not a resident of
Cyprus.

160. The Notice of Dispute dated 2 October 2019 was not signed by Komaksavia's
contemporaneous director, Karklinsh. But even if it were signed by Karklinsh, the
Notice of Dispute would have been decided in any event outside Cyprus, as the
Claimant's Director and sole shareholder resided outside Cyprus, in the Russian
Federation. The Respondent notes that the purported Notice of Dispute did not
contain the Claimant's address of the registered office as required under Art.
103(1) of the Companies Law for letters issued by a Cypriot company [Exhibit R-52 bis]. The purported Notice of Dispute actually lacked any address or contact
details.

161. One of the most important Claimant's decisions - the commencement of the
arbitration proceedings against the Republic of Moldova - was taken outside Cyprus
by Shor and the Claimant's shareholders. Thus, in the purported Notice of Dispute
dated 2 October 2019 reference is made to the intention of the "Investors" to
"resort to international arbitration [...] as set forth in Article 10(2) of the Cyprus-
Moldova BIT" [Exhibit [SC-5]]. With the sole shareholder, the director (also the
secretary), and the real UBO of Komaksavia all residing outside Cyprus, the
decision to commence arbitration proceedings against the Republic of Moldova
could not have been taken and was not taken inside Cyprus.

162. The decision regarding the funding of the costs and expenses of this arbitration was
taken outside Cyprus as well, as Goncharenko was not residing in Cyprus. Thus, the

¹⁴⁶ It shall be noted that at no time was Nat Rothschild Komaksavia's director or shareholder. ↩

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Claimant alleges that the funds for this arbitration's costs and expenses, including
the advance payments, were provided to the Claimant pursuant to the decisions of
the Claimant's shareholder Goncharenko by two loans from two companies
registered in the Russian Federation, Komaks (000 YK KoMaKc¹⁴⁷) and 000
Diamand Estate (000 .[\viaMaHA 3cTe111T¹⁴⁸) [see paras. 1-6 of the Claimant's
Response to Tribunal's Question 4 for the Hearing on the Respondent's Application
for (A) Revocation of the Emergency Decision on Interim Measures and (B) Security
for Costs and Related Relief, dated 5 February 2021 (the "Claimant's Response
to Tribunal's Question 4"). (None of those loans provide "cover for an adverse
award of costs" in these proceedings.)¹⁴⁹Thus, para. 2 of the Claimant Response to
Tribunal's Question 4 provides as follows:

"2. These funds were allocated by the Claimant from two loans
received from two shareholder companies controlled by its
majority ultimate beneficial owner, Mr Goncharenko: 1) UK
Komaks LLC (a Russian company, registration number
1117746721157); and 2) Diamand Estate LLC (a Russian
company, registration number 1127746769700)."¹⁵⁰

163. Thus, the Claimant asserts that all those decisions regarding the funding of the
arbitration costs and expenses were taken by Goncharenko.

164. However, in addition to the above, in para 2 of the Claimant's Response to
Tribunal's Question 4, the Claimant makes additional assertions: that Goncharenko
is the "majority ultimate beneficial owner" of Komaksavia; that Goncharenko
controls 000 Diamand Estate; and further that Goncharenko controls Komaks.
Those assertions have not been explained, let alone proved, by the Claimant.
Moreover, the Claimant has not substantiated at what time had Goncharenko
become the majority UBO of the Claimant, and the controller of 000 Diamand
Estate and Komaks.

164.1. The Respondent notes that Goncharenko was registered as the sole
shareholder of 000 Diamand Estate (a company registered in the Russian
Federation) for 20 days, from 22 August 2019 to 12 September 2019
[Exhibit R-117, page 18]. He transferred its shares in 000 Diamand Estate
to Air Investments SRL, a limited liability company registered and existing
under the laws of the Republic of Moldova, state identification number and
fiscal code 1016600039392, with the office at the same address as Avia

¹⁴⁷ Cf. Exhibit R-40. ↩
¹⁴⁸ Cf. Exhibit R-117. ↩
¹⁴⁹ See para. 6 of the Claimant's Response to Tribunal's Question 4 for the Hearing on the Respondent's Application for ↩
(Al Revocation of the Emergency Decision on Interim Measures and (Bl Security for Costs and Related Relief, dated 5
February 2021.
¹⁵⁰ Para. 2 of the Claimant's Response to Tribunal's Question 4 for the Hearing on the Respondent's Application for (Al ↩
Revocation of the Emergency Decision on Interim Measures and (BI Security for Costs and Related Relief, dated 5
February 2021.

[Page 39]

Invest: Blvd Dacia 80/3, MD-2026 mun. Chisinau, Republic of Moldova ¹⁵¹
[Exhibit R-119], for the amount of [Redacted]
[Exhibit R- 117, page 18].¹⁵³ Air
Investments SRL was registered as the sole shareholder for three months
and in its turn transferred the shares in 000 Diamand Estate to Polunin
Alexey Vladimirovich (a citizen of the Russian Federation,
ITN 570301246895), the current sole shareholder of 000 Diamand Estate,
on 11 December 2019 [Exhibit R- 117, pages 4, 18].

164.2. Air Investments SRL is a company affiliated to Shor. Air Investments SRL
acquired [Redacted] of the shares in Air Handling SRL from Air Clasica SRL¹⁵⁴ on
14.08.2017 [Exhibit R-134]. On 19.02.2019, Air Investments SRL
transferred [Redacted] of the shares in Air Handling SRL to Buruiana Andrian
[Exhibit R-134], a citizen of the Republic of Moldova who acts in the
interests of and is controlled by Shor.

164.3. Air Handling SRL is a company affiliated to Shor [Exhibit R-66,
pdf pages 15, 18; Exhibit R-134]. From 29.05.2014 to 18.12.2018, Air
Handling SRL held [Redacted] of the shares in Aeroport Handling SRL,¹⁵⁵ a limited
liability company registered and existing under the law of the Republic of
Moldova, state registration number and fiscal code 1002600010480, with the
address at Blvd Dacia 80/3, MD-2026 mun. Chisinau, Republic of Moldova ¹⁵⁶
[Exhibit R-121], which is the quasi-monopolist provider of ground handling
services at Chisinau International Airport [Exhibit R-120]. Aeroport
Handling SRL was found by the Competition Council to be in the economic
dependence of Avia Invest [Exhibit R-120]. By a resolution of the
Competition Counsel dated 17.09.2020, Avia Invest was found in violation of
the Competition Law [Exhibit R-120].

164.4. Air Clasica SRL (in a number of documents also referred to as "ICS Air
Clasica SRL") is a company affiliated to Shor [Exhibit R-66, pdf pages 16,
19, 34, 36, 38, 74, 194; Exhibit R-133]. The sole shareholder of Air Clasica
SRL until 27 April 2016 was Wester Alliance LLP, a limited liability
partnership incorporated in Scotland on 22 November 2010, dissolved on 16
April 2019 [Exhibits R-122, R-133].¹⁵⁷ Wester Alliance LLP acted in the

¹⁵¹ This is the address of the administrative building of Chisinau International Airport under the management of Avia ↩
Invest.
¹⁵² See the official exchange rate on 11.09.2019 [Exhibit R-118]. ↩
¹⁵³ It is believed that Air Investments SRL was used for tunnelling money out of Avia Invest and other Shor's affiliates. ↩
¹⁵⁴ Air Clasica SRL shall not be confused with Classica Air SRL or Airklassica Group SRL, all three companies belonging to ↩
Shor's group.
¹⁵⁵ See the Resolution of the Competition Council dated 17.09.2020 [Exhibit R-120, pdf page 5]. ↩
¹⁵⁶ This is the address of the administrative building of Chisinau International Airport under the management of Avia ↩
Invest.
¹⁵⁷ It shall be noted that Wester Alliance LLP issued a Power of Attorney immediately after the incorporation on ↩
3 December 2010 to Maria Gutuleac [see Exhibit R-122, pdf pages 10-15], who reputedly is the cousin of llan Shor [see
Exhibit R-65, page 27, para. 1].

[Page 40]

Republic of Moldova through Maria Gutuleac (Sher's cousin) under the Power
of Attorney issued immediately after incorporation, on 3 December 2010
[Exhibit R-122].¹⁵⁸ From 27 April 2016 until 18 January 2019, the sole
shareholder of Air Clasica SRL was Egor Ertagaev [Exhibit R-133], a citizen
of the Republic of Moldova who acted and acts in the interests of Shor, and
was and is controlled by Shor. Egor Ertagaev is also the sole director of Air
Clasica SRL [Exhibit R-133].

164.5. The current sole shareholder of Air Clasica SRL is Infoton-Com SRL, a limited
liability company registered and existing under the law of the Republic of
Moldova, state registration number and fiscal code 1008600002418, with the
office at Blvd Constantin Negruzzi 2, mun. Chisinau, Republic of Moldova
[Exhibit R-123; R-133]. Upon its incorporation on 17 January 2008,
Infoton- Com SRL's sole shareholder and sole director was Cojocaru Ion
[Exhibit R-123; Exhibit R-105], a citizen of the Republic of Moldova, the
car driver of Shor, who acted and acts in the interests of Shor, and was and
is controlled by Shor [Exhibit R-66, pdf pages 80, 163-168, 189, 242, 260,
279, 282, 283, 285, 294, 295, 297-299, 301-307, 321-330]. Infoton-Com
SRL is a company affiliated to Shor [Exhibit R-66, pdf page 189, 221, 244,
248, 249, 250, 251, 253).

164.6. The above substantiates that Goncharenko and Shor have cooperated very
closely with each other regarding the purported investment in Avia Invest
and, moreover, regarding business operations of Avia Invest under the
Concession Agreement.

165. Komaksavia's decisions regarding or involving finances have been taken by the
shareholders of the Claimant, as the Claimant did not and does not draw its
financial resources from its own operations or activities, which it has none of. The
Claimant has provided no evidence that it owns assets.¹⁵⁹ Furthermore, the
Claimant alleges that it never received dividends from Avia Invest.¹⁶⁰ The Claimant
declared that it was funded by "two loans received from two shareholder companies
controlled by its majority ultimate beneficial owner, Mr Goncharenko" to pay for the
arbitration costs and expenses, including the advance payments,¹⁶¹ and that as of
31 August 2020 it had "not yet secured enough funds to pay the Respondent's
share of advance or arbitration costs" [Exhibit R-54]. Accordingly, the Claimant
exclusively relies on third parties' funds for Komaksavia corporate finances. The

¹⁵⁸ Maria Gutuleac was involved in other capacities in the operations with of funds which eventually caused the ↩
insolvency and winding up of three commercial banks, Banca de Economii, Banca Socia/a, and Unibank [Exhibit R-65,
pages 26-27, 30; Exhibit R-66, pdf pages 55, 126, 166, 189, 302, 304, 324-328).
¹⁵⁹ The Claimant alleged that it only agreed "to purchaseIIIIlt the shares in Avia Invest" (para. 30 of the SoC). ↩
¹⁶⁰ See the Soc, paras. 39-40. ↩
¹⁶¹ Para. 2 of the Claimant's Response to Tribunal's Question 4 for the Hearing on the Respondent's Application for (A) ↩
Revocation of the Emergency Decision on Interim Measures and (B) Security for Costs and Related Relief, dated 5
February 2021.

[Page 41]

Claimant alleges that such funds were ensured by the shareholders. Those
decisions were taken outside Cyprus as well.

166. Since 2018 onwards to the present time, the Bulgarian phone number of Tenev has
officially been on file with the Registrar of Companies as the "Correspondence
Contact Details" of Komaksavia [Exhibit R-61]. This has not change since the
appointment of Menelaou as Komaksavia's director on 5 November 2019. This
proves that Tenev, not Menelaou, is officially and publicly in charge of and
responsible for communication with any third party on behalf of Komaksavia.

167. The selection of the Counsel for the Claimant in these arbitration proceedings, a
Ukrainian law firm with Russian language skills, was decided by the shareholders,
Goncharenko and Tenev, and the real UBO, Shor, and was not decided by the
Claimant's registered director. Menelaou would not have gone to Ukraine to select a
local law firm as the Claimant's Counsel in these proceedings. Nor would NR
Investments Limited have gone to Ukraine to seek legal assistance in these
proceedings from a local law firm.

168. Since his appointment as Komaksavia's director on 5 November 2019, Menelaou is
accustomed to act in accordance with the instructions and directions of the
shareholders and the real UBO of Komaksavia.

169. Accordingly, the most important corporate body of the Claimant was not located at
the alleged address in Cyprus, and not in the territory of Cyprus. Hence, the most
important corporate governance decisions of and for the Claimant were and are
taken not at that address in Cyprus, and not in Cyprus at all, but outside the
Republic of Cyprus, which indicates prima facie that the seat of the Claimant is
located outside Cyprus.

b. Komaksavia's Management by Former Directors Exercised Outside Cyprus

170. Komaksavia's Board of Directors has been at all times composed of one individual
member.¹⁶²

171. The sole individual member of the Board of Directors from 22 August 2016 to
5 November 2019 - Tenev and, subsequently, Karklinsh - was a foreign citizen
with the residence outside Cyprus. The Republic of Moldova notes that both Tenev
and Karklinsh received provisional residence permits of the Republic of Moldova on
17 March and 3 April 2027, respectively. Accordingly, the situs of the Board of
Directors' decisions was located outside Cyprus at any given time during the period
from 22 August 2016 to 5 November 2019.

172. However, the Respondent submits that as a matter of fact the effective
management and financial control of Komaksavia has been carried out throughout
Komaksavia's lifetime, from the date of incorporation until present, by the real UBO

¹⁶² See the Excerpts regarding the directors and secretaries of Komaksavia [Exhibit R-114]. See also the Forms HE4 ↩
"Notification of Change of Officers or change to their information" [Exhibits R-6, R-8, R-10].

[Page 42]

of Komaksavia. The real UBO of Komaksavia has been a foreign resident
throughout the lifetime of Komaksavia, therefore the situs of management and
control has been outside Cyprus at any given time.

173. As a matter of formality, the shareholders of Komaksavia have been foreign
persons, individuals and a company, therefore the management and control has
always been located outside the territory of the Republic of Cyprus.

174. It has not been alleged by the Claimant that Komaksavia was a qualified investor
under the BIT prior to 22 August 2016. For the sake of argument, however, with
Kyriakos Y. Panagos formally holding the position of director during those three
days (19 August to 22 August 2016), the management and control of Komaksavia
was actually exercised by Shor, Karklinsh, Tenev.¹⁶³

(i) Kyriakos Y. Panagos - 19.08.-22.08.2016

175. Kyriakos Y. Panagos was on record as the Claimant's initial nominal Director and
Secretary upon the incorporation of the Claimant. Kyriakos Y. Panagos resigned the
offices of Director and Secretary on 22 August 2016 and was succeeded by Martin
Mihov Tenev, who was appointed as Claimant's Director and Secretary on the same
day of 22 August 2016 [Exhibit R-6]. The Registrar of Companies received and
registered the Form HE4 "Notification of Changes of Officers or change to their
information" on 29 August 2016.

176. As the Claimant's initial director and shareholder, Kyriakos Y. Panagos acted upon
the instructions of Tenev, Karklinsh, Shor, and did not take any management or
control decisions on his own. A practicing advocate in Cyprus, Kyriakos Y. Panagos
provided professional services of the director and shareholder to Komaksavia. In
any event, the Claimant does not allege that at the time of Kyriakos Y. Panagos
holding the position of Komaksavia's director, the Claimant was a qualified investor
under the BIT. The Claimant alleges that it qualified as an investor under the BIT
on 6 September 2016, the date at which Komaksavia allegedly agreed to purchase
.,f the shares in Avia Invest from 000 Komaksavia.¹⁶⁴ At that latter date,
Komaksavia was under the direct management and control of Shor, Karklinsh, and
Tenev, who were foreign citizens residing outside Cyprus.

(ii) Marin Mihov Tenev - 22.08.2016-04.04.2018

177. Tenev became Claimant's Director and Secretary on 22 August 2016 [Exhibit R-6]. He succeeded Kyriakos Y. Panagos in the office of the Claimant's Director and
Secretary. The Form HE4 was signed by Tenev on 22 August 2016, and the
Registrar of Companies received and registered the Form HE4 on 29 August 2016.
Tenev resigned his Director's and Secretary's offices on 04 April 2018, that is, in

¹⁶³ The Respondent submits that Komaksavia was not registered as a shelf company because (1) of its specific name ↩
which denotes a continuity of intent and control from 000 Komaksavia, and (2) immediately after its incorporation, it
agreed to purchases from 000 Komaksavia the 95 of the shares in Avia Invest.
¹⁶⁴ Cf. paras. 30 (30.1.), 92 of the Soc. ↩

[Page 43]

the same day, in which he became the nominal owner of the 1000 ordinary shares
of Claimant which were transferred to him by Karklinsh.

(iii) Modris Karklinsh - 04.04.2018-05.11.2019

178. Karklinsh was appointed as the Claimant's Director and Secretary on 04 April 2018
that is, in the same day, in which he resigned as the nominal owner of the 1000 of
the Claimant's ordinary shares which he transferred to the name of Tenev [Exhibit
R - 8]. Karklinsh succeeded Tenev in the office of Claimant's Director and
Secretary. The Form HE4 was signed by Karklinsh on 04 April 2018, and the
Registrar of Companies registered the Form HE4 on 16 May 2018 [Exhibit R-8].
Karklinsh resigned his office of Claimant's Director and Secretary on
OS November 2019 and was succeeded the by the current Claimant's Director,
Andreas Menelaou [Exhibit R-10].

179. As evidenced in the Form HES7 and Form HE4 dated 4 April 2018 [Exhibits R-7, R - 8]¹⁶⁵on file with the Registrar of Companies, there was a rotation of the
Claimant's Director (and Secretary) and nominal shareholder between Tenev and
Karklinsh on 04 April 2018. Shor, who exercised the actual control of the Claimant,
rotated those two positions. On the one side, Tenev, who had been the Claimant's
Director and Secretary since 22 August 2016, took over the place of Karklinsh and
became the Claimant's sole nominal shareholder on 04 April 2018. On the other
side, Karklinsh, who had been the Claimant's sole nominal shareholder since
22 August 2016, took over the position of Tenev and became the Claimant's
Director and Secretary on 04 April 2018.

180. As Komaksavia Director, Karklinsh acted from the territory of the Russian
Federation, being a citizen thereof and residing in Moscow. For instance, he issued
a Power of Attorney in Moscow in the name of Komaksavia (as the Principal) to a
lawyer (as the Attorney) in the Republic of Moldova to represent Komaksavia at the
general shareholders' meeting of Avia Invest and vote on all issues of the meeting's
agenda as the Attorney considered fit [Exhibit R-128].

181. It should be noted that after being registered as the sole shareholder of
Komaksavia on 28 August 2019, NR Investments Limited had not replaced
Komaksavia's director Karklinsh. This substantiates the fact that, although the
ownership of shares was formally transferred to NR Investments Limited (the
Respondent submits that that was done for the purpose of improving the "image"
of the Claimant and its purported investment tainted by fraud and illegality, with
Rothschild acting as a celebrity¹⁶⁶), Shor remained in control of Komaksavia.

¹⁶⁵ Cf. Exhibits R-114 and R-115. ↩
¹⁶⁶ Rothschild visited Avia Invest and Chisinau International Airport on 19 August 2019 [Exhibit R-108] on the ↩
instructions received from Shor.

[Page 44]

182. The Republic of Moldova notes that the way in which the Claimant has insisted in
his written submissions in this arbitration on the name "Rothschild",¹⁶⁷ although
Nathaniel Rothschild has not been a shareholder, or director, or manager of the
Komaksavia, denotes that the Claimant continues to exploit associations related to
that family name in order to polish the image of the Claimant, of the shareholders
thereof, Tenev and Goncharenko, of the Claimant's purported investment, of the
real UBO, Shor, in order to impress the Tribunal, and for other hitherto undisclosed
purposes.

183. The following table summarises the dates of changes in the Claimant's former
officers:

c. Komaksavia's Management by Shadow Directors Exercised Outside Cyprus

(i) Claimant's Current Director Manages About Fifty Companies

184. The Claimant essentially asserts that the law firm Andreas Menelaou LLC rents the
"working space 02" to Komaksavia, where the latter purportedly has a registered
office address since 4 July 2018,¹⁶⁸ and that Andreas Menelaou provides the
administrative services of director to Komaksavia since late 2019.¹⁶⁹

185. The forms and other documents on file with the Registrar of Companies of Cyprus
indicate that the name partner of the law firm Andreas Menelaou LLC, Mr Andreas
Menelaou, born on 26 January 1988, a citizen of Cyprus, ID number 1024436,
passport No. K00354136, address: Kantaras 34B, Ap. 201, Strovolos, CY-2049
Nicosia, Cyprus, phone number +357 99218135, is currently the Director of the
Claimant on record with the Registrar of Companies. He was appointed as
Claimant's Director and Secretary on 5 November 2019 [Exhibit R-10].¹⁷⁰
Menelaou simultaneously held both offices of Director and Secretary between
5 November and 23 December 2019. Andreas Menelaou succeeded Karklinsh in the
offices of the Claimant's Director and Secretary who resigned on 5 November 2019.

¹⁶⁷ See, for instance, para. 86.5.2., 90.4. of the Claimant's Reply dated 5 March 2019; page 5 of the Annex I to the ↩
Claimant's Response dated 18 December 2020.
¹⁶⁸ See paras. 86.5.4.1., 89.1{a), 89.1{b) of the Claimant's Reply dated 5 March 2021. ↩
¹⁶⁹ The Claimant actually alleges that Menelaou was appointed as the director of Komaksavia on 23 October 2019: see ↩
page 23 of the Appendix I to the Claimant's Response; See also para. 14 of the SCWS-Menelaou [Exhibit [SC-75]].
¹⁷⁰ The Respondent notes that in para. 6 of the [first] CWS-Menelaou (filed with the Claimant's Application dated ↩
24 July 2020), Andreas Menelaou falsely and groundlessly stated that he was appointed as director of Komaksavia on
23 October 2019. It shall be noted that in para. 6 of the [first] CWS-Menelaou, whilst referring to "NR Investments",
Andreas Menelaou used the plural "shareholders" ("I was appointed to this role by the former shareholder!"
(emphasis added)).

[Page 45]

The Registrar of Companies received and registered the Form HE4 on
11 November 2019 [Exhibit R-10). Andreas Menelaou was succeeded in the office
of the Claimant's Secretary by Lydia Menelaou on 23 December 2019 [Exhibit R-11).

186. The Republic of Moldova notes that Menelaou pretends that he has been appointed
by NR Investments Limited as Komaksavia's director,¹⁷¹ without, however,
explaining why NR Investments Limited would have appointed Menelaou, a Russian
speaking Cypriot advocate, as "a director of Komaksavia" just one month¹⁷² prior to
the purported transfer of the 100% of the shares in Komaksavia back to Tenev.
Neither has this been explained by the Claimant.

187. The current Secretary of the Claimant is Lydia Menelaou, born on 09 April 1993, a
citizen of Cyprus, national card No. 967430, address: Eptanisou 8, Strovolos, CY-
2049 Nicosia, Cyprus [Exhibit R-11). She was appointed as Claimant's Secretary
on 23 December 2019. She succeeded Andreas Menelaou in the office of Claimant's
Secretary who had been appointed as Claimant's Secretary on 5 November 2019.
The Form HE4 was signed by Lydia Menelaou on 23 December 2019, and the
Registrar of Companies received and registered the Form HE4 on 28 January 2020
[Exhibit R-11).

