In the matter of an arbitration
under the Arbitration Rules of
the United Nations Commission
on International Trade Law (2021)
PCA Case No. 2023-40
Permanent Court of Arbitration
Peace Palace
The Hague
The Netherlands
Day 1
Monday, 16 September 2024
Hearing on Preliminary Objections
Before:
PROFESSOR GABRIELLE KAUFMANN-KOHLER
MR WILLIAM KIRTLEY
PROFESSOR DONALD MCRAE
ZEPH INVESTMENTS PTE LTD
Claimant
-v-
THE COMMONWEALTH OF AUSTRALIA
Respondent
BRYCE WILLIAMS, registrar and legal counsel,
LILIA MENDOZA-ROSALES, assistant legal counsel, and
BENJAMIN CRADDOCK, senior case manager, appeared for
the Permanent Court of Arbitration.
Tribunal Secretary: LUKAS MONTOYA
Transcript produced by Trevor McGowan,
Georgina Vaughn and Lisa Gulland.
Trevor McGowan CR
CLIVE F PALMER, Claimant's representative and director
GEORGE SPALTON KC, counsel and Claimant party assisting
DR ANNA KIRK, counsel and Claimant party assisting
KRIS BYRNE, counsel and Claimant party assisting
MICHAEL SOPHOCLES, counsel and Claimant party assisting
ANNA PALMER, counsel and Claimant party assisting
BALJEET SINGH, administrator, Claimant party assisting
and director
DANIEL JACOBSON, counsel and Claimant party assisting
THOMAS BROWNING, counsel and Claimant party assisting
JONATHAN SHAW, counsel
EMILY PALMER, director
DECLAN SHERIDAN, director
LEANNE McCORMACK, administrative assistant
DOMENIC MARTINO, corporate advisor to the Claimant
SANDRA MARTINO, assistant to Mr Martino
NUI HARRIS, director of Claimant's subsidiary company
REGINA NOMMENSEN, assistant to Mr Harris
YEVHENIYA SOPHOCLES, counsel
SCOTT BIRKETT, expert witness
GEORGE SOKOLOV, Claimant party assisting
DR STEPHEN DONAGHUE KC, Solicitor-General of Australia
SAMUEL WORDSWORTH KC, Essex Court Chambers
PROFESSOR CHESTER BROWN, 7 Wentworth Selborne Chambers
DR NAOMI HART, Essex Court Chambers
DR ESME SHIRLOW, Shirlow International Law Office
PENELOPE BRISTOW, counsel assisting the Solicitor-General
JESSE CLARKE, general counsel, Office of International Law
LUCY MARTINEZ, counsel (investor-state disputes), Office of
International Law
KYLE DICKSON-SMITH, principal legal officer, Office of
International Law
STEPHANIE BROWN, senior legal officer, Office of
International Law
CHARLES LIGHT, senior legal officer, Office of
International Law
ERIN MANUEL, senior legal officer, Office of
International Law
JEREMY SHIRM, director, Department of Foreign Affairs
and Trade
CRAIG BYDDER, Solicitor-General of Western Australia
ANNIE TAN, senior assistant state solicitor,
Western Australia
JOHN LOPEZ, Opus 2 International
Opening submissions on behalf of Respondent ...................6
By Mr Clarke ........................................6
By Dr Donaghue ......................................7
By Mr Wordsworth ....................................32
By Dr Donaghue .....................................66
By Professor Brown ...................................93
By Dr Shirlow ......................................117
Opening statement on behalf of Claimant ....................129
By Mr Palmer .......................................129
Tribunal questions .....................................161
[Page 1]
08:42 1
Monday, 16 September 2024
2 (9.25 am)
3 THE PRESIDENT: Good morning to everyone. I see that we are
4 all eager to start and we are all ready before the
5 actual time for the start. Since this is being
6 streamed, I think we should not start before the time
7 for those who are watching remotely; it would not really
8 be fair. So we'll just wait five more minutes.
9 (Pause)
10 (9.30 am)
11 THE PRESIDENT: The Peace Palace bell just rang 9.30. I am
12 pleased to open this hearing and welcome you all here.
13 Let's just, for the record, establish who is in the
14 room. I also welcome all those who we are not seeing
15 and who are not in the room, but who are participating
16 remotely.
17 You of course have the Tribunal: Mr Kirtley on my
18 left, Professor McRae on my right; the Secretary of the
19 Tribunal, Mr Montoya, on my far right; and Mr Williams,
20 who is the representative of the PCA, on my far left.
21 We have the court reporter, the Opus technicians and
22 the technicians who handle the transmission.
23 For the Respondent -- and I'm starting with the
24 Respondent here because on preliminary objections, the
25 Respondent is in a position of claimant, so to say -- we
[Page 2]
09:31 1
have the Solicitor-General of Australia, Dr Donaghue KC.
2 Would you like to introduce those of your delegation
3 or do you wish that each person introduces him- or
4 herself?
5 DR DONAGHUE: Mr Clarke will introduce the delegation, if
6 that's suitable to the Tribunal.
7 THE PRESIDENT: Fine, thank you.
8 MR CLARKE: Thank you. Good morning, Madam President and
9 members of the Tribunal.
10 I am Jesse Clarke, the general counsel of the Office
11 of International Law at the Attorney-General's
12 Department. As you already noted, I am joined by the
13 Solicitor-General of Australia, Dr Stephen Donaghue KC,
14 and our counsel team: Mr Samuel Wordsworth KC,
15 Professor Chester Brown, Dr Naomi Hart and
16 Dr Esme Shirlow.
17 Joining from Western Australia is the
18 Solicitor-General of Western Australia,
19 Mr Craig Bydder SC, and Ms Annie Tan, senior assistant
20 state solicitor of the Western Australian
21 State Solicitor's Office.
22 THE PRESIDENT: If people who are in presence could just
23 raise their hand, so we can put names on faces, it would
24 be nice.
25 So Mr Solicitor-General of Western Australia. Good,
[Page 3]
09:33 1
thank you.
2 MR CLARKE: I think we had Ms Annie Tan as well.
3 I am also joined by counsel assisting the
4 Solicitor-General: Ms Penelope Bristow; Mr Jeremy Shirm
5 of the Department of Foreign Affairs and Trade; and
6 finally, my colleagues from the Office of International
7 Law: first, Ms Lucy Martinez, Mr Kyle Dickson-Smith,
8 Mr Charles Light, Ms Stephanie Brown and Ms Erin Manuel.
9 Madam President, if I may, we do have a PowerPoint
10 slide presentation this morning which we have provided
11 electronically, but we do have some hard copies
12 available in the room in case any of the members of the
13 Tribunal, the Secretary, the PCA or indeed the Claimant
14 would prefer a hard copy. We're just handing those up
15 now.
16 THE PRESIDENT: Thank you.
17 So let me turn to the Claimant now for the
18 introduction. Should I give you the floor, Mr Palmer,
19 to introduce those who are here with you, or do you want
20 each of them to introduce him- or herself?
21 MR PALMER: I think it's best that they introduce
22 themselves. I am Clive Palmer, I'm the representative
23 and director of the Claimant in the arbitration.
24 DR KIRK: Dr Anna Kirk from Bankside Chambers, counsel
25 assisting.
[Page 4]
09:34 1
MR BYRNE: Kris Byrne, counsel assisting.
2 MR SOPHOCLES: Michael Sophocles, lawyer assisting the
3 Claimant.
4 MR SHAW: Jonathan Shaw, lawyer assisting the Claimant.
5 MS A PALMER: Anna Palmer, counsel assisting the Claimant.
6 MR SHERIDAN: Declan Sheridan, director of the Claimant.
7 MS E PALMER: Emily Palmer, director of the Claimant.
8 MR BROWNING: Thomas Browning, Claimant party assisting.
9 MR JACOBSON: Daniel Jacobson counsel assisting.
10 MS SINGH: Baljeet Singh, administrator Claimant party
11 assisting and director of the Claimant.
12 MS McCORMACK: Leanne McCormack, administrative assistant.
13 MR HARRIS: Nui Harris, director of Waratah Coal.
14 MRS SOPHOCLES: Yevheniya Sophocles, assisting the Claimant.
15 MR BIRKETT: Scott Birkett, expert witness from BDO.
16 MR MARTINO: Domenic Martino, corporate advisor to the
17 Claimant.
18 MR PALMER: George Sokolov was to come; he's in Australia
19 watching online. He's assisting us in the arbitration.
20 So he's there. I thought I should just point that out.
21 (Pause)
22 THE PRESIDENT: As you know, the agenda of this hearing is
23 to address the preliminary objections. We will proceed
24 in accordance with Procedural Order No. 5. Some of the
25 rules that we will follow are also in Procedural
[Page 5]
09:37 1
Order No. 1.
2 On transparency and confidentiality, we will follow
3 the annex to Procedural Order No. 3. If a participant
4 wishes to raise an issue that is confidential, then
5 he/she should mention it at the start, and then the feed
6 will be cut until it is either determined that the
7 matter is, in reality, not confidential or we have
8 completed the discussion of the confidential matter.
9 Since the Tribunal may not always know when this is
10 the case, please mention so expressly. The same shall
11 apply when a confidential matter comes up with a witness
12 or expert, or you think that the witness/expert will now
13 respond with something that is confidential: you may
14 wish to flag it.
15 We will follow the schedule that is attached to
16 Procedural Order No. 5. So today we will hear opening
17 arguments, a maximum of 3 hours for each party. You
18 know the time allocation over the entirety of the
19 hearing, which is 9.5 hours for the Respondent and 6.5
20 for the Claimant. That includes, of course, the time
21 for the opening arguments and for the answers to
22 Tribunal questions, and closing remarks on the last day.
23 Is there anything that is unclear, or any comments
24 that a party would wish to raise before we give the
25 floor to the Respondent for the opening argument?
[Page 6]
09:38 1
Mr Donaghue, Mr Clarke?
2 DR DONAGHUE: Not on our part.
3 THE PRESIDENT: No, I don't see anything.
4 Mr Palmer, on your side?
5 MR PALMER: Not on our part, Madam President.
6 THE PRESIDENT: Good. Excellent. Then we may start.
7 We have received a paper copy of the Respondent's
8 PowerPoint, and we also understand that it has been
9 uploaded on the platform. You are welcome to start.
10 (9.39 am)
11 Opening submissions on behalf of Respondent
12 MR CLARKE: Thank you very much, Madam President.
13 Before we begin, like you, I would just like to
14 greet all of those who are watching this hearing live
15 from the public webcast. It is important that this
16 hearing is a transparent process, particularly given the
17 public interest from Australians watching back home.
18 I want to thank the Tribunal and the Permanent Court of
19 Arbitration for the efforts taken to facilitate
20 a transparent and open hearing.
21 (Slide 2) The opening statement by the Respondent
22 this morning will be structured as follows. The
23 Solicitor-General will make some introductory
24 observations, including as to the state of the evidence,
25 and will provide an overview of the main facts that are
[Page 7]
09:40 1
common to Australia's preliminary objections.
2 Mr Sam Wordsworth KC will address the "no investor" and
3 "no investment" objections. The Solicitor-General will
4 then return to address the denial of benefits objection.
5 Professor Chester Brown will address the abuse of
6 process objection. Finally, Dr Esme Shirlow will
7 address estoppel and acquiescence.
8 I will now hand over to the Solicitor-General.
9 Thank you, Madam President.
10 DR DONAGHUE: Good morning, Madam President and members of
11 the Tribunal.
12 (Slide 3) This is a claim said by the Claimant to be
13 worth AUD 300 billion or €182 billion. That is
14 an incredible figure. It makes this the largest
15 investor-state dispute settlement claim ever brought.
16 The sheer size of the claim makes this proceeding
17 one of great significance to Australia. It meant
18 Australia had no choice but to divert very significant
19 public resources to defending the claim. That was
20 necessary because any claim for AUD 300 billion must be
21 taken seriously, even if -- as is the case here, for
22 reasons that we will develop over the course of the
23 morning -- it is a claim with weak jurisdictional
24 foundations.
25 The Tribunal has witnessed firsthand, ever since
[Page 8]
09:41 1
this proceeding was commenced, that the proceeding has
2 been personally managed at every stage by the Claimant's
3 representative, Mr Palmer. Mr Palmer is an Australian
4 citizen. He is one of Australia's richest people and
5 he has a high public profile in Australia, having been
6 a Member of the Australian Parliament for nearly
7 three years, and having founded an Australian political
8 party, the United Australia Party, which was formerly
9 known as Clive Palmer's United Australia Party.
10 Mr Palmer's wealth derives substantially from
11 Australian company Mineralogy Proprietary Limited, which
12 he wholly owns through a corporate structure that now
13 includes the Claimant, Zeph Investments.
14 There is no dispute that the Claimant is wholly
15 owned and controlled by Mr Palmer. As a consequence,
16 there is no dispute that this is a claim brought by
17 a foreign company after that company was interposed into
18 an existing corporate structure between a valuable
19 Australian company and the prominent Australian citizen
20 by which that company is ultimately owned and
21 controlled.
22 It is therefore perhaps not surprising that this
23 case -- an enormous claim by a company owned by
24 a national of one state against that national's own
25 state -- has generated significant public interest
[Page 9]
09:43 1
around the world, both in the mainstream media and in
2 the investor-state academic community.
3 That interest reflects the fact that global
4 attitudes to the rules-based trading system are in flux.
5 The outcome of this dispute will focus attention on
6 whether the existing framework for investor-state
7 arbitration truly reflects the intention of parties to
8 treaties such as AANZFTA and the many treaties in
9 similar terms. For that reason, in our submission, this
10 Tribunal has been charged with a heavy task.
11 As this case has proceeded, it has acquired four
12 exceptional features, which we wish to emphasise at the
13 outset, which are particularly extraordinary in
14 combination.
15 The first is: despite the extensive evidential case
16 that Australia has assembled in support of its
17 preliminary objections, the Claimant has left that case
18 largely unaddressed in its pleadings and unanswered in
19 its evidence. Yet the evidence that the Claimant has
20 largely ignored is of a comprehensive and serious kind.
21 It includes evidence from five experts and one fact
22 witness.
23 By way, for the moment, just of very brief summary,
24 the first expert is Professor Thomas Lys, who is the
25 Eric L Kohler Professor Emeritus at Kellogg School of
[Page 10]
09:44 1
Management at Northwestern University. He is
2 a specialist in accounting, economics, corporate
3 governance and negotiation. He has been a faculty
4 member of the Kellogg School since 1981, and he became
5 an Emeritus Professor in 2015.
6 Both Professor Lys's first report and his
7 supplementary report are lengthy and detailed documents,
8 and they cover a range of issues, including the scope of
9 Zeph's business operations in Singapore, the business
10 purpose of the restructuring, Zeph's arguments on
11 retained earnings and the involvement of Zeph's
12 directors in Mineralogy.
13 It is, we submit, of some note that the tribunal
14 that decided Philip Morris v Australia, which is
15 Exhibit RLA-95, was significantly assisted by
16 Professor Lys. One passage from the award of that
17 tribunal, at paragraph 583, which addressed
18 Professor Lys's evidence on the purpose of a corporate
19 restructuring, has particular resonance in this hearing
20 today. Having set out the background of unpersuasive
21 witness evidence by the claimant in that case, the
22 tribunal said:
23 "Against this background, the expert report of
24 Professor Lys does carry weight, especially as it
25 remains unrebutted by other expert evidence, and
[Page 11]
09:45 1
Professor Lys was not called for cross-examination."
2 That passage could equally be written in this case.
3 The second expert Australia relies upon is
4 Mr George Rogers, whose experience, stretching back to
5 1989, includes having structured, lent and advised on
6 several US billion dollars' worth of mining project
7 finances in projects all over the world. Having set up
8 the mining project finance business of Investec Bank in
9 London in 2013, he set up his own mining project finance
10 consultancy. And his first and supplementary expert
11 reports address, again in detail, Zeph's claim that it
12 was incorporated for the purpose of pursuing financing
13 in Singapore for Australian coal projects. His evidence
14 has been almost totally ignored by the Claimant.
15 The third expert is Mr Daniel Kalderimis KC,
16 a New Zealand barrister of more than 20 years' standing,
17 whose report addresses whether Zeph has presented
18 a plausible rationale for the incorporation of
19 Mineralogy International Limited in New Zealand in order
20 to pursue lithium exploration or exploitation.
21 The fourth expert is Professor Graeme Cooper, who
22 has practised in Australian tax law for more than
23 30 years, taught tax at a variety of prestigious
24 universities, and advised numerous states and international
25 organisations. His evidence addresses the tax rationale
[Page 12]
09:47 1
that Zeph has put forward for its incorporation in
2 Singapore, including by identifying tax risks that the
3 restructure created for the Mineralogy Group as a whole
4 in Australia.
5 The fifth expert is Associate Professor
6 Stephen Phua, who has for more than 30 years taught
7 Singaporean and international tax law at the National
8 University of Singapore, and who has advised local law
9 firms and the Singaporean Government on tax matters.
10 His opinion questions the asserted advantages put
11 forward by Zeph under Singaporean tax law for the
12 relevant restructure.
13 Finally, Australia presents as a fact witness
14 Mr Bruno Vickers, the managing director of JS Held LLC
15 in Singapore, who has over 15 years' experience in
16 investigations and business intelligence. He provides
17 a detailed account of his investigations into Zeph's
18 alleged business operations in Singapore.
19 Madam President, members of the Tribunal, these
20 witnesses, the five experts and the one fact witness,
21 address issues which are relevant to each of Australia's
22 preliminary objections, and the experts provide
23 persuasive independent evidence in support of those
24 objections.
25 It is in that context that the second of the four
[Page 13]
09:48 1
exceptional features that I identified arises, which is
2 that the Claimant has chosen not to cross-examine any of
3 Australia's witnesses; not one.
4 The Claimant was, of course, entitled to make that
5 choice, having regard to paragraph 6.7 of Procedural
6 Order No. 1. But that paragraph does not mean that the
7 [Claimant]'s choice not to challenge the evidence of any
8 of Australia's witnesses is without any consequence. To
9 the contrary, that choice has the significant
10 consequence that Australia's evidential case is, in
11 substance, unchallenged.
12 The decision to proceed in that way cannot
13 reasonably be attributed to a lack of resources on the
14 Claimant or Mr Palmer's part, such that the very clear
15 inference is that the Claimant had no answer to that
16 evidentiary case, and indeed feared that its position
17 would indeed go backwards if it sought to cross-examine
18 Australia's witnesses.
19 The third exceptional feature of the case is that
20 less than two days after Australia communicated that it
21 was exercising its right to call eight of the Claimant's
22 witnesses for cross-examination, the Claimant entirely
23 withdrew the evidence of four of those witnesses for the
24 purposes of this jurisdictional hearing.
25 That eleventh-hour decision is, we say, remarkable.
[Page 14]
09:49 1
It leaves large parts of the Claimant's written
2 pleadings, which refer to the now-withdrawn witness
3 statements, unsupported. Indeed, it leaves the Claimant
4 in this proceeding almost entirely reliant on the
5 uncorroborated evidence of Mr Palmer itself. That's
6 really all you have from the Claimant. (Pause)
7 (Slide 4) The Claimant has failed to give the
8 Tribunal any plausible exploration for the withdrawal of
9 these four witnesses. The explanation, you will recall,
10 proffered in the letter dated 21 August 2024, only a few
11 weeks ago, which you can see extracted on the screen,
12 was with respect to two witnesses:
13 "The witness statements of Mr ... Martino and
14 Mr ... Harris were sworn prior to the Respondent's
15 admissions made in the Reply on Preliminary Objections
16 and, accordingly, their relevance for the purposes of
17 the Hearing has been largely reduced ..."
18 Zeph has never informed the Tribunal what the
19 alleged admissions it says rendered Mr Martino and
20 Mr Harris's statements irrelevant actually are, and
21 Australia certainly does not accept that it has made any
22 admissions which have that effect. As for Mr Migliucci
23 and Mr Sorensen, the Claimant stated in the same letter
24 that their witness statements were "intended for the
25 merits and damages stage of the Arbitration". But given
[Page 15]
09:51 1
that there were references to the evidence of these
2 witnesses in the pleadings concerning preliminary
3 objections, that statement is inexplicable.
4 The position became no clearer at the pre-hearing
5 video conference, where the Claimant stated only that
6 it had:
7 "... deemed [the four witnesses] not to be any more
8 relevant to the case as we are presenting it to the
9 Tribunal."
10 The reality is that, far from becoming irrelevant,
11 the evidence of the four witnesses that the Claimant has
12 withdrawn went directly to matters of ongoing evidence
13 to the Claimant's attempt to answer Australia's
14 preliminary objections.
15 To give you for now just one example, Mr Martino had
16 given an account of advice he claimed to have given to
17 Mr Palmer concerning the reasons for the restructure
18 that resulted in the interposition of Zeph into the
19 corporate structure in January 2019, including as to the
20 reasons to carry out that restructure urgently. We
21 would have tested Mr Martino's evidence on that topic by
22 cross-examination. Yet immediately upon us advising the
23 Claimant of that fact, the Claimant advised us that
24 Mr Martino's evidence had been withdrawn.
25 The result is that Mr Palmer gives an uncorroborated
[Page 16]
09:52 1
account of the meeting in March 2018 when he says he
2 received advice from Mr Martino about the restructure,
3 while at the same time the Tribunal is deliberately
4 deprived of the opportunity to hear about the same
5 advice from the person who is said to have given it.
6 Throughout this opening, Australia will provide
7 other examples where the evidence of the non-appearing
8 witnesses would have been relevant, and obviously so.
9 We respectfully submit that the Tribunal should take
10 a very dim view of the Claimant's attempt to curate the
11 facts so that Mr Palmer himself can completely control
12 the factual narrative he contends that the Tribunal
13 should accept.
14 The fourth and final exceptional feature of this
15 case is the complete absence of contemporaneous
16 documents of the kind one would expect to exist if the
17 factual contentions that Zeph is advancing were true.
18 Where, for example, are the contemporaneous
19 documents that support Zeph's case that it was
20 incorporated as part of a restructured design to
21 facilitate access to coal financing in Singapore, or,
22 for that matter, to achieve tax benefits? Literally no
23 such documents have been filed or produced,
24 notwithstanding orders from the Tribunal that would have
25 required such documents to be produced.
[Page 17]
09:54 1
The result of the four matters I've just identified
2 is that the ambit of the factual contest in this
3 preliminary hearing is reasonably confined. You're not
4 going to hear very much evidence. But critically,
5 that's not because there is substantial agreement
6 between the parties as to the facts; there's not. It's
7 because the Claimant has largely vacated the field,
8 leaving Australia's case completely unanswered.