188. Andreas Menelaou currently provides administrative services of rendering directors
to legal persons,¹⁷³ mostly as the sole director, to well over fifty {SO) companies
incorporated in Cyprus,¹⁷⁴ as well in other countries.¹⁷⁵ Andreas Menelaou also

¹⁷¹ See para. 6 of the [first] CWS-Menelaou; see also para. 14 of the SCWS-Menelaou [Exhibit [SC-75])). The ↩
Respondent notes that also in the SCWS-Menelaou, Andreas Menelaou falsely and baselessly stated that he was
appointed as "a director of Komaksavia" on 23 October 2019 (see para. 14).
¹⁷² The Respondent has proved that pursuant to the Claimant's Notification to the Registrar of Companies [Form HE4] ↩
[Exhibit R-10], Menelaou was appointed on 5 November 2019.
¹⁷³ For the definition of the administrative services, see Art. 4 of the Law Regulating Companies Providing ↩
Administrative Services and Related Matters of 21 December 2012 [Exhibit R-136].
¹⁷⁴ See, for example, Exhibits R-13; R-14; R-16; R-18; R-19; R-20; R-21; R-22; R-24; R-25; R-26; R-29; R-31; R-32; R-33; ↩
R-34; R-35, as well as of other Cypriot companies, inter alia, Lenta PLC (reg. No. HE407296), Amashen Limited
(HE398867), Rouanari Enterprises Limited (HE365980), IDF Holding Ltd (HE317558), SP Cosmoart Studio Lashes
Limited (HE400195), Gluckstenson Holding Limited (HE389102), Netmaco Limited (reg. No. HE367384), Galaga
Investments Limited (HE417170), Kerfirua Holding Limited (reg. No. HE241818), Fondport Ltd (reg. No. HE412231),
Creative Universe (reg. No. HE411619), Zinagori Limited (reg. No. HE338346), Propexperts Ltd (reg. No. HE377867),
Alson Limited (reg. No. HE207982), AB Beneficio Neto Investments Limited (reg. No. HE394768), Hedonism Wine
Trading I Ltd (HE412245), AS Sales Revenue Investments Limited (HE394766), Bravarus Limited (HE392200), Joferno
Limited (HE310431), Quasiva Limited (HE400898), Betop Holding Group Investment and Management Ltd (HE363750),
Otmostio Limited (HE416326), Shenron Limited (HE383308), Marlini Executive OV Limited (HE394938), Actencia
Limited (HE302515), Lnex Limited (HE363789), Saule Invest Properties Ltd (HE401043), SB Regulus Lucens Investments
Limited (HE394953), A. Menelaou Mechanical Services Ltd (HE395509), Greista Investments Limited (HE194433), BP-
Properties Limited (HE234901), Vneshposyltorg Group Limited (HE349385), Solagran Limited (HE182963), Trustville
Limited (HE241364), Cadillacing Investments Limited (HE244719), I.M.C. Demand (CY) Limited (HE347429), Starbiz
Limited (HE349385), AIFG Trading Company Limited (HE371042). Andreas Menelaou is the Director and Secretary of
the Law Firm Andreas Menelaou LLC, see Exhibit R-27.
¹⁷⁵ Andreas Menelaou is the director of the company Pewdie Productions UK Limited (No. 09742888) [Exhibit R-124], ↩
oversea company Hedonism Wine Trading I (No. FC038142) [Exhibit R-125], company PDPUK Limited (former PXM
Network Limited) (No. 9795904) [Exhibit R-126), all registered in England and Wales.

[Page 46]

provides administrative services of rendering secretary to legal persons to
numerous active companies incorporated in Cyprus.¹⁷⁶ In addition, the law firm
Andreas Menelaou LLC purportedly rents the same "working spaces" to a large
number of companies: more than twenty five (25) companies have notified
their registered office address at the address of the law firm Andreas Menelaou LLC
in Limassol.¹⁷⁷ Furthermore, as a practicing advocate, the sole member of the law
firm Andreas Menelaou LLC, Andreas Menelaou provides legal services to clients in
the areas as advertised on the law firm's website www.menelaou-law.com [Exhibit R-49].

189. The law firm Andreas Menelaou LLC positions itself as "Advocates I Legal
Consultants" on its website www.menelaou-law.com.¹⁷⁸ It provides the following
information about "THE FIRM":

"ANDREAS MENELAOU LLC is a licensed law firm in the
Republic of Cyprus, with its office located in Limassol, the
commercial centre of Cyprus, providing services to Local and
International clients in Cyprus and abroad. [...] Our experience
allows us to provide innovative and practical solutions to legal,
financial and taxation issues faced by our clients enabling them
to implement their strategic goals in the most skilful and
beneficial manner."¹⁷⁹

190. Accordingly, Andreas Menelaou's availability and ability to devote the time and
attention to the management of, have the knowledge and information, and taking
meaningful decisions for, the Claimant is impaired and objectively only extremely
limited.

191. Menelaou's actions and measures are concerned with housekeeping, clerical,
supportive matters rather than with policy, strategic or management matters
pertaining to the conduct of business of Komaksavia. He provides indiscriminate
administrative services to all companies under his directorship. Being overwhelmed
with so many clerical and housekeeping issues, Andreas Menelaou performs poorly
even on them, as he himself has proved time and time again. Thus, in his SCWS-
Menelaou, Andreas Menelaou submitted a purported sub-lease agreement of
Komaksavia Investment Ltd to prove the purported physical presence in Cyprus of
another company - Komaksavia Airport Invest Ltd [Exhibit [SC-75], paras. 36.1.

¹⁷⁶ Andreas Menelaou is the secretary, inter alia, of the following Cypriot companies: Zinorel Limited (HE299392), AB ↩
Beneficio Neto Investments Limited (reg. No. HE394768), MSS Global Trade Consultants Limited (HE360952),
Stratosoft Limited (HE377486), AS Sales Revenue Investments Limited (HE394766), MGC Construction Limited
(HE88729), A. Menelaou Mechanical Services Ltd (HE395509), Gluckstenson Holding Limited (HE389102), Saule Invest
Properties Ltd, HE401043, A.M.Menelaou Bros Food & Beverage Limited (HE325283), Q.M.S. Network Limited
(HE379109), Propexperts Ltd (HE377867), Sarbitek Limited (HE302321).
¹⁷⁷ See, for example, Exhibits R-13; R-14; R-15; R-16; R-17; R-18; R-19; R-20; R-21; R-22; R-23; R-24; R-25; R-29; R-31; ↩
R-32; R-33; R-34; R-36. The Law Firm Andreas Menelaou LLC has its registered office at the same address, see Exhibit
R-27.
¹⁷⁸ See the screenshots of the website of Andreas Menelaou LLC [Exhibit R-49]. ↩
¹⁷⁹ The screenshots of the website www.menelaou-law.com of Andreas Menelaou LLC [Exhibit R-49]. ↩

[Page 47]

and 36.3.8., and pdf pages 358-360].¹⁸⁰ In another instance, on 18 May 2020,
Andreas Menelaou issued a purported letter to Avia Invest on behalf of Komaksavia
("Komaksavia's Letter dated 18 May 2020") stating that "the shareholders of
the company have completed negotiations with a group of creditors on the
provision of an amount [Redacted] That,
it turned out, by Menelaou's own admission, "was a mistake on [his] part", and in
the CWS-Menelaou,¹⁸² Andreas Menelaou, whilst referring to that wrong statement,
indicated that "the document erroneously states [Redacted] but that was a
mistake on my part and the correct figure is [Redacted]

192. Komaksavia's Letter dated 18 May 2020 [Exhibit C-2 (pdf page 95); Exhibit [SC-75] pdf page 229], which is the only letter of Komaksavia signed by Menelaou and
submitted in these proceedings, is a clear evidence that Andreas Menelaou does not
have the management of Komaksavia. In Komaksavia's Letter dated 18 May 2020
Menelaou states that the "the shareholders of the company have completed the
negotiations with a group of creditors on the provision" of money for the purposes
of Avia Invest to comply with the Concession Agreement (emphasis added).¹⁸⁴ He
further states that as a result of the negotiations, there was "reached an
agreement on the provision of the necessary funds for the above purposes in the
nearest future".¹⁸⁵ In addition, he states that "the legal and technical aspects of the
loans' provision are being clarified".¹⁸⁶ In top of that he does not even have the
knowledge of and is not informed on the purported negotiated amount, because he
indicates in figures and words the amount of [Redacted] Those actions as stated in
Komaksavia's Letter dated 18 May 2020 underly the duties, which by their nature
belong to company's management and, also, pursuant to para. 87 of Komaksavia's
Articles of Association - "[t]he business of the company shall be managed by the
directors" - belong to Komaksavia's directors but have been carried out by
Komaksavia's shareholders. This in turn demonstrates that the effective
management and financial control of Komaksavia was with Komaksavia's
shareholders who acted as shadow directors thereof.

193. Para. 12.3. of the CWS-Menelaou [Exhibit C-2 to the Claimant's Application dated
24 July 2020,] and Komaksavia's Letter dated 18 May 2020 contain mutually
exclusive statements. Thus, in para. 12.3., Andreas Menelaou first referred to a
purported press release of Avia Invest dated 14 July 2020 containing the following

¹⁸⁰ The Claimant referred to it as "a simple administrative error, as an incorrect (but similarly named) company's ↩
Sublease Agreement was exhibited instead of the correct version" (Footnote 13 to the Claimant's Reply dated 5 March
2021).
¹⁸¹ Letter of Komaksavia to Avia Invest dated 18 May 2020, attached to the CWS-Menelaou [Exhibit C-2 (pdf page 95) ↩
to the Claimant's Application dated 24 July 2020].
¹⁸² CWS-Menelaou [Exhibit C-2 to the Claimant's Application dated 24 July 2020]. ↩
¹⁸³ Para. 12.3. of CWS-Menelaou [Exhibit C-2 to the Claimant's Application dated 24 July 2020]. ↩
¹⁸⁴ See Exhibit C-2 (pdf page 95) to the Claimant's Application dated 24 July 2020; see also SCWS-Menelaou, pdf ↩
page 229.
¹⁸⁵ Ibid. ↩
¹⁸⁶ Ibid. ↩

[Page 48]

phrase: "AVIA INVEST also notifies about the signed agreement on the allocation
of funds from investors in the amount of 170 million euros, which will be available
in the next 30 days."¹⁸⁷ (emphasis added). In para. 12.3. Menelaou then stated
that "[o]n 18 May 2020, I personally signed a letter to Avia Invest confirming that
Komaksavia's shareholders had recently completed negotiations in order to
ensure that EUR 170 million would be available to Avia Invest for the second stage
of its investment obligations"¹⁸⁸ (emphasis added). In Komaksavia's Letter dated
18 May 2020, however, Menelaou had stated that "[a]t present, the legal and
technical aspects of the loans' provision are being clarified, and the funds
can be provided upon completion of all procedural issues and activities,
which is expected in the shortest possible time."¹⁸⁹ (emphasis added). Thus, that
last phrase of Komaksavia's Letter dated 18 May 2020 directly contradicted the
statements on the "signed agreement" and on the "completed negotiations", and
actually indicated that, as of 14 May 2020, neither the negotiations were
completed, nor any agreement was signed, because the legal and technical aspects
of an agreement were to be clarified before a loan agreement was signed, and
where they were not yet clarified, the negotiations were still ongoing, and no
agreement was signed. The Respondent also notes that Komaksavia's Letter dated
18 May 2020 is a highly unusual letter with a highly unusual and contradictory
content in its own terms and is rather part of the Claimant's efforts to create a post
factum reality.

194. The paragraphs above clearly demonstrate that Andreas Menelaou is a director in
name only, provides administrative services to Komaksavia and about SO other
companies as a practicing lawyer, is poorly informed about Komaksavia's particular
business affairs and moreover about his own capacity in Komaksavia. It is
manifestly evident that the company's business is run by other persons, and not by
Andreas Menelaou, and that Andreas Menelaou is accustomed to act in accordance
with the instructions of the shareholders and the real UBO.

195. Providing simultaneously such a large range of various legal and administrative
services to so many companies renders those services completely devoid of any
business and/or economic component/substance. Although part of management
decisions making,¹⁹⁰ the economic and business decisions of the Claimant cannot
be taken in their substance by Menelaou as he lacks the time, information,
knowledge, first-hand experience, context, sophistication, details of the Claimant's
business. They are exercised by the shareholders and the real UBO, who are the
only persons informed about the details and substance of the Claimant's purported
investment, and who are the only ones that may take meaningful and informed
decisions for the Claimant.

¹⁸⁷ CWS-Menelaou, pdf page 93 and para. 12.3. [Exhibit C-2 to the Claimant's Application dated 24 July 2020]. ↩
¹⁸⁸ CWS-Menelaou, para. 12.3. [Exhibit C-2 to the Claimant's Application dated 24 July 2020]. ↩
¹⁸⁹ CWS-Menelaou, pdf page 93 [Exhibit C-2 to the Claimant's Application dated 24 July 2020]. ↩
¹⁹⁰ See para. 87 of Komaksavia's Articles of Association [Exhibit R-127 part I]. ↩

[Page 49]

(ii) Komaksavia's Effective Management Decisions Have Been Taken by
Shadow Directors

196. In paras. 148 et seqq., the Respondent has demonstrated that the most important
business and managerial decisions of the Claimant have been adopted by the
shareholders and real UBO.

197. As analysed in the previous subsection (paras. 184 et seqq.), the effective
management of Komaksavia is in fact not taken place in the territory of Cyprus.

198. As the Claimant's director, Menelaou is fully dependable on the finances provided
by the shareholders and real UBO from external sources. Since Komaksavia has
had no income, Menelaou does not dispose money of Komaksavia and cannot take
decisions involving finances. Such money or financial decisions for Komaksavia are
taken by the shareholders, although they normally pertain to the company's
management.¹⁹¹ Menelaou is accustomed to act under the guidelines of the
shareholders and the real UBO.

199. Menelaou cannot bring new and meaningful corporate opportunities to the
Claimant,¹⁹² and, as a matter of fact, he has not. Moreover, if someone is to bring a
corporate opportunity to the attention of Komaksavia, she would do it by calling the
phone number provided as the "Correspondence Contact Details" on file with the
Registrar of Companies, which has been the Bulgarian phone number of Tenev form
2018 onward to the present time [Exhibit R-61].

200. His purported office of "managing director" of Komaksavia is devoid of any
substance, as Menelaou cannot and does not have the time, knowledge,
information, first-hand experience, context, sophistication, details of the business
for the necessary meaningful and detailed decisions for Komaksavia. In any event,
the Claimant has presented no evidence to substantiate the allegation that
Menelaou is in fact the "managing director". But as the sole director on the board of
directors in a majority of those about 50 companies to which he provides
administrative services as director, as he is in Komaksavia, it may not be difficult
for Menelaou to allege or pretend that he has appointed himself to the office of the
"managing director" in any one of those majority companies.¹⁹³

201. Also, the regulatory environment for Cypriot advocates prohibits the latter to be
actively involved in the conduct of any business or commercial or other economic
nature. Thus, under Art. 18(2) of the Code of Conduct Regulations of 2002 of
Cyprus Bar Association [Exhibit R-51], an advocate shall "abstain from actively
participating in the conduct of any business of commercial or other
economic nature or from being an active member of such business."

¹⁹¹ Ibid. ↩
¹⁹² See RER-Papadopoulos, pp. 49-50. ↩
¹⁹³ Pursuant to para. 109 of Komaksavia's Articles of Association [Exhibit R-127 part I): "The directors may from time ↩
to time appoint one or more of their body to the office of managing director for such period and on such terms as
they think fit, and, subject to the terms of any agreement entered into in any particular case, may revoke such
appointment."

[Page 50]

Furthermore, pursuant to the same Art. 18(2), Cypriot advocates may not be
"managing directors" of firms and companies, whether in Cyprus or abroad.
Those provisions fully apply to Menelaou, as he is an advocate, a member of
Cyprus Bar Association [Exhibit R-48].

202. The economic and business decisions have been taken by Komaksavia's
shareholders and real UBO, not by its director or purported "managing director".
For his director's decisions, Menelaou has been systematically and continuously
dependent on the directions and instructions of the shareholders and the real UBO.
Even the Counsel for the Claimant in these arbitration proceedings was not selected
by the Claimant's purported director Menelaou.

203. The Claimant's shareholders and real UBO are persons who exercise the real
influence in the corporate affairs of the Claimant. They have provided instructions
and directions to Komaksavia's director, particularly since the office of the director
is held by Menelaou. Tenev has been officially in charge of and responsible for
communication with any third persons on behalf of Komaksavia, since his Bulgarian
phone number as "Correspondence Contact Details" has been on file with the
Registrar of Companies from 2018 onward to the present time [Exhibit R-61].
Consequently, the shareholders and real UBO of Komaksavia shall be considered
the shadow directors of Komaksavia pursuant to the provisions of the Companies
Law [Exhibit R-52 bis] and Law Regulating Companies Providing Administrative
Services and Related Matters [Exhibit R-136].

204. Art. 118(4) of the Companies Law [Exhibit R-52 bis] provides as follows:

"For the purposes of this section and of Part I of the Sixth
Schedule, the expressions "director" and "officer" shall
include any person in accordance with whose directions
or instructions the directors of the company are
accustomed to act."¹⁹⁴ (emphasis added).

205. Art. 2 of the Law Regulating Companies Providing Administrative Services and
Related Matters [Exhibit R-136] provides, in relevant part, as follows:

"director" means a person occupying the position of director
in a company or who has the power to effectively
exercise the same powers as those exercised by a
director in a company, and includes a person on whose
instructions a director or directors usually act; "¹⁹⁵
(emphasis added).

206. The Tribunal should find that the shareholders and the real UBO of Komaksavia are
the shadow directors of Komaksavia and, as such, they have exercised the effective
management of Komaksavia.

¹⁹⁴ Art. 118(4) of the Companies Law of the Republic of Cyprus [Exhibit R-52 bis]. ↩
¹⁹⁵ Art. 2 of the Law Regulating Companies Providing Administrative Services and Related Matters of 21 December ↩
2012 [Exhibit R-136).

[Page 51]

207. The shadow directors have not resided in Cyprus, hence the place of the effective
management of Komaksavia has been throughout located outside the territory of
Cyprus. Accordingly, the Claimant has at any one time had its "seat" outside the
territory of Cyprus.

(iii) No Seat Established in Cyprus After 5 November 2019

208. As demonstrated in paras. 177-182 above, until 5 November 2019, Komaksavia's
directors Tenev and Karklinsh, who both were foreign citizens with residence
outside the territory of Cyprus, adopted their decisions as directors outside the
territory of Cyprus. No effective management and control of the Claimant occurred
in the territory of Cyprus until 5 November 2019.

209. Andreas Menelaou has been appointed on 5 November 2019 as Komaksavia's
director. However, the effective management and control has been actually and
continuously exercised by the Claimant's shareholders, and not by the Claimant's
Board of Directors. Despite the provision of para. 87 of Komaksavia's Articles of
Association [Exhibit R-127 part I] - "[t]he business of the company shall be
managed by the directors" - the pivotal management decisions of Komaksavia were
as a matter of fact taken by the shareholders, who exercised the real power and
influence on the management. Consequently, no seat, that is, no place of the
effective management and control, has been established in the territory of Cyprus
since 5 November 2019.

(iv) Andreas Menelaou Is Not the "Managing Director" of Komaksavia as
Falsely Alleged

210. Both in the CWS-Menelaou¹⁹⁶ and SCWS-Menelaou, Andreas Menelaou stated that
he was "the managing director of Komaksavia" (emphasis added) and was making
the "witness statement in support of" the Claimant's submission [Exhibit C-2,
para. 1; Exhibit [SC-75], para. 1]. No evidence was adduced by the Claimant to
substantiate its allegation. However, there is evidence indicating that the statement
(that he was "the managing director of Komaksavia") of Andreas Menelaou may
actually be false and misleading.

211. Firstly, in the documents on record with the Companies Registrar in Cyprus,
Andreas Menelaou (Av<Spfoc; M£v£Mou or AN8PEA:r MENEMOY, in Greek) was
registered as the "Director" as of 11 November 2019 [Exhibit R-10], and not as
the 'managing director', of Komaksavia, and as of the day of the RfA dated
15 May 2020, Andreas Menelaou was the "Director" of Komaksavia on record with
the Companies Registrar [Exhibits R-10; R-114].¹⁹⁷ Accordingly, Komaksavia

¹⁹⁶ The Witness Statement of Andreas Menelaou submitted [as Exhibit C-2) with the Claimant's Application for the ↩
Appointment of an Emergency Arbitrator and an Emergency Decision on Interim Measures, dated 24 July 2020.
¹⁹⁷ However, as of 23 December 2019, he is no longer (also) the Secretary of Komaksavia. The Secretary of Komaksavia ↩
on record as of 23 December 2019 is Lydia Menelaou, a legal consultant, from the same law firm Andreas Menelaou
LLC [Exhibit R-11).

[Page 52]

appointed and registered Andreas Menelaou as its director (a service that he
provides to Komaksavia against a fee) and not as the managing director.

212. Secondly, the purported Komaksavia's Letter to Avia Invest dated 18 May 2020 has
been signed by Andreas Menelaou as "Director of Komaksavia Airport Invest Ltd"
(emphasis added) [Exhibit [SC-75] pdf page 229]. The Respondent observes that
the Letter of Komaksavia dated 18 May 2020 is the only letter signed by Menelaou
which has been submitted by the Claimant in these proceedings.

213. Thirdly, Andreas Menelaou is a practicing lawyer (advocate) in Cyprus,¹⁹⁸ member
of the Cyprus Bar Association since September 2012 [Exhibit R-48] and the name
partner of the Cyprus law firm Andreas Menelaou LLC, which has the address of the
registered office at 256 Makarios Avenue, Eftapaton Court, Office C3, Limassol
3107, Cyprus [Exhibit R-49]. Menelaou offers and provides, inter alia, company
and commercial legal services as the sole member of the law firm Andreas
Menelaou LLC [Exhibit R-49]. The Claimant itself specifically referred to Menelaou
as to "a practising lawyer within the territory of the Republic of Cyprus".¹⁹⁹

214. The Republic of Moldova submits that Andreas Menelaou as a practicing lawyer and
advocate in Cyprus may not be the purported "managing director" of Komaksavia,
because those two capacities are incompatible and at odds with each other as a
matter of law, and may not be simultaneously exercised by an advocate under the
Cyprus law. Thus, Art. 18 of the of the Code of Conduct Regulations of 2002 as
approved by the Cyprus Bar Association sets forth as follows:

"18. (Incompatibility)
(1) In order for advocates to be in a position to exercise their
function with the necessary independence and in a manner
conformable to their obligation to participate in the
administration of justice, the exercise of professions or
activities which are incompatible with the legal
profession is prohibited.
(2) Subject to the generality of paragraph (1), advocates
must, in particular, abstain from actively participating in
the conduct of any business of commercial or other
economic nature or from being an active member of
such business.
Provided that the management of their property or assets or
of those of their family is not considered to be an active
participation in any business of commercial or other economic
nature.
Further provided that advocates may be members of the board

¹⁹⁸ The notions of "practising as an advocate", "practising advocate" are defined in Art. 11(1) of "The Advocates Law" ↩
of Cyprus [Exhibit R-50].
¹⁹⁹ Para. 90.5 of the Claimant's Reply dated 5 March 2021. ↩

[Page 53]

of directors or secretary (but not employees) of a firm or
company, but not managing directors.
(3) For the purposes of this Regulation, a firm, group, union,
partnership or legal entity (controlled by advocates) providing
counselling or other services which are ancillary, related,
successive or supplementary to those which an advocate
provides or may provide in person or as a trustee, are not
businesses of commercial or other economic nature."²⁰⁰
(emphasis added).

215. Had Andreas Menelaou acted in violation of those rules in Art. 18 above, he would
not be able to practice as a lawyer (advocate) in Cyprus, because according to Art.
17 of the Advocates Law of the Republic of Cyprus:

"(1) If any advocate is convicted by any Court of any criminal
offence which, in the opinion of the Disciplinary Board,
involves moral turpitude or if such advocate is, in the opinion
of the Disciplinary Board, guilty of disgraceful, fraudulent or
unprofessional conduct towards the profession or if he has
acted or behaved in a manner contravening or
conflicting with the provisions of the Advocates' Code of
Conduct Regulations, the Disciplinary Board may -
(a) order the name of the advocate to be struck off the
Register of Advocates;
(b) suspend the advocate from practising for such period
as the Disciplinary Board may think fit;
(c) order the advocate to pay, by way of fine, any sum not
exceeding twenty thousand euros:
Provided that any amount paid under this paragraph shall be
deposited to the Bar Council's Fund and for its objects.
(d) warn or reprimand the advocate;
(e) make such order as to the payment of the costs of the
proceedings before the Disciplinary Board as the Disciplinary
Board may think fit, either against the convicted advocate or,
in case of his innocence, against the complainant, and such
acts shall be calculated by the Extra Judicial Reward
Committee of the Cyprus Bar Association and approved by the
Disciplinary Board, on the scale of €10.000.00 to €50.000,00
of civil actions and collected by it as a penalty."²⁰¹

²⁰⁰ Art. 18 of the Code of Conduct Regulations of 2002 (in English), Cyprus Bar Association [Exhibit R-51]. ↩
²⁰¹ Art. 17 of the Advocate Law [Exhibit RLA-50] ↩

[Page 54]

216. Fourthly, the law firm Andreas Menelaou LLC's services include the provision of
physical directors to companies for a fee. Thus, the member of that law firm
and advocate Menelaou is registered as the director of a very large number of
companies incorporated in Cyprus.²⁰² He is also a director of a company registered
with the Registrar of Companies in England and Wales [Exhibit R-28]. In none of
those companies is he registered as "managing director". In addition, Andreas
Menelaou holds the office of the secretary in numerous active companies
incorporated in Cyprus.²⁰³ The Claimant has not explained how Menelaou's serving
simultaneously as a multiple director and a multiple secretary is compatible with
him allegedly serving as the purported "managing director" of Komaksavia.

217. Accordingly, Andreas Menelaou is not the "managing director" of Komaksavia, and
he does not exercise the effective management and control of the Claimant.

218. The Claimant submitted a copy of a Sublease Agreement dated 4 July 2018
allegedly concluded between Andreas Menelaou LLC and Komaksavia Airport Invest
Ltd (the "Sublease Agreement") to substantiate its allegation of the Claimant's
physical presence in Cyprus [Exhibit C-8 to the Claimant's Reply to the
Respondent's Request for Summary Procedure dated 5 March 2021].
Furthermore, based on that Sublease Agreement, the Claimant suggested that
Menelaou was appointed director of Komaksavia at an earlier time rather than on
5 November 2019, and falsely asserted that it was Menelaou acting "as managing
director" who sold shares in Komaksavia "to Mr Rothschild" which allegedly
occurred on 19 August 2019 [para. 90.4 of the Claimant's Reply dated 5 March
2021].

219. The Claimant's statement about:

"the copious evidence of Mr Menelaou who states that
he takes (and continues to take) decisions on behalf of
the Claimant as its managing director from Cyprus (for
instance, its sale to Mr Rothschild)"²⁰⁴ (emphasis
added)

is false, is a confusion in terms, and goes against the own evidence brought by the
Claimant.

220. Firstly, there is no evidence introduced by the Claimant or otherwise that
Menelaou takes decisions on behalf of the Claimant.

221. Secondly, the Respondent notes that on 4 July 2018, the date of the conclusion of
the purported Sublease Agreement, Andreas Menelaou was not the Claimant's
director. Andreas Menelaou was appointed as the Claimant's Director on
5 November 2019 [Exhibit R-10]. Any allegation made by the Claimant that

²⁰² See, for example, Exhibits R-13; R-14; R-16; R-18; R-19; R-20; R-21; R-22; R-24; R-25; R-26; R-29; R-31; R-32; R-33; ↩
R-34; R-35. He is the Director of the Law Firm Andreas Menelaou LLC, see Exhibit R-27.
²⁰³ See, for example, Exhibit R-30. ↩
²⁰⁴ Para. 90.4. of the Claimant's Reply dated 5 March 2021. ↩

[Page 55]

Menelaou somehow acted as the Claimant's director before the date of
5 November 2019 is false and is denied.

222. Particularly, the Claimant's allegation in para. 90.4. of the Claimant's Reply dated
5 March 2021 that it was Menelaou who sold shares in Komaksavia "to Mr
Rothschild" is false. Even if it were true, which it is not, Menelaou could not have
taken that decision, because the shares in Komaksavia which were allegedly sold to
NR Investments Limited belonged to Tenev, as the Claimant's nominee
shareholder, and not to Komaksavia. Furthermore, even if it were true, which it is
not, Tenev allegedly sold the shares in Komaksavia to NR Investments Limited, and
not "to Mr Rothschild" as falsely stated by the Claimant. That was not a decision
which could substantiate the Claimant's wrong allegation that Komaksavia's
important decisions were taken inside Cyprus.²⁰⁵

223. The Respondent submits that decision-making within the Claimant occurred and
occurs outside Cyprus throughout the lifetime of Komaksavia. Thus, both Tenev
and Karklinsh were foreign citizens residing outside Cyprus, in Bulgaria and Russian
Federation, respectively [Exhibits R-62 bis and R- 76 bis]. NR Investments
Limited was a foreign company with no presence in Cyprus [Exhibit R-3; R-4].
Goncharenko as well was a foreign citizen residing in the Russian Federation
[Exhibit R-107]. Accordingly, throughout the time Tenev and Karklinsh succeeded
each other as Komaksavia's director - from 22 August 2016 to 5 November 2019 -
director's decisions had been all taken outside Cyprus. Menelaou, who was
appointed Komaksavia's director on 5 November 2019, is not a relevant decision-
maker in Komaksavia. There is no evidence that he ever was.

224. Furthermore, shareholders' decisions had been taken exclusively outside Cyprus, as
none of Komaksavia's shareholder was or is a resident of Cyprus.

225. Finally, Shor, the ultimate beneficial owner of Komaksavia, was a citizen of the
Republic of Moldova residing outside of Cyprus, in the Republic of Moldova [Exhibit
R-63].

(v) Advocate-Client Relationship

226. Under the Cyprus law, the relationship between the advocate Menelaou and
Komaksavia is an advocate-client relationship, rather than a director-company
relationship.

227. As indicated in Art. 18(2) of the Code of Conduct Regulations of 2002 of Cyprus Bar
Association [Exhibit R-51], an advocate shall "abstain from actively participating
in the conduct of any business of commercial or other economic nature or from
being an active member of such business." Furthermore, pursuant to the same

²⁰⁵ As a matter of law, such a decision is taken by the owner of the shares, and not by the company which issued the ↩
shares.

[Page 56]

Art. 18(2), Cypriot advocates may not be "managing directors" of firms and
companies, whether in Cyprus or abroad.

228. Accordingly, since Menelaou is a member of the Cyprus Bar Association and
practices law in Cyprus as an advocate, as the sole member of the law firm Andreas
Menelaou LLC, which advertises its legal services, he may not at the same time
lawfully be the "managing director" of Komaksavia, as he has wrongly alleged.

229. Furthermore, the prohibition in Art. 18(2) of the Code of Conduct Regulations of
2002 applies to Menelaou as well, and therefore he may not actively participate in
the conduct of the business, commercial or economic activity of Komaksavia.
Consequently, he cannot exercise the effective management and control of
Komaksavia.

230. In addition, since pursuant to Art. 18(2) of the Code of Conduct Regulations of
2002 he may only be a member "of the board of directors or secretary", Menelaou
may not lawfully be the "managing director" of Komaksavia.

(vi) Andreas Menelaou Was Not Appointed on 23 October 2019 as Falsely
Alleged

231. Andreas Menelaou stated in the CWS-Menelaou that he had been "appointed
director of Komaksavia" on 23 October 2019 [Exhibit C-2, paras. 6, 14]. Also, in
his SCWS-Menelaou he stated that he "was appointed as a director of Komaksavia"
on 23 October 2019 [Exhibit [SC-75], paras. 14, 29, 38]. Those statements are
false and misleading.

232. In fact, Menelaou contradicted himself: in the Notification of Changes of Officers or
change of their information (the "Form HE4 dated 5 November 2019"), which
was signed and submitted by Menelaou and which is currently on file with the
Registrar of Companies, there was indicated that Andreas Menelaou had been
"[a]ppointed on: 05/11/2019" as the director of Komaksavia [Exhibits R- 10,
page 1; R-114] and that the former director Modris Karklinsh "[r]esigned on
5/11/2019/" [Exhibits R-10, page 2; R-114]. Moreover, the Form HE4 dated
5 November 2019 was received and recorded with the Registrar of Companies on
11 November 2020 [Exhibit R-10].

233. The Respondent submits that the date of "05/11/2019" was actually the true date
of the appointment, and Komaksavia was under a duty to provide the true date of
the appointment pursuant to Art. 192 of the Companies Law [Exhibit R- 52].

234. The relevant part of the Form HE4 dated 5 November 2019 as filed by the Claimant
with the Registrar of Companies [Exhibit R-10] is reproduced here below:

[Page 57]

\lil\l\t

[Page 58]

235. It is therefore proved that Andreas Menelaou had provided false testimony about
the date of his appointment as the director of the Claimant [cf. paras. 6, 14 of
CWS-Menelaou, Exhibit C-2; paras. 14, 29, 38 of SCWS-Menelaou, Exhibit
[SC- 75]].

236. Although, in the Claimant's Response dated 18 December 2020, the Claimant's
half-heartedly admitted its false statement on the date of Menelaou's
appointment,²⁰⁶ it nonetheless continued to falsely suggest that Andreas Menelaou
had been earlier appointed as the Claimant's Director (see page 23 of the Appendix
I to the Claimant's Response dated 18 December 2020). However, that Claimant's
suggestion was not grounded in any evidence provided in these proceedings [cf.
Exhibits R-10; R- 114].

237. The Claimant has produced a document called "Register of Directors of Komaksavia
Airport Invest Ltd, Registration Number HE359258, Date of Registration: the 19^th
August 2016, Registered Office Address: 256 Makareiou Street, Eftapaton Court,
Flat/Office C3, 3107 Limassol, Cyprus" (the "Register of Directors Held by
Komaksavia"), allegedly signed by the Secretary Lydia Menelaou on 23.12.2019
[Exhibit [C-3]; Exhibit [SC-75], pdf page 70]. The Register of Directors Held by
Komaksavia indicates the date of "23/10/2019"as the "Date of Appointment" of
Andreas Menelaou as the Claimant's director. The Claimant has failed to explain the
reasons of the entries in the Register of Directors Held by Komaksavia which
precede 23 December 2019 being confirmed and signed by Lydia Menelaou, as she
was appointed as secretary only on 23 December 2019 [Exhibit R-11], and how
those entries were to reflect the true dates of the directors' appointment.

238. However, the Respondent submits that the Form HE4 dated 5 November 2019
[Exhibit R-10], which was filed by the Claimant itself with the Registrar of
Companies of Cyprus and confirmed by the Claimant to be "true and accurate" and
"in accordance with the corporate Register of the Company" [Exhibit R-109], is a
better proof, which contradicts the entries in the Register of Directors Held by
Komaksavia [Exhibit [C-3]; Exhibit [SC-75], pdf page 70], which might have
been created post factum by the Claimant.

239. The information in the Form HE4 dated 5 November 2019 [Exhibit R-10] is even
more credible than the alleged information in the Register of Directors Held by
Komaksavia [Exhibit [C-3]; Exhibit [SC-75], pdf page 70], as it is based on the
provisions of Art. 192 of the Companies Law of the Republic of Cyprus. Art. 192
provides in its relevant part as follows:

192.- (1) Every company shall keep at its registered office a
register of its directors and secretaries.
[...]

(4) The company shall, within the periods respectively

²⁰⁶ See page 23 of the Appendix I to the Claimant's Response dated 18 December 2020. ↩

[Page 59]

mentioned in subsection (5), send to the registrar of
companies a return in the prescribed form containing
the particulars specified in the said register and i!.
notification in the prescribed form of any change among
its directors or in its secretary or in any of the
particulars contained in the register, specifying the date
of the change. (emphasis added)
(5) The periods referred to in subsection (4) are the following,
namely:-
(a) the period within which the said return is to be sent shall
be a period of fourteen days from the appointment of the first
directors of the company; and
(b) the period within which the said notification of a change is
to be sent shall be fourteen days from the happening thereof:
Provided that, in the case of a return containing particulars
with respect of any person who is the company's secretary at
the commencement of this Law, the period shall be fourteen
days from the commencement of this Law.
[...)²⁰⁷

240. Accordingly, the Form HE4 dated 5 November 2019 [Exhibit R-10], containing the
particulars specified in the register of the Claimant's directors and secretaries and
change among its directors and in its secretary, specifying the date of the
change, was filed/sent by the Claimant to the Registrar of Companies pursuant to
Art. 192 of the Companies Law and was received by the Registrar of Companies on
11 November 2019. The Form HE4 dated 5 November 2019 was a
contemporaneous document. In contrast, the Register of Directors Held by
Komaksavia [Exhibit [C-3]; Exhibit [SC-75], pdf page 70] might have been
created after the event. Its evidentiary value regarding the date of appointment of
Andreas Menelaou is destroyed by the Form HE4 dated 5 November 2019 [Exhibit
R - 10].

241. Thus, the date of 5 November 2019 was the date of the change among the
directors of Komaksavia and, as specified in the Form HE4 dated 5 November 2019
on file with the Registrar of Companies, Andreas Menelaou was appointed as
director (and secretary²⁰⁸) of Komaksavia on 5 November 2019 and not, as falsely
testified by Andreas Menelaou, on 23 October 2019. Menelaou's testimony in the
CWS-Menelaou and SCWS-Menelaou is on most accounts flawed, in contradiction to

²⁰⁷ Art. 192 of the Companies Law of the Republic of Cyprus [Exhibit R-52). ↩
²⁰⁸ Andreas Menelaou served as the Secretary of Komaksavia allegedly until 23.12.2019 [Exhibit R-11). However, the ↩
Notification of Change of Officers or change to their information with regard to the appointment of Lydia Menelaou as
the Secretary of Komaksavia and resignation of Andreas Menelaou from the office of the Secretary of Komaksavia was
filed late, in violation of the 14-day term as provided for in Art. 192(5) of the Companies Law, and was only received
by the Registrar of Companies on 28 January 2020.

[Page 60]

the facts and evidence; it is anything but "truth" [cf. Exhibit C-2, page 10, the
alleged "Statement of Truth"; Exhibit [SC-75], pages 18-19, the alleged
"Statement of Truth"].

242. At the time of the issuance of the purported Notice of Dispute dated 2 October
2019, Menelaou was not the director of Komaksavia. At that time, as the records
showed [Exhibits R-8], Komaksavia's director was Karklinsh, who resided in
Moscow, Russian Federation. Certainly, the decision to issue the purported Notice of
Dispute was not taken at the Claimant's designated address of the registered office
in Cyprus.

243. There is no proof that the place of the effective management and control of
Komaksavia until 5 November 2019

(vii) Andreas Menelaou Has No Direct Knowledge of Alleged Facts, Events,
Circumstances

244. As to the substance of Andreas Menelaou's written testimony in the CWS-Menelaou,
paras. 7, 8, 9, 11 (including 11.1., 11.2., 11.3.), 12.1., 12.2., 14, 15, 23 refer to
the alleged events, facts or circumstances that predated his appointment as the
director of Komaksavia. He has no direct knowledge of and was not a witness to
those facts, events, and circumstance, and he actually only speculates about them.

245. Furthermore, in fact in the CWS-Menelaou Andreas Menelaou has acknowledged
that he has no direct knowledge of the alleged facts, events, or circumstances
portraited by him in paras. 11 (including 11.1., 11.2., 11.3.), 13-18, 23-29, 32.2.
and other paragraphs of the CWS-Menelaou, because those alleged acts or
measures of the Republic of Moldova which he testifies about are allegedly directed
towards the 'Concessionaire (Concession Enterprise)', not towards the Claimant.
Andreas Menelaou states wholesalely that he "agree[s] with the description of those
measures in the Application" [Exhibit C-2, para. 14].

246. That Andreas Menelaou has no direct knowledge of the alleged facts, events and
circumstances is further evidenced by the "List of the documents submitted with
the Witness Statement of Mr Andreas Menelaou" [Exhibit C-2, page 11]. That List
(of the Exhibit AM1) is reproduced hereunder.

[Page 61]

Exhibit AMI
List of documents submitted with the Witness Statement of Mr Andreas Menelaou

247. 11 out of the 14 documents listed in the List are documents either issued by Avia
Invest to third parties or received by Avia Invest from third parties (not to or from
Komaksavia) [see Nos. 1, 2, 3, 4, 7, 9, 10, 11, 12, 13, 14 of the List]. Furthermore,
documents Nos. 5 and 6 of the List refer to the facts and events predating Andreas
Menelaou's appointment as the director of the Claimant.

248. In the SCWS-Menelaou, the alleged events, facts or circumstances referred to by
Menelaou in a majority of paragraphs, inter alia, in para. 33 (including 33.1., 33.2.
and 33.3.), predate Menelaou's appointment as Komaksavia's director. Accordingly,
Menelaou has no direct knowledge of and has not been a witness to those facts,
events, and circumstance, and he actually only speculates about them.

249. The Respondent notes that the Claimant has not proved that Menelaou has ever
visited Avia Invest (in Moldova) and/or has any first-hand knowledge about the
business of Avia Invest.

(viii) Andreas Menelaou Actually Acts Under the Directions and Instructions of
Shareholders and real UBO

250. The document No. 8 from the above reproduced List (of the Exhibit AM1) is the only
document allegedly issued by Komaksavia at the time at which Andreas Menelaou
was its director [see Exhibit C-2, page 95]. In that document Andreas Menelaou
actually acknowledges that he does not control anything in Komaksavia, and that
"the shareholders of the company" have full control over Komaksavia's affairs,
particularly, with regard to "negotiations with a group of creditors" on the provision
of loans, "reach[ing] an agreement on the provision of the necessary funds",

[Page 62]

clarification of "the legal and technical aspects of the loans' provision" [Exhibit C-2,
page 95]. As he himself recognises, he does not even have the knowledge about the
alleged amount allegedly negotiated by the company's shareholders [see Exhibit C-2, para. 12.3.; cf. Exhibit C-2, page 95].

251. The paragraphs above clearly show that Andreas Menelaou is a director in name only,
provides corporate services to Komaksavia as a practicing lawyer, is poorly informed
about Komaksavia's corporate and business affairs and even about his own capacity
in Komaksavia. It is patently obvious that the company's business is run by other
persons, and not by Andreas Menelaou.

252. According to Art. 192 para. (9) of the Companies Law of the Republic of Cyprus
[Exhibit R-52 bis]:

(9) For the purposes of this section-
(a) a person in accordance with whose directions or
instructions the directors of the company are accustomed to
act shall be deemed to be a director and officer of the
company;
[...]²⁰⁹

253. Accordingly, those who direct and instruct Andreas Menelaou shall be held as officers
(directors) of the Claimant.

(ix) Andreas Menelaou Falsely Refers to Wrong or Inexistent Content of
Claimant's Application

254. In para. 13 of the CWS-Menelaou, Andreas Menelaou referred to an alleged
"description of the RM's hostile and unlawful actions since 2019 [...]" which was
alleged to be found in para. 43 of the Claimant's Application dated 24 July 2020 [see
Exhibit C-2, para. 13]. However, para. 43 of the Claimant's Application dated 24
July 2020 did actually refer to the alleged incorporation and existence of Avia Invest
under Moldovan law [see Claimant's Application dated 24 July 2020, para. 43)²¹⁰
and did not refer to any alleged "description of the RM's hostile and unlawful actions
since 2019 [...]" as falsely alleged by Andreas Menelaou.

255. As evidenced in para. 13 of the CWS-Menelaou, Andreas Menelaou has in fact not
"read the Application fully and carefully" as he falsely and invalidly stated in para. 2
of the CWS-Menelaou [Exhibit C-2, para. 2]. Furthermore, his statement in para. 2
of the CWS-Menelaou that "I approve its contents being in agreement with all of the
statements therein" is actually in sheer dis-agreement with the contradiction between
his statement in para. 13 of the CWS-Menelaou and para. 43 of the Claimant's

²⁰⁹ Art. 192(9) of Companies Law [Exhibit R-52 bis]. ↩
²¹⁰ Para. 43 of Claimant's Application for the Appointment of an Emergency Arbitrator and an Emergency Decision on ↩
Interim Measures, dated 24 July 2020.

[Page 63]

Application dated 24 July 2020, as well as with other false and invalid statements in
the CWS-Menelaou.

(x) Menelaou Was Appointed as Director for Komaksavia to Request Tax
Residency Certificate

256. Whether incorporated in Cyprus or in a foreign country, companies with foreign
shareholders or with business outside Cyprus often appoint and register Cypriot
residents as directors for the purpose of acquiring the tax residency certificate in
Cyprus. By its nature, an appointment of a Cypriot resident as director based on
such rationale is a matter of formality, and the effective decision-making and
control in such companies do not therefore have to relocate to Cyprus.

257. In the instant case, with no proven business activity in the territory of Cyprus²¹¹
and with non-resident shareholders of Cyprus, Komaksavia purportedly appointed
Menelaou as its sole director on 5 November 2019 in order to request a tax
residency certificate form the tax authority in Cyprus.

258. Furthermore, Menelaou was appointed as Komaksavia's director at the stage of
Komaksavia's preparation for this arbitration.

259. Before appointing Menelaou as its director, Komaksavia's directors and
shareholders were foreign citizens and non-residents of Cyprus.

260. With the appointment of Menelaou as its sole director, the effective decision-
making and control in Komaksavia did not however relocate to Cyprus.

261. The Tax Certificate for the year 2020 [Exhibit C4 to the RfA; Exhibit [SC-75], pdf
page 66] does not evidence the Claimant's seat is being located in Cyprus. The Tax
Certificate states that Komaksavia "is registered in Cyprus" and for the year 2020 is
a tax resident of Cyprus. It does not and may not state that Komaksavia has its
seat or registered office in Cyprus, because the certificate's issuer authority, the
Tax Department, is not an authority that investigates whether a company actually
has or not its seat or registered office in Cyprus.

262. Under Cypriot law, a tax certificate is issued entirely based on the information filed
via a questionnaire by the legal entity,²¹² and the actual content of the information
provided in the questionnaire is not independently verified by the tax authority in
any way. Therefore, the Tax Certificate for the year 2020 does not and may not
serve as conclusive proof that Komaksavia is a tax resident of Cyprus for the year
2020. This matter may and should be determined alone by the Tribunal.

²¹¹ Despite its allegation that "the Claimant is Cypriot company with its place of business firmly rooted in Cyprus" ↩
[para. 77 of the Claimant's Reply dated 5 March 2021], no such "firmly rooted" business has been introduced into
evidence by the Claimant.
²¹² See the Form of the Tax Residency Certificate Request and Questionnaire for Legal Entities, Republic of Cyprus ↩
[Exhibit R-138).

[Page 64]

263. Under the Income Tax Law of Cyprus, '"resident in the Republic' - means a
company whose management and control is exercised in the Republic".²¹³ As
proved by the Respondent the management and control of Komaksavia is not
exercised in the Republic of Cyprus.

264. The Claimant submitted a purported Certificate of Incorporation issued by the
Registrar of Companies of Cyprus on 19 August 2016 [Exhibit C-4, page 1, to the
RfA] apparently to substantiate that Komaksavia has its registered office in Cyprus.
The Certificate of Incorporation does not provide an address.

265. However, a certificate of incorporation does not deem certification of the company's
incorporation by the Registrar of Companies as a sufficient condition for holding a
registered office in existence. Such an interpretation, however, would defeat the
very purpose of a registered office and Cyprus corporate practice. It would lead to
imposing on the Registrar of Companies a time-consuming, and costly, obligation of
an actual inspection of the premises and supporting documents as to the
company's right to use them.