9 Indeed, in our submission, the Claimant has left the
10 Tribunal with a purposely incomplete and unverified
11 narrative of key steps, including the reasons those
12 steps were taken. In a claim said to be worth
13 AUD 300 billion, that is demonstrably inadequate.
14 There can, we submit, be no explanation for the
15 Claimant's decision to rest its case entirely upon the
16 uncorroborated evidence of Mr Palmer, other than that
17 it was unable to do better.
18 Madam President, members of the Tribunal, that's the
19 first part of the opening remarks I am giving.
20 I propose now to turn to what we submit really happened
21 in this case concerning the transposition of the
22 extremely valuable Australian company Mineralogy to the
23 supposed Singapore investor Zeph, and to identify some
24 facts that are common to many of our preliminary
25 objections.
[Page 18]
09:55 1
In assessing the circumstances in which the Claimant
2 came to be incorporated in Singapore in circumstances of
3 apparent urgency in January 2019, and then to be
4 interposed into the Mineralogy corporate group and to
5 make immediate attempts to create the appearance of
6 substantive business operations in Singapore by
7 acquiring existing Singaporean companies, one needs to
8 go back to late 2018.
9 At that time, various long-standing tensions between
10 Mineralogy and the State of Western Australia concerning
11 the State Agreement were coming to a head. The relevant
12 State Agreement had been made between Mineralogy and the
13 WA Government way back in 2002 and it had been amended
14 in 2008. That's an agreement that is given force by
15 legislation, by Western Australian legislation.
16 In 2012, the WA Government had declined to approve
17 Mineralogy's Balmoral South Iron Ore Project proposal,
18 a proposal that was made under that State Agreement, and
19 that in turn precipitated a serious long-term decline in
20 relations between Mineralogy and the Western Australian
21 Government; a decline that was manifest in numerous
22 ways, including a prolonged arbitral proceeding in
23 Australia before a domestic arbitrator, Mr McHugh.
24 Another manifestation of those declining relations
25 arose in the context of what was initially a commercial
[Page 19]
09:57 1
dispute between Mineralogy and a Chinese state-owned
2 company called CITIC, which had submitted mine
3 continuation proposals continued to extend the life of
4 an ongoing project, the Sino Iron Project, in a manner
5 that could only occur if Mineralogy was prepared to
6 submit a proposal to the WA Government under the
7 State Agreement.
8 Over a period of several years, Mineralogy declined
9 to submit that proposal, and that led CITIC to seek to
10 involve and gain the support of the Western Australian
11 Government.
12 The proposed response of the Western Australian
13 Government introduced a new and highly relevant
14 additional dimension to the already long-running
15 tensions between Mineralogy and the WA Government
16 concerning Mineralogy's rights under the State
17 Agreement, because it was at that point that Western
18 Australia raised the prospect that it might unilaterally
19 legislate to amend the State Agreement to Mineralogy's
20 detriment.
21 I'm going to take you now to a series documents that
22 show this occurring, from November onwards.
23 (Slide 5) So you can see on the screen (R-130): on
24 3 November 2018, The West Australian newspaper reported
25 statements by the then Premier of Western Australia,
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09:58 1
Mr McGowan, and by the opposition leader of Western
2 Australia, in which the Premier was reported as being
3 open to:
4 "... changing the State Agreement governing the Sino
5 Iron Project to break the impasse between [the] operator
6 CITIC Pacific and tenement owner Clive Palmer."
7 The article quoted Premier McGowan as saying that,
8 "The State is considering its options".
9 (Slide 6) Almost immediately, a couple of days
10 later, on 6 November 2018, Mineralogy wrote to
11 Premier McGowan asserting that it was inappropriate for
12 Parliament to intervene in a commercial dispute (R-132).
13 (Slide 7) But then, a few weeks later, in the
14 Parliament of Western Australia, the Premier stood up
15 and made the following statement (R-133):
16 "State agreements are an important instrument ...
17 but there is a responsibility on the beneficiary,
18 Mineralogy, to do the right thing. I noted the recent
19 comments of the opposition leader and his offer to help
20 the government do all he can to sustain the project
21 including altering the state agreement. I thank the
22 opposition leader for this commitment. It appears we
23 are as one on this issue ... Clive Palmer and Mineralogy
24 are now on notice."
25 That's 29 November 2018.
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09:59 1
(Slide 8) The next day, 30 November 2018, Mineralogy
2 engages Allen & Gledhill, a Singaporean law firm, to
3 begin the process of incorporating a private company in
4 Singapore. In those instructions (C-502), as you can
5 see highlighted on the screen, it emphasised that "time
6 is of the essence", and that Mineralogy was "looking to
7 move very quickly".
8 As we will develop over the course of the morning,
9 none of the explanations that the Claimant now asks the
10 Tribunal to accept provide any explanation for that
11 obvious urgency. Mr Palmer claims in his evidence that
12 in a meeting in March 2018, Mr Martino advised him that
13 "we should move as fast as we could". But if Mr Martino
14 did say that, and if he provided any explanation for
15 that advice, Mr Palmer has not shared it. We would have
16 asked Mr Martino about that, but of course his evidence
17 was withdrawn.
18 But in any event, even if that advice was given in
19 March 2018, it was clear that it wasn't followed,
20 because nothing happened until late November 2018,
21 immediately after Premier McGowan's statements in
22 Parliament. As subsequent events show, this was not
23 simply a coincidence.
24 (Slide 9) In particular, again only days later,
25 2 December 2018, Mineralogy again expressed disagreement
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10:01 1
with the approach of the WA Government towards the State
2 Agreement, in correspondence to Premier McGowan, and it
3 took the step of publishing that letter, Exhibit R-136,
4 in a full-page advertisement in The West Australian
5 newspaper. We haven't put it on the slide, but that's
6 Exhibit R-137.
7 Less than two weeks later, on 14 November,
8 Mineralogy International Limited, or "MIL", was
9 incorporated in New Zealand, pursuant to the directions
10 of Mr Palmer. And two days after that, on 16 November,
11 it engaged in a share swap by which the new shell
12 company, MIL, obtained a very valuable 6 million or so
13 shares in the Australian company Mineralogy by issuing
14 the same number of shares in itself to the previous
15 owners in Mineralogy in proportion to their previous
16 shareholdings.
17 Those shares issued of MIL were of no value.
18 Mr Wordsworth will be returning to that point very
19 shortly.
20 (Slide 10) Then on 18 January 2019, which is in the
21 quite brief period of time when MIL was the direct owner
22 of the Australian company Mineralogy, MIL wrote to the
23 Premier of Western Australia. And you can see again
24 an extract on the slide (R-44).
25 Even though MIL had been incorporated only a month
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earlier, it asserted in the first paragraph of the
2 letter -- we've extracted the first paragraph, but you
3 can see it under the heading on the slide -- it asserted
4 that it "engage[d] in substantive business operations in
5 New Zealand" and that it "has an active and continuous
6 link with that country's economy", such that it was
7 "entitled to ... protections ... under ... (AANZFTA)".
8 That specific phrase, "substantive business
9 operations", rather than "substantial business
10 activities", of course has a familiar ring to it.
11 The letter stated that if the WA Government
12 proceeded to amend the State Agreement, that would cause
13 significant loss and damage to Mineralogy, and as such
14 to MIL, and it warned that this would breach Australia's
15 obligations under AANZFTA.
16 (Slide 11) MIL further wrote in the letter -- and
17 we'll be taking the Tribunal back to this letter in more
18 detail at subsequent points:
19 "If your Government alters by legislation the terms
20 of the State Agreement as you have foreshadowed to
21 Parliament, Mineralogy inter alia will have lost its
22 royalty income under existing agreements and court
23 judgments and the benefit of the exclusive tenure it
24 currently enjoys ... It cannot be a proper purpose to
25 take from an Australian an Australian asset ..."
[Page 24]
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This is MIL writing this:
2 "... and in effect give it to a Chinese Government
3 owned entity for a commercial purpose for that party to
4 commercially exploit."
5 (Slide 12) "We put you and your government on notice
6 of MIL's claim inter alia under AANZFTA for prompt,
7 adequate and effective compensation should you, your
8 Government or the Parliament of Western Australia take
9 any steps to expropriate, either directly or indirectly,
10 Mineralogy's interests or rights in Western Australia
11 ... If your Government proceeds with amending
12 legislation, MIL will immediately make a claim for $45Bn
13 against the Commonwealth ..."
14 So that threat of proceedings is made in
15 January 2019.
16 (Slide 13) A copy of that letter was sent to the
17 Commonwealth Minister for Energy, Mr Angus Taylor
18 (R-45). So the letter is sent to the Western Australian
19 Government, but it's copied to the Federal Government.
20 The covering letter to Mr Taylor repeated that MIL
21 was a New Zealand company:
22 "... which engages in substantive business
23 operations in New Zealand and which ... [was] entitled
24 to the protections offered to investors under ...
25 (AANZFTA)."
[Page 25]
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It asserted that Premier McGowan had "threatened to
2 unilaterally repudiate certain rights of Mineralogy"
3 under the State Agreement, which would result in a major
4 loss of MIL's investments, and would amount to:
5 "... many billions of dollars which under the terms
6 of the AANZFTA would immediately become due and payable
7 by the Commonwealth of Australia."
8 We submit that, particularly given the references in
9 the first paragraphs of both this letter and the
10 previous letter to the denial of benefits test, it is
11 evident that the possibility that Australia might deny
12 benefits under AANZFTA was front of mind for Mr Palmer
13 and MIL at the time these letters were written.
14 (Slide 14) Then, again just days later,
15 22 January 2019, The Australian newspaper, which is
16 a national broadsheet newspaper in Australia, reported
17 that the following statement was made by Mr Palmer
18 (R-46):
19 "Mr Palmer said the move offshore meant Mineralogy
20 would be able to claim compensation from the Australian
21 government under the investor protection provisions of
22 the Australia-[New Zealand] free-trade agreement. He
23 vowed to launch a damages claim if West Australia
24 Premier Mark McGowan carrie[d] through with his threat
25 to legislate in favour of Chinese giant CITIC's
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interests in the $US10bn Sino Iron project in the
2 Pilbara."
3 (Slide 15) There were a range of other articles
4 published in due course, as you can see on the slide,
5 reflecting the same statements. And Mr Palmer has never
6 denied making the statement that the move offshore meant
7 Mineralogy could claim compensation under AANZFTA.
8 In any case, the letters speak for themselves. They
9 directly link the incorporation of MIL and its insertion
10 into the ownership chain above Mineralogy to the attempt
11 to obtain treaty protection. And not only that: they
12 also display a contemporaneous awareness of the denial
13 of benefits test that they would need to overcome in
14 order to obtain that protection.
15 (Slide 16) Now, I've been talking about MIL. But
16 around the same time as that press report was published,
17 the incorporation of Zeph was being pursued with
18 urgency. Here you can see an email (R-817) sent at
19 8.05 pm on the night of 19 January, which is a Saturday.
20 Instructions were sent to Singaporean law firm Allen
21 & Gledhill to incorporate a new company.
22 (Slide 17) At 6.03 am the following morning, Sunday
23 morning, Allen & Gledhill were advised that
24 Mr Mashayanyika, who was the chairman of MIL:
25 "... [would] be travelling to Singapore and would
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like to meet ... at 10am on Monday in relation to [the]
2 incorporation of this new company."
3 (Slide 18) Later on the Sunday, at 4.52 pm,
4 a partner from Allen & Gledhill enquired about the
5 business plan for the new entity, and said, "When do you
6 need the entity by?"
7 (Slide 19) Later on Sunday night, 9.43 pm,
8 Mr Mashayanyika advised that:
9 "The new entity will be acquiring established
10 businesses in Singapore and we require [it] to be
11 incorporated tomorrow Monday 21st ..."
12 (Slide 20) Allen & Gledhill responded at 11.10 pm on
13 the Sunday night, "not[ing] the urgency of the
14 incorporation ... by tomorrow" (R-549).
15 (Slide 21) And Zeph was actually incorporated on the
16 Monday, the following day, as you can see from the
17 certificate of incorporation (C-70).
18 (Slide 22) Now, again around the same time,
19 Mr Sorensen, a long-term advisor to the Claimant, then
20 a partner at PwC, also referred to the urgency of the
21 incorporation of Zeph in contemporaneous emails. He
22 also referred in those emails, as you can see extracted
23 on the slide (R-775), to whether any delay would be
24 consistent with what were identified as "broader asset
25 protection aims". That is plainly a reference to the
[Page 28]
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investment treaty protection purpose, given the
2 escalating dispute with Western Australia, and the
3 absence of any other apparent basis on which
4 interposition of a shell company above Mineralogy would
5 provide any asset protection benefit.
6 In light of those emails, the Respondent called
7 Mr Sorensen for cross-examination, but of course, again,
8 the Tribunal is now deprived of the opportunity to hear
9 from him on this issue.
10 In all the circumstances, the Tribunal should infer
11 that the reason for the urgency associated with the
12 incorporation of Zeph was that Mr Palmer had realised
13 that he had made a mistake, and that the incorporation
14 of MIL in New Zealand would not provide the investment
15 treaty protection that had been sought.
16 (Slide 23) That mistake was identified publicly in
17 the Australian press on 23 January, when press reports
18 highlighted -- and you can see the headline, "Palmer's
19 NZ move looks like a flop" -- that Australia and
20 New Zealand had, by an exchange of letters, agreed that
21 Chapter 11 of AANZFTA did not create rights or
22 obligations between Australia and New Zealand. So
23 a New Zealand company was not an appropriate vehicle for
24 an investor-state claim, or not a possible vehicle.
25 On 29 January 2019, only about a week after it was
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incorporated in Singapore, Zeph acquired all of the
2 shares in Mineralogy in a share swap with MIL. The
3 approximately 6 million shares in the valuable company
4 Mineralogy were swapped for approximately 6 million
5 newly issued shares in the Claimant; and again, the
6 shares of the Claimant were of no value. Again,
7 Mr Wordsworth will return to this issue shortly.
8 (Slide 24) Lest there be any doubt that the
9 interposition of Zeph was related to the attempt to
10 obtain investment treaty protection, on 4 February -- so
11 again, only days after it becomes incorporated into the
12 group -- correspondence from MIL, the New Zealand
13 company, noted that its interest in Mineralogy was now
14 held via Zeph, which at that point in time was called
15 Mineralogy International Proprietary Limited, which was
16 said to be:
17 "... a Singapore registered company, which engages
18 in substantive business operations in Singapore and
19 which has an active and continuous link with that
20 country's economy."
21 A claim made just days after the company was
22 created. And it was said to make it entitled to bring
23 an investment claim, this time under the
24 Singapore-Australia Free Trade Agreement.
25 In addition to the unambiguous terms of that
[Page 30]
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4 February letter, the timing of this letter strongly
2 supports the inference that the purpose of the
3 restructure and the insertion of Zeph into the corporate
4 chain was to attract treaty protection in relation to
5 the possible unilateral amendment of the State Agreement
6 that Western Australia had threatened.
7 (Slide 25) The Claimant's internal documents confirm
8 that although that letter was not sent until 4 February,
9 it was actually drafted in the lead-up to the share swap
10 which saw Zeph interposed between MIL and Mineralogy.
11 You can see that from the draft which you now have on
12 the slide, which is dated 24 January, so before the
13 interposition.
14 It's apparent that the draft was incomplete. So the
15 author can't, as you can see in the top text box,
16 remember the name of the company. But nevertheless, the
17 letter threatens proceeding under the
18 Singapore-Australia Free Trade Agreement even before
19 Zeph had acquired any interest in Mineralogy.
20 What's more, the Claimant itself recognises that
21 this letter is connected to the share swap because this
22 letter was produced to Australia in response to document
23 request 3, which sought correspondence "in relation to
24 the Mineralogy Group restructure".
25 (Slide 26) Contemporaneous press reports at the
[Page 31]
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time, around the time of the share swap, in our
2 submission, accurately recognised what had occurred,
3 with The Australian reporting that Mr Palmer had
4 "shifted his corporate headquarters" from the
5 "unoccupied" office in New Zealand to Singapore in
6 an attempt to revive his threat to sue Australian
7 taxpayers for AUD 45 billion (R-142), after he found
8 that a New Zealand company could not make an investment
9 treaty claim against Australia under AANZFTA.
10 Subsequently, and well before the passage of the
11 Amendment Act, upon which Zeph bases its claim, on
12 14 March 2019, 20 March 2019, 15 October 2019 and
13 25 November 2019, MIL, Mineralogy and the Claimant
14 repeatedly wrote to Australia invoking relevant free
15 trade agreements to protest against unilateral action on
16 the part of the Western Australian Government that would
17 impact on Mineralogy's rights under the State Agreement.
18 Now, the Claimant has rejected the suggestion that
19 any of these letters that I've just shown the Tribunal
20 threatened investment treaty proceedings in response to
21 the Western Australian Government's suggestion that
22 it might legislate to amend the State Agreement. And
23 we'll show you that submission.
24 (Slide 27) In the SODPO at paragraph 523,
25 the Claimant argues:
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"... the CITIC letters merely evince Mr Palmer's
2 knowledge of the existence of investor-State agreements
3 and nothing more."
4 With great respect, that claim is absurd. For
5 example, the statement, "If your Government proceeds
6 with amending legislation, MIL will immediately make
7 a claim for $45Bn against the Commonwealth" -- that's
8 a quote from Exhibit R-44, the letter of 18 January --
9 is in its terms a threat to commence investment treaty
10 proceedings.
11 Madam President, members of the Tribunal, the facts
12 I have just outlined are relevant to many of Australia's
13 preliminary objections because they demonstrate very
14 clearly what was really going on when Zeph was urgently
15 incorporated into the Mineralogy Group in January 2019.
16 We now propose to develop each of our preliminary
17 objections, and with the Tribunal's permission, I will
18 hand over to Mr Wordsworth KC to deal with the first
19 two. Thank you.
20 THE PRESIDENT: Thank you.
21 MR WORDSWORTH: Madam President, members of the Tribunal,
22 thank you very much.
23 (Slide 28) I will be developing the first two of
24 Australia's preliminary objections.
25 (Slide 29) First, that Zeph is not an "Investor of
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a Party" as defined by Article 2(d) of Chapter 11 of
2 AANZFTA. Zeph has not made an investment in the
3 territory of Australia because it has not made any form
4 of active contribution.
5 Second, that Zeph has not established the existence
6 of a protected investment under Chapter 11. It's unable
7 to demonstrate any of the inherent characteristics of
8 an investment, most obviously in the form of the absence
9 of contribution or of risk.
10 These objections fall to be considered against the
11 exceptional factual background that you've just heard
12 outlined by the Solicitor-General. And although the
13 parties have referred to many of the past cases in their
14 pleadings, in none of these was a tribunal looking at
15 closely analogous facts.
16 As Mr Palmer said to The Australian newspaper, as
17 you've just seen at slide 14, MIL was incorporated so
18 that:
19 "... Mineralogy would be able to claim compensation
20 from the Australian government under the investor
21 protection provisions of the [AANZFTA]."
22 That's R-[46]. So no contribution is suggested
23 there.
24 (Slide 30) As to what happened next, MIL obtained
25 from Mr Palmer and his wholly owned companies the very
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valuable 6 million or so shares in Mineralogy by
2 swapping newly issued shares in MIL. MIL had a value of
3 just $1. And you can see that from the relevant
4 resolution of 16 December 2018 (C-63):
5 "The Company has no assets and liabilities other
6 than the share capital of 1 fully paid redeemable share
7 of NZD $1 ..."
8 So MIL had nothing of intrinsic value to contribute
9 to Mineralogy, and did not contribute anything of value.
10 (Slide 31) Then Zeph -- newly incorporated, as
11 you've just seen, a few weeks later -- acquired the
12 shares in Mineralogy from MIL through an exchange of
13 shares with MIL. And again, as you can see from the
14 slide, Zeph had a value of $1 only. You can see that
15 from the resolution of what was then called Mineralogy
16 International Pte Limited of 19 January 2019 (C-63).
17 Thus, Zeph acquired the very valuable shares without
18 contributing anything of intrinsic value. Any value in
19 the Zeph shares came solely from the value of the
20 Mineralogy shares, the Australian company Mineralogy.
21 If anything, that is the reverse of a contribution.
22 Although Zeph says that it contributed in other
23 ways, namely through management of Mineralogy and
24 investing returns, all that happened is that existing
25 Mineralogy directors and personnel were also appointed
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as directors of Zeph, and Zeph cannot point to a single
2 document showing any actual step taken by it -- taken by
3 Zeph -- to invest returns in Mineralogy.
4 (Slide 32) Against that backdrop, I turn to the
5 first question, focusing on the correct interpretation
6 of Article 2(d). And focusing on that definition, the
7 key phrase on which the parties are focusing is "make,
8 is making, or has made an investment".
9 (Slide 33) To make an investment, in its ordinary
10 meaning, is to make some form of contribution, most
11 obviously of capital, in order to acquire an asset. And
12 consistent with that interpretation, one can see from
13 Article 8(1), which is the provision concerning free
14 transfers, that the treaty-drafters saw the importance
15 of ensuring the free transfer of, specifically,
16 "contributions to capital, including the initial
17 contribution".
18 So they undoubtedly envisaged that there would be
19 an initial contribution. That's a point on context that
20 Zeph has completely blanked in its written pleadings.
21 (Slide 34) Zeph has taken the position -- and this
22 is paragraph 262 of its SODPO -- that "the verb 'make'
23 has little or no substantive meaning in its own right",
24 and that it just takes its meaning from the word
25 "investment".
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(Slide 35) You can see at paragraph 279 it is also
2 saying that mere "passive ownership ... is sufficient".
3 But that is to deny the word "make" any effet utile
4 and it's plainly wrong. To make an investment is not
5 the same as to have, to own or control, to acquire or to
6 hold an investment; all terms that the treaty parties
7 could have used, but did not use. Just as, for example,
8 to have or acquire a meal is not the same as to make
9 a meal. The word "meal" is not somehow all-defining.
10 And the same is true when it comes to the word
11 "investment". The actual verb used is critical to
12 meaning, and it is not a mere connective, as Zeph is
13 suggesting.
14 (Slide 36) One can test the point another way. If
15 the formula "to make an investment" just takes its
16 meaning from the word "investment" -- that's Zeph's
17 case -- then it would be easy just to slot in the treaty
18 definition of "investment" in Article 2(c), which you
19 will recall refers to "every kind of asset owned or
20 controlled by an investor". But then if you try and
21 slot that in, it just doesn't work, because "to make
22 every kind of asset owned or controlled by an investor",
23 it just doesn't make sense.