266. In Laerstate BV v. The Commissioner for Her Majesty's Revenue and Customs²¹⁴
which was decided in the UK, a jurisdiction from which Cyprus also takes
inspiration, the court said:

"There is no assumption that CMC [central management and
control] must be found where the directors meet. It is entirely
a question of fact where it is found. Where a company is
managed by its directors in board meetings it will normally be
where the board meetings are held. But if the management is
carried out outside board meetings one needs to ask who was
managing the company by making high level decisions and
where, even where this is contrary to the company's
constitution."²¹⁵

267. The court in that case went on to say that the test is not confined to looking at
particular actions of the company (e.g., signing documents or making board
resolutions) if a more general overview of the course of business and trading shows
that as a matter of fact the central management and control abides
elsewhere.²¹⁶ The court indicated that the mere fact that the director was
resident in the UK during the relevant time did not of itself mean that
Laerstate, which was incorporated in the Netherlands, was resident in the
UK.²¹⁷ Rather, as the court indicated, the question was whether the director was

²¹³ Art. 2 {definition of "resident in the Republic") of the Income Tax Law, 2002, No.118(1)/2002 [Exhibit R-137]. ↩
²¹⁴ See the Decision in Laerstate BV v. The Commissioner for Her Majesty's Revenue and Customs, released on 11 ↩
August 2009 [Exhibit R-139].
²¹⁵ Ibid., para. 27. ↩
²¹⁶ Ibid., para. 28. The court applied the legal test developed in De Beers Consolidated Mines Ltd v. Howe {Surveyor of ↩
Taxes) {1906) AC 455, in which Lord Loreburn (at p. 458) said: "I regard that as the true rule, and the real business is
carried on where the central management and control actual abides."
²¹⁷ Ibid., para. 39. ↩

[Page 65]

exercising central management and control in the UK.²¹⁸ Because of the key
decisions having been taken in the UK, Laerstate was held to be UK resident under
domestic law.²¹⁹

268. As the evidence on the record proves, the central management and financial control
of Komaksavia has not been exercised by its sole director, but by the shareholders
and the real UBO outside the territory of Cyprus. Furthermore, the Claimant has
had no business in the territory of Cyprus, despite the unproven assertion that "the
Claimant is a Cypriot company with its place of business firmly rooted in Cyprus".²²⁰
Accordingly, the central management and control does not abide in Cyprus.

269. Accordingly, the Tax Certificate for the year 2020 [Exhibit C4 to the RfA; Exhibit
[SC-75], pdf page 66] cannot be considered conclusive evidence that "for the year
2020" the Claimant is tax resident of Cyprus.

270. In any event, the Tax Certificate does not prove that the Claimant has its seat in
the territory of Cyprus, as Cypriot tax legislation shall be strictly interpreted in
accordance with its peculiar notions and definitions and may not help in defining
the term "seat" under the BIT. For similar reasons, the tribunal in CEAC v
Montenegro found that '"seat' cannot be equated with 'tax residence III ²²¹ and that
"regardless of whether Claimant is a tax resident of Cyprus or not, its tax residency
cannot serve to prove that CEAC has a 'seat' in Cyprus for the purposes of Article
1(3)(b) of the BIT".²²²

271. In any event, the key condition of the provision of Art. 1(3)(b)(ii) - "having their
seat in the territory of the Republic of Cyprus" - is not met by the Claimant.

d. No Proper Physical Premises for "Registered Office" and/or "Seat" in
Cyprus

(i) The "Working Place 02" May Not and Does Not Serve as the "Registered
Office" and/or "Seat"

272. Komaksavia has not proved that it has business premises in Cyprus. The "working
space 02", which it allegedly rents under the alleged Sublease Agreement dated
4 July 2018 [Exhibit [C-8]] in the office of the law firm Andreas Menelaou LLC²²³
does not mean business premisses. No physical parameters of the "working space
2" (which is improperly referred to as the "Office") have been provided, let alone

²¹⁸ Ibid., para. 39. ↩
²¹⁹ Ibid., paras. 41, 45, 51. ↩
²²⁰ Para. 77 of the Claimant's Reply dated 5 March 2021. ↩
²²¹ Central European Aluminum Company {CEAC) v. Montenegro, ICSID Case No. ARB/14/8, Award, dated 26 July 2016, ↩
para. 209 [Exhibit RLA-17].
²²² Ibid., para. 211. ↩
²²³ See SCWS-Menelaou, para. 36.1. [Exhibit [SC-75]). ↩

[Page 66]

proven, by the Claimant. The "working space 02" has not been shown to be
measurable or measured in units of area [cf. Exhibit [C-8]].

273. It is not clear whether the "working space 02" in the Sublease Agreement between
Andreas Menelaou LLC and Komaksavia Airport Invest Ltd is the same as the
"working space 02" in the Sublease Agreement between Andreas Menelaou LLC and
Komaksavia Investment Ltd [Exhibit [SC-75]; Exhibit [C-2]; Exhibit [CA-35]
²²⁴].²²⁵ There is no doubt that the same "working space 02" in the Sublease
Agreement between Andreas Menelaou LLC and Komaksavia Airport Invest Ltd is
the co-working space shared by an exceptionally large number of companies as
their "registered office", as substantiated in the following paragraphs. Given these
circumstances, the "working space 02" indicates a cubicle or a pigeonhole, and not
a separate room. Therefore, the "working space 02" may not be equated with an
"Office", as improperly referred to in the Sublease Agreement dated 4 July 2018
[Exhibit [C-8]].

274. The space rented to the Claimant as the "working space 02" lacks functional
autonomy and, indeed, any kind of autonomy to serve as a "registered office". And
by any standards, the "working space 02" may not serve as the "seat" of the
Claimant. The "working space 02" is an integral and functional part of a "larger
space", "situated in the offices",²²⁶ used by a vast number of other companies and
for the purposes of various other administrative services and legal services by the
law firm Andreas Menelaou LLC and the lawyers thereof.

275. The "working space 02" may not be delimitated or separated so that it is not
continuously trespassed by the users of the other integral parts of the "larger
space". Moreover, the "working space 02" may not be used without continuously
trespassing other spaces and/or "working spaces".

276. Furthermore, a more substantial problem is the one concerning the possibility of an
effective, functional and purposeful use of the "registered office", as it is defined in
Sections 102 and 103 of the Companies Law [Exhibit R-52 bis), in the "working
space 02". This is even more so problematic, as the Claimant has alleged that it

"conducts real economic activity on the territory of the
Republic of Cyprus, which, inter alia, could be proven with
the office sub-lease agreement [see exhibit CA-35]],
employment agreements confirming general business costs,
liabilities and owned assets, extracts and analytical statements
from financial statements confirming general administrative or
operational expenses related to the company's business

²²⁴ It should be noted that the same sublease agreement between Andreas Menelaou LLC and Komaksavia Investment ↩
Ltd was submitted twice, as Exhibit [C-2] and Exhibit [CA-35], with the Claimant's Response dated 18 December 2020.
²²⁵ In a footnote [Footnote 13] to the Claimant's Reply dated 5 March 2021, the Claimant has halfheartedly recognized ↩
an "administrative error" in that it introduced into evidence the purported Sublease Agreement concluded between
Andreas Menelaou LLC and Komaksavia Investment Ltd on 4 July 2018 [Exhibit [SC-75]; Exhibit [C-2]; Exhibit [CA-35]).
²²⁶ SCWS-Menelaou, para. 36.1. [Exhibit [SC-75]). ↩

[Page 67]

activity; "²²⁷ (emphasis added).

277. The alleged "[r]eal economic activity on the territory of the Republic of Cyprus"
(which has not been proven by the Claimant) cannot be conducted from a cubicle
or pigeonhole. Such "real economic activity" would require proper functional and
adequate physical premises which the "working space 02" is not. Moreover, the
conduct of any corporate activity would require adequate physical premises to meet
the conditions set out in Sections 102 and 103 of the Companies Law, and the
Claimant has not substantiated, let alone proved, that the "working space 02" is in
conformity with those required conditions.

278. Co-sharing business spaces has its physical limits there, where it encroaches on the
functionality and autonomy of a "registered office" and/or "seat", or the physical
capacity or limits thereof. Since the "working space 02" should be continuously
trespassed by the users of the other dozen "working spaces" rented to those
numerous companies, it cannot have the meaningful functions of the Claimant's
"registered office" and/or "seat".

279. At the same time, co-providing that large range of administrative services (see
para. 284 below) to so many companies encroaches on the physical capacity and
limits of Menelaou to take meaningful and detailed business decisions as
Komaksavia's director which he, as a matter of fact, does not take. As indicated in
other subsection of this Memorial, Menelaou's decision-making within Komaksavia
is of a clerical, housekeeping, front-desk nature only, not of a management nature.

280. In any event, the provision of the "working space 02" to the Claimant does not
locate the decision-making of the Claimant at the "working space 02" or at the
address indicated by the Claimant.

281. The object of the purported Sublease Agreement dated 4 July 2018 is the rent of
the "working space 02" and not the administrative services of "provision of
registered office address"²²⁸ to Komaksavia [Cf. Exhibit [C-8]]. The use of the
address of the law firm Andreas Menelaou LLC as the designated address of the
Komaksavia's registered office is not even mentioned in the Sublease Agreement
dated 4 July 2018. Furthermore, the "working space 02" has not been mentioned or
specified as the "registered office address" of Komaksavia in the Notification of the
Address of the Registered Office [Exhibit R-61]. Thus, the "working space 02"
does not equate the "registered office address", nor should it be construed to
constitute Komaksavia's "registered office address". The Claimant however has
mixed up those two issues.

²²⁷ Para. 13S(vi) of the Claimant's Response dated 18 December 2020. Except the purported Sublease Agreement ↩
dated 14 July 2018, none of the documents listed by the Claimant to prove its alleged economic activities has been
introduced into evidence.
²²⁸ Such as regulated in Art. 4(1)(iv) of the Law regulating Companies Providing Administrative Services and Related ↩
Matters [Exhibit R-136).

[Page 68]

282. In any event, even the provision of a registered office address would not locate the
decision-making in Komaksavia at that address given that Komaksavia's decision-
making is not with its director, but it is with the shareholders and the real UBO.

283. The Claimant has not proved that it had paid the "agreed rent" (in the amount of
EUR225) for the "working space 02" under the Sublease Agreement to the law firm
Andreas Menelaou LLC. Furthermore, Claimant has not proved that it has had any
income from which it would pay the "agreed rent", or whether it has been issued
with invoices by the law firm Andreas Menelaou LLC.

284. The address indicated by the Claimant²²⁹ is an address of the law firm Andreas
Menelaou LLC at which address more than twenty-five other companies also
have notified their address of their registered offices with the Registrar of
Companies,²³⁰ highly likely on the basis of the same terms and conditions as the
Sublease agreements submitted by the Claimant in these proceedings [Exhibit-
[C-8]; Exhibit [SC-75]; Exhibit [C-2]; Exhibit [CA-35]]. In addition, as
described elsewhere in this Memorial, at the same address of the law firm Andreas
Menelaou LLC, Andreas Menelaou provides simultaneously the administrative
services of rendering directors, mostly in form of a sole director, to well over fifty
(SO) companies incorporated in Cyprus,²³¹ as well in other countries.²³² Also at
the same address/ in the same office of the law firm Andreas Menelaou LLC,
Andreas Menelaou provides administrative services of rendering secretary to
numerous active companies incorporated in Cyprus.²³³ Furthermore, the same

²²⁹ See para. 1 of the SoC; see also para. 1 of the RfA. ↩
²³⁰ See, for example, Exhibits R-13; R-14; R-15; R-16; R-17; R-18; R-19; R-20; R-21; R-22; R-23; R-24; R-25; R-29; R-31; ↩
R-32; R-33; R-34; R-36. The Law Firm Andreas Menelaou LLC has its registered office at the same address, see Exhibit
R-27.
²³¹ See, for example, Exhibits R-13; R-14; R-16; R-18; R-19; R-20; R-21; R-22; R-24; R-25; R-26; R-29; R-31; R-32; R-33; ↩
R-34; R-35, as well as of other Cypriot companies, inter alia, Lenta PLC (reg. No. HE407296), Amashen Limited
(HE398867), Rouanari Enterprises Limited (HE365980), IDF Holding Ltd (HE317558), SP Cosmoart Studio Lashes
Limited (HE400195), Gluckstenson Holding Limited (HE389102), Netmaco Limited (reg. No. HE367384), Galaga
Investments Limited (HE417170), Kerfirua Holding Limited (reg. No. HE241818), Fondport Ltd (reg. No. HE412231),
Creative Universe (reg. No. HE411619), Zinagori Limited (reg. No. HE338346), Propexperts Ltd (reg. No. HE377867),
Alson Limited (reg. No. HE207982), AB Beneficio Neto Investments Limited (reg. No. HE394768), Hedonism Wine
Trading I Ltd (HE412245), AS Sales Revenue Investments Limited (HE394766), Bravarus Limited (HE392200), Joferno
Limited (HE310431), Quasiva Limited (HE400898), Betop Holding Group Investment and Management Ltd (HE363750),
Otmostio Limited (HE416326), Shenron Limited (HE383308), Marlini Executive OV Limited (HE394938), Actencia
Limited (HE302515), Lnex Limited (HE363789), Saule Invest Properties Ltd (HE401043), SB Regulus Lucens Investments
Limited (HE394953), A. Menelaou Mechanical Services Ltd (HE395509), Greista Investments Limited (HE194433), BP-
Properties Limited (HE234901), Vneshposyltorg Group Limited (HE349385), Solagran Limited (HE182963), Trustville
Limited (HE241364), Cadillacing Investments Limited (HE244719), I.M.C. Demand (CY) Limited (HE347429), Starbiz
Limited (HE349385), AIFG Trading Company Limited (HE371042). Andreas Menelaou is the Director and Secretary of
the Law Firm Andreas Menelaou LLC, see Exhibit R-27.
²³² Andreas Menelaou is the director of the company Pewdie Productions UK Limited (No. 09742888) [Exhibit R-1241, ↩
oversea company Hedonism Wine Trading I (No. FC038142) [Exhibit R-125), company PDPUK Limited (former PXM
Network Limited) (No. 9795904) [Exhibit R-126), all registered in England and Wales.
²³³ Andreas Menelaou is the secretary, inter alia, of the following Cypriot companies: Zinorel Limited (HE299392), AB ↩
Beneficio Neto Investments Limited (reg. No. HE394768), MSS Global Trade Consultants Limited (HE360952),
Stratosoft Limited (HE377486), AS Sales Revenue Investments Limited (HE394766), MGC Construction Limited
(HE88729), A. Menelaou Mechanical Services Ltd (HE395509), Gluckstenson Holding Limited (HE389102), Saule Invest

[Page 69]

address / the same office of the law firm Andreas Menelaou LLC is used by the
advocate Andreas Menelaou to provide legal services to clients in the areas as
advertised on the law firm's website www.menelaou-law.com [Exhibit R-49].
Moreover, at the same address, Lydia Menelaou provides administrative services of
rendering secretary to a very large number of active companies registered in
Cyprus.

285. Thus, the "working place 02" may not and does not serve as the "seat" and/or
"registered office" of the Claimant.

286. Furthermore, the "working space 02" may not and does not server as the address
of the registered office of the Claimant. Nor has it been indicated in the Notification
of the Address of the Registered Office [Exhibit R-61].

287. The Respondent has brought sufficient evidence in paras. 148 et seqq. and 196 et
seqq. that the decisions taken by the shareholders of Komaksavia have not been
located at the "working space 02" or at the address indicated by the Claimant in
the RfA and Soc and, moreover, not in the territory of Cyprus. Also, the financial
control of Komaksavia has not been located at the "working space 02" or at that
address and, furthermore, not in the territory of Cyprus. In addition, the decisions
of the shadow directors, which actually have continuously exercised the effective
management of Komaksavia, have definitely not been located at the "working
space 02" or at that address, or otherwise in the territory of Cyprus. Accordingly,
the "seat" of the Claimant has not been located at the "working space 02" or at the
address provided by the Claimant and, furthermore, not in the territory of Cyprus.

288. The address provided by the Claimant is a purely formal address. It is not the place
where the effective management and control of the Claimant has been carried out.
Also, it is not the place of "some sort of actual or genuine corporate activity."²³⁴

(ii) The Purported Sublease Agreement Is Not Valid

289. The Sublease Agreement between the law firm Andreas Menelaou LLC and
Komaksavia Investment Ltd dated 4 July 2018, which was the first such sub-leases
submitted by the Claimant in these proceedings [Exhibit [SC-75]; Exhibit [C-2];
Exhibit [CA-35]], is signed by Menelaou and sealed with the company seal of the
law firm Andreas Menelaou LLC which contains the name of the law firm engraved
in Greek characters: "AND.PEAL MENEMΟΥ b..E.n.Ε." and the registration number
"HE 357259". The relevant part of the signature block, including the seal of
Andreas Menelaou LLC, of that Sublease Agreement is reproduced here below:

Properties Ltd, HE401043, A.M.Menelaou Bros Food & Beverage Limited (HE325283), Q.M.S. Network Limited
(HE379109), Propexperts Ltd (HE377867), Sarbitek Limited (HE302321).
²³⁴ Tenaris S.A. and Ta/ta - Trading e Marketing Sociedade Unipessoa/ Lda. v. Bo/ivarian Republic of Venezuela, ICSID ↩
Case No. ARB/11/26, Award, 29 January 2016, para. 150 [Exhibit RLA-37].

[Page 70]

290. The purported Sublease Agreement between the law firm Andreas Menelaou LLC
and Komaksavia Airport Invest Ltd dated 4 July 2018, which was submitted by the
Claimant in these proceedings on 5 March 2021 [Exhibit [C-8]],²³⁵is signed by
Menelaou and sealed with the company seal of the law firm Andreas Menelaou LLC
which contains the name of the law firm engraved in Latin characters: "ANDREAS
MENELAOU LLC" and the registration number "HE 357259". The relevant part of the
signature block of that Sublease Agreement is as well reproduced here below:

291. It is highly suspicious that the two Sublease agreements concluded by the law firm
Andreas Menelaou LLC with either of the two companies, Komaksavia Airport Invest
Ltd and Komaksavia Investment Ltd (the latter being a company registered in
Cyprus under the No. HE359254 on 19 August 2016; with the same Kyriakos Y.
Panagos as the first shareholder, director and secretary; and, starting 21.12.2016,
having Marin Mihov Tenev as the sole shareholder, sole director and secretary; with
1000 ordinary shares; with a "Reminder letter sent" on the same date of
10.10.2019),²³⁶ each purportedly dated with the same date of 4 July 2018, each
having its object the rent of the "working space 02", each containing the same
terms and conditions, were nonetheless sealed with distinct seals of the law firm
Andreas Menelaou LLC.

292. Accordingly, if the two Sublease agreements are real, on 4 July 2018, the law firm
Andreas Menelaou LLC had and used two various company seals. This is, however,
unlawful, because under the Companies Law, a company shall have one "common

²³⁵ Submitted as an exhibit to the Claimant's Reply dated 5 March 2021. ↩
²³⁶ See the Excerpt regarding Komaksavia Investment Ltd from the file of the electronic records of the Companies ↩
Section of the Department of Registrar of Companies and Official Receiver of the Republic of Cyprus [Exhibit R-143).

[Page 71]

seal" (Art. 15(1)) [Exhibit R-52 bis]. Also, Art. 1 of Andreas Menelaou LLC's
Articles of Association defines "Seal" as "the common seal of the Company"
[Exhibit R-144]. Furthermore, Art. 115 of the Articles of Association regulates the
"custody of the Seal" and how "the Seal shall be affixed". There is no provision in
Art. 115 about any official seal (as regulated under Art. 36(1) of the Companies
Law) in addition to the common seal. In any event, neither of the two seals of
Andreas Menelaou LLC were issued pursuant to Art. 36(1) of the Companies Law.
Accordingly, Andreas Menelaou LLC should have had only one company seal - the
common seal - on 4 July 2018. Thus, one of the two seals were not the "common
seal" of Andreas Menelaou LLC and, therefore, invalid, with the consequence that
also at least one of the two Sublease agreements were invalid as well.

293. The Respondent submits that the purported Sublease Agreement between the law
firm Andreas Menelaou LLC and Komaksavia Airport Invest Ltd dated 4 July 2018
[Exhibit [C-8]] was invalid on the ground provided in previous paragraphs. That
Agreement bore the seal which contained the name of the law firm engraved in
Latin characters "ANDREAS MENELAOU LLC", which was not the common seal of
Andreas Menelaou LLC on 4 July 2018. At that time, the common seal of Andreas
Menelaou LLC was the seal which contained the name of the law firm engraved in
Greek characters "ANfJ.PEAX MENEI\AOY fJ..E.n.E.".

294. Furthermore, pursuant to Section 77(1) of the Contract Law (Cap. 149) of the
Republic of Cyprus,²³⁷ in the case of a lease contract of an immovable property for
a period exceeding one year, it shall not be valid and enforceable unless it is in
writing and signed at the end thereof by each contracting party, in the presence
of at least two witnesses who are competent to contract [Exhibit R-145]. It
has not been proved by the Claimant that the signatures of the Parties had been
witnessed by both witnesses, Lydia Menelaou and Svetlana Ulanova,²³⁸ that both
witnesses were present in person at the places where the Sublease Agreement was
signed by the one and the other Party thereof.

²³⁷ Section 77(1) of the Contract Law (Cap. 149) provides as follows: ↩
"Contracts relating to leases of immovable property for any term exceeding one year shall not be valid and
enforceable unless--
(a) expressed in writing; and
(b) signed at the end thereof, in the presence of at least two witnesses themselves competent to contract who have
subscribed their names as witnesses, by each party to be charged therewith or by a person who is himself competent
to contract and who has been duly authorised to sign on behalf of such party."

²³⁸ Svetlana Ulanova, a Moldovan lawyer, is the spouse of Denis Ulanov, a Moldovan lawyer, the permanent lawyer of ↩
Shor and its affiliates in the Republic of Moldova.
The Republic of Moldova notes that Ulanov Denis represented 000 Komaksavia before all organs of the Republic of
Moldova by a Power of Attorney issued on 21.12.2015 and legalised by the Moldovan public notary Bondarciuc Olga
(entry No. 6472).
Ulanov Denis also represented TB Team Management LLP by a Power of Attorney issued on 10.06.2016 and legalised
by public notary Bondarciuc Olga. Furthermore, Ulanov Denis represented Dylox United Ltd., the alleged executive
partner of TB Team Management LLP.

[Page 72]

295. It shall be reminded here that the purported Sublease Agreement between the law
firm Andreas Menelaou LLC and Komaksavia Airport Invest Ltd [Exhibit [C-8] was
submitted by the Claimant in these proceedings only upon the objections raised by
the Respondent regarding the repeatedly submitted wrong Sublease agreement
[Exhibit [C-2]; Exhibit [CA-35]; Exhibit [SC-75]].

296. In any event, the Sublease Agreement dated 4 July 2018 proves neither the seat
nor the registered office of Komaksavia at the address of the law firm Andreas
Menelaou LLC. Firstly, the object of the Sublease Agreement is renting the "working
space 02" [Exhibit [C-8]]. The object of the Sublease Agreement is not the
administrative services of "provision of registered office address" to Komaksavia.
Komaksavia did not and does not purchase a "registered office address" under the
Sublease Agreement. Accordingly, Andreas Menelaou LLC does not provide
"registered office address" to Komaksavia, as regulated in Art. 4(1)(b)(iv) of the
Law regulating Companies Providing Administrative Services and Related Matters
[Exhibit R-136].

297. Under the Sublease Agreement, Komaksavia is provided with the right to use the
"working space 02"; it is not provided with the address of the law firm Andreas
Menelaou LLC for its purported "registered office address". Furthermore, the
"working space 02" was not and is not the "registered office address" of
Komaksavia, nor should it be construed to constitute Komaksavia's "registered
office address". Accordingly, the Sublease Agreement could have not constituted
the basis for the establishment of the purported "registered office" at the address
of the law firm Andreas Menelaou LLC. Komaksavia notified its purported
"registered office" at the address of Andreas Menelaou LLC [Exhibit R-61],
however, as analysed by the Respondent in paras. 100, 108, 319,²³⁹ the Registrar
of Companies did not independently investigate the Sublease Agreement and
whether Komaksavia had actually been provided with an address of its purported
registered office.

298. Secondly, on 4 July 2018, the director of Komaksavia was Karklinsh, a resident of
the Russian Federation [Exhibits R-8; R-10]. Menelaou was not the director of
Komaksavia on 4 July 2018. Hence, the purported management decisions by
Komaksavia's director were not located in Cyprus. The purported rent of the
"working space 02" under the Sublease Agreement did not cause the seat of
Komaksavia to relocate to or to establish in Cyprus on 4 July 2018.

299. Thirdly, no management decisions have been located at the "working space 02" in
the law firm Andreas Menelaou LLC since the appointment of Andreas Menelaou as
Komaksavia's director on 5 November 2019, because as argued by the Respondent
in paras. 196 to 207, as well as at para. 148 et seqq., the effective management
and control of Komaksavia has been exercised by its shareholders and real UBO,
who have acted as Komaksavia's shadow directors.

²³⁹ See also the RER-Papadopoulos, pp. 35-36. ↩

[Page 73]

(iii) Komaksavia Does Not Meet the Substance Criteria of AML Directive

300. The Claimants has asserted that it "should not be considered a shell company
under the laws of Cyprus".²⁴⁰ The Claimant has referred to the Central Bank of
Cyprus's Fifth Directive to Credit Institutions on "Prevention of Money Laundering
and Terrorist Financing" dated February 2019 (the "AML Directive") [Exhibit
[CA-34]] issued under the Prevention and Suppression of Money Laundering
Activities Law of the Republic of Cyprus of 2007 (Law No. 188(1)/2007), as
amended in 2019 [Exhibit R-113], which has transposed into Cyprus law the
Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May
2015 on the prevention of the use of the financial system for the purposes of
money laundering or terrorist financing [Exhibit R-69]. The Claimant has further
argued that it meets the "substance" criteria set out in the AML Directive.

301. It shall be noted that the AML Directive "falls within the scope of banking law and
not within the scope of company law".²⁴¹ However, should the AML Directive found
applicable to the Claimant's status, the Respondent notes that, despite its
assertions, the Claimant does not meet the substance criteria set out in the AML
Directive.

302. Art. 151(a) of the AML Directive sets out, in relevant part, as follows:

"The physical presence of a company/entity is interpreted as
the existence of a place of business or activity (owned or
leased buildings) in the country of incorporation/registration.
Also, the absence of substantial management
(meaningful mind} and administration could be
interpreted as lack of physical presence. The presence of a
third person who merely provides services as a
representative/proxy person, including the duties of the
secretary of the company, is not in itself an indication of
physical presence."²⁴²

303. Firstly, with regard to physical presence requirement, it should be noted that it is
not satisfied by "a postal address", a cubical, a pigeonhole, or the "working space
02", because "a place of business or activity" is needed. The Claimant has produced
a Sublease Agreement dated 4 July 2018 through which it has allegedly obtained
rights to "working space 02" in the premises of the law firm Andreas Menelaou LLC.
This does not by itself satisfy the physical presence requirement.

304. Secondly, it should be further noted that "the absence of substantial management
(meaningful mind) and administration could be interpreted as lack of physical
presence."²⁴³ As proved by the Respondent, the management, administration, and
control of Komaksavia has been throughout carried out by the shareholders and the

²⁴⁰ Para. 134 of the Claimant's Response dated 18 December 2020. ↩
²⁴¹ RER-Papadopoulos, pp. 59-60. ↩
²⁴² Art. 151(a) of the AML Directive [Exhibit [CA-34]). ↩
²⁴³ Ibid. ↩

[Page 74]

real UBO, not by Komaksavia's director Menelaou. Furthermore, the AML Directive
makes it clear that "the presence of a third person who merely provides services as
a representative/proxy person, including the duties of the secretary of the
company, is not in itself an indication of physical presence."²⁴⁴ Menelaou in fact
merely provides services that are not related to managing Komaksavia. He is not
the "meaningful mind" of Komaksavia.

305. Thirdly, concerning the business activity, no evidence of any Cyprus-related
business activity performed by Komaksavia itself has been introduced into
evidence, although Komaksavia has alleged it has "its place of business firmly
rooted in Cyprus".²⁴⁵ Until the beginning of 2021, Komaksavia has deposited no
accounts, annual return [Form HE32], or any other document providing information
about its operations to the Registrar of Companies, as required by Cyprus law.

306. Fourthly, the Claimant does not fall under the "circumstances [which] could indicate
a business activity".²⁴⁶ Art. 151(b) sets out, in relevant part, as follows:

"i. the company/entity was established/incorporated for
the purpose of holding share capital or shares or equity
instruments of another business entity or entities dealing with
legitimate business with identifiable ultimate beneficial
owner(s),
ii. the company/entity was established/incorporated for the
purpose of holding intangible or other assets, including
immovable property, ships, aircrafts, investment portfolio,
debt and financial instruments,
iii. the company/entity was established/incorporated to
facilitate monetary transactions and assets transfers,
corporate mergers, and also for the execution of asset
management activities and the trading of shares,
iv. the company/entity acts as treasurer for companies
recognised as a group or manages the activities of the group,
v. any other case where conclusive evidence can be provided
that the company/entity is involved in a legitimate business,
with identifiable ultimate beneficial owner(s)."²⁴⁷

307. Firstly, as evidenced in Clause 3 ("The objects for which the company is
established ... ") (sub-closes 1 to 37) of the Memorandum of Association,
Komaksavia was established/incorporated for a whole range of business activities
[Exhibit R-127 part I], and not solely "established/incorporated for the purpose of
holding shares capital or shares or equity instruments of another business
entity...".²⁴⁸ In fact, Komaksavia has alleged it has "its place of business firmly

²⁴⁴ Ibid. ↩
²⁴⁵ Para. 77 of the Claimant's Reply dated 5 March 2021. ↩
²⁴⁶ See Art. 151(b) of the AML Directive [Exhibit [CA-34]). ↩
²⁴⁷ Art. 151(b) of the AML Directive [Exhibit [CA-34]). ↩
²⁴⁸ /bid., para. 151(b)(i). ↩

[Page 75]

rooted in Cyprus".²⁴⁹ Furthermore, the Claimant has not proved who the
"identifiable" UBO(s) of "another business entity" is (are). Accordingly, the
Claimant does not meet the circumstances under Art. 151(b)(i).

308. In addition, Menelaou is not and may not be²⁵⁰ the Managing Director of the
Claimant as substantiated by the Respondent in paras. 210 et seqq.

309. Secondly, the Claimant has not proved who its "identifiable" UBO(s) is (are). In
fact, the Claimant's real UBO is Shor. Therefore, the Claimant does not meet the
circumstances under Art. 151(b)(v).²⁵¹

310. Accordingly, there is no physical presence of Komaksavia in the territory of Cyprus
pursuant to the AML Directive.

(iv) Komaksavia's Director Denies Access to the Purported Registered Office

311. On 14 May 2021, Aimilia Efstathiou, a lawyer at the law firm Elias Neocleous & Co
LLC, Limassol, Cyprus,²⁵² contacted Komaksavia's registered director, Andreas
Menelaou via e-mail ([email protected]) and mobile phone
number (+357 96 675665) to agree on a visit of Mrs Efstathiou to Komaksavia's
purported registered office on 17 May 2021 with the purpose of a discussion on
whether the necessary registers are located at the registered office of the company
and to receive some information. Mrs Efstathiou told Menelaou that she will be a
witness in this Arbitration.

312. Menelaou told Mrs Efstathiou that there was no such a possibility and, in light of the
fact that Komaksavia and the Republic of Moldova were opponent parties in the
arbitration, Komaksavia had no willingness for such a meeting. Menelaou further
told Mrs Efstathiou that he was going to inform his clients accordingly, and then he
was going to reply to Mrs Efstathiou's e-mail.²⁵³

313. This phone discussion between Mrs Efstathiou and Menelaou on 14 May 2021 is
highly relevant of Menelaou's role in Komaksavia. The dialog reveals that Menelaou
told Mrs Efstathiou that has to go back to "his clients", whoever they actually are,
as Menelaou would not reveal, and only then he could answer any questions or
requests of Mrs Efstathiou. This wording of Menelaou denotes that as a matter of
fact he does not take decisions in Komaksavia, that the decisions are taken by "his
clients", and what Menelaou has to report back to Mrs Efstathiou as a reply to her
email is the decision of "his clients". This was precisely a situation where Menelaou

²⁴⁹ Para. 77 of the Claimant's Reply dated 5 March 2021. ↩
²⁵⁰ The Regulation 18 of the Code of Conduct Regulations of 2002, Cyprus Bar Association [Exhibit R-51), does not ↩
permit an advocate to manage/ conduct any business or being an active member of such business, including to be
managing director of any business. The Respondent notes that the Regulation derives its authority from Art. 32 of the
Advocates Law {Cap.2) [Exhibit R-50).
²⁵¹ The other condition of Art. 151(b)(v) has as well not been proved by the Claimant. ↩
²⁵² RWS-Efstathiou. ↩
²⁵³ Ibid. ↩

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showed and proved that he was accustomed to act under the directions and instructions of the shareholders and the real UBO.

314. On 17 May 2021, Mrs Efstathiou called Menelaou a second time to inquire whether his clients had approved the communication and the visit by Mrs Efstathiou to Komaksavia registered office to inspect the registers that shall be kept at a company's office and available for inspection by any third party.²⁵⁴ Menelaou told her that he received no positive instructions to respond to Mrs Efstathiou in writing. He further told Mrs Efstathiou that they denied the visit to the purported registered office of Komaksavia. Menelaou also stated that the information which the Respondent sought could be found in Komaksavia's file of the Registrar of Companies which is updated.

315. On 17 May 2021, after the call conference between Mrs Efstathiou and Menelaou, Mrs Efstathiou visited the building Eftapaton Court, located at Makareiou, 256, CY- 3107 Limassol, Cyprus, where the purported registered office of Komaksavia is located.²⁵⁵ A number of companies' offices are located in Eftapaton building. At the entrance of the building there was a large vertical board with companies' names [Exhibit R-152]. Among those names there was the name of law firm Andreas Menelaou LLC, but no name of Komaksavia. She went up to the third floor, where the office C3 was located. Next to the entrance door to C3 there was a board with the name of the law firm Andreas Menelaou LLC. However, the name of Komaksavia was not shown in there either. The entrance door of C3 was closed, and Mrs Efstathiou did not attempt to knock the door because Menelaou had earlier denied her the visit to the purported registered office of Komaksavia. She did not manage to note whether employees were inside the office or not. Furthermore, she was not able to see what "working place 02" would look like.²⁵⁶

316. The Respondent notes that Menelaou denied the visit of Mrs Efstathiou on the ground that he had not received positive instructions from his clients to do so. Also, since there were no positive instructions form Menelaou's clients, he did not respond to the e-mail sent by Mrs Efstathiou to Komaksavia on 14 May 2021. This again substantiates the role the "clients", that is, of those behind Komaksavia, in the management and control of Komaksavia - the paramount role. Menelaou answers are further proof of him following the instructions and directors of the "clients" and being accustomed to follow such instructions and directions. Those instances prove that Mr Menelaou is not in charge of the management and control of Komaksavia and, accordingly, Komaksavia's seat is not located in Cyprus.

e. No Certificate of Registered Office Submitted by the Claimant

317. The Claimant has provided no certificate of registered office issued by the Registrar of Companies.

²⁵⁴ Ibid. ↩
²⁵⁵ Ibid. ↩
²⁵⁶ Ibid. ↩

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318. However, even if the Claimant were to present such a certificate, it would not prove that Komaksavia's registered office is located at the designated address in Cyprus and, moreover, that Komaksavia's registered office is located in Cyprus.

319. The Respondent notes that it has long been universal practice of the Registrar of Companies of Cyprus to require a declaration of registered office in order to incorporate the company, without, however, independently investigating whether the declaration is actually correct, whether the company has actually been provided with an address of its purported registered office, or whether the company keeps its registered office at the designated addressed.

320. This Tribunal is entitled and should make its own determination based on the evidence introduced in these proceedings as to whether the Claimant has its purported registered office in Cyprus, or whether it has its purported registered office at the designated address.

f. Komaksavia's Cyprus-Bulgarian Mixed "Correspondence Contact Details" in the Notification of Address

321. Komaksavia's correspondence contact details notified to the Registrar of Companies via the Notification of the Address of the Registered Office dated 4 July 2018 and filed on 31 October 2018 are not all located "within the jurisdiction" of Cyprus [Exhibit R-61]. A correspondence contact detail thus notified is located in Bulgaria - the phone number "+359898883898" (emphasis added), which belongs to Tenev, the majority shareholder of Komaksavia. Thus, the correspondence contact details on file with the Registrar of Companies since 4 July 2018 have been split up and located in two countries, Cyprus and Bulgaria. That is an essential criterion evidencing that the location of the Claimant's purported "registered office" and/or the "seat" is not in the territory of the Republic of Cyprus and, accordingly, the Tribunal should deny the Claimant's assertions to the contrary.

322. The Notification of the Address of the Registered Office is the last such Address Notification [Form HE2] filed by the Claimant, which is currently on file Registrar of Companies [Exhibit R-61]. No other changes in the correspondence contact details have been notified or filed with the Registrar of Companies since 31 October 2018 with a Form HE2. The relevant part of the Notification of the Address of the Registered Office is reproduced here below:

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323. The Claimant indicated a Bulgarian phone number "+359898883898" (emphasis added), which is the phone number of Tenev, as the Claimant's "Correspondence Contact Details". Since 4 July 2018, Tenev's phone number has been on file with the Registrar of Companies as Komaksavia "Correspondence Contact Details".

324. The code "359" is the Bulgarian assigned country phone code by the International Telecommunication Union [Exhibit R-146]. The code "89" is for the GSM mobile network Telenor in Bulgaria. The seven digits telephone number "8883898" is the Telenor mobile phone number of Tenev.

325. The Respondent notes that the same Bulgarian telephone number "+359898883898" (emphasis added) of Tenev has been also indicated as the "Correspondence Contact Details" for the company Komaksavia Investment Ltd (HE359254) in the Notification of the Address of the Registered Office of a

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Company or Change in Address signed by Marin Mihov Tenev, dated 4 July 2018, and received by the Registrar of Companies on 31 October 2018 in which Komaksavia Investment Ltd also indicated the address: Makariou (Avenue), 256, Eftapaton Court, Ap. C3, 3107, Limassol [Exhibit R-147]. It shall be reminded here that the sole shareholder and sole director of Komaksavia Investment Ltd is Marin Mihov Tenev [Exhibit R-143].

326. Accordingly, as evidenced in the Notification of the Address of the Registered Office dated 4 July 2018 [Exhibit R-61], not all "Correspondence Contact Details" of the Claimant have been located in the Republic of Cyprus. At least one Correspondence Contact Details has been located in Bulgaria and not at Claimant's designated address of the "registered office" in the territory of Cyprus.

327. As of 4 July 2018, Tenev was the sole shareholder of Komaksavia, and he has been the shareholder of Komaksavia ever since, except for a short period of time from 28 August 2019 to 12 December 2019, when the shares in Komaksavia were allegedly transferred for hitherto undisclosed reasons to NR Investments Limited. During the time from 4 July 2018 to present, Komaksavia's registered directors have been Karklinsh (from 4 April 2018 to 5 November 2019) and Menelaou (from 5 November 2019 to present). However, throughout the time from 4 July 2018 to present, Tenev's phone number "+359898883898" as "Correspondence Contact Details" has been on file with the Registrar of Companies. By indicating the phone number "+359898883898" in the Notification of the Address of the Registered Office, Komaksavia puts everyone who is to contact Komaksavia on public notice to call that number. There is no other telephone number indicated in the Notification of the Address of the Registered Office. The appointment of Menelaou as Komaksavia's director on 5 November 2019 has caused no change in the contact phone number of Komaksavia on file with the Registrar of Companies. This proves that Tenev, not Menelaou, has officially and publicly been in charge of and responsible for communication with any third party on behalf of Komaksavia.

328. A company which has "its place of business firmly rooted in Cyprus",²⁵⁷ as the Claimant alleges it has, would not provide a Bulgarian telephone number of the Bulgarian shareholder as its "Correspondence Contact Details".

329. The communication with third parties of the Claimant is an integral part of the effective management of the Claimant, however, it is not carried out by the Claimant's director and, moreover, it is carried out from outside the territory of Cyprus. Communication through the telephone must be crucial for the Claimant, because, as alleged by Claimant, he holds shares in Avia Invest, which is a company registered and carrying business in the Republic of Moldova. Any third party to communicate with the Claimant would do it through the telephone number of the Claimant, as it is the only phone number publicly on file with the Registrar of Companies.

²⁵⁷ Para. 77 of the Claimant's Reply dated 5 March 2021. ↩

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330. The Claimant has no website which would contain the contacting details brought to the knowledge of the public. The subdomain komaksavia.com has been registered on 12 May 2020, that is, just three days before the filing of the RfA, and, no doubt, it has been registered with the view of providing more "evidence" of Komaksavia being a regular company [Exhibit R-101]. There is no website hosted on the subdomain komaksavia.com.

331. The purported e-mail address [email protected], if a real e-mail address, could possibly have been created at best one or two days before the filing of the RfA on 15 May 2020. There is little doubt that has been created with the purpose of showing the Tribunal that Komaksavia has one, that Komaksavia is a regular company. Furthermore, the Claimant has brought no evidence that as of the day of its RfA, the purported e-mail address was functional. That purported e- mail address or, indeed, any e-mail address has not been notified to the Registrar of Companies. Thus, anyone to contact Komaksavia had and has to use the Bulgarian telephone number publicly on file with the Registrar of Companies as the official contact details of Komaksavia since 4 July 2018.

332. The provision of the Bulgarian phone number in the Notification of the Address of the Registered Office puts officially Tenev in charge of and responsible for communications with third parties for and on behalf of the Claimant. Thus, Komaksavia's shareholder Tenev, and not Komaksavia's purported director Menelaou, is officially managing the communications of Komaksavia with any third parties for and on behalf of Komaksavia.

333. This is not surprising and corroborates with all the evidence that Komaksavia's shareholders and the real UBO have in fact been acting as Komaksavia's shadow directors throughout in that the run, manage and operate Komaksavia's affairs. Menelaou, the registered director, handles only clerical and housekeeping matters whilst accustomed to act under the directions and instructions of the shareholders and the real UBO.

334. Consequently, the notification of the Bulgarian telephone number by the Claimant with the Registrar of Companies unequivocally denotes that the "registered office" and "seat" of the Claimant are not located in Cyprus.

335. In para. 86.3. of the Claimant's Reply dated 5 March 2021 the Claimant argues that in the Soc and RfA it has provided an address in the Republic of Cyprus and a telephone number within the Republic of Cyprus. The Respondent notes that in para. 1 of the RfA and para. 1 of the Soc, the Claimant has indicated a phone number "+357 96 675665",²⁵⁸ which is not on Komaksavia's file with the Registrar of Companies.²⁵⁹ That phone number has been provided by the Claimant in these arbitration proceedings for non-specified purposes. Furthermore, that phone number has not been publicly notified by the Claimant through a notification of the

²⁵⁸ See also para. 11 of the Claimant's Application dated 24 July 2020, in which the same phone number has been provided. ↩
²⁵⁹ Cf. Exhibit R-61. ↩

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address of the registered office of a company, or change in address [a form HE2] to the Registrar of Companies. In addition, that phone number is not part of the "Correspondence Contact Details" of the Claimant, and it is not otherwise known to third parties. On the day of filing the RfA, the Bulgarian phone number "+359898883898" of Tenev was on Komaksavia's file with the Registrar of Companies as its "Correspondence Contact Details".

336. No phone number or e-mail address of Komaksavia's director was or is officially on file with the Registrar of Companies since 4 July 2018.²⁶⁰ Moreover, no phone number or e-mail address of Menelaou was ever officially on file with the Registrar of Companies in a Form HE2. Thus, the Claimant's assertion that it has provided a Cypriot phone number and an e-mail address in the RfA and Soc does not change anything with regard to the fact that Tenev, not Menelaou, has officially and publicly been in charge of and responsible for communications with third parties on behalf of Komaksavia. This, in turn, serves as evidence that Komaksavia's "seat" and "registered office" has not been in Cyprus.

g. Komaksavia's "Correspondence Contact Details" at Other Addresses for Shares' Transfer and Officers' Change

337. In the last notification of Transfer of Private Company Shares [Form HE57] dated 23 December 2019 and filed by the Secretary of Komaksavia with the Registrar of Companies on 28 January 2020 [Exhibit R-2], which provides the status of Komaksavia's current shareholders, Komaksavia indicated the following "Correspondence Contact Details" of the law firm Andreas Menelaou LLC, which provides the purported "working space 02" in Limassol to Komaksavia:

"ANDREAS MENELAOU LLC - 406998
2A Elia Venezi Street, Athienitis Strovolos Park, 1st Floor,
Office 102
Nicosia
[Post Code] 2042
[Telephone] 99-218135"²⁶¹

338. That address of the law firm Andreas Menelaou LLC is located in Nicosia. It is not the address of the law firm Andreas Menelaou LLC in Limassol where this law firm provides the "working space 02" to Komaksavia.²⁶² Thus, Komaksavia has indicated the address in Nicosia as its "Correspondence Contact Details" and not the address in Limassol for the purposes of the transfer of shares.

339. The same address in Nicosia was notified by Komaksavia (by Menelaou, as Director/Secretary thereof) in the notification of the Transfer of Private Company Shares [Form HE57] dated 12 December 2019 and filed by the Secretary of Komaksavia with the Registrar of Companies on 16 December 2019 [Exhibit R-3].

²⁶⁰ Cf. Exhibit R-61. ↩
²⁶¹ Exhibit R-2. ↩
²⁶² Cf. Exhibit [C-8]. ↩

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340. [Accordingly, for the purposes of the transfer of shares in Komaksavia, the law firm Andreas Menelaou has indicated its address in Nicosia, not in Limassol].

341. Earlier on 28 August 2019, when Tenev transferred the 100% shares in Komaksavia to NR Investments Limited, Komaksavia indicated in the notification of the Transfer of Private Company Shares [Form HE57] dated 28 August 2019 and filed by Komaksavia with the Registrar of Companies on 29 August 2019 [Exhibit R-9] the following address for its "Correspondence Contact Details":

"HARNEYS FIDUCIARY CYPRUS LIMITED
28th October Street, No. 313, Omrania Building
[Telephone] 25820020"²⁶³

342. Accordingly, for the purposes of the notification of the transfer of shares in Komaksavia, Komaksavia has put on public record various addresses of various firms as its "Correspondence Contact Details", none of which is the designated address of its purported registered office in Limassol, Cyprus.

343. Komaksavia used various other addresses as its "Correspondence Contact Details" not only for the purposes of notification of the transfer of shares by its shareholders, but also for the purposes of the notification of change of officers or change to their information [Form HE4]. Thus, in the Form HE4 on the notification of appointment of Menelaou as Komaksavia's Director and Secretary dated 5 November 2019 and filed with the Registrar of Companies on 11 November 2019 [Exhibit R-10], which provides the status of Komaksavia's current Director, Komaksavia (by its Director/Secretary, Menelaou) indicated the following address as the "Correspondence Contact Details" of Komaksavia:

"HARNEYS FIDUCIARY CYPRUS LIMITED
28th October Street, No. 313, 3rd Floor, Limassol, Cyprus
[Post Code] 3105 [Telephone] 25820020"²⁶⁴

344. Furthermore, in the latest Notification of Changes of Officers or change to their information dated 23 December 2019 and filed with the Registrar of Companies on 28 January 2020 [Exhibit R-11], which provides the status of Komaksavia's current Secretary, Komaksavia (by its Secretary, Lydia Menelaou) indicated the following "Correspondence Contact Details":

"ANDREAS MENELAOU LLC - 406998
2A Elia Venezi Street, Athienitis Strovolos Park, 1st Floor,
Office 102
Nicosia
[Post Code] 2042 [Telephone] 99-218135"²⁶⁵

²⁶³ Exhibit R-9. It shall be observed that the address contained no postcode, no city name. This was not a functional address. ↩
²⁶⁴ Exhibit R-10. ↩
²⁶⁵ Exhibit R-11. ↩

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345. As demonstrated above, none of those addresses for "Correspondence Contact Details" is the designated address of the purported "working space 02" or the address of the law firm Andreas Menelaou LLC in Limassol, Cyprus.

h. Komaksavia's Confusions About Its Own Address

346. In the SCWS-Menelaou, Andreas Menelaou has made two statements as to the purported address of Komaksavia. Thus, the first statement is comprised by the Preamble of his testimony and contains the following text:

"I, Andreas Menelaou of Makareiou, 256, Eftapaton Court,
Flat/Office C3, 3107, Limassol, Cyprus ... ".²⁶⁶ (emphasis added).