24 This identifies that the treaty-drafters had
25 something else in mind in Article 2(d): that is, to
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"make" an investment in the ordinary sense of the word,
2 to make some form of contribution, to acquire an asset.
3 All this is confirmed by context and object and
4 purpose. Article 2(c), as you can see, defines the term
5 "investment" using different concepts: "owned or
6 controlled by an investor". And it would make no sense
7 if to "make" an investment was just to mean to own or
8 control an investment, as that's already within the term
9 "investment".
10 (Slide 37) The same basic point applies to
11 Article 2(a) as to which Zeph seeks to rely on the words
12 "established, acquired or expanded". But these words
13 address a temporal issue. An investment is thus covered
14 irrespective of whether it came into being, was acquired
15 by the investor or was enlarged after AANZFTA came into
16 force. The requirement in Article 2(d) to "make"
17 an investment addresses a different issue, and that's
18 why a different word is used.
19 (Slide 38) Zeph also seeks to make a point in the
20 footnote, footnote 4, by reference to "seeks to make".
21 Again, that's just addressing a different issue.
22 An investor which has not yet made a concrete investment
23 must have more than an abstract desire to do so in order
24 to benefit from protection under Chapter 11. No great
25 surprise there.
[Page 38]
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(Slide 39) As to object and purpose, Zeph has said
2 that the primary purpose of AANZFTA is investor
3 protection. But that is plainly wrong. Chapter 1 of
4 AANZFTA sets out this free trade agreement's objectives.
5 Article 1(c) states the objective to:
6 "... facilitate, promote and enhance investment
7 opportunities among the Parties through further
8 development of favourable investment environments ..."
9 There's no need for specifically favourable
10 environments for investment opportunities if investments
11 do not engender risk; that is, some form of contribution
12 that could be lost in an unfavourable environment.
13 Article 1(d) then speaks of:
14 "... strengthening, diversifying and enhancing
15 trade, investment and economic links among the
16 Parties ..."
17 Investment and economic links between the AANZFTA
18 state parties are not strengthened and enhanced if there
19 is just a formal change in corporate structure, where
20 a party of one state comes to own or control assets in
21 another state without making any contribution.
22 Now, Zeph, in its recent Rejoinder, the RejPO,
23 appears belatedly to have recognised the force of
24 Australia's case on interpretation. In certain parts of
25 its Rejoinder, Zeph is maintaining its position that
[Page 39]
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Article 2(d) requires no active steps and that the mere
2 passive holding of an investment is enough. One can see
3 that, for example, at paragraphs 132 to 135.
4 But Zeph also now includes a section where it seeks
5 to give at least some limited meaning to the word
6 "make", saying that this does require an activity, but
7 merely in terms of participating in the relevant
8 transaction. You can see that at paragraphs 158 through
9 to 166. That would be a very major shift in position.
10 (Slide 40) We've put up on the slide for you to see
11 and compare paragraphs 265 to 266 and 279 of the SODPO
12 of March 2024 -- and you can see those are all saying in
13 one way or another that mere holding or passive
14 ownership is enough. Please compare that with the Zeph
15 Rejoinder of August 2024 at paragraph 165, by way of
16 example, where there is a reference to "the requirement
17 to have 'made an investment", with mere holding being
18 distinguished.
19 So it is now accepting that the verb "to make" does
20 have some meaning, which is a critical change in its
21 case. Of course, it wishes to confine that meaning by
22 saying, "It's enough if we just entered into this share
23 swap, we signed some documents, we issued some shares",
24 and it says, "There's no need for us to make an actual
25 contribution".
[Page 40]
10:27 1
We do hope we're going to get some clarity on what
2 Zeph's case in fact is this afternoon. I just want to
3 emphasise: it does really matter, because the two cases
4 that Zeph now appears to be running are inconsistent.
5 And if Zeph is shifting ground, then much of its
6 argument on interpretation in the SODPO simply falls
7 away.
8 Take as an example the case on which Zeph has placed
9 the most emphasis, and that's the Swiss Federal
10 Tribunal's first decision in the Clorox case, RLA-144.
11 The Tribunal already has our basic point that the
12 court was looking at materially different wording,
13 "invested by investors", in the definition of the term
14 "investment", and there was no case there as to whether
15 the requirements to be an investor had been met.
16 Venezuela had conceded that, and it had to, because
17 you may recall that relevant treaty wording, the
18 definition of "investor", does not contain the "make
19 an investment" wording so far as concerns corporate
20 entities. Interestingly, it does contain that wording
21 so far as concerns natural persons, which brings in
22 a very nice contrast. But Clorox of course was not
23 a natural person and did not have the benefit of the
24 "make an investment" type wording.
25 (Slide 41) But leaving this to one side, Zeph was
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saying -- and you can see this from paragraph 270 of its
2 SODPO -- that Clorox supported its position that
3 "The [mere] holding of assets was sufficient", which is
4 a correct analysis of what the Swiss court's decision
5 says. And this was being used to say, by Zeph, that the
6 words "make an investment" do not require any positive
7 act, just like the words "invested by". So it's saying:
8 look at Clorox, look at its interpretation of the words
9 "invested by"; no positive act is required, mere holding
10 is sufficient.
11 And you can see the court's analysis: we've just
12 highlighted the most relevant part at the bottom of
13 paragraph 3.4.2.7 (RLA-144).
14 But Zeph now appears to accept, quite correctly,
15 that the "makes an investment" wording does require more
16 than mere holding, although it seeks to limit that by
17 reference to the form of action that is required. Thus,
18 it appears now to be accepting our case that Clorox is
19 distinguishable. Clorox, it says, "invested by": mere
20 passive holding enough. Our wording, "make
21 an investment", some action is required: mere passive
22 holding is not enough. Which is it saying? We wait to
23 see.
24 But if Zeph now accepts that the "made by
25 an investor" language does indeed require more than
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a passive holding, the only question is: what positive
2 action is required? Is it the mere participation in
3 a share swap with relation to Zeph shares of no value?
4 That's Zeph's case. Or is some form of actual
5 contribution required? That's Australia's case.
6 Now, there are many cases on this point that the
7 parties have deployed, and we've tried to put those down
8 in a more convenient form for you at slides 42-43. And
9 of course we are identifying whether this has the "make
10 an invest[ment]" type language, or does it have the
11 different "invested by" language; and we are also
12 identifying whether some form of active contribution was
13 in fact made by the investor, and what the outcome was.
14 I can just say a few words on the entries concerning
15 cases on which Zeph places particular weight in its
16 pleadings. You'll see on the next page (43) we have
17 Clorox, which I've already looked at; that's entry 12.
18 And the point there is: different wording. It's all
19 about the meaning of "invested by investors" in the
20 "investment" definition.
21 Then Sea Search-Armada v Colombia (CLA-242), that's
22 entry 16, a new authority cited by Zeph in RejPO
23 paragraph 155, and the treaty language is again
24 materially different, turning on the definition of
25 "investment" and the meaning of the words "commitment of
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10:32 1
capital". And the tribunal specifically found that
2 treaties with different wording were "inapposite" and
3 "of limited use"; that's paragraphs 170 and 172.
4 Then PAO Tatneft, RLA-51 at entry 10, a judgment on
5 which Zeph relies heavily in both its pleadings. But
6 not only is the "invested by" wording materially
7 different, as the table shows, the judge expressly
8 distinguished this from the "make an investment"
9 formulation. And we refer you in particular to
10 paragraphs 78 through to 80.
11 (Slide 44) It's useful to turn back to the other
12 English court judgment that the parties are referring
13 to: that's Gold Reserve (RLA-44). Zeph is now embracing
14 this case in support of its changed position in the
15 RejPO, for example at paragraph 162. And you can see
16 the relevant treaty definition (RLA-44, paragraph 15) is
17 analogous:
18 "(g) 'investor' means ...
19 [a person] who makes the investment in the territory
20 of [the host state] ..."
21 In due course, we invite you to focus on the
22 persuasive reasoning from paragraph 32 to paragraph 35,
23 all of which is passed over by Zeph.
24 On the slide, you can see the interim conclusion in
25 the judge's reasoning (paragraph 37):
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10:34 1
"Mere passive ownership of an asset is insufficient.
2 What is required is an active relationship between the
3 investor and the investment ... in the context of the
4 BIT in this case a person can only be one who 'makes the
5 investment' if there is some action on his part.
6 Passive holding of an asset by itself would not amount
7 to making the investment. That is so, it seems to me,
8 as a matter of the ordinary use of language."
9 Same here.
10 The conclusion by reference to the facts is then at
11 paragraph 44. Picking that up halfway down the extract:
12 "There is no evidence that [Gold Reserve] ..."
13 That is the claimant:
14 "... made any payment or transferred anything of
15 value to Gold Reserve Corp in return for becoming the
16 indirect owner or controller of the shares in [the] CAB
17 or of the Brisas Project."
18 That's obviously the investment.
19 There is then a reference to the absence of any
20 evidence of action at all. And the court concludes:
21 "Whilst [Gold Reserve] undoubtedly become the
22 indirect owner or controller of the shares in CAB and of
23 the Brisas Project I must conclude that it did not at
24 that time make an investment in the assets in respect of
25 which the protection of BIT was sought."
[Page 45]
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Zeph is now seeking to portray this case as showing
2 that to make an investment is satisfied by any form of
3 activity -- that is, mere participation in the
4 transaction -- and does not require any contribution of
5 value. But the case doesn't say that. The court is
6 just looking at the facts before it.
7 Zeph also seeks to distinguish the case because the
8 Claimant itself had not transferred any shares; it was
9 the Claimant's parent company that had transferred the
10 shares. But although in this case it is Zeph which
11 issued the shares, in substance that is very similar to
12 the transaction in Gold Reserve. As in Gold Reserve,
13 the Claimant has not contributed anything of value.
14 Here, Zeph was a company worth $1 before the
15 transaction. All of the value in the transaction came
16 from the Mineralogy shares, which MIL held.
17 Zeph also seeks in its RejPO to support its position
18 that any form of activity by the investor is sufficient
19 by reference to two other cases. These are AMF (RLA-49)
20 and also Gramercy (CLA-86), and if I can look at those
21 briefly.
22 (Slide 45) You can see AMF, which is RLA-49. At
23 paragraph 450, the tribunal finds that:
24 "The ordinary meaning of ['make an investment'] ...
25 indicates that the investor has to act and effectively
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10:37 1
engage in the action of making the investment."
2 We submit that must be right.
3 At paragraph 453, reference is made to previous
4 cases in which there had not been an active investment.
5 These included:
6 "... where a company did not make any payment or
7 transfer anything of value in return for becoming the
8 indirect owner or controller of the shares in the
9 company that owns the investment ..."
10 Then on the next slide (46), paragraph 456, you can
11 see there's a reference to Standard Chartered Bank and
12 the Alapli v Turkey case, where:
13 "The ... tribunal ... [stated] that in order to
14 establish the activity of investing, [a tribunal] 'must
15 find an action transferring something of value (money,
16 know-how, contacts, or expertise) from one
17 treaty-country to another'."
18 Then the key facts are at paragraph 457:
19 "Claimant, a German company, itself purchased the
20 Aircraft from Fischer Air by transferring the purchase
21 price to the Czech company's account ..."
22 So the facts are completely different: there was
23 a real contribution of value, and the case does not
24 establish that mere participation in a transaction --
25 let's say the mere issue of shares in a company that has
[Page 47]
10:39 1
no value -- is sufficient.
2 (Slide 47) Zeph also refers to Gramercy v Peru,
3 CLA-86. And again, this helps Australia. The
4 conclusion is at paragraph 606 of the award, following
5 on from a summary of the Alapli case and also KT Asia.
6 You can see it says:
7 "These cases are inapposite; they refer to corporate
8 restructurings where shell corporations acquire the
9 investment for a nominal price, from a national of the
10 host State or a third-party investor who does not
11 benefit from the treaty."
12 Those are, in essence, what has happened here. So
13 of course this doesn't cut across our position that mere
14 participation in a transaction, without a contribution
15 of value, does not amount to making an investment.
16 Against that backdrop on the law, can I turn to the
17 current facts. Zeph actually says, "Well, in any event,
18 we have made a contribution", and it puts that in three
19 different ways. It says, "We've made the initial
20 acquisition in shares in Mineralogy, we've invested in
21 terms of management and we've reinvested returns".
22 If I can look at those in turn, starting, of course,
23 with the initial acquisition. As you've seen, Zeph
24 acquired its shares in Mineralogy, as a result of two
25 share swaps, without contributing anything of value.
[Page 48]
10:40 1
Zeph now has three primary lines of argument.
2 First, it relies heavily on a statement in Australia's
3 ROPO, paragraph 64, that:
4 "... Australia does not dispute that the share swap
5 was both lawful and effective ..."
6 That so-called "admission" adds nothing.
7 Article 2(d) requires that a putative investor make
8 an investment. So the fact that we don't dispute that
9 Zeph is the legal owner is neither here nor there.
10 Second, Zeph insists that the new shares it issued
11 to MIL were in fact of value, but it provides no
12 evidence of this. For example, it asserts at RejPO
13 paragraph 149 that, "It is incorrect to say that the
14 shares had no value", but notably, there is no reference
15 to any evidence in support.
16 At RejPO paragraph 168, Zeph appears to be relying
17 on the face value of the consideration shares that it
18 had issued, which is approximately AUD 6 million. But
19 of course, face value tells one nothing. Zeph's paid-up
20 capital, its actual value before the transaction, was
21 $1, as you've already seen from R-536, the board minute
22 of 29 January 2019. The Zeph shares acquired value only
23 as a result of the transaction with MIL.
24 (Slide 48) This is further confirmed in the evidence
25 of Professor Lys. And you can see in particular at
[Page 49]
10:42 1
paragraph 37 -- I don't have time to take you through it
2 all:
3 "Because the Consideration Shares represent
4 ownership of an enterprise with no assets and no
5 intrinsic value immediately prior to the restructuring
6 transaction, they have zero value outside of this share
7 exchange."
8 All this is intuitive: this is what you'd be
9 expecting, you'd be understanding. Professor Lys is
10 confirming this from his expert point of view, and of
11 course he is not being challenged through
12 cross-examination.
13 Instead, and tellingly, Zeph is seeking to take out
14 of context something that Australia has said on adequacy
15 of consideration. But all Australia said -- and this is
16 ROPO paragraph 61(a) -- was:
17 "Contrary to Zeph's suggestion, Australia does not
18 rely on any argument concerning the adequacy of the
19 consideration provided by Zeph. Its argument is that
20 Zeph was required to make an active contribution, which
21 cannot be achieved if Zeph provided nothing of value."
22 So of course there is no admission there.
23 Third, and defensively, Zeph argues that it is
24 immaterial whether the shares it issued to MIL were of
25 any value, because what matters instead is that it
[Page 50]
10:44 1
actively participated in the transaction, such that the
2 investment wasn't purely passive. But that's the
3 argument on the law I've already addressed. The key
4 point is that no foreign investor ever contributed
5 anything of value.
6 Factually, there is actually a helpful analogy to be
7 drawn to the facts of Clorox (RLA-148), because of
8 course the Swiss courts overturned the award, but it's
9 still useful to focus on what the facts showed, and
10 hence what the outcome would have been had there been
11 a requirement to make a contribution under the treaty
12 language, as we say there is here; completely different
13 treaty language.
14 (Slide 49) The basic facts are at paragraphs 827 and
15 828, if I can just summarise these for you now. One
16 sees a Spanish SPV being incorporated so as to acquire
17 the shares in the Venezuelan investment vehicle in
18 exchange for issuing shares in itself to a US parent
19 company, and all the value in the SPV then comes from
20 the US parent company in the transfer of the valuable
21 investment.
22 You can see the conclusion, the tribunal's response
23 to that set of facts, which plainly is analogous to what
24 we have here. So Clorox España was found not to have
25 made an investment, despite having -- sorry:
[Page 51]
10:45 1
"In light of these facts, the Tribunal finds
2 unconvincing the Claimant's assertions that there
3 occurred a 'real exchange of value', that '... there was
4 a transfer between Clorox International and
5 Clorex España and that 'This is a transfer for valuable
6 and real consideration'."
7 So the point there: the SPV was found not to have
8 made an investment, despite having taken what Zeph would
9 call an "active step", in terms of issuing shares to the
10 US company, and that's because those shares had no
11 intrinsic value.
12 I turn to the second contribution engage alleged,
13 which is through what Zeph calls "active management",
14 which is based on the fact that five of the Claimant's
15 directors also have roles in Mineralogy.
16 Notably, Zeph has not put forward a single case in
17 support of the argument that when personnel of the
18 locally incorporated investment company -- here
19 Mineralogy -- are subsequently also appointed to some
20 position in the alleged investor -- here Zeph -- this
21 somehow amounts to a contribution by the investor.
22 Plainly this is completely different to the situation
23 where you have a foreign investor who is coming in and
24 is contributing by way of some specific individual
25 know-how or expertise.
[Page 52]
10:47 1
What we have is just individuals who were already
2 involved in Mineralogy, usually over a period of years
3 or even decades, and then in 2019 or later their being
4 appointed to the board of Zeph, but thereafter still
5 continuing at Mineralogy.
6 The most obvious example is Mr Palmer himself, who
7 has been involved in Mineralogy since the 1980s and has
8 served almost continually as a Mineralogy director. He
9 was just appointed as a director of Zeph on
10 23 January 2019, but of course that doesn't mean
11 he hasn't remained heavily involved in Mineralogy.
12 As we've already highlighted in our ROPO at
13 paragraph 67, the same basic point applies to all the
14 other five individuals, who we do note have not been
15 tendered as witnesses, ready to explain firsthand how
16 specifically, as Zeph officers, they have contributed
17 anything material to Mineralogy.
18 (Slide 50) Now, that leaves Zeph's third alleged
19 form of contribution, and this is the alleged making of
20 an investment through returns and dividends invested by
21 the Claimant into Mineralogy. You can see that is
22 exactly how Zeph is putting its case at SODPO
23 paragraphs 303 and 358(g): an "invest[ment] by the
24 Claimant into Mineralogy".
25 (Slide 51) Now, the two provisions that Zeph is
[Page 53]
10:49 1
relying on are Article 2(c), and you see that:
2 "For the purposes of the definition of investment in
3 this Article, returns that are invested shall be treated
4 as investments ..."
5 Then Article 2(j):
6 "... return means an amount yielded by or derived
7 from an investment, including profits, dividends,
8 interest, capital gains ..."
9 This gives rise to two separate questions. First,
10 are there returns in this case that meet the definition
11 or requirements of Article 2(j); and second, even if
12 yes, is the further requirement of Article 2(c) met,
13 i.e. are those returns that are invested?
14 So as to Article 2(j), as you see, there must
15 already be a qualifying investment in existence, as
16 follows from any plain reading of the words: "an amount
17 yielded by or derived from an investment". And in this
18 case, there is no prior covered investment by Zeph,
19 either through the share swap or the supposed management
20 of Mineralogy, thus there can be no returns within the
21 meaning of Article 2(j). And notably, Zeph does not
22 engage with this point.
23 But it is an important point because, stepping back,
24 Zeph wishes to deploy this as a sort of get-out-of-jail
25 card. It would have no need to rely on alleged returns
[Page 54]
10:50 1
if it had already succeeded in showing that it has made
2 an investment through its acquisition of shares or
3 through management. But it fails in that. And if it
4 fails in that, as we say it does, this reliance on the
5 treatment of returns under Articles 2(j) and 2(c)
6 doesn't help it at all.
7 So Zeph's case on returns falls at the very first
8 hurdle. There's just no investment on which
9 Article 2(j) can bite.
10 Moving to the second hurdle, Article 2(c) is
11 concerned with returns that "are invested". And as it
12 accepts -- I showed you the relevant passages at
13 slide [51] -- it must be Zeph itself as the investor
14 which is investing. It cannot be enough for a claimant
15 to point to an asset within the host state that is
16 generating and retaining profits, without any action at
17 all from the investor. After all, Article 2(c) is
18 concerned with assets owned or controlled specifically
19 by an investor, which of course is a person who must
20 make an investment.
21 Turning briefly to the facts, Zeph relies on the
22 profits that were made by Mineralogy in 2019 and 2020
23 that were not paid to it by way of dividends. But
24 it can point to no evidence that it ever had any
25 entitlement to these funds, nor that it ever made any
[Page 55]
10:52 1
decision or took any act in relation to those profits,
2 such that it could say that it had invested these sums
3 in Mineralogy.
4 (Slide 52) Now, looking at the Mineralogy
5 constitution, you can see at clause 31.1 -- this is
6 C-563:
7 "The Company in general meeting may declare
8 a dividend if, and only if the directors have
9 recommended a dividend and such dividend shall not
10 exceed the amount recommended by the directors."
11 So of course a dividend must be declared before
12 there is any entitlement to it; it must be recommended
13 before it can be declared. The general meeting -- that
14 is, the shareholders -- cannot decide of their own
15 initiative that there will be a dividend. The power is
16 only to approve a dividend that the directors have
17 already recommended; which, by the way, is also the
18 default position as a matter of Australian law under
19 Section 254U of the Corporations Act at CLA-161.
20 Now, the difficulty for Zeph is that no positive
21 steps were ever taken so far as concerns the profit that
22 Zeph now relies on. This is highlighted in
23 Professor Lys's second report at paragraphs 54 to 56,
24 but the basic facts are as follows.
25 In 2019, Mineralogy's directors did not recommend
[Page 56]
10:54 1
any dividends, so Zeph, as a shareholder, was not
2 entitled to any dividends. There is therefore no sum
3 that it obtained, or was entitled to obtain, by way of
4 a return that was available to it to reinvest. This
5 means that in its RejPO at paragraph 181, it's just
6 wrong to state that it had "forgone" a dividend, because
7 there was nothing for it to forgo.
8 Then in 2020, the Mineralogy directors did recommend
9 a dividend -- that's of approximately AUD 8.1 million --
10 but it's not suggested that those sums were reinvested
11 by Zeph. And of course the same point applies: Zeph
12 wasn't entitled to any dividend beyond those sums
13 because nothing more was recommended and declared. So
14 again, there was no return which it could have
15 reinvested.
16 Zeph's answer appears to be that it was somehow
17 engaged in the decision-making processes of Mineralogy
18 because when Mr Palmer was acting as a director of
19 Mineralogy, he was acting as Zeph, or was in any event
20 entitled to act in the best interests of Zeph as
21 a matter of clause 22.3 of the Mineralogy constitution
22 (C-563), which you can see on the screen.
23 We can obviously explore that a bit with Mr Palmer.
24 But we note that the position that Mr Palmer was acting
25 as Zeph, when he was in fact acting as a director of
[Page 57]
10:55 1
Mineralogy, is not supported by a single document.
2 Further, the clause 22.3 entitlement for Mineralogy
3 to act "in the best interests of [Zeph] and in a manner
4 which is contrary to the best interests of [Mineralogy]"
5 does not somehow mean that Mineralogy directors are
6 acting as Zeph. To the contrary, it highlights that
7 these are separate legal entities with separate
8 interests.
9 And the Claimant's expert Mr Dunning KC doesn't
10 suggest otherwise; indeed, he supports our position that
11 it could only be Mineralogy directors acting under this
12 provision. We refer you to paragraphs 4, 7 and 10 of
13 his report. That's why there is no need for us to call
14 him for cross-examination.
15 Indeed, one notes in the sidelines that if the
16 Mineralogy directors were acting in the interests of
17 Zeph, and these contradicted what the interests of
18 Mineralogy would be -- and that's one of the premises of
19 clause 22.3 -- then that is the opposite of Zeph making
20 a contribution to Mineralogy: it is Mineralogy making
21 some sacrifice as to its interests for Zeph, the reverse
22 of a contribution.
23 Curiously, you will have seen from the Rejoinder
24 that there's also a great weight being placed by the
25 Claimant on what Mineralogy could have done and how
[Page 58]
10:57 1
dividends could have been recommended by its directors.
2 But that of course is all hypothetical. The question
3 for this Tribunal is whether returns were reinvested,
4 not whether this could have happened.
5 Finally, one last point on "no investor". One could
6 posit a situation where there is no investment through
7 acquisition of shares in a local company, but a claimant
8 has later made contributions which it says are
9 themselves independently qualifying investments. In
10 those circumstances, of course, the Claimant would have
11 to show that the criteria in the treaty are met. That's
12 not how Zeph is putting this limb of its case; and if it
13 did, it would fail, for all the reasons we've already
14 given.
15 (Slide 53) I turn now to the "no investment"
16 objection. The relevant provision that the Tribunal has
17 already seen is Article 2(c):
18 "... investment means every kind of asset owned or
19 controlled by an investor, including but not limited to
20 the following ..."
21 The following of course being a non-exclusive list
22 of forms of asset.
23 Australia's key contention is that the term
24 "investment" connotes certain inherent characteristics,
25 including particularly of contribution and risk. And
[Page 59]
10:58 1
the fundamental point that is developed in Australia's
2 pleadings is that the term "investment" should be given
3 its ordinary meaning, and that the meaning is not simply
4 "asset".
5 Now, that is known from the text of Article 2(c).
6 Footnote 3, which is contained in Article 2(c), states:
7 "For greater certainty, investment does not mean
8 claims to money that arise solely from:
9 (a) commercial contracts for sale of goods or
10 services; or
11 (b) the extension of credit in connection with such
12 commercial contracts."
13 This is said to be "For greater certainty". It is
14 a clarification of what is already built into the
15 definition, rather than the exception to what would
16 otherwise be an all-encompassing definition. So that
17 makes clear that, even absent the clarificatory
18 footnote, assets such as a claim to money under
19 a commercial contract for the sale of goods or services
20 would not qualify as an investment. And that's exactly
21 what one would expect, because such assets would not
22 fall within the ordinary meaning of "investment", given
23 the lack of any inherent characteristics.
24 Now, Australia has pointed to this, and to other
25 textual indicators, at paragraphs 101 and 102 of its
[Page 60]
11:00 1
ROPO, including Article 8(1)(a), which, as you recall,
2 lists transfers to include, at the very first
3 sub-provision, "contributions to capital, including the
4 initial contribution", treating it as a given that there
5 will be an initial contribution to the investment.
6 Zeph does not engage with those paragraphs of our
7 ROPO, but it does say that Article 2(c) does not refer
8 to inherent characteristics. But that's just ignoring
9 the particular language we rely on, as well as the
10 significant number of cases, including recent ones, that
11 have taken an ever more focused look at what is entailed
12 by an "every kind of asset"-type definition, and have
13 found that the inherent characteristics of an investment
14 must still be taken into account.
15 We have set these cases out in our SOPO at
16 paragraphs 188 and 193, and ROPO, 104 to 106. We have
17 also listed them out at the table at slides 54 and 55,
18 including showing the relevant treaty language.
19 For now, I draw attention to two cases with
20 materially similar language to that in Article 2(c) of
21 Chapter 11.
22 (Slide 56) The first of these is Nova Scotia
23 v Venezuela, RLA-64. You see the definition at
24 paragraph 75: ""investment' means any kind of asset",
25 followed by a non-exhaustive list.
[Page 61]
11:02 1
(Slide 57) Then at paragraph 77, the tribunal begins
2 its helpful explanation as to why the tribunal must do
3 more than simply look to the list of examples offered.
4 Then at paragraph 78, it gives three reasons:
5 "First, the list of examples in Article I(f) is
6 clearly non-exhaustive on its own terms. The open-ended
7 nature of this part of the purported definition of
8 investment calls for recourse to inherent features."
9 The same point here.
10 (Slide 58) Then paragraph 79:
11 "Second, the interplay between Article I(f) and
12 Article I(g) of the BIT, and the terms 'investment' and
13 'investor' generally, support the necessity of recourse
14 to inherent features. 'Investor' operates as a gateway
15 for 'investment.' The 'investor' 'make[s] the
16 investment."
17 Of course, again, the same point here.
18 "The Tribunal does not see the terms 'investor' and
19 'investment' as separate and pertaining only to ratione
20 personae and ratione materiae respectively. By its
21 plain meaning, the language in the BIT makes it
22 necessary to address the question of what it is to
23 'make' an investment. This question in turn requires
24 recourse to the inherent features of an investment."
25 Of course, the same reasoning applies so far as
[Page 62]
11:03 1
concerns Articles 2(c) and (d) of Chapter 11. And we
2 refer you in time to look at Komaksavia v Moldova,
3 a 2022 case, at RLA-63, at paragraphs 148 and 153 and
4 following, for analogous reasoning.
5 The third reasoning of the Tribunal is at
6 paragraph 80, rejecting the argument that the existence
7 of an inherent meaning is dependent on the choice of
8 arbitral forum, i.e. whether it's an ICSID case or not.
9 (Slide 59) And paragraph 84 sets out the Tribunal's
10 view as to what is required, and you see there the
11 reference to "contribution ... and risk".
12 (Slide 60) If I can take you very briefly to the
13 2023 decision in Rasia v Armenia (RLA-129), another case
14 with a non-exclusive list of assets; but here,
15 interestingly, the definition is referring to "every
16 kind of investment", not "every kind of asset". But the
17 tribunal didn't see this as determinative. It saw as
18 most important, again, the fact of the non-exclusive
19 nature of the list of assets, just as we see here.
20 If I can ask you in due course to look with great
21 care at paragraph 373, explaining the tribunal's
22 persuasive reasoning, looking at Romak and saying that:
23 "... unless the term 'investment' is given some
24 inherent meaning, the non-exclusive nature of the asset
25 list in most BITs provides no benchmark by which
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11:05 1
a tribunal could evaluate the qualifications of other
2 forms of assets outside the illustrative list."
3 And importantly, it notes:
4 "The same is true for the common formulation in
5 other BITs, which defines 'investment' sweepingly as
6 'every kind of asset.' Unless some intrinsic meaning is
7 assigned to the term, such general formulations risk
8 permitting even transactions that bear none of the
9 traditional hallmarks of investment to qualify as such."
10 We know the treaty parties in this case were
11 concerned to eliminate coverage in relation to such
12 transactions.
13 (Slide 61) If I can ask you in due course to look at
14 the remaining paragraphs of that, including, of course,
15 the reference to what is required.
16 (Slide 62) It is also useful to point you -- it's
17 not just referring to the need for contribution at
18 paragraph 237 (RLA-67), but also:
19 "What matters is the economic reality of the
20 contribution in consideration of all the relevant
21 circumstances, not the formal arrangements used.
22 An investor could ... borrow money from third parties to
23 make an investment. What matters is that the investor
24 is the one ultimately bearing the financial burden of
25 the contribution."
[Page 64]
11:06 1
Which sheds light on why risk is also relevant.
2 A party doesn't assume risk unless it bears some
3 financial burden. The mere possibility of receiving
4 a return does not mean that an investor has assumed
5 risk.
6 (Slide 63) One can get that from KT Asia
7 v Kazakhstan, RLA-68 (paragraphs 218-219), and you can
8 see there the same basic reasoning in relation to risk:
9 "As a general matter, an investment through the
10 acquisition of equity in a corporation entails the risk
11 that the value of the equity decreases or is even
12 completely lost. Such a risk certainly qualifies as
13 an investment ...
14 The difficulty here is that KT Asia has made no
15 contribution and, having made no contribution, incurred
16 no risk of losing such (inexistent) contribution."
17 And that is what's identified as the relevant risk.
18 (Slide 64) One can see the same point in Komaksavia
19 v Moldova. Paragraph 175 actually is also relevant to
20 the issue of contribution; while paragraph 177, on the
21 next slide (65), deals with the issue of risk.
22 I skipped over by mistake Rand v Serbia; that's
23 slide 62. I think perhaps -- this is obviously a case
24 that the President knows very well.
25 THE PRESIDENT: You quoted it.
[Page 65]
11:08 1 MR WORDSWORTH: I quoted it, thank you.
2 So then one turns very briefly to the application to
3 the facts of this case.
4 As to contribution, the relevant facts are the same.
5 As I've already addressed in relation to whether Zeph
6 has made an investment, there has been no contribution.
7 As to risk, Zeph's case is that it assumed risk
8 simply by owning shares, given that the potential return
9 from those shares is a matter of uncertainty. But
10 exposure to uncertainty is not the same as an assumption
11 of risk, as the various cases persuasively identify.
12 We refer you also to the second report of
13 Professor Lys (paragraphs 220-221), which explains what
14 is required for a risk from his economist's point of
15 view, at slide 66. As he explains:
16 "... Zeph only faces the risk that it may lose the
17 value of the Consideration Shares it exchanged for the
18 'parcel of Mineralogy shares.' However ... that risk is
19 inconsequential ... [as] the consideration shares issued
20 by Zeph had no value ..."
21 So Zeph is also unable to show risk.
22 And because no contribution, no risk, one never
23 really needs to get to the question of duration. So for
24 this reason also, Zeph is unable to show an investment.
25 Madam President, that concludes my submissions.
[Page 66]
11:10 1
I suspect now may be a convenient moment for a break.
2 THE PRESIDENT: Absolutely. Thank you.
3 Shall we take a 20-minute break now, is that fine,
4 and resume in 20 minutes? Good.
5 (11.10 am)
6 (A short break)
7 (11.31 am)
8 THE PRESIDENT: So we are ready to resume. (Pause)
9 I give the floor to the Respondent to continue with
10 the next objection.
11 DR DONAGHUE: (Slide 67) Thank you, Madam President, members
12 of the Tribunal. I will now be addressing the denial of
13 benefits objection.
14 (Slide 68) The starting point, of course, is the
15 text of Article 11, which the Tribunal can see on the
16 screen, or the relevant part of which you can see on the
17 screen. Ultimately, the determinative question to which
18 that text directs attention is whether the Claimant had
19 "substantive business operations" in Singapore as at the
20 relevant date.
21 In discussing provisions of the kind that you see on
22 the screen, numerous decisions of investment tribunals
23 have recognised that the effect of these type of
24 provisions is that investors are effectively prevented
25 from seeking treaty protection simply by incorporating
[Page 67]
11:32 1
letterbox or shell companies in the relevant
2 jurisdiction.
3 (Slide 69) So, for example, in AMTO v Ukraine,
4 RLA-72 at paragraph 69, the tribunal said that the
5 purpose of a denial of benefits provision at issue in
6 that case was:
7 "... to exclude from protection investors which have
8 adopted a nationality of convenience. Accordingly,
9 'substantial' in this context means 'of substance, and
10 not merely of form'."
11 (Slide 70) In the same vein, an APEC International
12 Investment Agreements Negotiators Handbook (RLA-153)
13 observes that, at page 26:
14 "Without a Denial of Benefits clause, nationals of
15 the host State may incorporate an entity in the other
16 Contracting Party, so as to take advantage of the
17 protection afforded by the treaty against their own
18 country."
19 That, of course, is precisely what Australia
20 contends has occurred here.
21 In considering the proper interpretation and
22 application of Article 11 of AANZFTA, Australia urges
23 the Tribunal to bear the above purpose in mind, because
24 if the effect of a denial of benefits clause can be
25 circumvented simply by incorporating a shell company,
[Page 68]
11:33 1
and then having that shell company purchase or enter
2 into a joint venture with an existing local business in
3 order that the shell company can then claim the existing
4 activities of the existing business as its own, then
5 that provides a blueprint for rendering denial of
6 benefit clauses completely ineffective in achieving
7 their purpose.
8 That points, we submit, to a construction of the
9 substantive provisions of Article 11(1)(b) that can't be
10 circumvented in such a transparent way.
11 Article 11(1)(b) contains both a procedural
12 notification requirement and then two substantive
13 requirements.
14 (Slide 71) As to the procedural notification
15 requirement, we say it was satisfied by Australia
16 providing notification to both Zeph and the Government
17 of Singapore of its exercise of its entitlement to deny
18 the benefits of Chapter 11 to Zeph and its investments.
19 That occurred by way of the two letters that you can see
20 on the screen, C-153 and C-155, as is addressed in the
21 SOPO at paragraphs 260 to 262, and I say no more
22 about it.
23 There are two substantive conditions in
24 Article 11(1)(b), and we address them in turn. The
25 first is also straightforward; that is, whether or not
[Page 69]
11:35 1
the words "owned or controlled" in Article 11(1)(b) are
2 satisfied. And those words, we contend, must be
3 interpreted as including indirect ownership or control,
4 for the reasons developed in the SOPO at paragraphs 213
5 to 217.
6 The Claimant did not deny in its SODPO that it is
7 ultimately owned or controlled by Mr Palmer, who is
8 a national of Australia and therefore a national of the
9 denying party. Instead, at paragraph 373, it stated
10 that this was "irrelevant" and that it did not have to
11 contest that issue.
12 (Slide 72) But then, as you can see on the slide, in
13 paragraph 128 of its Rejoinder, at 128(e), the Claimant
14 accepts that it is ultimately owned by Mr Clive Palmer.
15 In our submission, that is clearly sufficient to satisfy
16 the first substantive condition.
17 The second substantive condition is that which
18 I identified a few moments ago as the determinative one,
19 which is whether the Claimant has "substantive business
20 operations" in Singapore.
21 In assessing whether the Claimant satisfies this
22 requirement, we submit it is important to recall the key
23 facts that I have taken the Tribunal to already this
24 morning, including the numerous letters sent shortly
25 after the incorporation of Zeph, which not only
[Page 70]
11:36 1
expressly invoked treaty protection but also, you will
2 recall, contained express assertions, drafted in the
3 language of Article 11(1)(b), asserting that both MIL
4 and Zeph had, days after they were created, substantive
5 business operations in the relevant jurisdictions.
6 Those letters, we contend, make plain that Mr Palmer
7 was aware of the need for a company to have substantive
8 business operations in its state of incorporation if it
9 was to obtain investment treaty protection under
10 AANZFTA. It's that awareness that provides the only
11 plausible explanation for the fact that only a few days
12 after acquiring shares in Mineralogy, Zeph sought to
13 create the appearance that it did have substantive
14 business operations by cloaking itself in the
15 pre-existing activities of existing Singaporean
16 companies. Specifically, on 31 January 2019, two days
17 after its interposition into the Mineralogy Group, Zeph
18 acquired three Singaporean engineering companies.
19 Now, I'll address the acquisition of those companies
20 in a little more detail later in this part of the
21 opening. But for now, it is sufficient to note that all
22 three of companies had been in the business of providing
23 contract maintenance in Singaporean shipyards. They had
24 nothing to do with mining, they had nothing to do with
25 coal finance, they had nothing to do with any of the
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other asserted rationales for the restructure creating
2 Zeph, but they were purchased two days after it was
3 included in the group.
4 Now, in its SODPO at paragraph 89(d)(iv), Zeph
5 acknowledges that it paid SGD 3.6 million for these
6 companies. As you will see from Professor Lys's
7 statement, that was 15 times the book value of their
8 combined equity before the purchase.
9 (Slide 74) And Zeph acquired those companies without
10 conducting any due diligence, at a time when Australia's
11 investigator, Mr Vickers, concludes that it is probable
12 that they had already ceased to have any significant
13 business operations. Mr Vickers says that in
14 paragraph 83(b) of his witness statement, and the
15 Claimant has chosen not to cross-examine Mr Vickers on
16 that conclusion, which we contend the Tribunal should
17 accept.
18 The acquisition of the engineering companies is
19 analysed in detail by Professor Lys, who explains why
20 their purchase was not a commercially viable decision,
21 and who, like Mr Vickers, concludes that the companies
22 were already failing when Zeph bought them, well prior
23 to any effect of the Covid pandemic.
24 (Slide 75) As Professor Lys put it, and you can see
25 the quote on the screen (expert report, paragraph 527),
[Page 72]
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in the last sentence:
2 "... from an operational perspective ... [the
3 acquisition of these companies] makes no ... sense at
4 all."
5 Again, the complainant has chosen not to test these
6 conclusions, which strongly support the inference that
7 the only plausible explanation for Zeph's acquisition of
8 those companies is that it was a poorly executed attempt
9 to defeat the denial of benefits clause in Article 11.
10 The attempt to provide the appearance of substantive
11 business operations in Singapore is also the only
12 plausible explanation for why, about a year later, in
13 January 2020, Zeph entered into a joint venture with
14 Kleenmatic, a Singaporean office-cleaning business.
15 Again, I'll address this in more detail later in this
16 part of the opening.
17 But like the acquisition of the engineering
18 companies, the joint venture is explicable only as
19 an attempt to subvert the plain intent of the parties to
20 AANZFTA in agreeing to Article 11. It's just an attempt
21 to re-badge the activities of an existing Singaporean
22 business as substantive business operations of Zeph
23 itself. We submit there's no other explanation for the
24 holding company of a substantial Australian mining
25 company -- which was established in Singapore, we are
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told to assist in coal financing or to gain personal tax
2 benefits for Mr Palmer -- to get into the business of
3 office cleaning.
4 The belated suggestion of Mr Palmer that this was
5 an effort to diversify operations and seek further
6 business opportunities cannot be taken seriously. It is
7 addressed in detail by Professor Lys in his first report
8 at paragraphs 579 to 592. And again, his evidence has
9 not been tested and indeed not been addressed on this
10 point by the Claimant at all.
11 Can I turn then to the law concerning
12 Article 1(1)(b), where, as I've noted, Australia
13 contends the decisive consideration is that, for the
14 reasons I'm going to develop, the Claimant itself, Zeph
15 itself, had no operations in Singapore that are capable
16 of being properly characterised as genuine or authentic
17 business operations.
18 Before developing that point, the Tribunal will note
19 that "substantive business operations", the phrase in
20 11(1)(b), differs from the much more common reference to
21 "substantial business activities" in denial of benefits
22 clauses in other treaties. The Tribunal will have noted
23 the debate between the parties in the written pleadings
24 about whether the term "substantive" sets a more onerous
25 threshold than "substantial", or whether the words may
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be used interchangeably, or whether "substantial" is
2 more exacting than "substantive".
3 (Slide 76) Happily, we consider you can be spared
4 any further debate on that point, because the Claimant
5 in the SODPO, in the extract you can see on the screen
6 (paragraph 458(a)), recognises that the term
7 "'substantive' may connote 'authenticity and
8 genuineness", and that its "plain meaning" is "having
9 substance; being real as supposed to apparent". And the
10 Claimant in its Rejoinder reiterates or confirms that
11 interpretation.
12 The Respondent agrees that the question the Tribunal
13 should ask itself in applying Article 11(1)(b) is
14 whether the Claimant's business operations in Singapore
15 are genuine, authentic and of substance. So there
16 appears to be no meaningful difference between the
17 parties on this point.
18 The test that I have just identified is consistent
19 with the award of the ICSID tribunal in Alverley
20 v Romania, RLA-71, that being a tribunal which was
21 chaired by Sir Christopher Greenwood. The Alverley
22 tribunal said that it is appropriate to exercise
23 particular care in assessing the genuineness of
24 a putative investor company's connection to its state of
25 incorporation if that company is in fact ultimately
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owned or controlled by a national of the respondent
2 state.
3 While the tribunal said that in the context of
4 determining where the claimant's real seat was located
5 for the purpose of determining whether there had been
6 an investment within the meaning of the Romania-Cyprus
7 BIT, its reasoning is more generally applicable.
8 (Slide 77) In particular, the tribunal said at
9 paragraph 250, which you can see on the screen:
10 "If ... all that is happening is that a Romanian
11 investor is recycling funds into an existing Romanian
12 investment through a holding company in Cyprus which
13 really is no more than a paper façade, it is difficult
14 to see such an operation as something within the
15 contemplation of the parties to the BIT. That makes it
16 particularly important to scrutinise the evidence to see
17 whether the Cyprus holding company is exercising some
18 form of effective management and not simply discharging
19 formalities."
20 These comments are pertinent to the present case
21 given that prior to the restructure, Mr Palmer owned
22 Mineralogy through his two Australian holding companies,
23 and the share swap transaction that Mr Wordsworth has
24 already addressed seems to be the very kind of
25 transaction that the Alverley tribunal had in mind.
[Page 76]
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The Claimant, you will have noted, says that
2 Alverley was not a case which concerned the application
3 of a denial of benefits provision; which, as I've said,
4 Australia had already expressly noted in its SOPO at
5 paragraph 223. We say that does nothing to diminish the
6 force of the tribunal's analysis.
7 (Slide 78) The Claimant has also referred in its
8 SODPO at paragraph 455 to the ICSID tribunal's decision
9 in Gran Colombia v Colombia, RLA-80. This is a case
10 that Australia likewise already discussed in its SOPO at
11 paragraph 226, albeit under the different name of
12 Aris Mining v Colombia. There (paragraph 137) -- and
13 again it's on the screen -- the tribunal said:
14 "A business activity may not be mere cursory,
15 fleeting or incidental, but must be of sufficient extent
16 and meaning as to constitute a genuine connection by the
17 company to its home State ... The connection between the
18 company and the home State cannot be merely a sham, with
19 no business reality whatsoever, other than an objective
20 of maintaining its own corporate existence."