347. In para. 36.1. of the SCWS-Menelaou, however, Andreas Menelaou has stated that the Claimant has its physical presence:

"according to the Sublease Agreement dated 4 July 2018, the Claimant as the Subtenant rented from Andreas Menelaou LLC as the Sublessor the working space 02, situated in the offices on the third floor of the building named "Eftapaton Court" at 256 Makarios Avenue, Eftapaton Court, Office C4, 3105, Limassol, Republic of Cyprus".²⁶⁷ (emphasis added).

348. The recital (A) of the purported Sublease Agreement between the law firm Andreas Menelaou LLC and Komaksavia Airport Invest Ltd dated 4 July 2018 contains, in relevant part, the following wording:

"The Sublessor is the tenant of the offices situated on the 3.5 floor of the building named "Eftapaton Court" situated at 256 Makarios Avenue, Eftapaton Court, Office C3, 3105 Limassol, Republic of Cyprus ... "²⁶⁸ (emphasis added).

349. However, the recital (A) of the purported Sublease Agreement between the law firm Andreas Menelaou LLC and Komaksavia Investment Ltd dated 4 July 2018 contains, in relevant part, the following wording:

"The Sublessor is the tenant of the offices situated on the 3.5 floor of the building named "Eftapaton Court" situated at 256 Makarios Avenue, Eftapaton Court, Office C4, 3105 Limassol, Republic of Cyprus ... "²⁶⁹ (emphasis added).

350. As recorded in those various accounts of the Claimant, two different postal codes "3105" and "3107" have been provided by the Claimant as its alleged postal code.

²⁶⁶ SCWS-Menelaou, Preamble [Exhibit [SC-75]]. ↩
²⁶⁷ Ibid., para. 36.1. ↩
²⁶⁸ The Sublease Agreement between the law firm Andreas Menelaou LLC and Komaksavia Airport Invest Ltd dated 4 July 2018 [Exhibit [C-8]]. ↩
²⁶⁹ The Sublease Agreement between the law firm Andreas Menelaou LLC and Komaksavia Investment Ltd dated 4 July 2018 [Exhibit [C-2]; Exhibit [CA-35]; [Exhibit [SC-75]]. ↩

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This is the more surprising considering that both have been indicated by Andreas Menelaou in the same SCWS-Menelaou. It shall be noted that a designated address with a wrong postcode or without a postcode is not a functional address.

351. In addition, whereas the two submitted sublease agreements indicate that the office "C3" and "C4" are located on the "3.5 floor", Andreas Menelaou stated in the SCWS-Menelaou that the office "C4" is located on the "third floor".

352. The Respondent notes that the Claimant has provided no explanation on those confusing accounts regarding the designation of its purported address in various Claimant's exhibits and submissions.

i. Komaksavia's Delinquency in Complying with Statutory Obligations

353. Pursuant to Art. 327 of the Companies Law, the Registrar of Companies may move to strike the name of the company off the register, in which case the company ceases to be regarded as constituted or incorporated under Cyprus law.²⁷⁰ Art. 327 also contains the procedure to be followed by the Registrar of Companies. The procedure is triggered in cases where there is "reasonable cause to believe that the company is not carrying on business or [is not] in operation",²⁷¹ where the company has not paid its annual dues for a year,²⁷² where the company omits to file any document whose filing with the Registrar of Companies is required by the Law, including not submitting the Annual Return [Form HE32].²⁷³

354. Komaksavia had filed no annual returns for a number of consecutive years [Exhibit R-141], which prompted the Registrar of Companies to send a "Reminder Letter" to Komaksavia.²⁷⁴ The excerpt from the records of the Registrar of Companies regarding the HE32 Archive of Komaksavia shows that no annual returns had been submitted from the day of Komaksavia's incorporation until at least the beginning of 2021.²⁷⁵ It might also have been that the cause of the "Reminder Letter" was the Registrar's belief that Komaksavia was not carrying on business and/or was not in operation. In any event, the two extracts from the electronic recordings of the Registrar in Exhibits R-140 and R-141 indicate that the Claimant failed to submit to the Registrar of Companies the annual returns it was required to submit under Art. 118 of the Companies Law.

355. Komaksavia has problems following basic statutory requirements for a limited liability company under Cypriot law.

²⁷⁰ See Art. 327 of the Companies Law [Exhibit R-52 bis]. ↩
²⁷¹ Ibid., Art. 327(1). ↩
²⁷² Pursuant to the provisions of the Law 190(1)/2012, all companies registered with the Registrar of Companies have to pay by 30th June an annual levy in order to be considered in good standing and for their name to be retained on the register maintained by the Companies registry. ↩
²⁷³ Cf. Art. 118 of the Companies Law [Exhibit R-52 bis]. ↩
²⁷⁴ See Exhibit R-141. See also Exhibit R-140. ↩
²⁷⁵ See Exhibit R-141. See also Exhibit R-142 showing Komaksavia's filings with the Registrar of Companies in 2021. ↩

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356. Surprisingly and with no evidence whatsoever, the Claimant asserted in the Claimant's Response dated 18 December 2020 that:

"the Claimant has paid all necessary taxes in the Republic of Cyprus, which is proven by tax returns/ letter of confirmation from the tax authorities confirming that the Claimant's income was taken into account when calculating tax liabilities and there was no unreasonable tax benefit received."²⁷⁶ (emphasis added).

No such alleged "tax returns" were ever "proven" in these proceedings.

357. The Respondent notes that, pursuant to Companies Law, the annual return shall contain the details of the registered office, registers of shareholders and debenture holders, shares and debentures, indebtedness, past and present members and directors and directors and secretary, and other details.²⁷⁷ The annual return shall be prepared and filed "once at least in every year" together with the audited financial statements, within 12 months from the previous annual return, without disregarding the calendar year.

358. Thus, Komaksavia was delinquent in complying with the statutory obligations under Cyprus law for several consecutive years since its incorporation, including throughout the year 2020.

359. Although Menelaou was appointed as the sole director on 5 November 2019, the delinquency continued until at the beginning of 2021,²⁷⁸ as the excerpts contained in Exhibit R-141 ("Organisation status: Reminder letter sent") and Exhibit R-142 demonstrate. Menelaou failed to resolve those pure clerical, housekeeping matters during 2019 and 2020 for reasons that the Claimant did not provide or explain.

360. It appears that Komaksavia might have filed the annual return as recently as on 16.03.2021 for the first time since its incorporation [Exhibit R-142], although no copy of that annual return/those annual returns can be downloaded from the electronic recordings of the Registrar of Companies. The timing of the filing of the annual return/returns reveals that this was manifestly an opportunistic move by the Claimant to show to the Arbitral Tribunal that it was not anymore delinquent, that it contemporaneously complied with the statutory obligations, that it lately kept its public filings updated. The sustained and concerted efforts of the Claimant to create a post factum reality is evidenced by this move as well.

361. The Respondent notes that it is not able in this Memorial to provide an argument based on the substance of the Claimant's filings with the Registrar of Companies in 2021, as it has been impossible to obtain and/or access the copies of those filings from the Registrar of Companies as of the date of this Memorial. The Registrar of Companies has yet to make them available in the electronic archive, as they are

²⁷⁶ Para. 135(viii) of the Claimant's Response dated 18 December 2020. ↩
²⁷⁷ See Art. 118 and the Sixth Schedule (Part I and Part II) of the Companies Law [Exhibit R-52 bis]. ↩
²⁷⁸ From Exhibit R-142 can actually be inferred that the delinquency continued to 2021. ↩

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not available and cannot be accessed at this moment. However, the Respondent will provide such an argument once the Claimant will have produced the documents filed by it with the Registrar of Companies in 2021.

j. Komaksavia Holds Someone Else's Shareholding in Avia Invest

362. Komaksavia was conceived and implemented by Shor through Tenev, Karklinsh and others as a vehicle to be bestowed with the [Redacted] of the shares in Avia Invest in order to acquire Cyprus nationality for the purported investment. Komaksavia is a shell company holding the [Redacted] of the shares in Avia Invest for someone else. Komaksavia has not proved that it has paid for the [Redacted] of the shares in Avia Invest that it allegedly purchased from 000 Komaksavia through the Share Sale- Purchase Contract dated 6 September 2016. In fact, the balance sheet of the 000 Komaksavia [Exhibit R-37, see pages 10 to 23] did not record or reflect any amount received in 2016 or thereafter from the sale of the [Redacted] of the shares in Avia Invest, and this is prima facie evidence that Komaksavia did not pay the price of the shares.

363. As already indicated by the Respondent, the only business of 000 Komaksavia was to hold the [Redacted] of the shares in Avia Invest and selling it would not have been in the interest of 000 Komaksavia, had 000 Komaksavia decided for itself, in an arm's length transaction. However, the Share Sale-Purchase Contract dated 6 September 2016 was not an arm's length transaction. Clause 5 of the said Contract provides sufficient evidence that that Contract was a non-arm's length transaction. This is so, moreover, as 000 Komaksavia has received no payment of the price of the [Redacted] of the shares. By the Share Sale-Purchase Contract dated 6 September 2016, Shor through various individuals and companies transferred the shares in Avia Invest from one vehicle, 000 Komaksavia, to another vehicle, Komaksavia.

C. Conclusion

364. The effective management and control of the Claimant is not located at the designated address of the registered office.

365. Accordingly, neither the "seat" nor the "registered office" of the Claimant has been located at the address provided by the Claimant and, furthermore, not in the territory of Cyprus.

366. It was the Claimant choice to keep its seat outside Cyprus, and so it must also face the negative consequences of the waver of Cyprus protection under the BIT.

367. The Claimant is not a national of Cyprus and, therefore it does not qualify as an investor "of one Contracting Party" under BIT Art. 1(1).

368. The Arbitral Tribunal lacks jurisdiction ratione personae because the Claimant is not an investor.

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IV. THE TRIBUNAL LACKS JURISDICTION RATIONE MATERIAE

1. Introduction

369. The Arbitral Tribunal has no jurisdiction ratione materiae, because the Claimant has made no investment and has no investment in the Republic of Moldova.

370. Art. 1(1) of the BIT is the 'gateway' to the BIT arbitration, and the powers of the Arbitral Tribunal can only come into existence if the requirements of Art. 1(1) are met.

371. Art. 1(1) of the BIT provides as follows:

"The term 'investments' means every kind of asset invested by investors, for the purpose of acquisition of economic benefit or other business purpose, of one Contracting Party in the territory of the other Contracting Party in accordance with the legislation of the latter and in particular, though not exclusively, shall include:

a) Movable and unmovable property as well as any other property rights;

b) Rights derived from shares, bonds and other kinds of interests in companies;

c) Claims to money or other claims and rights having an economic value;

d) Intellectual property rights, technical processes and know- how;

Provided that a possible change in the form in which the investments or reinvestments have been made shall not affect their character as investments so long as such a change does not contravene laws and regulations of the Contracting Party in the territory of which the investments were made."²⁷⁹ (emphasis added).

372. Accordingly, to benefit ratione materiae from the BIT, an investor should have "invested" "every kind of asset" (emphasis added) for the purpose of acquisition of economic benefit or other business purpose in the territory of the host State (emphasis added). That is, under Art. 1(1), an investor shall invest assets ("every kind of asset invested") for economic benefit or other business purposes in

²⁷⁹ Art. 1 para. 1 of the BIT [Exhibit RLA-1 bis]. ↩

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order for the assets to qualify as investments. Those criteria should be met cumulatively under the BIT Art. 1(1).

373. It is incumbent on the Claimant to prove that it has made a qualifying investment in the Republic of Moldova pursuant to the BIT Art. 1(1) to be able to invoke the substantive investment protection provisions under the BIT. The Claimant has failed to do so and accordingly the Arbitral Tribunal lacks jurisdiction ratione materiae.

374. In the Respondent's Answer to the Claimant's Request for Arbitration dated 9 July 2020, the Respondent raised the objection that the Claimant had not proved that it had invested in the territory of the Republic of Cyprus.²⁸⁰Furthermore, the Respondent raised the lack of investment's objection in the Respondent's Application dated 27 November 2020 and the Respondent's Reply dated 4 January 2021. Despite those repeated objections, in the Soc dated 14 January 2021, the Claimant totally failed to tender any evidence to address those objections and to prove that it made an investment in the Republic of Moldova as required under Art. 1(1) of the BIT.

2. Claimant Failed to Discharge Its Burden of Proof

375. In the Soc, the Claimant's alleges that, on 6 September 2016, it has "invested in the territory of the RM by agreeing to purchase [Redacted] of the shares in Avia Invest"²⁸¹ (emphasis added), and has in so doing invested in an asset "in the form of rights derived from shares, bonds and other kinds of interest in companies [sic]"²⁸², "in the form of obtaining claims to money or to other claims and rights having an economic value"²⁸³, "in the form of obtaining intellectual property rights, technical processes and know-how"²⁸⁴, and/or "has in so doing invested in an asset which falls within the broad definition of 'every kind of asset"'²⁸⁵. Further, the Claimant alleges that it has invested in Avia Invest for Avia Invest's obligations under the Concession Agreement "by agreeing to pay the share purchase price for a [Redacted] shareholding in Avia Invest in the sum of EUR 3,658,247,70"²⁸⁶ (emphasis added) and "by forgoing dividends from Avia Invest in order that surplus revenue is reinvested in the development of Chisinau Airport".²⁸⁷

376. In its RfA, the Claimant alleged that it "invested in the territory of the RM by the purchase of [Redacted] of the shares in Avia Invest",²⁸⁸ (emphasis added) and that it

²⁸⁰ Ibid. ↩
²⁸¹ Soc, para. 30. See also paras. 92, 93.1. of the Soc. ↩
²⁸² Ibid., para. 30.2. ↩
²⁸³ Ibid., para. 30.3. ↩
²⁸⁴ Ibid., para. 30.4. ↩
²⁸⁵ Ibid., para. 30.5. ↩
²⁸⁶ Ibid., paras. 93, 93.1. ↩
²⁸⁷ Ibid., para. 93.2. ↩
²⁸⁸ RfA, para. 16. See also para. 57 of the Claimant's Application for the Appointment of an Emergency Arbitrator and an Emergency Decision on Interim Measures dated 24 July 2020 {SCC EA 2020/130), in which the Claimant alleged that ↩

[Page 89]

"invested in Avia Invest for the fulfilment of Avia Invest's obligations under the Concession Agreement"²⁸⁹ "by payment of the share purchase price for a [Redacted] [Redacted]"²⁹⁰ (emphasis added), "by acting as parent company surety and/or guarantor on loans made by the Avia Invest to various entities in order to ensure that its investment obligations under the Concession Agreement have been fulfilled"²⁹¹, and "by forgoing dividends from Avia Invest in order that surplus revenue is reinvested in the development of Chisinau Airport"²⁹².

377. Thus, by written suppositions and speculations in the Claimant's submissions, RfA and Soc, the Claimant surprisingly transformed its purported investment from purchasing [Redacted] into agreeing to purchase [Redacted] and from paying the share purchase price into agreeing to pay the share purchase price. The Claimant put forward no explanation, let alone any evidence, for that metamorphosis in its allegations regarding its "investment".

378. The burden of proof to show that the Claimant's purported investment qualify as investment under the BIT is upon the Claimant. In the RfA and Soc, the Claimant tendered speculations, confusing, and contradictory statements, but no evidence, with regard to its purported investment in the territory of the Republic of Moldova.

379. The Republic of Moldova notes that in the Respondent's Reply dated 4 January 2021 (paras. 27-32) it has raised the objection that the Claimant never paid the price of the purported purchase of the [Redacted] in Avia Invest pursuant to the Share Sale-Purchase Contract dated 6 September 2016. Moreover, the Republic of Moldova tendered evidence that no price of the purported shares purchase had been ever paid. However, the Claimant simply ignored the objections and evidence, and completely failed to adequately engage and address those issues, and discharge its burden of proof, in the Soc, which was filed thereafter, and the Claimant had sufficient time and was able to address them. There is little doubt that the Claimant employs various technics and tactics to enable it to create a post factum reality with regard to its purported investment in the Republic of Moldova. The Republic of Moldova specifically reserves its right to make the arguments and provide additional evidence, and to request the Arbitral Tribunal to make such arguments and provide such evidence, once the Claimant has clarified its position on the purported investment.

[Redacted]

²⁸⁹ Ibid., para. 37. ↩
²⁹⁰ Ibid., para. 37.1. ↩
²⁹¹ Ibid., para. 37.2. ↩
²⁹² Ibid., para. 37.3. ↩

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3. The Claimant Made No Investment and Has No Investment

a. Claimant's Contradictory Statements About Its Purported Investment

380. The Claimant asserts that it invested in the territory of the Republic of Moldova on 6 September 2016 "by agreeing to purchase [Redacted] of the shares in Avia Invest",²⁹³ and it "made an investment in the Republic of Moldova" in that it "agreed to purchase [Redacted] the shareholding in Avia Invest" on 6 September 2016.²⁹⁴

381. The Claimant further asserts that:

"93. By that investment and since 6 September 2016, Komaksavia has invested in Avia Invest for the fulfilment of Avia Invest's obligations under the Concession Agreement in at least the following ways:
[Redacted]

382. In the paras. 92-93 (including sub-paras. 93.1.-93.2.), the Claimant appears to differentiate between "agreeing to purchase [Redacted] on the one side, and "agreeing to pay the share purchase price for a [Redacted] on the other side. The same differentiation is made in para. 30 (including sub-paras. 30.1.-30.5.) of the Soc. The Claimant has failed to provide any explanation of that differentiation and the ground thereof.

383. It appears from paras. 30 and 92 of the Soc that the Claimant alleges that its purported initial investment has been made by "agreeing to purchase [Redacted] -only. Furthermore, the Claimants has decoupled the Claimant's "agreeing to pay the share purchase price for a [Redacted] from the Claimant's "agreeing to purchase [Redacted].

384. The Claimant's assertions in para. 93 and sub-paras. 93.1.-93.2. are confusing and equivocal, as the Claimant has not clarified whether the "agreeing to pay" the price (see para. 93.1.) has occurred "[b]y that investment", or it has occurred "since 6 September 2016" (para. 93).

385. Furthermore, in para. 93.1. of the Soc the Claimant has footnoted para. 33.1. of the SCWS-Menelaou [Exhibit [SC-75]], which refers to the alleged investments made by Avia Invest in the time from 30 August 2013 to 31 December 2017. The Claimant failed to explain, let alone to prove, how his "agreeing" to pay the

²⁹³ See Soc, para. 30. ↩
²⁹⁴ See Soc, para. 92. ↩
²⁹⁵ Soc, paras. 93, 93.1 and 93.2 (footnotes omitted). ↩

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price for the [Redacted] of the shares, on the one side, and the alleged amount of Avia Invest's purported investment during the indicated period, on the other side, are related.

386. In addition, in para. 93.2. of the Soc the Claimant has footnoted para. 33.2. of the SCWS-Menelaou, which refers to the alleged investments made by Avia Invest in the time from 1 January 2018 to 31 December 2018. The Claimant again failed to explain, let alone to prove, how his "forgoing dividends from Avia Invest", on the one side, and the alleged amount of Avia Invest's purported investment during the referred period, on the other side, are related.

387. Also, the Claimant's "agreeing to purchase [Redacted] and the Claimant's "agreeing to pay the share purchase price for a [Redacted] could not by any stretch of the imagination be "invested in Avia Invest for the fulfilment of Avia Invest's obligations under the Concession Agreement" (para. 93) (emphasis added).

388. The Respondent notes that the Claimant has tendered the Contract of Sale- Purchase of Share in the Share Capital between 000 Komaksavia and Komaksavia dated 6 September 2016 [the "Share Sale-Purchase Contract dated 6 September 2016"] [Exhibit [SC-30]]²⁹⁶ as evidence for its purported "agreeing to purchase [Redacted]".²⁹⁷ The Claimant, however, has not demonstrated how its "agreeing to purchase [Redacted] shall mean the purported investment or making the purported investment.

389. The Claimant has provided no evidence for its purported "agreeing to pay the share purchase price for a [Redacted]. Furthermore, the Claimant has not demonstrated how its "agreeing to pay the share purchase price for a [Redacted] [Redacted] shall mean the purported investment or making the purported investment.

390. The Claimant has made no investment in the Republic of Moldova by the purported "forgoing of dividends" as it never invested in the Republic of Moldova and, in any event, never had a crystallised right to receive dividends from Avia Invest. The Republic of Moldova notes that the right of a shareholder to dividend crystallizes only when the dividend is declared, and Avia Invest never declared or distributed dividends to Komaksavia.

b. Claimant's "Agreeing to Purchase [Redacted] Is Not an Investment

391. In the Soc, the Claimant contends that by agreeing to purchase shares in Avia Invest pursuant to Share Sale-Purchase Contract dated 6 September 2016 it has

²⁹⁶ The Respondent notes that some phrases of the Share Sale-Purchase Contract dated 6 September 2016 [Exhibit [SC-301] have been misleadingly translated by the Claimant. Also, Clauses 2 to 8 are wrongly numerated in the translation. ↩
²⁹⁷ Soc, para. 30. See also para. 92. ↩

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"made an investment in the territory" of the Republic of Moldova.²⁹⁸ The Claimant further asserts that by "agreeing to purchase a shareholding", it has made an investment "for the purposes of the acquisition of economic benefit and/or for some other business purpose" (para. 30.1.);²⁹⁹ "invested in an asset in the form of rights derived from shares, bonds and other kinds of interests in companies" (para. 30.2.);³⁰⁰ that it "invested in an asset in the form of obtaining claims to money or to other claims and rights having an economic value" (para. 30.3.);³⁰¹ that it "invested in an asset in the form of obtaining intellectual property rights, technical processes and know-how" (para. 30.4.);³⁰² and/or that it "invested in an asset which falls within the broad definition of 'every kind of asset'' (para. 30.3.).³⁰³ Thus, the Claimant disingenuously puts forward a list almost identical to the wording of Art. 1(1) of the BIT, without however even substantiating it, let alone proving it.

392. However, contrary to the Claimant's contentions, the mere "agreeing to purchase a shareholding" does not in itself constitute a protected investment when no Claimant's contribution has been made. Furthermore, the mere "agreeing to purchase a shareholding" does not constitute an investment within the inherent meaning of that term and does not satisfy the definition of "investments" in Art.1(1) of the BIT (see sub-section g. below).

c. Claimant's "Agreeing to Pay the Share Purchase Price" Is Not an Investment

393. Pursuant to Clause 5 of the Share Sale-Purchase Contract dated 6 September 2016 [Exhibit [CS-30]], Komaksavia was under an obligation to pay the price of the [Redacted] in Avia Invest to 000 Komaksavia. Clause 5 of the Share Sale- Purchase Contract dated 6 September 2016 provides as follows:

[Redacted]

²⁹⁸ See Soc, paras. 30, 92. ↩
²⁹⁹ No evidence whatsoever has been tendered by the Claimant. ↩
³⁰⁰ No evidence whatsoever has been tendered by the Claimant. ↩
³⁰¹ No evidence whatsoever has been tendered by the Claimant. ↩
³⁰² No evidence whatsoever has been tendered by the Claimant. ↩
³⁰³ No evidence whatsoever has been tendered by the Claimant. ↩

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[Redacted]

394. Accordingly, pursuant to Clause 5 above, the Buyer, Komaksavia, should pay the price, which is the countervalue of the [Redacted] within 90 days from the signing of the Share Sale-Purchase Contract dated 6 September 2016.

395. The Claimant has not even suggested, let alone proved, the day when it made its purported investment in the way of "agreeing to pay the share purchase price".