21 (Slide 79) Next, and importantly, the ICSID tribunal
22 in Pac Rim v El Salvador (RLA-33), in upholding a denial
23 of benefits objection, held that a substantial business
24 activities requirement is concerned only with activities
25 that are attributable to -- and you can see the language
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there three lines down -- "the 'enterprise' itself".
2 Thus, as the Pac Rim tribunal explained by reference to
3 the equivalent of Article 11(2)(b):
4 "... [the] first condition... relates not to the
5 collective activities of a group of companies, but to
6 activities attributable to the 'enterprise' itself; here
7 the Claimant. If that enterprise's own activities do
8 not reach the level specified by CAFTA Article 10.12.2,
9 it cannot aggregate to itself the separate activities of
10 other natural or legal persons to increase the level of
11 its own activities: those would not be the enterprise's
12 activities for the purpose of applying CAFTA
13 Article 10.12.2."
14 (Slide 80) Importantly, the Claimant has accepted --
15 and you can see that from the extract that you've got on
16 the screen from the SODPO at paragraphs 465 to 466 --
17 that:
18 "It is correct that the tribunal in Pac Rim ... held
19 that although the group of companies of which the
20 claimant (as a subsidiary) formed part did have
21 substantial business activities in the territory in
22 question, the 'substantial business activities' ... had
23 to be attributable to the 'enterprise' itself ..."
24 So given that quite correct acceptance in the SODPO,
25 the debate between the parties is not as to the
[Page 78]
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applicable legal test, but simply as to whether or not
2 the Claimant itself, Zeph itself, had substantial
3 business activities at the relevant date, as opposed to
4 whether some other company had such activities.
5 We say that's significant because even if the
6 engineering companies were not already defunct by the
7 time they were purchased by Zeph -- and we say the
8 evidence shows they were -- but even if they weren't,
9 any business activities in which those companies engaged
10 would not have been relevant because they would not have
11 been activities of Zeph itself. The same is true for
12 the business activities of the Kleenmatic companies, for
13 the same reason.
14 (Slide 81) Next, in Bridgestone Licensing Services
15 v Panama, RLA-30, the ICSID tribunal agreed at
16 paragraph 291 with the United States' non-disputing
17 party submission, and you can see it extracted on the
18 screen. The US had argued, from paragraph 290, about
19 halfway through the quote, that:
20 ""While it has long been U.S. practice to omit
21 a precise definition of the term 'substantial business
22 activities' in order that the existence of such
23 activities may be evaluated on a case-by-case basis, the
24 United States has indicated in, for example, its
25 Statement of Administrative Action on the NAFTA that
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"shell companies could be denied benefits but not,
2 for example, firms that maintain their central
3 administration or principal place of business in the
4 territory of, or have a real and continuous link with,
5 the country where they are established.""
6 Finally on the law, as to the requirement that the
7 Claimant have "business operations" in Singapore, as
8 opposed to "business activities", Australia submits that
9 the term "operations" refers to a more significant form
10 of continuous physical presence than merely having
11 activities. We say that in SOPO, paragraph 222. The
12 Claimant disputes this, for reasons we contend are
13 unconvincing, in SODPO at paragraph 458. But
14 ultimately, whichever test is applied, the Tribunal
15 should conclude that that test is not satisfied by
16 artificial arrangements of the kind in issue here.
17 Madam President, members of the Tribunal, before
18 coming in a little more detail to the evidence
19 concerning the Claimant's alleged operations in
20 Singapore, can I say something brief about the point in
21 time at which the existence of such operations falls to
22 be assessed.
23 (Slide 82) The Claimant has said that 13 August 2020
24 is relevant date, because that's the date of the
25 enactment of the Amendment Act, which the Claimant
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alleges is the breach of the treaty. The Respondent
2 submitted that the date for making this assessment must
3 be, at the latest, the date on which the Claimant sought
4 to avail itself of the protection of Chapter 11 of
5 AANZFTA, which was 14 October 2020, which was the date
6 it submitted its [written request for] consultation. So
7 there's not much difference between them. We say, at
8 the latest, 14 October; the Claimant says
9 13 August 2020.
10 We submit that ultimately it doesn't matter which of
11 those dates is chosen, because the Claimant had no
12 substantive operations at either of those dates. But on
13 any view of it, events that occurred after October 2020
14 are irrelevant and must be disregarded. That's on the
15 view of both parties. Anything after October 2020 is
16 irrelevant.
17 Can I commence my examination of the evidence with
18 Mr Palmer's claim, which was made in his first witness
19 statement at paragraphs 36 and 37, that:
20 "During the 2020 calendar year, the Claimant
21 conducted its business operations from two offices in
22 Singapore located at:
23 A. 80 Genting Lane ... and
24 B. 1 Joo Koon Way ...
25 These addresses were, respectively, you can see from
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the evidence, the premises of the engineering companies,
2 first, and the Kleenmatic companies, second.
3 (Slide 83) The unchallenged evidence of Mr Vickers
4 at paragraphs 23 through to 51 of his statement is that
5 the Claimant did not, at the relevant time, have
6 a visible presence at either of those locations.
7 Indeed, Mr Vickers found no evidence of a visible
8 physical presence in Singapore at all. For example --
9 and you can see on the screen -- he found no evidence of
10 a website, a shopfront, public contact details, social
11 media accounts for the company, visible employees or
12 press reporting about the company, all of which are
13 things he says he would have expected to find.
14 The Claimant chose not to cross-examine Mr Vickers
15 on these conclusions, and it hasn't otherwise denied
16 them or led any evidence that would establish the
17 contrary; being, of course, evidence that the Claimant
18 should have been peculiarly well placed to provide if
19 there really was evidence of a physical presence at the
20 relevant time.
21 As to the location of Zeph's directors, at all times
22 the majority of the Claimant's board of directors had
23 been based in Australia. The Claimant seeks to make
24 much of the fact that it has two Singaporean directors,
25 these people being the two people who have for many
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years been running the Kleenmatic business. It's
2 a family business and they've been running it for many
3 years. They are now directors of Zeph.
4 While it's no doubt true that those two resident
5 Singaporean directors make operational decisions in
6 relation to the Kleenmatic business, there is no
7 evidence at all that they make decisions in relation to
8 the Claimant itself, in relation to Zeph. Indeed, it's
9 not even clear the contrary is asserted.
10 (Slide 84) In fact, the contemporaneous documents
11 from the time of Zeph's incorporation make it clear that
12 it was the intention of Mr Palmer and those established
13 in the establishment of Zeph that Zeph would be managed
14 from Australia, not from Singapore. For example, you
15 can see the email on the screen from Mr Sorensen sent in
16 January, so around the time of the incorporation; just
17 a day after the incorporation of Zeph. Mr Sorensen
18 wrote:
19 "... we will also need to ensure that all meetings
20 for the interposition of Mineralogy International
21 Pte Ltd..."
22 That's Zeph.
23 "... are held in Australia, with the chairperson
24 also located in Australia for each meeting ...
25 We need to be able to clearly demonstrate that the
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interposition resolutions were made in Australia and
2 that the majority of the directors are Australian
3 resident to ensure Australian tax residency is
4 established for [Zeph]."
5 Now, Mr Sorensen was obviously concerned to ensure
6 that Zeph should have Australian tax residency, and to
7 that end he sought to ensure that all the critical
8 decisions were made in Australia.
9 (Slide 85) This is a topic addressed in some detail
10 by Professor Cooper. Mr Sorensen's concern was no doubt
11 because, as Professor Cooper explains, the insertion of
12 the Claimant into the chain of ownership of Mineralogy
13 may have had highly adverse tax consequences for the
14 Mineralogy Group if the Claimant was not an Australian
15 tax resident.
16 To avoid those consequences, it was necessary to
17 ensure that "the 'management and control' of Zeph" --
18 and I'm quoting there from the highlighted passage at
19 29 -- "never be allowed to happen [from] Singapore".
20 Zeph was never to be allowed to be managed or controlled
21 from Singapore. That, as Professor Cooper explains,
22 meant -- and you see this at the top of paragraph 31 in
23 the quote -- "Mr Palmer might walk a tight-rope" in
24 trying to establish investor protection based on
25 presence in Singapore, whilst not triggering adverse tax
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consequences in Australia.
2 Again, the Claimant has not sought to challenge
3 Professor Cooper's evidence in this regard. And that,
4 we say, is not surprising because it seems that
5 Mr Sorensen was himself conscious of the importance of
6 avoiding the very adverse tax consequences that
7 Professor Cooper explains.
8 We referred to Mr Sorensen's email in our ROPO at
9 paragraphs 206 and 234, and we wanted to ask him about
10 this email exchange with Mr Palmer and to explore the
11 advice that Mineralogy was receiving about the pros and
12 cons of inserting a Singaporean company into the chain
13 of ownership above Mineralogy. But notwithstanding the
14 fact we'd expressly referred to that issue in the ROPO,
15 which should have alerted the Claimant to the issue,
16 Mr Sorensen was one of the witnesses who was withdrawn,
17 apparently because his evidence was not relevant.
18 (Slide 86) What Mr Sorensen's interventions show was
19 that, far from the Claimant managing Mineralogy from
20 Singapore, the reverse is true, and must remain true.
21 The explanation for that is provided by
22 Professor Cooper. I won't take you into the detail of
23 the Australian law, but you can see the relevant
24 definition in paragraph 3 on the screen:
25 "A foreign-incorporated company will be
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an Australian tax resident if it ...
2 '... has either its central management and control
3 in Australia, or its voting power [is] controlled by
4 shareholders who are residents of Australia.'"
5 Zeph can't satisfy that second test because
6 it's owned by a New Zealand company.
7 Professor Cooper opines that:
8 "... the affairs of both Zeph and MIL have been
9 managed ... to attract Australian residence under the
10 'central management and control in Australia' limb ..."
11 Which is consistent with Mr Sorensen's concern about
12 ensuring that Zeph is an Australian tax resident, but is
13 entirely inconsistent with its assertion that the
14 management of Zeph is a substantive business operation
15 that occurs in Singapore for Article 11 purposes. They
16 can't both be true.
17 (Slide 87) In any event, the evidence before the
18 Tribunal plainly establishes that the person who manages
19 and controls both the Claimant and Mineralogy was and is
20 Mr Palmer himself. This is emphatically asserted by
21 Mr Palmer in, for example, his sixth witness statement
22 at paragraph 61. And it's plain that that occurs from
23 Australia, not from Singapore.
24 Can I come then to explain in a little more detail
25 the Singaporean engineering companies, and return to the
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Claimant's assertion that it had substantive business
2 operations in Singapore as a result of its acquisition
3 of those companies.
4 We submit it's plain on the evidence that those
5 companies did not have substantive business operations
6 in August 2020, not least because all three went into
7 voluntary liquidation in October 2020. But as I've
8 already said, the unchallenged evidence is that they
9 probably did not have substantive business operations by
10 the end of 2018 -- that is, before they were acquired --
11 meaning that even when they were acquired, they could
12 not have helped the Claimant to show that it had
13 substantive business operations in Singapore, even if it
14 was entitled to count the business operations of those
15 companies, which it wasn't because of Pac Rim.
16 (Slide 88) The Claimant acquired the engineering
17 companies only about a week after its incorporation.
18 And Professor Lys analyses the acquisition in detail in
19 his statement, in terms that are unchallenged. He
20 concludes, as you can see on the screen (expert report,
21 paragraph 339), that:
22 "... these three firms appeared to be failing when
23 Zeph bought them on January 31, 2019."
24 (Slide 89) Nevertheless, the Claimant purchased the
25 companies, each from the same individual, for a total of
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SGD 3.5 million. As Professor Lys notes:
2 "... the record contains no evidence of any due
3 diligence or valuation ... that preceded the acquisition
4 of those three firms which, based on my experience, is
5 contrary to what I would expect."
6 (Slide 90) At paragraph 338, he states:
7 "... my analysis of the financial statements does
8 not provide any support for paying SGD $3.5 million for
9 those three engineering firms."
10 And indeed, at paragraph 343, he goes on to state:
11 "... my review of their financial statements
12 indicates that their value was substantially less than
13 SGD $3.5 million, which incidentally is almost 15 times
14 the book value of their combined equity shortly before
15 the purchase."
16 (Slide 91) Professor Lys concludes at paragraph 348:
17 "In summary, my review of the documents in the
18 record, including the financial statements of the three
19 engineering firms and Zeph, indicate no business or
20 economic purpose to the transactions: the three
21 engineering firms were losing money and offered no
22 synergies to Mineralogy. Moreover, the financial
23 outlook for at least two of the three engineering firms
24 at the acquisition date seems bleak, further raising the
25 question of what the real reason was for acquiring these
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three engineering firms. Ultimately, all three
2 investments resulted in significant losses."
3 The Claimant has attributed the failure of the
4 engineering companies to the Covid pandemic in its RejPO
5 at paragraph 216(c). But that is demonstrably
6 incorrect, given that Professor Lys's analysis of the
7 accounts and Mr Vickers's unchallenged evidence
8 concluded that they had likely failed to have
9 substantive business operations by the end of 2018, well
10 before the emergence of the pandemic.
11 Given all of that, we contend that the Tribunal
12 should accept that the evidence demonstrates that the
13 engineering companies are of no assistance to Zeph in
14 establishing that it had substantive business operations
15 in October 2020, because by that date they did not have
16 any business operations at all; and that even if they
17 had, it would not assist Zeph because Pac Rim
18 demonstrates that the analysis must focus on the
19 business operations of the Claimant itself, not those of
20 other corporate entities within its group, such as
21 companies it had purchased.
22 Can I turn then to the Kleenmatic joint venture,
23 which commenced in January 2020.
24 The Claimant did not actually acquire the Kleenmatic
25 businesses until August 2022, two years after what it
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itself says is the relevant date. So the position that
2 is relevant is the joint venture, the contractual
3 agreement between the companies, that commenced in
4 January 2020.
5 (Slide 92) As Mr Vickers explains in paragraph 92,
6 which you can see on the slide:
7 "... Kleenmatic is a long-standing family-owned
8 cleaning business in Singapore that operated for
9 approximately 20 years prior to Zeph's involvement."
10 And the managers of Kleenmatic continue to be the
11 same people who have managed it for many years.
12 Analysis of the joint venture agreement demonstrates
13 that by entering into that agreement, Zeph sought simply
14 to adopt the existing business of the Kleenmatic
15 companies, and we'll show the Tribunal this in due
16 course. It's plain from the joint venture agreement
17 that those companies were always intended to carry on
18 exactly the same business they had carried on before,
19 using the same employees, paid out of the same bank
20 accounts, keeping the same business records. The
21 business's operations remained exactly as they were
22 before the joint venture, business operations of the
23 Kleenmatic companies.
24 Not only were those companies separate legal
25 entities from the Claimant, they weren't even owned by
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the Claimant: there was just a contractual joint venture
2 agreement. There is no principal basis upon which their
3 activities can properly be treated as if they were
4 business operations of the Claimant itself.
5 (Slide 93) The Claimant seeks to escape that
6 conclusion by relying on the fact that it is the formal
7 employer of some of the Kleenmatic workers. But this,
8 we say, is complete artifice.
9 Those employees -- and you can see this in the ROPO,
10 and in particular at footnote 437, which we've blown up
11 on the screen -- those employees were just informed that
12 their employment would be transferred to Zeph --
13 apparently after the fact they were informed -- while at
14 the same time they were told that their "duties,
15 responsibilities, remuneration, leave details" and other
16 details "remain[ed] unchanged". The evidence shows that
17 their salary continued to be paid by the Kleenmatic
18 companies out of the Kleenmatic bank accounts.
19 The Claimant does pay their compulsory Central
20 Provident Fund contributions, which is the Singaporean
21 Government's basic pension requirement, presumably
22 because that's a statutory obligation that arises from
23 the formal employment relationship. But in every other
24 respect, at the relevant time, the employees remained in
25 substance employees of Kleenmatic and apparently
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regarded themselves as such, according to Mr Vickers's
2 evidence.
3 The artificiality of the Claimant asserting the list
4 of names of its employees who were transferred from
5 Kleenmatic to Zeph was highlighted in the document
6 production process because when ordered to produce the
7 employment contracts of its employees in Singapore, the
8 Claimant produced 146 contracts, which we've listed in
9 annexure A to our ROPO. Of those 146 contracts,
10 140 relate to cleaners. So of Zeph's employees, 140 of
11 the 146 are cleaners; the other 6 were management roles
12 within the Kleenmatic business. So none had anything to
13 do with the purported rationale for the incorporation of
14 Zeph, such as accessing finance or matters of that kind.
15 The Claimant also argues that it has licences from
16 the Singaporean Government and that it carries insurance
17 policies in Singapore. But again, we contend that
18 doesn't assist the Claimant, as these are licences and
19 forms of insurance necessary to carry on a cleaning
20 business in Singapore; they don't evidence substantive
21 business operations of the Claimant itself.
22 Nor does it assist the Claimant that it may have
23 been entitled to subsidies from the Singaporean
24 Government during Covid, most of which in any event
25 postdate the relevant date of August 2020.
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Finally, I come to the Claimant's assertion that it
2 actively manages its investments in Australia, which
3 constitutes business operations in Singapore. That, we
4 contend, is simply nonsense. The Claimant does not even
5 seek to refer to any evidence in support of that claim
6 in its Rejoinder. In our submission, the simple and
7 obvious fact is that the management of Mineralogy and
8 Mr Palmer's various other Australian companies is
9 carried out in Australia by Mr Palmer himself.
10 Indeed, as I've already mentioned, and as
11 Professor Cooper's evidence makes clear, this is
12 a necessary and deliberate state of affairs because if
13 the management of Zeph ever did occur in Singapore, that
14 would have major adverse tax implications for the
15 Mineralogy Group.
16 For all of those reasons, the reality is that Zeph
17 had no substantive business operations in Singapore as
18 at the relevant date, notwithstanding the evidence that
19 immediately upon its incorporation -- within two days of
20 incorporation into the group -- it immediately attempted
21 to create the semblance of such operations, presumably
22 to back up the claim in the letters you've seen, the
23 claim made immediately after incorporation, that these
24 were firms with substantive business operations in
25 Singapore or New Zealand.
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The link between those events -- the acquisition of
2 the local business and the attempt to obtain investment
3 treaty protection -- is made manifest in the letters
4 themselves that had been drafted asserting that Zeph had
5 substantive business operations in Singapore. And
6 I showed you the draft of the 4 February letter, dated
7 24 January. Written even before Zeph had been inserted
8 into the chain, and before it had acquired the
9 engineering businesses, Zeph was asserting that it had
10 substantive business operations in Singapore. It is
11 artifice.
12 Thank you for your attention. Can I now pass the
13 floor to Professor Brown to address the next objection,
14 which is abuse of process.
15 THE PRESIDENT: Please. Thank you.
16 PROFESSOR BROWN: Thank you, Madam President, members of the
17 Tribunal.
18 (Slide 94) I will be presenting Australia's
19 submissions on abuse of process.
20 The crux of this objection is that the Claimant,
21 Zeph, was created for the determinative purpose of
22 bringing a treaty claim concerning a foreseeable and
23 foreseen unilateral amendment of the State Agreement by
24 the WA Parliament to the disadvantage of Mineralogy.
25 As the Tribunal has already heard this morning,
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there is compelling contemporaneous evidence that the
2 Mineralogy Group sought to incorporate -- and did
3 incorporate -- foreign companies to take advantage of
4 Australia's investment treaties in view of its
5 deteriorating relationship with the WA Government in
6 2018 and into early 2019.
7 There is extensive independent evidence filed by
8 Australia, with which the Claimant has not meaningfully
9 engaged, that seriously undermines the credibility of
10 Zeph's claim that there was any, let alone
11 a determinative bona fide purpose for the Mineralogy
12 Group restructure, and the insertion of MIL and Zeph
13 into the chain of ownership of Mineralogy.
14 It is telling that there is barely a shred of
15 contemporaneous documentary evidence to support the
16 purported rationale for the restructure that the
17 Claimant has put forward. It is also telling that the
18 Claimant has withdrawn the witnesses who it had
19 previously claimed provided some corroboration for
20 Mr Palmer's evidence.
21 As this Tribunal will be well aware, it is an abuse
22 of process for an investor to file a claim under
23 an investment treaty following a corporate restructure
24 that takes place when a dispute is already in existence
25 or could be reasonably foreseen. Indeed, two of the
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members of this tribunal were members of the
2 Philip Morris Asia tribunal, RLA-95, which assisted in
3 the crystallisation of the relevant principles. These
4 principles are now well established in investment treaty
5 cases, and so the disagreement between the parties in
6 respect of this objection concerns how these principles
7 apply on the facts.
8 None of the Claimant's submissions are sufficient to
9 overcome clear evidence to the effect that Zeph was
10 incorporated and acquired the Mineralogy shares at
11 a time -- to use the words of the Philip Morris tribunal
12 at paragraph 554 -- when there was:
13 "... a reasonable prospect ... that a measure which
14 may give rise to a treaty claim will materialise."
15 To the contrary, the extensive evidence of the
16 purpose behind the restructure reveals the abusive
17 nature of the present claim. And as the Tidewater
18 tribunal recognised -- that's RLA-93, at paragraph 150
19 of its decision on jurisdiction of 8 February 2013 --
20 it is an abuse of process for a claimant to file a claim
21 following a restructuring when:
22 "... 'the objective purpose of the restructuring was
23 to facilitate access to an investment treaty tribunal
24 with respect to a claim that was within the reasonable
25 contemplation of the investor'."
[Page 96]
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That includes a quote from Professor Douglas's
2 well-known work on international law investment claims,
3 which is RLA-86.
4 So the Respondent accordingly submits that the
5 Tribunal should dismiss the Claimant's claim as an abuse
6 of process.
7 I begin with the facts. And the Solicitor-General
8 has already set out the salient factual background, and
9 the detail of that is also contained in the chronology
10 to Australia's SOPO.
11 Not only was a treaty claim related to the State
12 Agreement foreseen by the Mineralogy Group in late 2018
13 and early 2019, but it specifically acted on that
14 foresight by incorporating Zeph as the corporate vehicle
15 to pursue that claim in the event that the WA Government
16 adopted measures interfering with Mineralogy's rights
17 under the State Agreement. And the Mineralogy Group
18 foreshadowed to the Australian Government that such
19 a claim would be filed if any such measures were
20 adopted. And so, in circumstances where the parties had
21 been disputing over Balmoral South since 2012, the
22 Claimant filed the present claim once the Amendment Act
23 was passed.
24 Now, in these circumstances, it's neither here nor
25 there that the Amendment Act of the WA Parliament was
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not adopted until August 2020. Zeph's claims in these
2 proceedings closely mirror the terms of the letters that
3 were sent well prior to the passage of the Act and
4 immediately following its incorporation in Singapore.
5 (Slide 95) You can see on the slide a letter which
6 you've already seen earlier today, a letter that was
7 sent by MIL in respect of Mineralogy's investment in
8 Zeph on 4 February 2019 -- that's Exhibit R-141 -- which
9 was sent less than one week after the Claimant acquired
10 the shares in Mineralogy. And you can see the
11 highlighted passage referring to "interference in the
12 rights of Mineralogy under the State Agreement".
13 I come then to the purpose of the restructure.
14 Tribunals applying the principles articulated in the
15 Philip Morris Asia award have repeatedly confirmed the
16 importance for abuse of process objections of the
17 purpose behind the relevant corporate restructure.
18 (Slide 96) For instance in Alverley v Romania,
19 RLA-71, the tribunal stated at paragraph 376 of its
20 award of 16 March 2022 that:
21 "... the correct test is whether a determinative or
22 principal purpose was to gain the protection of the
23 treaty."
24 You can see that in the highlighted passage at the
25 end of that paragraph.
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And the Cascade v Turkey Tribunal, RLA-98, said at
2 paragraph 340 and also 341 of its award of
3 29 September 2021 that:
4 "... a key objective ... is to derive from the
5 evidence a conclusion as to whether an investment
6 transaction was made for the genuine 'purpose of
7 engaging in economic activity' in the host State, or
8 only apparently to obtain treaty protection in the face
9 of a looming dispute, for an investment which (prior to
10 the transaction) would not have been entitled to such
11 protection."
12 The Cascade tribunal is there quoting the passage
13 immediately before footnote marker 458 of the award in
14 Phoenix Action, which is RLA-91.
15 Tribunals have also confirmed that the purposes of
16 the restructure must be assessed subjectively, by
17 reference to what the evidence discloses to be the
18 Claimant's actual purpose at the relevant time, and also
19 objectively, by reference to what a reasonable investor
20 in the Claimant's position could have had as its
21 purpose.
22 As to the timing for assessing purpose, Zeph appears
23 now to have abandoned its earlier position that a 2008
24 meeting concerning an IPO in Hong Kong is somehow
25 relevant to assessing the reasons behind the
[Page 99]
12:13 1
restructure; it made that concession in its Rejoinder at
2 paragraphs 462 and 463. So the parties agree that the
3 Tribunal should assess the evidence of the purpose of
4 the restructure as at 2018 and early 2019.
5 (Slide 97) Now, although the Claimants asserts that
6 commercial reasons were the primary reasons for the
7 restructuring, it now admits that investment treaty
8 coverage was an "ancillary purpose". That is set out in
9 the Rejoinder at paragraphs 380 and 383, which are on
10 the slide.
11 By reason of that concession, the parties now agree
12 that Zeph was incorporated, at least in part, for the
13 purpose of securing treaty protection for what were
14 otherwise purely Australian entities. As the
15 Solicitor-General has explained, the contemporaneous
16 documents and the Mineralogy Group's conduct at the
17 relevant time reveal that securing treaty protection in
18 relation to the escalating dispute with WA was
19 a determinative purpose of the restructure; and further,
20 the urgency with which the restructure was undertaken is
21 inconsistent with the alternative rationales put forward
22 by Zeph to explain the actions of the Mineralogy Group.
23 The reasons that Zeph invokes to explain its
24 incorporation in 2019 and its acquisition of Mineralogy
25 shortly afterwards are ex post rationales developed for
[Page 100]
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the purpose of these proceedings. This explains why
2 their contours have shifted even over the course of the
3 written pleadings, and why there are no contemporaneous
4 documents to support them.
5 Now, this of course matters. The rationale for
6 a given restructuring should be, insofar as concerns the
7 investor, a well-known fact. The investor should not be
8 casting around years after the event took place looking
9 for reasons, and then abandoning reasons that it has
10 suggested when they are shown to be implausible.
11 The first of these rationales, which is the
12 so-called "alleged coal funding rationale", arises from
13 the proposition that Zeph was inserted into the chain of
14 ownership of Mineralogy in order to assist in securing
15 funding from Singapore banks to develop the coal
16 holdings of its subsidiary Waratah Coal in Queensland.
17 Australia's independent experts have considered this
18 purported rationale and it does not withstand scrutiny.
19 (Slide 98) Mr George Rogers is an independent expert
20 with over 30 years' experience in the financing of
21 mines. He states in his expert report
22 (paragraph E.1.1.1) that there was:
23 "... no basis for believing that Singapore banks
24 would have been more likely to fund the coal projects of
25 Singapore companies than Australian ones [in the
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relevant period] between December 2017 and
2 January 2019."
3 He also says, in the second extract on the slide
4 (paragraph G.6.1.7), that Singapore banks had:
5 "... no track record in arranging [or] structuring
6 a project financing for a coal mine of any size ..."
7 He also says (paragraph E.1.1.2) that there is:
8 "... [no] serious basis for Mineralogy to have
9 believed that the insertion of Zeph into the corporate
10 structure would increase the likelihood of attracting
11 financing from Singaporean banks, or indeed those of any
12 nation."
13 He also says (paragraph G.8.1.1) that:
14 "Even the most basic research, due diligence or
15 conversations would have told Mr Palmer and
16 Mr Martino ..."
17 Who also gave evidence on this issue:
18 "... that there would be no improved access to
19 finance by their insertion of Zeph into the corporate
20 structure."
21 He also said that the stated urgency would not have
22 been for project finance-related reasons.
23 (Slide 99) Professor Lys, an Emeritus Professor at
24 the Kellogg School of Management at Northwestern
25 University in Illinois, who is an expert in economics
[Page 102]
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and finance, likewise considers the alleged coal funding
2 rationale to be fundamentally flawed.
3 In his first report, he notes at paragraphs 540 to
4 542 that there is no evidence that the transfer of
5 Mineralogy shares to Zeph would yield any advantage for
6 procuring financing for Mineralogy's mining operations
7 in Australia.
8 At paragraphs 593 to 595, he notes that there is no
9 evidence that any staff with the expertise necessary to
10 realise the alleged coal funding rationale were at any
11 time engaged by or for Zeph in Singapore.
12 Also, in the third extract on the slide, at
13 paragraph 529, he notes that there is a lack of
14 contemporaneous documentary evidence supporting this
15 claimed rationale for the restructure. And you can see,
16 if you continue to read in the not-highlighted section
17 of paragraph 529, the types of documents that
18 Professor Lys would have expected to have been available
19 and to have been produced in the course of the alleged
20 rationale.
21 Now, the Claimant has no substantive response to any
22 of this expert evidence. It chose not to put on
23 rebuttal evidence, it chose not to take the opportunity
24 to cross-examine these experts on their evidence, and
25 nor did it take the opportunity to file with its
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Rejoinder any of the types of documents that
2 Professor Lys noted would have existed had this been
3 a genuine, let alone a determinative, rationale for the
4 restructure.
5 In fact, the Claimant has specifically withdrawn
6 most of the limited evidence it had filed in support of
7 this rationale through its eleventh-hour decision to no
8 longer rely on the witness statements of Messrs Martino,
9 Harris and Migliucci. The withdrawn witness statements
10 included purported evidence of conversations about the
11 coal funding rationale, and they also concerned the
12 availability of funding in Singapore.
13 But they are no longer before the Tribunal and we
14 are unable to test that evidence in cross-examination.
15 This leaves the alleged coal funding rationale supported
16 only by Mr Palmer's assertions. And the only reasonable
17 inference for the withdrawal of those witnesses is that
18 they would not have supported Mr Palmer's version of
19 events.
20 I turn then to the alleged tax rationale. Australia
21 would first note that the contours of this rationale
22 have shifted over the course of the proceedings.
23 (Slide 100) We understand Zeph's current position to
24 be that the restructure was in some way connected with
25 an asserted plan on the part of Mr Palmer to relocate to
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Singapore to take up permanent residency there in order
2 to save AUD 90 million in personal tax. This plan
3 required him to give up his Australian tax residency, as
4 is acknowledged in the Rejoinder at paragraph 713.
5 Again, there is a lack of contemporaneous
6 documentary evidence supporting this rationale. Neither
7 Mr Palmer nor Zeph have provided evidence of having
8 received any substantive contemporaneous advice from
9 a tax expert as to alleged tax benefits.
10 Mr Palmer asserts that he did his own research as to
11 tax benefits on the internet. That is simply
12 implausible. Indeed, it is clear that Mineralogy was
13 receiving some advice from Mr Sorensen as to the adverse
14 tax implications that the restructure might cause,
15 although that advice has not actually been produced.
16 What few documents have been produced, such as
17 Exhibit R-600, which the Solicitor-General referred to
18 earlier, confirm that to the extent any tax consequences
19 were considered during the course of the restructure,
20 the Mineralogy Group sought to preserve its existing tax
21 status.
22 (Slide 101) That was in R-600, which is on the
23 screen again now: the email from Mr Sorensen dated
24 22 January 2019, the date immediately after the
25 incorporation of Zeph. In this email, Mr Sorensen tells
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Mr Palmer that the new Singapore company, Zeph, and the
2 New Zealand company, MIL, both need to maintain
3 Australian tax residency.
4 As the Solicitor-General said earlier, we wanted to
5 cross-examine Mr Sorensen about this matter. But again,
6 his evidence has been withdrawn.
7 From the documents provided by the Claimant with its
8 Statement of Defence, its SODPO, Mr Palmer only sought
9 advice as to the implementation of this plan in
10 March 2024, during these proceedings.
11 This can be seen in Exhibit C-495 -- and these are
12 not, I believe, extracted on the slide. But
13 Exhibit C-495 is a short letter from Ms Sharnie Mitchell
14 of BDO, who more recently appeared as an expert witness
15 on behalf of the Claimant, on a potential AUD 90 million
16 tax saving if Mr Palmer became a tax resident of
17 Singapore. And Exhibit C-496, being a short letter from
18 Mr Louis Lim on the methods of obtaining permanent
19 residency of Singapore.
20 I don't need to take you to these letters, but both
21 of them are dated March 2024, rather than late 2018 or
22 early 2019, at the time the alleged tax rationale was
23 under consideration and was supposedly motivating the
24 Mineralogy Group restructure.
25 Australia has provided expert reports by Emeritus
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Professor Graeme Cooper of the University of Sydney and
2 Associate Professor Stephen Phua of the National
3 University of Singapore, and the Solicitor General has
4 already referred to their expert reports. They are
5 experts in Australian and Singaporean tax law,
6 respectively, and they offer compelling evidence that no
7 tax advantages arose as a result of the restructure.
8 (Slide 102) As Professor Graeme Cooper explains in
9 his report, which you can see on the slide at
10 paragraphs 24 and 25, the insertion of Zeph into the
11 corporate chain did not give rise to any Australian tax
12 advantage for Mr Palmer. He goes on to say that the
13 restructure in fact created tax disadvantages for the
14 Mineralogy Group and an ongoing imperative to ensure
15 that the management of Mineralogy and the two new
16 international companies, MIL and Zeph, only occurred in
17 Australia. And that explains the email from Mr Sorensen
18 to Mr Palmer which we just looked at, Exhibit R-600.
19 (Slide 103) Professor Phua likewise explains that
20 the incorporation of Zeph and its insertion into the
21 chain of ownership of Mineralogy was superfluous and
22 wholly unnecessary for any alleged personal tax
23 advantage for Mr Palmer in Singapore. He also says that
24 it created potential tax disadvantages for the
25 Mineralogy Group.
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Now, Zeph itself has not offered any evidence, any
2 witness evidence, capable of substantiating its position
3 that the restructure was motivated by tax reasons. As
4 the Respondent pointed out in its SOPO at paragraphs 340
5 and 341, there were significant deficiencies in
6 Mr Martino's evidence on this purported rationale,
7 including inconsistencies with Mr Palmer's evidence on
8 this matter.
9 And the short expert report of Ms Mitchell takes
10 matters no further. That report simply cites fragments
11 of the evidence from Professors Cooper and Phua out of
12 context and asserts, without offering any supporting
13 analysis, that tax advantages would have accrued to
14 Mr Palmer as a result of the restructure.
15 (Slide 104) Finally on this point, Zeph has
16 confirmed in its Rejoinder that Mr Palmer in fact
17 remains an Australian tax resident and that there has
18 been no activation of the restructure for the purpose of
19 obtaining tax advantages. That can be seen on the slide
20 at paragraph 513 of the Rejoinder. And the Claimant
21 says that it will get professional advice as to the
22 activation of that plan if and when that happens.
23 But Zeph's failure to activate this plan, and its
24 explanation for its failure to activate this plan, is
25 wholly inconsistent with the contemporaneous documents
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at the time of the restructure indicating that the
2 restructure was undertaken with some urgency.
3 For completeness, with respect to the incorporation
4 of MIL in New Zealand, the Claimant elected not to
5 engage with Australia's submissions or expert evidence
6 on its alleged lithium rationale, despite now claiming
7 in its Rejoinder that it has not abandoned this
8 purported rationale as an explanation for the
9 incorporation of MIL. The Claimant simply states that
10 it's addressed in the witness evidence of Mr Martino and
11 Mr Palmer.
12 As to this, of course Mr Martino's evidence has been
13 withdrawn; and yet again, there is a lack of documentary
14 evidence as we would expect to find if it was
15 a genuinely motivated incorporation of MIL in
16 New Zealand. So the Tribunal has only the
17 uncorroborated evidence of Mr Palmer as to this alleged
18 rationale.
19 (Slide 105) Mr Palmer in his evidence and the
20 Claimant in its submissions also entirely fail to engage
21 with the expert report of Mr Daniel Kalderimis KC that
22 it was unnecessary to have a New Zealand company to
23 engage in lithium exploration. And you can see
24 a summary of Mr Kalderimis's conclusions on that issue
25 extracted on the slide.
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So the stated reasons for the incorporation of MIL
2 as the first step in the restructure does not withstand
3 any scrutiny.
4 Madam President, members of the Tribunal, I turn
5 next to foreseeability.
6 (Slide 106) As the tribunal accepted in Pac Rim,
7 RLA-33, at paragraph 2.100, the Tribunal needs to
8 determine whether a restructure has taken place:
9 ""... at a time when the investor is aware that
10 events have occurred that negatively affect its
11 investment and may lead to arbitration."
12 It's extracted on the slide on the screen.
13 And the tribunal in Cascade Investments v Turkey,
14 RLA-98, held that a dispute will be foreseeable where it
15 was subjectively actually foreseen by an investor or in
16 circumstances where:
17 "... a reasonable investor, conducting
18 an appropriate inquiry, should have understood that the
19 investment it was acquiring already faced a significant
20 risk of government action that would adversely affect
21 its rights ..."
22 The Cascade tribunal noted that in many cases,
23 specific government action is preceded by some period of
24 deteriorating relationships, and the longer the
25 relationship deteriorates, the more foreseeable adverse
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state action may become. That's from paragraphs 345 and
2 347 of the award in Cascade.
3 Now, in the present case, the restructure clearly
4 took place following such a period of deteriorating
5 relationships between Mineralogy and companies in the
6 Mineralogy Group on the one hand, and the WA Government
7 on the other.
8 By at least late 2018, to use the words of the
9 Transglobal v Panama tribunal, which is RLA-97 --
10 this is paragraph 116 of that award, which is not on
11 a slide -- "it was clear that there was a problem"
12 between Mineralogy, which was at that time, of course,
13 wholly Australian owned, and the WA Government, in light
14 of the strongly contested positions of both parties with
15 respect to the WA Government's threat to amend
16 unilaterally the State Agreement to the detriment of
17 Mineralogy.
18 Both the timeline and the conduct of the
19 Mineralogy Group, including its engagement with
20 Australia and its invocation of investment treaty
21 protection in correspondence, unequivocally confirm that
22 it had foreseen that the Government of Western Australia
23 may take adverse state action in relation to unilateral
24 amendment of the State Agreement, and that a claim was
25 in fact "in prospect at the time[] of the
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restructuring". That's language taken from the
2 ConocoPhillips award at paragraphs [279] and 280,
3 RLA-94.
4 Now, Zeph nonetheless seeks to avoid its clear
5 statements in previous correspondence by characterising
6 the dispute at issue in these proceedings by reference
7 to the Amendment Act, which was passed by the Western
8 Australian Parliament on 13 August 2020, and which Zeph
9 contends was not foreseeable at the time it was
10 incorporated.
11 Key to the Claimant's submissions in this respect is
12 its position that the specific measure at issue in the
13 treaty claim must have been foreseen for that claim to
14 constitute an abuse of process. Yet the foreseeability
15 test for the purpose of an abuse of process objection
16 focus on the foreseeability of the dispute, and not the
17 precise measure at issue in the resulting claim. In
18 this respect, the Claimant's submissions in its
19 Rejoinder in relation to several decisions take it no
20 further forward.
21 (Slide 107) For instance the Claimant has referred
22 to the Philip Morris Asia case, which is extracted on
23 the slide, quoting at paragraph 341 of its Rejoinder --
24 I'm sorry, this is paragraph 554 of the award
25 (RLA-95) -- that:
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"... a dispute is foreseeable when there is
2 a reasonable prospect ... that a measure which may give
3 rise to a treaty claim will materialise."
4 And we entirely agree with that statement. As the
5 Tribunal will recall, the precise facts of the Philip
6 Morris case were that the plain packaging measure had in
7 fact been announced by the Australian Government.
8 Now, what the Claimant is seeking to do is to
9 conflate the need for the dispute to be foreseeable with
10 the need for the specific measure to be foreseeable, but
11 tribunals have been clear that it is only the dispute
12 that must be foreseeable. I refer to our Reply,
13 paragraphs 245 to 258.
14 (Slide 108) The Claimant also seeks to rely on the
15 choice of words of the Pac Rim tribunal, which is
16 RLA-33, which refer to the foreseeability of a specific
17 future dispute. It's worth looking at exactly what the
18 Pac Rim tribunal said in the proper context of its
19 reasons in that case.
20 At paragraph 2.96, which is not on the slide, the
21 tribunal noted that the parties had suggested three
22 possible points in time when a change of nationality can
23 become an abuse of process. And at paragraph 2.99,
24 it came up with the formula which the Claimant invokes,
25 that:
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12:32 1
"... the dividing-line occurs when the relevant
2 party can see an actual dispute or can foresee
3 a specific future dispute as a very high probability and
4 not merely as a possible controversy."
5 But that is not where the tribunal ends its
6 analysis. At paragraph 2.100, the tribunal expressly
7 accepts:
8 "... the Respondent's general submission that:
9 '... it is clearly an abuse for an investor to
10 manipulate the nationality of a shell company subsidiary
11 to gain jurisdiction under an international treaty at
12 a time when the investor is aware that events have
13 occurred that negatively affect its investment and may
14 lead to arbitration.'"
15 The tribunal went on to explain the policy rationale
16 behind this approach, namely that the doctrine of abuse
17 of process must preclude unacceptable manipulations by
18 a claimant acting in bad faith and fully aware of
19 an existing or future dispute.
20 This is the test that informed the tribunal's
21 decision in Pac Rim: was the investor aware of events
22 that had occurred which negatively affected its
23 investment and which may lead to arbitration?
24 The Claimant refers to other cases which are
25 similarly unavailing. The Respondent has addressed
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these in its SOPO at paragraphs 305 to 316 and in its
2 ROPO at paragraphs 241 to 264.
3 Now, the approach adopted in the Philip Morris award
4 that a dispute must be foreseeable, not the particular
5 measure, is widely regarded as correct, and this
6 approach has been applied in subsequent cases.
7 (Slide 109) One such case is Cascade v Turkey, to
8 which I have referred a few times already. In its award
9 of 20 September 2021 -- this is RLA-98 -- the tribunal
10 provided a persuasive analysis, which it described as
11 being consistent with the approach in Philip Morris
12 Asia, of what must be foreseeable for the purposes of
13 an abuse of process objection. And there are two
14 paragraphs to which I draw your attention on the slide:
15 350 and 351.
16 If I can just look to the highlighted section in
17 paragraph 350:
18 "Logically, a domestic investor who artificially
19 imposes a foreign entity in an ownership chain in the
20 context of a developing disagreement with its own
21 government, solely to allow itself to invoke
22 an investment treaty in the event the State takes
23 adverse action against its rights, is no less guilty of
24 abuse of process because the State ultimately adopts
25 measure X against the investment, rather than measure Y
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which the investor may have predicted."
2 Turning to paragraph 351, and again looking at the
3 highlighted text:
4 "... what must be reasonably foreseeable is that the
5 State will take some adverse action against the
6 investment, on account of a disagreement or conflict of
7 interests with the investor, which -- when it
8 transpires -- will impact the investor's rights and
9 therefore be 'susceptible of being stated in terms of
10 a concrete claim'... That formulation does not require
11 foreseeability of the precise measure that the State
12 eventually adopts, just 'a measure' ... that is capable
13 of harming the investment to the degree that a treaty
14 claim could be asserted."
15 In Australia's submission, this approach of the
16 Cascade tribunal is the correct articulation of the
17 principles regarding foreseeability as they apply in
18 cases such as the present. And contrary to the
19 submissions of the Claimant, it is also the way that the
20 awards in Alverley, which is RLA-71, and Ipek, RLA-99,
21 should be understood.
22 The relevant passages from Alverley -- I won't take
23 you to them now in the interests of time, but I'd ask to
24 you look at paragraph 385 of the Alverley tribunal's
25 award at RLA-71, and paragraphs 320 and following of the
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Ipek award at RLA-99.
2 As to the Claimant's reliance on the decisions of
3 the Swiss Federal Tribunal in Clorox II, the Claimant
4 here again conflates the foreseeability of the dispute
5 with the foreseeability of the measure.
6 (Slide 110) If we look at the judgment of the Swiss
7 Federal Tribunal in Clorox II, which is RLA-142, we can
8 see at paragraph 5.6, which is on the slide -- this is
9 taken from the English translation; when you are looking
10 in the authorities bundle, the English translation
11 follows the original French -- the Swiss Federal
12 Tribunal held that it was not possible to infer from the
13 President's speech that, firstly, a concrete measure
14 would be adopted, you can see the first step there
15 highlighted in the sixth line of the extract; and
16 secondly, that any such measure would actually affect
17 the investment, the investment here being products
18 marketed by the investor in that case; and thirdly, that
19 the effect of the measure would be of such an extent as
20 to lead to a dispute.