396. Upon the moment of the conclusion of the Share Sale-Purchase Contract dated 6 September 2016, the Claimant had not paid the price of the shares. Should the Claimant have paid the price upon the notarisation of the said Contract, the notary would have reduced that fact to writing, and the Share Sale-Purchase Contract dated 6 September 2016 would have contained a clause (or a subclause) in that regard. However, the said Contract does not contain any such clause. Instead, the parties to Share Sale-Purchase Contract dated 6 September 2016 agreed, as provided in the Clause 5 thereof, that the price be paid within 90 days.

397. No investment was made by the Claimant, and no Claimant's investment existed on 6 September 2016.

398. The Claimant tendered no evidence that it ever paid the price of the purchase of [Redacted] in Avia Invest pursuant to the Share Sale-Purchase Contract dated 6 September 2016. The shares were transferred to the Claimant without the Claimant paying for the shares.

399. The Claimant tendered no evidence that it funded the purported investment.

400. The Claimant failed to provide any evidence that it ever had any income, funds of any significance, or generated itself funds.

401. The Claimant has acknowledged that it has financed "its arbitration costs and expenses"³⁰⁵ through third party finding. Thus, the Claimant has stated that "two loans" have been "received from companies controlled by its majority ultimate beneficial owner, Mr Goncharenko: 1) UK Komaks LLC [...]; and 2) Diamand Estate LLC [...]."³⁰⁶ In this respect, as a side note, the Respondent notes that while the Arbitral Tribunal's question No. 4(1) requested the Claimant to "disclose (i) the

³⁰⁴ Clause 5 of the Share Sale-Purchase Contract dated 6 September 2016 [see Exhibit [CS-30], where it is wrongly numbered as clause 6). The Respondent notes that it slightly amended the translation of Clause 5 provided by the Claimant so that it faithfully follows the original language text. ↩
³⁰⁵ Claimant's Response to Tribunal's Question 4 for the Hearing on the Respondent's Application for (A) Revocation of the Emergency Decision on Interim Measures and (B) Security for Costs and Related Relief, dated 5 February 2021, para. 1. ↩
³⁰⁶ Ibid., para. 2. ↩

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identity of the funder, and (ii) whether the terms of the funding arrangement would or would not cover any adverse award of costs"³⁰⁷ (emphasis added), the Claimant failed to make a disclose as requested (no documents were disclosed), whilst limiting itself to its own statements.

402. Accordingly, the Claimant has failed to prove that it has made any capital contribution³⁰⁸ in the Republic of Moldova, and thus that it has made any investment. The mere agreeing to purchase [Redacted] and/or the mere agreeing to pay the shares' price does not constitute an investment within the inherent meaning of that term and does not satisfy the definition of "investments" in BIT Art.1(1).

403. In fact, there is prima facie evidence that the Claimant did not pay for the alleged acquisition of the [Redacted]. Thus, the balance sheet of the Seller, 000 Komaksavia [Exhibit R-37, see pages 10 to 23], did not record or reflect any amount received in 2016 or thereafter from the sale of th [Redacted]

d. Nature of the Share Sale-Purchase Contract

404. It shall be noted that Clause 5 of the Share Sale-Purchase Contract dated 6 September 2016 between 000 Komaksavia and Komaksavia is clearly indicative of a non-arm's length nature of that transaction. The provisions regarding payment to be made "within 90 days", "payment [...] on other conditions that may be agreed additionally", that the Seller "waives its redemption and retention rights", that "the indicated price [Redacted] is the real price of the transaction" and others are neither normal nor usual terms of an arm's-length transaction with shares on the market. The Share Sale-Purchase Contract dated 6 September 2016 was a sham transaction.

405. The Claimant has not explained how the "real price" of [Redacted] of the Share Sale-Purchase Contract dated 6 September 2016 squares with the Claimant's valuation of its purported investment in "the sum of [Redacted] (para. 57.5. of the RfA). In a similar context, the tribunal in Phoenix indicated as follows:

"The Tribunal considers that the existence of a nominal price for the acquisition of an investment raises necessarily some doubts about the existence of an 'investment' and requires an in depth inquiry into the circumstances of the transaction at stake."³⁰⁹ (emphasis added).

³⁰⁷ Tribunal Questions to the Parties for the Hearing on the Respondent's Application for (A) Revocation of the Emergency Decision on Interim Measures and (B) Security for Costs and Related Relief dated 26 January 2021, Question 4 - Third Party Funding, page 2. ↩
³⁰⁸ In the Soc (para. 48, and sub-paras. 48.1. to 48.3.), the Claimant does not even suggest that it has made a financial contribution. ↩
³⁰⁹ See Phoenix Action, Ltd. v The Czech Republic (ICSID Case No. ARB/06/5), Award, 15 April 2009, para 119 [Exhibit RLA-22]. ↩

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406. Also, the tribunal in Saba Fakes held that the payment of a mere nominal price could not be reconciled with the significance of the underlying business as expressed in the claimant's valuation of its alleged shareholding.³¹⁰

407. Furthermore, the tribunal in Cara tube observed that payment of a nominal price shall be interpreted as an indication that the purported investment has not been an economic arrangement and shall not be qualified for treaty protection.³¹¹

408. Similarly, the tribunal in KTAsia found that a company sold the shares to the investor at less than their true value (about one-eighth of their value)³¹² and held that that should not amount to investment under the applicable treaty.³¹³

409. It is remarkable that the Claimant in either of the RfA, the applications for interim measures (dated 18 May 2020³¹⁴ and 24 July 2020, respectively), the Claimant's Response dated 18 December 2020, the Soc, and other submissions in these arbitration proceedings, completely avoided to suggest, let alone to mention, that it "purchased" or "agreed to purchase" the [Redacted] in Avia Invest from 000 Komaksavia, as well as the circumstances of that transaction. The 000 Komaksavia was not mentioned at all in any of the Claimant's submissions.

410. The Claimant described and characterised its purported investment as if it were acquired in an initial public offer, or on a stock exchange, or at auction, or otherwise in an arm's length transaction, which in fact was not.

411. The non-arm's length nature of the Share Sale-Purchase Contract dated 6 September 2016 between 000 Komaksavia and Komaksavia is further evidenced by Tenev and Karklinsh being simultaneously on both the Seller's and the Buyer's sides of that transaction. Karklinsh was the Sole Shareholder of the Claimant (the Buyer)³¹⁵ [Exhibit R-5], and the Director of 000 Komaksavia (the Seller)³¹⁶ [Exhibit R-37]. At the very same time Tenev was the Director of the Claimant (the Buyer) [Exhibit R-6] and in control of 100% of the shares in 000 Komaksavia (the Seller), through the TB Team, which was registered as the Sole Shareholder of 000 Komaksavia [Exhibit R-37; Exhibit R-38, pdf page 28]. Tenev was registered the individual person with significant control of TB Team [Exhibit R-38, pdf page 28].

412. There is no doubt that they acted at an external direction.

³¹⁰ See Mr. Saba Fakes v Republic of Turkey (ICSID Case No. ARB/07/20), Award, 14 July 2010, para. 139 [Exhibit RLA- 69]. ↩
³¹¹ Caratube International Oil Company LLP v. The Republic of Kazakhstan, ICSID Case No. ARB/08/12, Award, 5 June 2012, para. 435 [Exhibit RLA-70]. ↩
³¹² KTAsia Investment Group B. V. v. Republic of Kazakhstan (ICSID Case No. ARB/09/8), Award, 17 October 2013, paras. 200 [Exhibit RLA-61]. ↩
³¹³ Ibid., para. 206. ↩
³¹⁴ See Exhibit R-82. ↩
³¹⁵ Karklinsh was the Sole Shareholder of the Claimant from 22.08.2016 to 04.04.2018, and not, as falsely stated by the Claimant in the Appendix I (see page 5) to the Claimant's Response, from "22 October 2016 to 4 April 2018". ↩
³¹⁶ Karklinsh was registered as the Director of 000 Komaksavia on 12.05.2016. ↩

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413. The Share Sale-Purchase Contract dated 6 September 2016 was a scam transaction controlled and conducted by Shor/Tenev and their affiliates to whitewash the investment wrongdoing. abandon the legal entities - TB Team and 000 Komaksavia³¹⁷ - which they used and exposed for participating in scam transactions with the purported investment in Avia Invest,³¹⁸ and create a new vehicle to take over the purported investment in view of a foreseeable dispute with the Republic of Moldova.

414. By the Share Sale-Purchase Contract dated 6 September 2016, Shor through various individuals and companies transferred the shareholding in Avia Invest from one vehicle, 000 Komaksavia, to another vehicle, Komaksavia. Both of those vehicles were bestowed with the shareholding in Avia Invest which economically belonged to Shor acting through Tenev, Karklinsh and others. Thus, although 000 Komaksavia held the [Redacted] of the shares in Avia Invest from February 2014 to September 2016, the balance sheet of the 000 Komaksavia for the years 2014, 2015, or 2016 did not record or reflect any shareholding in Avia Invest [Exhibit R- 37, see pages 10 to 23].

415. Furthermore, the Republic of Moldova notes that the acquisition, holding, and sale by TB Team of the [Redacted] in Avia Invest had never been reflected on the balance sheet of TB Team for the years 2013 and 2014, or for any other year [cf. Exhibit R-38]. TB Team's balance sheet for the year 2013, in relevant part, is reproduced here below:

[Redacted]

[Page 97]

[Redacted]

[Page 98]

e. Claimant's Purported Forgoing of Dividends Is Not an Investment

417. The Claimant alleges that it has invested in Avia Invest for Avia Invest's obligations under the Concession Agreement "by forgoing dividends from Avia Invest in order that surplus revenue is reinvested in the development of Chisinau Airport".³¹⁹ It refers to a general meeting of shareholder of Avia Invest dated 11 October 2019 (the "Shareholders' Resolution dated 11 October 2019") that allegedly adopted a decision to make a partial distribution of undistributed profits from the previous years in the amount of [Redacted] to its shareholders and the balance of undistributed profits to remain at Avia Invest's disposal until it is further distributed [Exhibit SC-11].³²⁰ Furthermore, it alleges that that the Shareholders' Resolution dated 11 October 2019 "was never carried out" by Avia Invest.

418. The Respondent submits that the Claimant has not made any investment by the purported "forgoing of dividends". The Claimant has made no contribution in the first place in order to have a protected investment under the BIT. Indeed, the Claimant had not "invested" any kind of asset that could rise the right to the protected dividends under Art. 1(1) of the BIT.

419. The tribunal in Malicorp stressed that "assets cannot be protected unless they result from contributions".³²¹ In the instant case, the Claimant's purported "forgoing of dividends" or the unpaid dividends may not qualify as protected investment because the alleged forgone dividends or unpaid dividends do not result from the Claimant's contribution.

420. An expectation of profit or return may only be entailed in the commitment of resources, in the economic materialisation of an investment in the first place.³²² The Claimant does not have a right to claim the BIT protection for its alleged forgone dividends or unpaid dividends from its purported investment as it has committed no resources, has no economically materialised investment in the first place.

421. The Shareholders' Resolution of Avia Invest dated 11 October 2019 could not turn a hitherto unprotected investment of the Claimant into a protected investment under the BIT.

422. The Respondent notes that the Claimant confuses various terms such as "forgoing of dividends", "undistributed profits". Furthermore, the Claimant by its own admission states [para. 39 of the SoC; see also Exhibit [SC-11]] that the shareholders have never actually distributed the profits, but solely "have proposed to make a partial distribution of undistributed profits".³²³ In addition, the Claimant

³¹⁹ The Soc, para. 93.2. see also RfA, para. 37.3. ↩
³²⁰ See the Soc, paras. 39-40. ↩
³²¹ Malicorp Limited v The Arab Republic of Egypt, ICSID Case No. ARB/08/18, Award, 7 February 2011, para. 110 [Exhibit RLA-71]. ↩
³²² See Zachary Douglas, The International Law of Investment Claims, Cambridge University Press, 2009, {Rule 23), p. 189 et seqq. [Exhibit RLA-74]. ↩
³²³ Exhibit [SC-11], ↩

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alleges that "Avia Invest never distributed profits to the Claimant or to any of its shareholders" [para. 40 of the SoC; para. 33.2. of SCWS-Menelaou]. Thus, it appears that Avia Invest's shareholders never actually distributed the purported profits of Avia Invest.

423. The Respondent notes that under the law of the Republic of Moldova, Avia Invest's "undistributed profits" are the profits and the ownership of Avia Invest and are not profits or ownership of Avia Invest's shareholders. The shareholders have no claim to any "undistributed profits".

424. Furthermore, under the law of the Republic of Moldova the "undistributed profits" are not and shall not be construed as being synonymous with "forgone dividends" ("forgoing of dividends"). Those are two different institutions of corporate law.

425. In addition, pursuant to Art. 39(1) of the Law on Limited Liability Companies, a company's annual registered net profit shall be distributed and not the purported historically accumulated net profit, unless the company's articles of association provide otherwise [Exhibit R-135]. The Claimant has not demonstrated that the articles of association of Avia Invest provide otherwise, that is, that general shareholders' meeting may distribute dividends "from previous years" as decided by the Shareholders' Resolution dated 11 October 2019.

426. Also, pursuant to Art. 49(1)(h) of the Law on Limited Liability Companies, it is the exclusive competence of the company's general shareholders' meeting to distribute between shareholders the company's annual registered net profit [Exhibit R-135]. In the instant case, by the Shareholders' Resolution dated 11 October 2019 the general shareholders' meeting had only "proposed to make a partial distribution of undistributed profits in the amount of [Redacted] from the previous years" [Exhibit [SC-11]]. That is, there was no actual distribution decided by the Shareholders' Resolution of Avia Invest dated 11 October 2019, and no right to dividends of the Claimant have ever crystallised. As the Claimant stated, "Avia Invest has never distributed profits to the Claimant or to any of its shareholders".³²⁴

427. Thus, the Claimant had no right to any dividends from Avia Invest; no right of the Claimant to dividends from Avia Invest ever crystallised. Avia Invest never distributed any dividends to the Claimant.

428. Accordingly, the Claimant's allegation that it has forgone dividends, and that it has invested "by forgoing dividends from Avia Invest in order to surplus revenue is reinvested in the development of Chisinau Airport"³²⁵ is false and not grounded in the arguments and evidence put forward by the Claimant in these proceedings.

429. For the sake of argument, the Claimant's purported right to dividends, quod non, could only had arisen on 11 October 2019, that is, on the day of the Shareholders' Resolution dated 11 October 2019. However, the Claimant alleged that already on

³²⁴ Para. 40 of the Soc. ↩
³²⁵ Para. 93.2. of the Soc. ↩

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2 October 2019 it had sent the purported Notice of Dispute dated 2 October 2019 to the Respondent [Exhibit SC-5]. That is, the Claimant had sent the Notice of Dispute dated 2 October 2019 before even having a purported right to being paid dividends from Avia Invest.

430. A dispute between the Claimant and the Respondent could in principle have not arisen prior the Claimant even having a right to dividends (before the right to dividends crystallises) regarding Avia's Invest shares. As noted above, under the law of the Republic of Moldova, the right to dividends arises only when the general shareholders' meeting agrees upon the distribution of company registered net profits. The Claimant sent the purported Notice of Dispute dated 2 October 2019 before a dispute even arose between the Claimant and the Respondent. Accordingly, the purported Notice of Dispute dated 2 October 2019 as a unilateral act allegedly issued by the Claimant is null and void, as it referred to an inexistent dispute between the Claimant and the Respondent.

f. Siphoning Money out of Avia Invest Is Not an Investment

431. The Claimant claimed in the RfA that it invested in Avia Invest "by acting as parent company surety and/or guarantor on loans made by Avia Invest to various entities in order to ensure that its investment obligations under the Concession Agreement have been fulfilled" (para. 37.2. of the RfA). The Soc contains no such claim anymore.

432. The Claimant has not provided any explanation, let alone any evidence, of such acting as surety and/or guarantor. Moreover, it has not advanced any arguments that such "acting as a parent company surety and/or guarantor on loans made [Redacted] Avia Invest" (emphasis added) qualifies as a protected investment under the BIT. This is denied.

433. It is not clear from the Claimant's submissions, and the Claimant has not expressly asserted, whether the Claimant assumes that it is a concessionaire under the Concession Agreement, or it has any obligations under the Concession Agreement. Furthermore, the Claimant has not explained what the legal basis is for such purported "acting as parent company surety and/or guarantor on loans made [Redacted] Avia Invest" (emphasis added)".

434. It is upon the Claimant to discharge its burden of proof with respect to that unsubstantiated allegation in the RfA.

435. The Claimant's assertion in the RfA appears to be a blatant claim that the Claimant in fact actively acted towards divesting in Avia Invest, that is, siphoning money out of Avia Invest.³²⁶ It shall be noted that important amounts of money siphoned out

³²⁶ Avia Invest granted during 2014-2019 interest-free loans, or loans at low interest, or long-term loans, or advance payments "to various entities" in the amount of about EUR 88 million. During those years, Avia Invest collected the interest on those loans and advanced payments in the amount of about EUR 85 thousand only. On or about 31 August 2019, the balance of the outstanding loans and/or advances granted by Avia Invest amounted to about EUR 66 million. At the same time, however, as indicated by the Claimant itself, Avia Invest had tax arrears, as well as ↩

[Page 101]

of Avia Invest ended up on the accounts of offshore companies and have never been repaid to Avia Invest.

g. No Investment Within Its Inherent Meaning

436. Contrary to the Claimant's contentions, the mere agreeing to purchase shares and/or agreeing to pay the shares' price does not in itself constitute a protected investment when no Claimant's contribution has been made. Furthermore, the mere agreeing to purchase shares and/or agreeing to pay the shares' price does not constitute an investment within the inherent meaning of that term and does not satisfy the definition of "investments" in Art.1(1) of the BIT.

437. The Claimant's literal construction of Art. 1(1) of the BIT³²⁷ is contrary to the established rules of treaty interpretation.

438. The provisions of the BIT should be interpreted in accordance with the Vienna Convention on the Law of Treaties (the "VCLT") [Exhibit RLA-13]. Pursuant to Art. 31(1) of the VCLT, Art. 1(1) of the BIT shall be interpreted in good faith in accordance with the ordinary meaning of its terms in their context and in light of its object and purpose.³²⁸

439. The BIT does not contain a substantive definition of the protected "investments". Art. 1(1) of the BIT merely lists the forms that an investment may take, that is, the types of assets that may be invested, but does not define the term "investments" (or "investment") itself:

"The term 'investments' means every kind of asset invested by investors, for the purpose of acquisition of economic benefit or other business purpose, of one Contracting Party in the territory of the other Contracting Party in accordance with the legislation of the latter and in particular, though not exclusively, shall include:

a) Movable and unmovable property as well as any other property rights;

b) Rights derived from shares, bonds and other kinds of interests in companies;

c) Claims to money or other claims and rights having an economic value;

arrears on payments due to the Civil Aviation Authority and the PPA, and apparently needed loans from "a shareholder in Komaksavia in order to discharge in their entirety Avia Invest's debts to the CAA and to the PPA". All those transactions appear to have been designed to overburden Avia Invest and to other improper purposes.
³²⁷ See paras. 30 (including 30.1. to 30.5.), 43, 93 (including 93.1. and 93.2.) of the SoC; see paras. 16 (including 16.1 to 16.5.), 36, 37 (including 37.1. to 37.3.) of the RfA. ↩
³²⁸ See, e.g., Romak SA v Uzbekistan, Award, PCA Case No. AA280, 26 November 2009, para. 176 [Exhibit RLA-18]; Alps Finance and Trade AG v The Slovak Republic, Award, UNCITRAL, 5 March 2011, paras. 236-237 [Exhibit RLA- 15]. ↩

[Page 102]

d) Intellectual property rights, technical processes and know- how;

Provided that a possible change in the form in which the investments or reinvestments have been made shall not affect their character as investments so long as such a change does not contravene laws and regulations of the Contracting Party in the territory of which the investments were made."³²⁹ (emphasis added).

440. A straight-forward reading of the introductory clause of Art. 1(1) of the BIT "in particular, though not exclusively" confirms that it merely provides for a non- exhaustive list of assets that may qualify as investments. In order to determine whether the Claimant's alleged shares qualify as a protected investment under the BIT, the relevant test is therefore not whether they fall within one or more categories of assets listed in Art. 1(1) of the BIT, but rather whether they meet the inherent definition of "investments" ("investment") under the BIT. And they do not.

441. Such inherent definition derives from the ordinary meaning of the term "investment" and, as further demonstrated below by reference to investment treaty awards, includes elements of contribution, risk and duration.

442. This is confirmed by the BIT's Preamble which underlines that the "purpose" pursued by the Contracting Parties is to "extend and intensify the long-term economic cooperation" by "create[ing] favourable conditions for investments".³³⁰ It would be manifestly absurd and unreasonable to assume that these goals and object could be achieved by granting BIT protection to "agreeing to purchase a shareholding" and/or agreeing to pay the shares' price. The existence of an investment is not a matter of form but a substantive requirement for jurisdiction - and hence a requirement for jurisdiction ratione materiae.

443. The need to refer to the intrinsically substantive definition of "investment" rather than to the non-exhaustive lists of assets contained in investment treaties (which merely list the assets that may be "invested") has been recognised by tribunals in ICSID³³¹ and non-ICSID³³² investment treaty arbitrations alike.³³³ The tribunal in

³²⁹ Art. 1 para. 1 of the BIT [Exhibit RLA-1 bis]. ↩
³³⁰ BIT, Preamble [Exhibit RLA-1 bis]. ↩
³³¹ The tribunal in GEA v Ukraine considered that the objective meaning of the term "investment" was inherent to the term investment, irrespective of the application of the ICSID Convention. The tribunal stressed that: "it is not so much the term "investment" in the ICSID Convention than the term "investment" perse that is often considered as having an objective meaning in itself, whether it is mentioned in the ICSID Convention or in a BIT." (GEA Group Aktiengesel/schaft v Ukraine, ICSID Case No. ARB/08/16, Award, 31 March 2011, para. 141 [Exhibit RLA-72]). ↩
³³² The Claimant's assertion that the Salini criteria have been applied only once outside an ICSID context (para. 44.4. of the SoC) is obviously wrong as it contradicts the available statistics (investor-state cases). ↩
³³³ See, e.g., Salini Cosrruttori S.p.A. and Ita/strade S.p.A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction, 23 July 2001, para. 52 et seqq. [Exhibit RLA-19]; Joy Machinery Limited v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Decision on Jurisdiction of 6 August 2004, para. 42 et seqq. [Exhibit RLA-12]; Romak SA v ↩

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KT Asia v Kazakhstan stressed that "[i]t is inherent to the word 'investment', irrespective of the application of the ICSID Convention".³³⁴

444. The tribunal in AFT v Slovakia, whilst applying Art. 1(1) of the Switzerland-Czech and Slovak Federal Republic BIT, which contains and asset-based investment definition similar to that of Art. 1(1) of the BIT, found that "the BIT definition of investment is not entirely self-standing concept, but refers to the more general concept given by international law rules".³³⁵

445. A non-exhaustive enumeration of assets in an investment treaty does not constitute a substantive definition of the term "investment". As correctly noted by the tribunal in the case Romak v Uzbekistan, the term "investment" has an intrinsic meaning, independent of the categories enumerated in the treaty, and that meaning cannot be ignored:

"[T]he categories of investments enumerated in Article 1(2) of the BIT are not exhaustive, and do not constitute an all- encompassing definition of 'investment.' Both Parties agree that this is the case. Therefore, there may well exist categories different from those mentioned in the list which, nevertheless, could properly be considered investments protected under the BIT. Accordingly, there must be a benchmark against which to assess those non-listed assets or categories of assets in order to determine whether they constitute an 'investment' within the meaning of Article 1(2). The term 'investment' has a meaning in itself that cannot be ignored when considering the list contained in Article 1(2) of the BIT."³³⁶ (emphasis added).

446. The tribunal in Romak v Uzbekistan further highlighted that assets what would not meet the inherent characteristics of "investments" are not automatically transformed into "investments" by the mere fact that they fall into one or more categories listed in the treaty definition of "investment".

"The term 'investment' has a meaning in itself that cannot be ignored when considering the list contained in Article 1(2) of the BIT. [...] The Arbitral Tribunal therefore considers that the term 'investments' under the BIT has an inherent meaning

Uzbekistan, Award, PCA Case No AA280, 26 November 2009, para. 173 et seqq. [Exhibit RLA-18]; Alps Finance and Trade AG v The Slovak Republic, Award, UNCITRAL, 5 March 2011, para. 230 et seqq. [Exhibit RLA-15].
³³⁴ KTAsia Investment Group B. V. v. Republic of Kazakhstan (ICSID Case No. ARB/09/8), Award, 17 October 2013, para. 165 [Exhibit RLA-61]. ↩
³³⁵ Alps Finance and Trade AG v The Slovak Republic, Award, UNCITRAL, 5 March 2011, para. 240 [Exhibit RLA-15]. The tribunal in that case highlighted (para. 239) that it "is aware that the multitude of bilateral and multilateral investment treaties - although containing different definitions (either narrow or broad) of what constitutes an 'investment' explicitly or implicitly refers to an 'objective' definition given by international law, as applied by other treaty-based tribunals. Tribunals must therefore be cautious to enforce the true intention of the Contracting Parties to the specific treaty forming the basis of their jurisdiction, which cannot grossly depart from the 'objective' case-law definition." ↩
³³⁶ Romak SA v Uzbekistan, Award, PCA Case No AA280, 26 November 2009, para. 180 [Exhibit RLA-18]. ↩

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(irrespective of whether the investor resorts to ICSID or UNCITRAL arbitral proceedings) entailing a contribution that extends over a certain period of time and that involves some risk. The Arbitral Tribunal is further comforted in its analysis by the reasoning adopted by other arbitral tribunals [...] which consistently incorporates contribution, duration and risk as hallmarks of an 'investment.' By their nature, asset types enumerated in the BIT's non-exhaustive list may exhibit these hallmarks. But if an asset does not correspond to the inherent definition of 'investment,' the fact that it falls within one of the categories listed in Article 1 does not transform it into an 'investment.' In the general formulation of the tribunal in Azinian, 'labeling [...] is no substitute for analysis.'''³³⁷ (emphasis added).

447. As indicated by the tribunal in Romak v Uzbekistan, a "mechanical application" of the categories of assets listed in an investment treaty's definition would lead to "a result which is manifestly absurd or unreasonable"³³⁸ - a result which is contrary to Art. 32(b) of the VCLT.³³⁹

448. The tribunal in AFT v Slovakia also pointed out that an investment shall fulfil the following characteristics in order to benefit from investment treaty protection:

"It is now common ground that the necessary conditions or characteristics to be satisfied for attributing the quality of 'investment' to a contractual relationship include: (a) a capital contribution to the host-State by the private contracting party, (b) a significant duration over which the project is implemented and (c) a sharing of operational risks inherent to the contribution together with long-term commitments."³⁴⁰ (emphasis added).

449. As it is clear from the cases mentioned above, the inherent meaning of the investment is also present in the BIT. In the instant case, "by agreeing to purchase [Redacted] of the shares in Avia Invest"³⁴¹ (emphasis added) and/or "12Y: agreeing to pay the share purchase price for a [Redacted] shareholding"³⁴² (emphasis added) the Claimant has not invested in the Republic of Moldova, and his such "agreeing" does not constitute an investment within the inherent meaning of that term, which comprises these elements: (a) capital contribution, (b) risk, and (c) duration.

³³⁷ Ibid., para. 207 (emphasis altered; footnote omitted). ↩
³³⁸ VCLT, Art. 32(b) [Exhibit RLA-13]. ↩
³³⁹ Romak SA v Uzbekistan, Award, PCA Case No AA280, 26 November 2009, para. 184 [Exhibit RLA-18]. ↩
³⁴⁰ Alps Finance and Trade AG v The Slovak Republic, Award, UNCITRAL, 5 March 2011, para. 241 [Exhibit RLA-15] (footnotes omitted). ↩
³⁴¹ Soc, para. 30. See also para. 92. ↩
³⁴² SoC, para. 93.1. ↩

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450. As to (a), the Claimant has made no capital contribution.³⁴³ The fact that the Claimant "agreed" to purchase shares and/or to pay the price, or the Claimant's "forgoing of dividends" is of no relevance, since there is no evidence that the Claimant ever paid the price of the shares in Avia Invest allegedly acquired in the non-arm's length Share Sale-Purchase Contract dated 6 September 2016 concluded with 000 Komaksavia. In fact, there is prima facie evidence that the Claimant has not paid the price of the shares in Avia Invest [Exhibit R-37, the balance sheet of 000 Komaksavia, which does not reflect any amount received in 2016 or thereafter].

451. The Claimant has not committed any resources, and therefore its "agreeing" to purchase and its "agreeing" to pay the price, and its "forgoing of dividends" cannot constitute an investment within the meaning of the BIT. The Claimant's intentions for the future are irrelevant for the purposes of establishing the jurisdiction of the Arbitral Tribunal.

452. Since the Claimant has made no contribution, that is, has not "invested" any kind of asset, its purported "forgoing dividends from Avia Invest"³⁴⁴ is not protected by Art. 1(1) of the BIT.

453. Art. 1(1) of the BIT requires that for the purposes of "economic benefit" or for "other business purpose", the Claimant should have first "invested" an "asset" ("every kind of asset"). The Claimant has not demonstrated that it "invested", that it made any investment in the first place. As indicated by the tribunal in Malicorp:

"[A]ssets cannot be protected unless they result from contributions, and contributions will not be protected unless they have actually produced the assets of which the investor claims to have been deprived."³⁴⁵ (emphasis added).

454. The purported "forgo[ne] dividends"³⁴⁶ that allegedly remained at Avia Invest's disposal may not qualify as protected "investments" under para. 1(1) of the BIT, because they do not result from the Claimant's contributions. Moreover, as demonstrated above, the Claimant had actually not forgone any dividends, as no dividends had ever been distributed by the general shareholders' meeting of Avia Invest. The undistributed profits³⁴⁷ were and are the profits of Avia Invest not of the Claimant. Moreover, the undistributed profits were and are the ownership of Avia Invest, and the Claimant has no ownership right on the undistributed profits of Avia Invest.

³⁴³ In the Soc, the Claimant does not even allege that it has made a contribution (see, for example, para. 48, including sub-paras. 48.1., 48.2., 48.3.). ↩
³⁴⁴ Soc, para. 93.2. See also paras. 38-40 of the SoC. ↩
³⁴⁵ Malicorp Limited v The Arab Republic of Egypt, ICSID Case No. ARB/08/18, Award, 7 February 2011, para. 110 [Exhibit RLA-71]. ↩
³⁴⁶ See Soc, paras. 38, 39, 40, 93.2. ↩
³⁴⁷ Cf. para. 39 of the Soc. ↩

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455. As to (b), having made no capital contribution, the Claimant has, by definition, no risk of losing it.

456. As to (c), since the Claimant failed to make a capital contribution, its purported investment has, by definition, no duration.

457. Accordingly, the Claimant's "agreeing to purchase [Redacted] of the shares in Avia Invest"³⁴⁸ and/or "agreeing to pay the share purchase price for a [Redacted] shareholding",³⁴⁹ or "forgoing dividends"³⁵⁰ does not qualify as investments under the BIT. As such, the claim falls outside the scope of the BIT, and the Tribunal lacks jurisdiction ratione materiae.

458. The Claimant argument that the "Salini criteria are inapplicable to sec arbitration" (Soc, para. 44.6.) misses the point, because the inherent definition of "investments" ("investment") is based on the BIT and international law, not on sec Rules.³⁵¹ The Claimant asserts that if Salini test were applicable, its purported investment would satisfy the following Salini test criteria: "a view to a certain regularity of profit and return over a certain period of time"; "an assumption of risk"; and "a substantial commitment with significance for the Republic of Moldova's economic, infrastructural and strategic development" (sub-paras. 48.1., 48.2., 48.3. of the SoC). The Claimant's statement thus impliedly admits that its purported investment fails to meet two other criteria: contribution and duration. The Respondent submits that the Claimant meets none of those criteria.

459. The tribunals in various investor-state cases have endorsed an objective definition of "investment" with three³⁵² and more elements.³⁵³ However, the criterium of contribution is common for all such tests, it is inherent to the objective definition of "investment", and the failure to make a contribution shall render the purported investment unprotected under the applicable investment treaty. In the instant case, the Claimant has not made a contribution, and its purported investment is not protected by the BIT.

³⁴⁸ Soc, para. 30. See also para. 92. ↩
³⁴⁹ Soc, para. 93.1. ↩
³⁵⁰ Soc, para. 93.2. ↩
³⁵¹ The tribunal in Salini (paras. 50-58) stated four criteria for the term "investment": (i) a contribution, (ii) a certain duration, (iii) an element of risk, and (iv) a contribution to the host State's economic development [Exhibit RLA-19]. ↩
³⁵² The tribunals in Saba Fakes v Turkey (paras. 110-111) [Exhibit RLA-69] and Quiborax v Bolivia (para. 219; 227) [Exhibit RLA-73], KTAsia v Kazakhstan (para. 173) [Exhibit RLA-61] considered three criteria: (i) contribution or allocation of resources; (ii) duration; (iii) risk. ↩
³⁵³ As already mentioned, the tribunal in Salini stated four criteria (paras. 50-58): (i) a contribution, (ii) a certain duration, (iii) an element of risk, and (iv) a contribution to the host State's economic development [Exhibit RLA-19]. The tribunal in Joy Mining v Egypt, para 53 [Exhibit RLA-12] considered five criteria: four Salini criteria plus the requirement of a regularity of profit and return. The Tribunal in Phoenix, para. 114 [Exhibit RLA-22] extended the criteria to six, including in the Salini test, the two additional criteria: (v) assets must be invested in good faith and (vi) in accordance with the laws of the host State. ↩

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460. Should the Arbitral Tribunal embrace any of those tests with more than three elements, the Respondent submits that the Claimant has met none of the criteria accepted in such tests.

461. The Respondent indicated in the previous paragraphs that the Claimant has made no contribution (and the Claimant admits that this criterium has not been met), and that without a commitment of resources the Claimant faces no risk of losing them, and that the purported investment entails no duration without the resources being committed first.

462. As to the contribution to the Respondent's economic development, the transfer of the shares in Avia Invest to the Claimant was made with the sole purpose of bringing a claim under the BIT against the Respondent and to harm the Respondent in other ways. This does not amount to a contribution to the Respondent's development or to its economic prosperity. Moreover, since the Claimant made no contribution, there is nothing that could contribute to the Respondent's development or prosperity.

463. The Respondent notes the Claimant's repeated pretence that the Republic of Moldova was struggling to attract foreign investment in the modernisation of the Chisinau International Airport back in 2013.³⁵⁴ The Claimant thus aims at asserting the saviour role of Shor and its affiliates, who through various scams ended up in controlling the concession and the purported investment. By its form, the Claimant's pretence appears to be a recognition of the continuity of control over the shares in Avia Invest; that the Claimant controls nothing. In its substance, the Claimant's pretence is false, because Chisinau International Airport had been a profitable business and, moreover, because the EBRD provided loans for the reconstruction of Chisinau International Airport when it was necessary to reconstruct the Airport.

464. As to the regularity of profit and return, the Claimant could not expect any regularity of profit and return without having "every kind of asset invested",³⁵⁵ that is, a contribution, in the first place. Only the commitment of resources, that is, the economic materialisation of the purported investment, could contain an expectation of profit and return. This has been highlighted by Zachary Douglas (in the Rule 23):

"The economic materialisation of an investment requires the commitment of resources to the economy of the host state by the claimant entailing the assumption of risk in expectation of il. commercial return."³⁵⁶ (emphasis added).

465. In the RfA, the Claimant claimed that it invested in Avia Invest "by acting as parent company surety and/or guarantor on loans made by the Avia Invest to various entities in order to ensure that its investment obligations under the Concession

³⁵⁴ See, inter alia, para. 48.3. of the SoC; para. 22 of the RfA. ↩
³⁵⁵ Art. 1(1) of the BIT [Exhibit RLA-1 bis]. ↩
³⁵⁶ Zachary Douglas, The International Law of Investment Claims, Cambridge University Press, 2009, p. 189 et seqq. [Exhibit RLA-74]. ↩

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Agreement have been fulfilled".³⁵⁷ The Respondent notes that the Claimant has tendered no evidence in that respect. However, this appears to be the Claimant's admission that it in fact has actively acted towards divesting in Avia Invest, that is, siphoning money out of Avia Invest.³⁵⁸

466. As to the requirement of good faith and conformity with the laws of the Republic of Moldova, in the Respondent's Application dated 27 November 2020, the Respondent's Reply dated 4 January 2021, the Respondent's Request for Summary Procedure dated 5 February 2021, the Respondent brought prima facie evidence regarding the purported investment being made in bad faith and in violation of the legislation of the Republic of Moldova.

³⁵⁷ Para. 37.2. of the RfA. ↩
³⁵⁸ Avia Invest granted during 2014-2019 interest-free loans, or loans at low interest, or long-term loans, or advance payments "to various entities" in the amount of about EUR 88 million. During those years, Avia Invest collected the interest on those loans and advanced payments in the amount of about EUR 85 thousand only. On or about 31 August 2019, the balance of the outstanding loans and/or advances granted by Avia Invest amounted to about EUR 66 million. At the same time, however, as indicated by the Claimant itself, Avia Invest had tax arrears, as well as arrears on payments due to the Civil Aviation Authority and the PPA, and apparently needed loans from "a shareholder in Komaksavia in order to discharge in their entirety Avia Invest's debts to the CAA and to the PPA". All those transactions appear to have been designed to overburden Avia Invest and to other improper purposes. ↩

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V. THE TRIBUNAL HAS NO JURISDICTION BECAUSE THE CLAIMANT FAILED TO PROPERLY REQUEST AND PROCEED WITH THE AMICABLE SETTLEMENT

467. The Arbitral Tribunal has no jurisdiction because the Claimant has failed to properly request and proceed with the amicable settlement of the alleged dispute.

468. The Republic of Moldova notes that the requirements of Art. 10 paras. 1 and 2 (first part) of the BIT shall be firstly fully met before a claimant could submit an alleged dispute to an arbitral tribunal pursuant to Art. 2 (second part) and 2(d) of the BIT. The provisions of Art. 10 paras. 1 and 2 (first part) of the BIT are an integral aspect of the Contracting Parties' consent to arbitration, and shall be interpreted and applied in a manner that respects the procedures and terms that the Contracting Parties put in place as an integral part of their consent.

469. Art. 10 of the BIT provides in relevant part as follows:

"Settlement of Disputes between an Investor and a Contracting Party

1. Any dispute which may arise between one Contracting Parry and an investor of the other Contracting Party in connection with an investment on the territory of that other Contracting Party shall be settled amicably through consultations and negotiations.

2. If a dispute can not be settled in accordance with paragraph 1 of this Article within a period of six months from the date on which either party to the dispute requested amicable settlement, the investor concerned may submit the dispute either to:

a) The competent court or administrative tribunal of the Contracting Party in the territory of which the investment has been made; or

b) [...]

c) [...]

d) The Arbitration Institute of the Arbitral Tribunal of the Chamber of Commerce in Stockholm; or

e) [...]

3. [...]

4. The arbitration award shall be based on:

- the provisions of this Agreement, and

- the rules and universally accepted principles of international

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law.

5. The arbitration award shall be final and binding on both parties to the dispute and shall be executed according to the law of the Contracting Party concerned.

6. [...]³⁵⁹

470. Obviously, the Claimant has not complied with the requirements of Art. 10 paras. 1 and 2 (first part) of the BIT.

471. The alleged Notice of an investment dispute under the BIT dated 2 October 2019 (the "Notice of Dispute") [Exhibit SC-5] has purportedly been submitted by "Investors" and "Investors' investments", although it appears that only one such 'investor' signed it. In the purported Notice of Dispute there has been no suggestion, let alone any description, as to what the "investments" of Komaksavia were so that the Government could be engaged in meaningful consultations and negotiations.

472. As mentioned earlier in this Memorial, should the Claimant have a purported right to dividends, quod non, such right could only had arisen on 11 October 2019, that is, on the day of the Shareholders' Resolution dated 11 October 2019. The Notice of Dispute has been dated with 2 October 2019. That is, the Claimant allegedly submitted the Notice of Dispute before even having a purported right to dividends from Avia Invest. Put differently, the Claimant sent the Notice of Dispute before even a dispute could, as a matter of principle, have arisen between the Claimant and the Respondent regarding the purported investment allegedly made in way of "forgoing dividends".³⁶⁰ To that extent, the purported Notice of Dispute as a unilateral act allegedly issued by the Claimant is null and void, as it referred to an inexistent dispute between the Claimant and the Respondent.

473. Independently from the arguments in the previous paragraphs, the Notice of Dispute was not and is not valid on various other grounds. Firstly, it has been signed by a person who was not the Director of the Claimant³⁶¹ and did not otherwise submitted, presented, showed any power of attorney that he could represent the Claimant. The Notice of Dispute was not signed by the contemporaneous director of Komaksavia, Karklinsh.

474. The relevant part of the alleged Notice of Dispute [Exhibit SC-5] is reproduced here below:

³⁵⁹ Art. 10 of the BIT. ↩
³⁶⁰ Cf. para. 93.2. of the Soc. ↩
³⁶¹ The alleged registered nominal Director of the Claimant on 2 October 2019 was Karklinsh [Exhibits R-8 and R-10]. ↩

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Yours sincerely,

475. Secondly, the Notice of Dispute contained no address, no contact details or, indeed, any details of the alleged petitioner or of the Claimant. That was even in violation of Section 103(1)(c) of the Companies Law of the Republic of Cyprus pursuant to which a company:

"[S]hall have mentioned in legible characters in all business letters of the company and in all notices and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, and in all bills of parcels, invoices, receipts and letters of credit of the company:

(i) the name of the company;
(ii) the number of registration of the company;
(iii) whether it concerns a private or a public company;
(iv) the registered office of the company;
(v) if in the documents mention is made of the capital of the company, the reference must mention the allotted and paid capital;
(vi) if there is good reason, the stage of the liquidation in which the company finds itself. "³⁶²

³⁶² Para. 103(1)(c) of the Companies Law of the Republic of Cyprus [Exhibit R-52 bis]. ↩

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476. The first page of the alleged Notice of Dispute is reproduced here below:

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Via international courier service

His Excellency Igor Dodon
The President of the Republic of Moldova
154 Stefan eel Mare bd., Chisinau, MD-2073, Republic of Moldova

Ms Maia Sandu
Prime Minister of the Republic of Moldova
Piata Marii Adunari Nationale, 1, Chi inau, MD-2033, Republic of Moldova

Ms Olesea Stamate
Minister of Justice of the Republic of Moldova
Str. 31 August 1989, 82, Chisinau, MD-2012, Republic of Moldova

Mr Vadim Brinzan
Minister of Economy and Infrastructure of the Republic of Moldova
Piata Marii Adunari Nationale, 1, Chi inau, MD-2033, Republic of Moldova

Mr Eugenlu Moraru
Director General of the Agency of Public Property of the Republic of Moldova
Piata Marii Adunari Nationale, 1, Chi inau, MD-2033, Republic of Moldova

October 2, 2019

NOTICE

of an investment dispute under the Agreement between the Government of the Republic of Cyprus and the Government of the Republic of Moldova for the reciprocal promotion and protection of investments of 13 September 2007

Komaksavia Airport Invest Ltd. is a limited liability company incorporated and existing under the laws of the Republic of Cyprus with registered number 359258 ("Komaksavia"). Avia Invest S.R.L. is an entity incorporated and existing under the laws of the Republic of Moldova with registered number 1013600025635 ("Avia Invest"). These entities are referred to as the "Investors". Komaksavia is a majority shareholder (g) of Avia Invest, a concessionaire and an operator of the Chisinau International Airport ("Chisinau Airport").

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477. Accordingly, the Republic of Moldova could not engage in any meaningful consultations because of the lack of the Claimant's address and contact details.

478. Thirdly, there was no indication, let alone proof, that the Notice of Dispute was ever submitted to any authority in the Republic of Moldova.

479. Fourthly, there was no proof that the Notice of Dispute was sent and/or submitted, or when and where it was submitted, or that it reached the Government of the Republic of Moldova.

480. The sole shareholder that issued the purported Notice of Dispute is no longer Komaksavia's shareholder. There is no evidence in this case that after the departure of the issuing shareholder, the incoming shareholders of Komaksavia formally approved the purported Notice of Dispute.

481. Nothing in the purported Notice of Dispute has made its way into the Request for Arbitration.

482. Hence, the alleged Notice of Dispute, which is invalid, should not be considered a proper notice for the purposes of the BIT Art. 10 para. 1 and/or for triggering the six-month cooling-off period prescribed in the BIT Art. 10 para. 2 (first part).

483. The Claimant's core claim in this arbitration is the alleged termination of the Concession Agreement concluded between the PPA and Avia Invest. The Notification of Resiliation (Notification of Termination), dated 8 July 2020, was issued by the Granter, the PPA, which as Party to the Concession Agreement "shall not be considered a Governmental Entity".³⁶³ Even if the Notification of Resiliation (Notification of Termination) were to be attributed to the Republic of Moldova, quod non, the Notice of Dispute did not and, in fact, could not identify those challenged measures, as the Notification of Resiliation (Notification of Termination) was issued on 8 July 2020, that is, post-dated the Notice of Dispute. Likewise, other challenged measures were also not identified in the Notice of Dispute, because allegedly they also post-dated the Notice of Dispute. Accordingly, the Claimant failed to observe the "cooling-off" period prescribed by Art. 10 para. 2 (first part) of the BIT with regard to measures which are at the core of Claimant's claim. Moreover, the Notice of Dispute pre-dates the main allegation in these arbitration proceedings: the purported illegal termination of the Concession Agreement.

484. Furthermore, the response of the Ministry of Justice dated 16 December 2019 [Exhibit SC-6] has been addressed to Avia Invest and not the Claimant, and the Claimant has not tried to explain that issue but pretends that it is the addressee of that response by the Ministry of Justice. The Claimant has not tried to explain, let alone to prove, that it has engaged in any meaningful consultations and negotiations with the Ministry of Economy and Infrastructure, "the authority responsible for the investment sector", as prescribed in the response of the Ministry

³⁶³ Art.1.1 (definition of the "Governmental Entity") of the Concession Agreement [Exhibit R-12]. ↩

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of Justice. Accordingly, the Claimant has not complied with the BIT Art. 10 para. 1 and 2 (first part) and, therefore, no jurisdiction has been established by the Claimant under the BIT Art. 10 para. 2 let. d).

485. The Claimant should not be permitted to flout the notice and colling-off period provisions of Art. 10 para. 1 and 2 (first part) of the BIT. The Arbitral Tribunal should apply the notice and six-month waiting period requirements in accordance with their plain meaning and deny its own jurisdiction (or, alternatively, hold that the Claimant's claim is inadmissible).

VI. RELIEF SOUGHT

486. The Respondent respectfully requests that the Arbitral Tribunal:

1. dismiss the Claimant's claims for lack of jurisdiction ratione personae; or
2. dismiss the Claimant's claims for lack of jurisdiction ratione materiae; or
3. dismiss the Claimant's claims for failure of the Claimant to properly request and proceed with the amicable settlement under para. 10 of the BIT; and

in any event

1. order the Claimant to pay the Respondent's costs of the arbitration on a full indemnity basis, i.e., the Respondent's costs, including but not limited to the fees and expenses of the Tribunal and the Respondent's costs of legal representation and assistance, experts, witnesses, and consultants, and all other fees and expenses incurred in participating in the arbitration, including internal costs, with post-award interest at a commercially reasonable rate; and
2. order such other relief as the Arbitral Tribunal, in its discretion, considers appropriate.

Dated 28 May 2021

Respectfully submitted on behalf of the Respondent

Buruiana & Partners

Counsel for the Respondent

[Redacted]

Mihail Buruiana