21 So in other words, there was no need for an investor
22 to foresee the specific measure that would be
23 implemented, simply that something would happen.
24 This does not mean, as the Claimant suggests in its
25 Rejoinder at paragraph 354, that an abuse occurs
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whenever it is reasonably foreseeable that a state will
2 take any measure which will result in any type of
3 investment dispute. What it means that it is no answer
4 to our objection that the Mineralogy Group did not
5 predict the passage of the Amendment Act prior to the
6 transfer of the Mineralogy shares to Zeph on
7 29 January 2019.
8 It is instead decisive that a dispute concerning the
9 unilateral amendment of the State Agreement by the
10 Western Australian Parliament, to the detriment of
11 Mineralogy, was foreseeable. Indeed, it was actually
12 foreseen prior to January 2019. This is amply
13 demonstrated by the contemporaneous letters and public
14 statements that the Solicitor-General took you to this
15 morning.
16 Madam President, members of the Tribunal, in these
17 circumstances, Zeph's invocation of Article 20 of
18 Chapter 11 of AANZFTA is an abuse of process and must be
19 dismissed by this Tribunal.
20 I now ask you to give the floor to Dr Esme Shirlow.
21 Thank you.
22 THE PRESIDENT: Thank you.
23 DR SHIRLOW: (Slide 111) Madam President, members of the
24 Tribunal, I will address Zeph's reliance on the
25 principles allegedly relevant to estoppel, admissions,
[Page 118]
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approbation and reprobation, unilateral acts,
2 acquiescence and good faith.
3 The factual foundation for Zeph's reliance on these
4 principles is a grab-bag of administrative decisions,
5 often of a non-discretionary kind, by which Australian
6 authorities have applied domestic statutory definitions.
7 Those definitions are all expressed in terms that differ
8 markedly to the matters under AANZFTA that are relevant
9 to Australia's preliminary objections.
10 (Slide 112) Specifically, the Claimant first refers
11 to the fact that Zeph was registered by the Australian
12 Securities and Investments Commission, or ASIC, as
13 a "foreign company" under the Australian
14 Corporations Act, which is CLA-161.
15 Under Section 9 of that Act, ASIC's registration of
16 Zeph followed automatically from Zeph's application,
17 Zeph being a company that is "incorporated ... outside
18 Australia".
19 The Claimant also refers to determinations by the
20 Foreign Investment Review Board, or FIRB, and the
21 Australian Taxation Office, the ATO. Those
22 determinations were to the effect that Mineralogy is
23 a "foreign person" within the meaning of the Australian
24 Foreign Acquisitions and Takeovers Act, which is
25 abbreviated as "FATA" and is CLA-166.
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That definition again applied because Zeph is
2 "a corporation formed outside the limits of the
3 Commonwealth of Australia". And you can see that
4 definition being applied in RLA-122 and R-603.
5 The bare fact of Zeph's incorporation in Singapore
6 is, of course, not in dispute in these proceedings.
7 Australia instead says that the circumstances in which
8 the Claimant was incorporated mean that it cannot invoke
9 treaty protection.
10 It also takes issue with whether the Claimant has
11 substantive business operations in Singapore, and ASIC,
12 FIRB and the ATO each expressed no opinion on those
13 matters. Nor did they address whether Zeph could be
14 regarded as an investor with an investment within the
15 meaning of Chapter 11 of the AANZFTA.
16 (Slide 113) In another example, the Claimant refers
17 to the decisions of the Queensland Revenue Office, QRO
18 (CLA-167), and Revenue WA (CLA-168). Those decisions
19 were to the effect, first, that the Mineralogy Group was
20 exempt from having to pay landholder duty as a result of
21 the Mineralogy Group restructuring.
22 Second, it was determined that foreign transfer duty
23 was payable on a subsequent purchase of residential real
24 estate in Western Australia by Mineralogy. That was on
25 the basis that Mineralogy was an entity in which
[Page 120]
12:41 1
a company incorporated in Singapore, being Zeph, had
2 a controlling interest.
3 Both decisions were made applying the relevant
4 domestic statutory provisions, the detail of which is
5 set out in paragraph 29 of the ROPO. But those
6 statutory tests again had nothing to do with the matters
7 relevant to Australia's preliminary objections.
8 (Slide 114) The Claimant also refers to the
9 Respondent having reported the present claim as
10 a "contingent liability" in its federal budget papers.
11 A contingent liability is of course expressly equivocal
12 and conditional. But in any case, it was reported under
13 domestic standards, which again have nothing to do with
14 the questions before this Tribunal. For more detail on
15 the relevant domestic tests that were applied, I refer
16 you to paragraphs 19 to 30 of the ROPO.
17 So turning first to the principle of estoppel, and
18 as Australia has explained in the ROPO at paragraphs 10
19 to 18, estoppel has been repeatedly and consistently
20 defined to require: first, clear, consistent unequivocal
21 and unambiguous statements or conduct on the part of one
22 party; second, that those statements or conduct be made
23 voluntarily, unconditionally and under authority; and
24 third, that they have induced reliance by another party,
25 causing some detriment to that party or some benefit to
[Page 121]
12:43 1
the party making the statements or undertaking the
2 conduct.
3 None of the acts or representations that Zeph
4 invokes come anywhere close to the requirement that
5 conduct be clear, consistent, unequivocal or
6 unambiguous. That is because, as I have explained, none
7 of the conduct [or] statements was made with reference
8 to any of the requirements in AANZFTA put in issue by
9 Australia's preliminary objections.
10 The situation may of course be different if
11 Australia were seeking to challenge, for example, the
12 fact of Zeph's incorporation in Singapore or its
13 ownership of shares in Mineralogy, assuming the other
14 requirements of estoppel were met. But it does not
15 challenge those facts, and so the domestic decisions on
16 those matters have no relevant overlap with any of the
17 matters this Tribunal needs to determine.
18 The Claimant argues that the alleged representations
19 need not be specific to AANZFTA in order to give rise to
20 estoppel under international law. But the reality is
21 that AANZFTA has specific requirements, and if
22 a representation under domestic law has no overlap with
23 those requirements, it plainly cannot be unequivocal or
24 unambiguous with reference to them.
25 The cases cited by the Claimant in support of its
[Page 122]
12:44 1
position on this matter or inapposite.
2 (Slide 116) The Claimant first cites Middle East
3 Cement v Egypt, which is CLA-174, which you can see on
4 the slide. And while the tribunal in that case did not
5 employ the language of estoppel, the determinations made
6 by the domestic authorities overlapped in any case
7 entirely with the matter that the Tribunal was required
8 to determine in applying the investment treaty. And
9 that matter was: who, as a matter of domestic law, owned
10 a ship.
11 (Slide 117) In Bankswitch v Ghana, which is RLA-119,
12 the matter at issue before the tribunal was whether
13 an agreement was valid and enforceable under domestic
14 law. The tribunal held that this matter had been
15 directly addressed in clear terms by domestic
16 authorities, including by the Attorney-General and
17 Minister for Justice in prior statements. And you can
18 see the clarity of the statement extracted on that slide
19 (paragraphs 11.82 and 11.83).
20 The Claimant's reliance on paragraphs 117 to 118 and
21 250 of the partial award from Eureko v Poland, which is
22 CLA-257, is similarly misplaced. That tribunal did not
23 even engage the principle of estoppel. It instead was
24 analysing the application of an umbrella clause in
25 considering whether a state was bound by a contract due
[Page 123]
12:45 1
to its involvement in contractual negotiations.
2 (Slide 118) The Claimant has also sought to contend
3 that a broader view of estoppel, which does not require
4 detrimental reliance, should be preferred to the
5 restrictive view, which does. However, as the
6 Respondent has established at paragraph 17 of the ROPO,
7 the decisions cited by the Claimant do not support its
8 position. That is because those tribunals did not
9 analyse the relevant submissions under the principle of
10 estoppel, or they referred to an element of at least
11 reliance.
12 The International Court of Justice and investment
13 tribunals have repeatedly emphasised that detrimental
14 reliance is required to give rise to estoppel under
15 international law. There is no broad principle of
16 estoppel, and the Claimant's attempt to argue otherwise
17 must be rejected.
18 The requirement of detrimental reliance has fatal
19 consequences for the Claimant's case on estoppel. This
20 is because the Claimant has not demonstrated that it
21 changed its position in reliance on the statements and
22 conduct it invokes to its detriment or to Australia's
23 benefit. And very obviously, it could not reasonably
24 have done any such thing.
25 The Claimant instead cites vague detriments and
[Page 124]
12:47 1
benefits which are unconnected to any of Australia's
2 alleged representations. Zeph alleges, first, that due
3 to Australia's conduct, and I quote from paragraph 685
4 of the Rejoinder:
5 "... the Claimant's local ... subsidiary elected to
6 retain over $240 million ... of dividends in Australia."
7 But where is the evidence of this supposed election
8 to retain dividends in reliance on Australia's conduct?
9 There is none.
10 As to the decisions of QRO and Revenue WA, there can
11 be no suggestion by Zeph that it suffered any detriment
12 as a result of being granted an exemption from the
13 payment of landholder duty under the applicable
14 legislation. And you can see that exemption being
15 granted at C-63, annexes 26 and 27.
16 Foreign transfer duty was paid by Mineralogy in
17 respect of Mineralogy's -- not Zeph's -- purchase of
18 a residential property in Western Australia in 2019, and
19 the ATO separately advised Mineralogy that it may have
20 breached the FATA because it did not seek approval from
21 the FIRB before purchasing that same property. On
22 31 March 2022, as Zeph acknowledges at paragraph 686 of
23 the Rejoinder, Mineralogy transferred the property to
24 Mr Palmer to remedy that breach and avoid the applicable
25 duty.
[Page 125]
12:48 1
The proposition appears to be that Mineralogy,
2 an Australian company, has somehow suffered detriments
3 relevant to these proceedings by being required to
4 comply with Australian law while operating in Australia.
5 This should be given short shrift by the Tribunal.
6 Zeph's submissions as to other nebulous detriments at
7 paragraphs 609, 612 and 692 of the Rejoinder should be
8 rejected for similar reasons.
9 Turning then to admissions. At paragraph 560 of its
10 Rejoinder, Zeph defines the concept of "admissions" by
11 reference to Professor Bowett's well-known article on
12 estoppel and acquiescence, and that's RLA-104. In that
13 article at page 195, Professor Bowett notes that:
14 "Where one or other of the foregoing essentials of
15 a binding estoppel is absent the representation ... may
16 still be adduced in evidence as an admission to show
17 a lack of consistency or weakness in a party's
18 position."
19 Of course, to show any lack of consistency or
20 weakness in Australia's position, the alleged position
21 must be referable to a position the Respondent is taking
22 in these proceedings. An element of specificity is
23 therefore also implicit in the concept of admissions.
24 (Slide 120) This requirement is emphasise indeed the
25 Channel Tunnel partial award at paragraph 277, and
[Page 126]
12:50 1
that's RLA-171 on the slide. There the tribunal
2 rejected the parties' respective reliance on alleged
3 admissions on the basis that to constitute admissions:
4 "... [they] would need to be unequivocal, and
5 unequivocally addressed to the issues before the
6 Tribunal, before they could be seriously taken into
7 account as admissions."
8 (Slide 121) Zeph itself accepts as much at
9 paragraph 563 of the Rejoinder, when it contends that
10 the statements and conduct that it invokes as the
11 relevant admissions must be "clear and unequivocal" and
12 must "be objectively construed by the Respondent for the
13 purposes of AANZFTA".
14 Obviously that test is not met so far as concerns
15 the supposed admissions made by entities like ASIC or
16 Revenue WA. Zeph also relies on purported admissions in
17 these proceedings, and these have already been addressed
18 by my colleagues.
19 Zeph's reliance on Australia's denial of benefits,
20 which it says constitutes a recognition by Australia
21 that Zeph is an investor with an investment under
22 AANZFTA, is a nonsense. In short, as the tribunal in
23 Fraport recognised at paragraph 395 -- and that's
24 CLA-176 -- an admission cannot arise out of a party
25 making "legitimate arguments in the alternative which
[Page 127]
12:51 1
scrupulous counsel are entitled to make".
2 Australia is, moreover, not seeking to resile from
3 any of the statements which Zeph describes as
4 admissions. So no issue of approbation and reprobation
5 can possibly arise.
6 (Slide 123) In support of its position on unilateral
7 acts, the Claimant cites the Nuclear Tests case, which
8 is CLA-246, and the International
[Page 145]
14:24 1 is: the ore is first crushed in a crusher and there are
2 three stages -- you can probably see down there -- of
3 magnetic concentration: we pass three concentrators.
4 Looking further ahead, there's the power station,
5 which is a similar-size station [to that] which powers
6 The Hague.
7 There's recycling water there that comes back from
8 the tailings dam. This is the tailings dam, where the
9 waste goes to. You'll see the size by the size of the
10 car now that you can see on the left-hand side. This
11 takes up about 20 square kilometres of tailing storage.
12 The Sino Iron Project and indeed Claimant's
13 investments in Australia are much larger and more
14 extensive than what's being briefly shown in this video,
15 and I think it can only be appreciated and understood by
16 a full site visit to Mineralogy's tenements in
17 Western Australia.
18 (Pause as video continues to play)
19 That's it.
20 The Respondent's jurisdictional objections cannot be
21 allowed to deny the Claimant a hearing in this important
22 investor-state dispute. When the correct law is applied
23 to the relevant facts, it is clear that the Tribunal has
24 jurisdiction to hear the Claimant's claims, and those
25 claims should be heard on their merits.
[Page 146]
14:28 1 I will turn in a moment to address a number of key
2 points which I'd like to make orally. But before doing
3 so, I'd like to emphasise on the record at the very
4 outset that nothing in my oral submission should be
5 treated as varying or departing from the Claimant's case
6 in the Rejoinder, the Response and other written
7 submissions. The Claimant's case is maintained in full.
8 Further, to the extent that the Respondent
9 suggests -- as it disingenuously sought to do at the
10 pre-hearing conference in August and today -- that the
11 Claimant has somehow changed its case or abandoned any
12 part of its case, that is wrong. As I explained
13 previously at the pre-hearing conference, the Claimant
14 has simply sought to ensure that the Tribunal is not
15 troubled with unnecessary factual testimony in
16 circumstances where the Respondent has now made, a bit
17 belatedly, some crucial admissions.
18 I'm in a position to address all relevant factual
19 matters, including any reference to the matters set out
20 in the other statements which I incorporate into my
21 evidence in full. All parties to arbitrations such as
22 this have a duty to make sure they are constantly taking
23 steps to assist the Tribunal to streamline the
24 procedure. It is this type of obligation some lawyers
25 often ignore, taking bad points. But I am keen to keep
[Page 147]
14:29 1 matters as clear and as focused as possible.
2 In this context, in this hearing dealing with
3 jurisdiction, the Claimant relies upon the Notice of
4 Arbitration, the Claimant's Response and Rejoinder, as
5 well as the witness statements and expert reports filed
6 by the Claimant in this arbitration, including all my
7 evidence which has been incorporated by cross-reference
8 to other statements; other than, of course, for this
9 jurisdictional hearing only, the witness statements of
10 Domenic Martino [and] Nui Harris, and the expert reports
11 of Graham Sorensen and Alberto Migliucci.
12 (Slide 10) I will now turn to the burden of proof.
13 (Slide 11) The Respondent bears the burden of
14 proving its claims on the balance of probabilities,
15 a burden it has not discharged. This burden is
16 acknowledged by the Respondent at paragraph 23 of the
17 Respondent's Statement of Preliminary Objections, which
18 states as follows:
19 "As to the applicable standard of proof, arbitral
20 tribunals have frequently applied the 'balance of
21 probabilities' standard, although there may be different
22 ways in which this standard is expressed (such as the
23 'preponderance of the evidence'). As recently explained
24 by the Carlos Sastre tribunal: ..."
25 Which is Exhibit RLA-29 at paragraph 147:
[Page 148]
14:31 1 "... 'This standard requires an evaluation by the
2 Tribunal of all the evidence produced by Claimants and
3 Respondent on the issues at hand to determine which
4 party's claims are more likely to be true. Thus,
5 Claimants must present persuasive evidence of the facts
6 to establish jurisdiction for the Tribunal to be
7 satisfied that the burden of proof has been
8 discharged. ... Respondent, in turn, must provide
9 persuasive evidence of the facts that make out its
10 objections to jurisdiction."
11 (Slide 12) The application of this principle is
12 illustrated in the following decisions, and they are up
13 there for you to have a look at: Antonio del Valle Ruiz
14 v Kingdom of Spain, which is Exhibit RLA-28, at
15 paragraph 495; Churchill Mining decision on annulment,
16 which is Exhibit RLA-31, at paragraph 215; Churchill
17 Mining award, which is Exhibit RLA-32, at paragraphs 240
18 and 244; Pac Rim decision on jurisdiction, which is
19 Exhibit RLA-33, at paragraph 2.10; Sergei v Russia,
20 which is Exhibit RLA-34, at paragraph 256.
21 Whereas the Claimant has provided substantial clear,
22 concrete evidence via facts by way of the witness
23 statement served with each Notice of Arbitration and
24 Statement of Claim, Response and Rejoinder, in contrast,
25 the Respondent has provided little or no evidence of
[Page 149]
14:32 1 facts, and failed to contest the Claimant's factual
2 evidence with any equivalent factual evidence of its
3 own. It is the Claimant's respectful submission that
4 the role of the Tribunal in considering the Respondent's
5 objections is to properly evaluate the factual evidence;
6 and/or where there are admissions, to apply the
7 provisions of AANZFTA and international law to such
8 factual admissions in reaching its conclusions.
9 The position in respect of the Respondent's evidence
10 is even less satisfactory when compared to the
11 Claimant's case and the Respondent's admissions. The
12 Respondent's evidence consists of ill-informed and
13 inadmissible opinion and speculation, often
14 transgressing wholly inappropriate, improper challenges
15 to the credibility of my evidence.
16 Consistent with the narrative in this case, the
17 Respondent spends its time attacking me personally, and
18 delaying matters with this jurisdictional challenge,
19 rather than focusing on the law and the actual facts.
20 (Slide 13) The law and the facts are against it. As
21 stated in Philip Morris v Australia, which is
22 Exhibit RLA-95, at paragraph 539:
23 "... the threshold for finding an abusive initiation
24 of an investment claim is high."
25 (Slide 14) And Clorox, which is Exhibit RLA-142, at
[Page 150]
14:34 1 paragraph 5.2.4, stated:
2 "It is up to the party claiming the existence of
3 after abuse of rights to allege and prove the facts ...
4 establish[ing] the foreseeability of the dispute [when
5 the investment was restructured] ..."
6 Evidence of fact in witness statements filed by the
7 Claimant from persons who were directly involved in the
8 relevant events cannot be displaced by speculative
9 opinion evidence from persons who were not
10 contemporaneously involved in the matters about which
11 they opine, who have no firsthand knowledge of any of
12 the facts.
13 In the current circumstances, the Respondent's
14 opinion evidence is nothing more than a hypothetical
15 analysis of what certain experts subjectively consider
16 might have been done differently in each case, based on
17 an expert's limited area of expertise, which, by its
18 very nature, isolates them from the context of all the
19 actual factual matters before the Tribunal, when none of
20 them have my commercial or practical business
21 experience.
22 The Respondent also misses the point that the
23 Respondent's own admissions, made during the course of
24 this arbitration, mean that once the appropriate law is
25 applied to those admitted facts, the Tribunal has
[Page 151]
14:35 1 jurisdiction to hear the Claimant's claims.
2 Having addressed the burden of proof and the
3 evidence, I will now address the issues.
4 Firstly, it is appropriate to review why we are
5 here. We are here because of the Amendment Act. It is
6 the Amendment Act which created the present dispute. If
7 there was no Amendment Act, we would not be here. If
8 there was no Amendment Act, there would be no claims for
9 the Tribunal to consider, and this arbitration just
10 would not exist.
11 The claims in this arbitration are claims emanating
12 from the enactment of the Amendment Act, a piece of
13 legislation which it is common ground was not
14 foreseeable and, inter alia, terminated the arbitration
15 agreement which had only been entered into some
16 three weeks earlier. How could this possibly have been
17 foreseeable over 20 months earlier?
18 The Amendment Act is Exhibit C-1. The Claimant's
19 primary position is, therefore, that the commercial
20 rationale for the restructuring is irrelevant to the
21 abuse of process objection, because the specific dispute
22 or measure at issue in this arbitration is the Amendment
23 Act and the damage it causes, which could not be
24 foreseeable. Indeed, it is now common ground that the
25 specific measure of the Amendment Act and the resulting
[Page 152]
14:36 1 claims were not foreseeable at the time of
2 restructuring.
3 Before dealing with the Respondent's
4 investor/investment and substantive business and abuse
5 of process objections, it is worthwhile recalling how
6 the Amendment Act was created, and how it created this
7 present dispute.
8 On 13 August 2020, the Amendment Act was enacted by
9 the Western Australian Parliament. The object of the
10 Amend[ment] Act was to eviscerate, inter alia,
11 Mineralogy's rights by terminating the arbitration
12 agreement and the mediation agreement, which had only
13 been entered into a few weeks earlier, and the
14 Claimant's right to pursue a claim for Western
15 Australia's established breach of the State Agreement in
16 2012.
17 The Amend[ment] Act also terminated the BSIOP
18 dispute as a whole, and it absolved by legislation all
19 liability of the State of Western Australia in relation
20 to the BSIOP proposal and consequent upon the passage of
21 the Amend[ment] Act itself.
22 To recall, the Amendment Act provided inter alia for
23 the following: that the BSIOP proposal has no
24 contractual or other legal effect, Section 9; that the
25 arbitration agreement and mediation agreement are
[Page 153]
14:37 1 terminated; that existing awards, including the first
2 and second awards, are of no effect, and taken never to
3 have had any effect, Section 10; that the State,
4 including the Crown, of Western Australia and the
5 Western Australian State Authority has no liability and
6 cannot have any liability to any person connected in any
7 way with the BSIOP proposal or the passage of the
8 Amendment Act, Sections 11 and 19; [that] there can be
9 no appeal, no review or any other challenge to the
10 State's conduct concerning the BSIOP proposal or the
11 passage of the Amendment Act; that the rules of natural
12 justice, including any duty of procedural fairness, do
13 not apply in respect of the BSIOP dispute or the passage
14 of the Amendment Act; [that] no conduct of the State
15 related to the BSIOP proposal or the passage of the
16 Amendment Act can give rise to commission of a civil
17 wrong or a criminal offence, Sections 18 and 20.
18 Really, is it acceptable that our politicians and
19 bureaucrats are given immunity from the criminal law and
20 place themselves above the rule of law? Is it
21 acceptable that the Amendment Act take from the courts
22 their jurisdiction in respect of this particular
23 dispute?
24 Mineralogy, International Minerals and Clive Palmer
25 must indemnify the State against any loss, cost [or]
[Page 154]
14:39 1 liability connected with the Amendment Act and the BSIOP
2 proposal, including those arising under international
3 treaties or international law, [and] any loss or cost
4 relating to the BSIOP proposal or the passage of the
5 Amendment Act.
6 By denying the right to freedom of information, the
7 Government also took away a free press to hold
8 politicians and bureaucrats accountable. The Amendment
9 Act, of course, also created a massive sovereign risk.
10 It was and is an unprecedented piece of legislation,
11 certainly for a western democracy, in terms of the
12 manner in which it was drafted, in secret; in terms of
13 the scope and effect; in terms of the disgusting
14 communications about me and the Claimant by key
15 protagonists, which have since been discovered; and in
16 terms of its consequences.
17 This arbitration is intended to bring the Respondent
18 to account for its multiple breaches of AANZFTA and
19 flagrant disregard for the rule of law.
20 Background to this hearing which should be borne in
21 mind when the Respondent remarkably and improperly seeks
22 to suggest that the conduct of the Claimant's side
23 amounts to a sham, an abuse, and fails to particularise
24 or provide any evidence of such: it lies in the
25 Respondent's mouth to make such submissions, given its
[Page 155]
14:40 1 own conduct.
2 As has been said, the Western Australia legislation
3 contemplates significant departures from traditional
4 characteristics of judicial process. It abrogates
5 a court's decisional independence, conscripts it into
6 an implementation of a government plan. It prejudices
7 an issue. It compromises the court's role in quelling
8 a dispute. It renders judicial decisions not final and
9 conclusive, which is inherent by their very nature.
10 These are fundamental and serious departures from
11 the characteristics of the judicial process,
12 significantly impairing a court's institutional
13 integrity. At risk is the judicial reputation of
14 an independent umpire in the resolution of disputes and
15 [as] upholders of the rule of law. If we effectively
16 permit this kind of treaty breach to go unsanctioned,
17 more and worse are likely to follow.
18 Key points that the Tribunal should take into
19 account when considering the Claimant's submission are:
20 [firstly,] that the Claimant was incorporated for
21 perfectly proper commercial reasons. This is addressed
22 in my evidence: in the first Palmer witness statement at
23 paragraphs 113 to 139 and in the fifth Palmer witness
24 statement at paragraphs 48 to 72. Secondly, the
25 incorporation of the Claimant was carried out at a time
[Page 156]
14:41 1 when the Amendment Act dispute was not foreseeable, as
2 the Respondent has admitted. And thirdly, the Claimant
3 carries on a perfectly proper and substantial business
4 in Singapore and Australia, and has done so at all
5 material times.
6 Before embarking on further analysis, the Tribunal
7 should consider the following facts: firstly, the
8 evidence meets the investor/investment test without
9 scope for any real debate; secondly, the Respondent has
10 recognised the nature and ownership of a number of
11 occasions with important and concrete consequences for
12 the Claimant and the group; thirdly, the Respondent's
13 submissions in these proceedings evince the mischief
14 which the Respondent has sought to achieve by bringing
15 these objections before the Tribunal; and fourthly, the
16 Respondent's preliminary objections are unarguable and
17 should be summarily dismissed.
18 The Respondent's objections are contrary to several
19 important formal admissions made by the Respondent
20 during the course of these proceedings and are not
21 supported by factual evidence. Those admissions, [with]
22 which the Respondent's preliminary objections are in
23 conflict, are, on their face, clear and unequivocal,
24 such that they no longer need to be proved by the
25 Claimant, and the Respondent cannot now resile from
[Page 157]
14:43 1 them. The Respondent is accordingly bound by such
2 admissions for the purpose of this arbitration.
3 Before proceeding further, it's important to recall
4 that a party to an arbitration is bound by omissions of
5 fact which are made in proceedings before an arbitral
6 tribunal. Once the party concedes a fact in issue, it
7 cannot contest that fact later in proceedings or take
8 any positions which conflict with the prior admission.
9 (Slide 16) Authority for that proposition is set out
10 in the Claimant's Rejoinder at paragraph 30, namely:
11 Petersen and Eton Park v Argentina, which is CLA-267, at
12 paragraph 83; Davis v City of New York, which is
13 CLA-268; and NAFED v Swarup Group of Industries, which
14 is Exhibit CLA-269, at paragraphs 8 and 14.
15 (Slide 17) As mentioned in paragraph 30 of the
16 Rejoinder, respected jurist Geoffrey Waincymer has
17 observed that "tribunals will commonly see particular
18 value in admissions against interest", given there is no
19 vested interest in making them. These observations are
20 recorded in Waincymer, Procedure and Evidence in
21 International Arbitration, which is Exhibit CLA-270, at
22 10.4.14.
23 It is also important to recall that a tribunal's
24 decision should also be consistent with any agreed
25 facts. This observation is also recorded in Waincymer,
[Page 158]
14:44 1 Procedure and Evidence in International Arbitration,
2 which is CLA-270, at 10.4.13.
3 To the extent, therefore, that those admissions are
4 inconsistent, or the Respondent's preliminary objections
5 are unsupportable by any factual evidence, such
6 objections are in themselves an abuse of process and
7 should be rejected on this basis.
8 It's important to emphasise in relation to the
9 various admissions made or confirmed by the Respondent
10 that once the nature and effect of those admissions is
11 properly understood, it is clear that Respondent's
12 preliminary objections are without any substance and
13 must be dismissed.
14 Accordingly, it is not necessary for the Tribunal to
15 be burdened with the task of fact-finding on a great
16 many issues. Instead, with the benefit of the
17 Respondent's admissions, the Tribunal can readily be
18 satisfied that the Respondent's preliminary objections
19 are unfounded and should be dismissed.
20 Reference will now be made to the Respondent's
21 various submissions and what the Tribunal should make of
22 them. I will now consider the Respondent's admissions
23 in respect of the Respondent's "investment" and
24 "investor" objections.
25 Respondent has made a series of admissions which
[Page 159]
14:45 1 enable the Tribunal to conclude that the Claimant is
2 an investor which has made a qualifying investment.
3 Some admissions by the Respondent are of fact and others
4 are of law.
5 First, at paragraph 64 of the Reply, the Respondent
6 has admitted that the share swap was both lawful and
7 effective in transferring the ownership of its shares in
8 Mineralogy to the Claimant.
9 Secondly, at paragraph 68 of its Reply, the
10 Respondent acknowledged that an investment can validly
11 be made through a cashless transaction.
12 [Thirdly], I note that in paragraph 71 of its Reply,
13 the Respondent does not deny that a share swap can
14 constitute an active contribution. I also note that it
15 is curious that at paragraph 72 of its Reply, the
16 Respondent does not question that the acquisition by way
17 of a share swap is not legitimate.
18 I note further, at paragraph 110 of its Reply, that
19 the Respondent did not dispute that Article 2(c) of
20 Chapter 11 of AANZFTA covers both direct and indirect
21 investment.
22 Against this background, the Claimant now turns to
23 consider in more detail the admissions which the
24 Respondent has made on the related issues of investor
25 and investment.
[Page 160]
14:47 1 It is submitted that the Respondent's admissions
2 confirm the Claimant is an investor and has a qualifying
3 investment in Australia in accordance with the terms of
4 AANZFTA.
5 (Slide 18) The Respondent's first admission, at
6 paragraph 64 of the Reply, is that:
7 "... Australia does not dispute that the share swap
8 was ... lawful and effective in transferring
9 ownership ..."
10 That's important:
11 "... in transferring ownership of the shares in
12 Mineralogy to Zeph [the Claimant]."
13 (Slide 19) AANZFTA, in Chapter 11, Article 2(c),
14 states:
15 "investment means every kind of asset owned or
16 controlled by an investor, including but not limited
17 to ...
18 (ii) shares ..."
19 In the circumstances, it's curious, to say the
20 least, for the Respondent to dispute that Claimant has
21 made an investment. The Respondent has conceded that
22 Claimant became the owner of the shares following
23 a lawful and effective share swap. The admission that
24 the share swap was lawful and effective in transferring
25 ownership of the shares [in] Mineralogy to the Claimant
[Page 161]
14:48 1 is necessarily an admission of ownership by the Claimant
2 of the asset, namely the Mineralogy shares. This is
3 therefore an admission of the Respondent of the
4 existence of the Claimant's investment within the
5 meaning of Chapter 11, Article 2(c) of AANZFTA.
6 (Slide 20) In the circumstances, it is also curious
7 and unsustainable for the Respondent to contend that the
8 Claimant is not an investor. This is because AANZFTA,
9 in Chapter 11, Article 2(d), as follows, states:
10 "... investor of a Party means a natural person of
11 a Party or a juridical person of a Party that seeks to
12 make, is making, or has made an investment ..."
13 (Slide 21) The Respondent's admission that the share
14 swap was lawful and effective is an admission that the
15 Claimant owns the Mineralogy shares, has made
16 an investment by the acquisition of shares in a company
17 incorporated in Australia; and accordingly, this is
18 an admission that the Claimant has made an investment in
19 the territory of Australia. By having an investment, we
20 must have an investor.
21 That being so, the Respondent has effectively
22 admitted that the Claimant is an "investor of a Party"
23 within the meaning of AANZFTA Chapter 11, Article 2(d)
24 of AANZFTA.
25 THE PRESIDENT: Mr Palmer, do forgive me for interrupting
[Page 162]
14:49 1 you, but I would like to make sure that we understand
2 your position correctly.
3 The way I understand the Respondent is they are not
4 saying you could not have a share swap; they are saying
5 that's, in principle, a lawful transfer. They are not
6 saying that that did not become the owner. What the
7 Respondent is saying is that that made no contribution
8 because the shares it contributed as part of the share
9 swap had no value.
10 Do you want to answer that? You can do it now or
11 later. But it would be good that we have your clear
12 position on that.
13 MR PALMER: I was going to answer that. I can answer --
14 THE PRESIDENT: Okay. Then you can do it later.
15 MR PALMER: I might get to it, but I can just say quickly.
16 In essence, with the share purchase agreement, it
17 was contemplated that the share swap would take place on
18 settlement, and at settlement there would be
19 a contemporaneous exchange of shares, right? For that
20 to happen -- it was a common commercial technique -- the
21 value is normally assessed as the -- the shares are of
22 equal value, because that's where the person ending up
23 has still that same investment.
24 In this case in particular, they had a face value of
25 AUD 6 million, which was covered by the articles of
[Page 163]
14:51 1 association and the Corporations Act: it's a real value.
2 So we say that it did have a real value.
3 But my point here is a little bit different. I'm
4 saying here that if we go back to the treaty, the treaty
5 says the test of an investment is actually ownership,
6 right? So in that sense, the treaty says ownership is
7 the test. The Respondent has admitted that the share
8 swap was valid and effective, but what it did do was it
9 transferred ownership.
10 Therefore, the ownership of the investment complies
11 with section 2 -- I'm not sure what it was of the
12 treaty [as] being a valid investment in Australia. And
13 to have a valid investment in Australia, you must have
14 an investor. So it's a little bit circular argument,
15 right?
16 I hope that --
17 THE PRESIDENT: So you are saying the test is ownership?
18 MR PALMER: Yes.
19 THE PRESIDENT: And you don't consider value as part of the
20 test?
21 MR PALMER: Well, we have to go back to the treaty.
22 THE PRESIDENT: Yes.
23 MS PALMER: The treaty should take precedence, I think,
24 prior to other matters. The treaty is quite clear on
25 its face: it says ownership is a test.
[Page 164]
14:52 1 Maybe I can just have a minute.
2 THE PRESIDENT: I don't want you to have to come back.
3 We can certainly read the treaty.
4 MR PALMER: If we look at Chapter --
5 THE PRESIDENT: I just wanted your answer on this value
6 issue.
7 MR PALMER: Chapter 11, Article 2(c), "investment" is "every
8 kind of asset owned or controlled by an investor,
9 including but not limited to ... shares".
10 THE PRESIDENT: Yes, but of course, then (2)(d) says "make
11 an investment". That's one part of the argument.
12 The other argument is that an investment in and of
13 itself implies certain characteristics, out of which
14 contribution is one; and "contribution" is contribution
15 of something of value --
16 MR PALMER: That's correct.
17 THE PRESIDENT: -- it's an allocation of resources.
18 MR PALMER: So we're saying it is something of value, right?
19 THE PRESIDENT: Yes.
20 MR PALMER: If I can just continue --
21 THE PRESIDENT: Of course. Apologies. But I thought it
22 might be better to ask for the clarification.
23 MR PALMER: There's a little bit more on it, so maybe there
24 are some more questions.
25 THE PRESIDENT: Sure.
[Page 165]
14:53 1 MR PALMER: In the circumstance, it's curious, to say the
2 least, for the Respondent to dispute the claim [that the
3 Claimant] has made an investment.
4 The Respondent has conceded that the Claimant became
5 the owner of the shares following a lawful and effective
6 share swap. The admission that the share swap was legal
7 and effective in transferring ownership of the shares in
8 Mineralogy to the Claimant is necessarily admission of
9 ownership of the Claimant of an asset, namely the
10 Mineralogy shares. This is therefore an admission [by]
11 Respondent of the existence of the Claimant's investment
12 within the meaning of Chapter 11, Article 2(c) of
13 AANZFTA.
14 In the circumstances, it's also curious -- and
15 unsustainable -- for the Respondent to contend that the
16 Claimant is not an investor. This is because AANZFTA
17 Chapter 11, Article 2(d) states as follows:
18 "... [an] investor of a Party means a natural person
19 of a Party or a juridical person of a Party that seeks
20 to make, is making, or has made an investment ..."
21 "... or has made an investment". So it's "or has
22 made an investment". It's not both of them; it's one or
23 the other, right? So I'm saying: if you have
24 an investment, it has made an investment.
25 The Respondent's admission that the share swap was
[Page 166]
14:54 1 lawful and effective is an admission that the Claimant
2 owns the Mineralogy shares, and as such has made
3 an investment by the acquisition of shares in a company
4 incorporated in Australia. And accordingly, this is
5 an admission that the Claimant has made an investment in
6 the territory of Australia. So by having an investment,
7 we must have an investor. That being so, the Respondent
8 has effectively admitted the Claimant was an "investor
9 of a Party" within the meaning of Chapter 11,
10 Article 2(d) of AANZFTA.
11 By reason of these matters, the Respondent has
12 admitted that the Claimant was an investor, has made
13 an investment. That being so, the Respondent's first
14 preliminary objection, in respect of "investor" and
15 "investment", is made contrary to its own admissions.
16 As such, the first preliminary objection cannot be
17 maintained; it should now be dismissed by the Tribunal.
18 I will now deal with the Respondent's admissions
19 relevant to denial of benefits.
20 (Slide 21) The Respondent makes a further admission
21 at paragraph 146 of its Reply, which was as follows:
22 "As at 13 August 2020, the Claimant's 'business
23 operations' consisted of: (a) holding three engineering
24 companies, being GCS Engineering Services Pte Ltd,
25 Visco Engineering Pte Ltd, and Visco Offshore
[Page 167]
14:56 1 Engineering Pte Ltd (the 'Engineering Companies'), which
2 it acquired on 31 January 2019; and (b) participation in
3 a Joint Venture Agreement (the 'JVA') with the
4 Kleenmatic Companies, which it entered into on
5 24 January 2020. It is only those activities that are
6 relevant to whether the Claimant had 'substantive
7 business operations' in Singapore with the meaning of
8 Article 11(1)(b) of Chapter 11 of AANZFTA."
9 The Respondent has thus admitted and acknowledged
10 the existence of the Claimant's investment and
11 businesses, the only relevant date being 13 August 2020,
12 the date the Amendment Act became law; see paragraph 131
13 of the Reply.
14 Not only that, but the Respondent has formally
15 admitted the Claimant and the Claimant's investment in
16 Australia. On 29 March 2019, the Respondent approved
17 the Claimant as a foreign company carrying on business
18 in Australia, as evinced by Claimant's application for
19 registration as a foreign company in Australia, which is
20 Exhibit C-97, and the current and historical ASIC
21 extract for the Claimant, which is Exhibit C-483.
22 That issue is addressed fully in Section II of the
23 Claimant's Response and Section Two of the Claimant's
24 Rejoinder, which need not be repeated here, but will
25 assist the Tribunal in understanding the matter.
[Page 168]
14:58 1 The Respondent cannot take the benefit, as it has in
2 this case, to the tune of more than $400,000, and then
3 seek to deny a benefit to the Claimant.
4 (Slide 22) The Respondent's taking of that benefit
5 is evinced by the foreign transfer duty statement
6 grounds WA, which is C-63, annexure A, exhibit 28 at
7 page 322.
8 The point is that the Respondent cannot, on the one
9 hand, formally admit the Claimant and its investments
10 and have notice of the Claimant's substantive business
11 in Singapore, and yet subsequently seek to deny the
12 Claimant the benefits of Chapter 11 of AANZFTA.
13 Cogent factual evidence, as set out, inter alia, in
14 the first Palmer witness statement at paragraphs 27 to
15 82, illustrates that Claimant's business in Singapore is
16 indeed substantive. The Respondent nevertheless asserts
17 without any proper foundation that Claimant does not
18 have a substantive business in Singapore. These
19 assertions do not stand scrutiny when one has regard to
20 the following series of admissions which the Respondent
21 has made in its Reply.
22 (Slide 23) First, the Respondent admitted the
23 following at paragraph 129 of its Reply:
24 "The key issue between the Parties is whether Zeph
25 had 'substantive business operations' in Singapore at
[Page 169]
14:59 1 the relevant time."
2 (Slide 24) Secondly, at paragraph 146 of its Reply,
3 the Respondent acknowledges that:
4 "As at 13 August 2020, the Claimant's 'business
5 operations' consisted of: ... [the] engineering
6 companies ... and ... [of the] Joint Venture Agreement
7 ... with the Kleenmatic Companies, which it entered on
8 24 January 2020. It is only those activities that are
9 relevant to whether the Claimant had [a] 'substantive
10 business'..."
11 Thirdly, the Respondent also acknowledged, at
12 paragraph 146 of the Reply, that the Claimant's business
13 operations are "activities that are relevant".
14 (Slide 25) Fourthly, at paragraph 168 of its Reply,
15 the Respondent said:
16 "In the document production phase of these
17 proceedings, the Claimant was ordered to produce
18 employment contracts for employees of the Claimant, and
19 records of transfer of employment or engagement
20 contracts from One Kleenmatic and Kleen Venture pursuant
21 to cl 24 of the JVA in the period 24 January 2020 to
22 13 August 2020. Of the 146 employment contracts
23 produced by the Claimant, only six related to positions
24 which were not cleaners."
25 So the Respondent has, by referring to such
[Page 170]
15:00 1 documents, admitted that it is aware that the Claimant
2 does have 146 people working for it in Singapore.
3 (Slide 26) Fifthly, at paragraph 170 of its Reply,
4 the Respondent admitted that the Claimant was issued
5 licences by the Singapore Government in order to carry
6 on its business in Singapore.
7 Sixthly, the Respondent admitted at paragraph 170 of
8 its Reply that the Claimant's business was a business
9 registered with the Singapore Government which was
10 entitled to receive, and did in fact receive,
11 substantial Covid-19 subsidies before and after
12 13 August 2020.
13 Seventhly, the Respondent further admitted, at
14 paragraph 170 of its Reply, that the Claimant engaged
15 three professional services firms in Singapore to assist
16 it during that relevant period.
17 Based on those admissions alone, it is respectfully
18 submitted that the Tribunal should find that the
19 Claimant has had at all relevant times a substantive
20 business in Singapore. The Claimant respectfully
21 submits that the Tribunal should so find. This is
22 especially the case where the Respondent has not
23 provided any factual evidence, or any particulars at
24 all, to support the scandalous allegations against not
25 just the Claimant but its highly respected legal and
[Page 171]
15:02 1 consulting advisors, Allen & Gledhill, BDO and PwC.
2 The Tribunal should consider the uncontested
3 evidence upon which the Claimant relies in respect of
4 its substantive business operations in Singapore,
5 including but not limited to annexure A, which is
6 Exhibit C-63 of my first witness statement, at
7 paragraphs 27 to 82.
8 There is no sham or pretence here, as the Respondent
9 acknowledges. The Claimant conducts proper, real,
10 lawful, substantive, profitable business activities in
11 Singapore. Real people doing real work rely [on] the
12 Claimant for their employment, and indeed they have done
13 so at all material times. Real clients pay for it.
14 There is simply no proper basis [on] which to challenge
15 this.
16 There is no requirement in AANZFTA, nor in
17 international law generally, that a field of commercial
18 activity entered in its home state be the same or
19 correspond to the investment in a respondent state in
20 any way. The business activity in the home state need
21 only be "substantive". There are no cases that discuss
22 this exact term. A more usual investment treaty
23 iteration in denial of benefit clauses [is] "substantial
24 business activity".
25 (Slide 27) In Big Sky v Kazakhstan, which is
[Page 172]
15:03 1 Exhibit RLA-85, at paragraph 286, the tribunal
2 approaches the concept of ["substantial business
3 activities"] this way:
4 "... the focus is on 'substance' and not 'form' and
5 on materiality rather than on the magnitude of the
6 business..."
7 It is submitted that the same applies to the term
8 "substantive".
9 The Cambridge Dictionary defines "substantive" as:
10 important, serious, or related to real facts and having
11 real importance or value. It can be synonymous with
12 "substantial" or "consideration". But it's primarily
13 used to denote something of substance: real, actual, as
14 opposed to imaginary or fictional.
15 It is without doubt that the Claimant's commercial
16 activity in Singapore is real and substantive. It is
17 not a shell, nor are the activities fictitious or
18 imaginary or exaggerated. Rather, they have proper,
19 significant and increasing value, [in terms of both]
20 profit and revenue, to the management and employees who
21 derive their livelihoods from the Claimant's business in
22 Singapore.
23 In light of the matters to which I have referred, it
24 will not be necessary for the Tribunal to traverse all
25 the detailed factual evidence about this issue. But if
[Page 173]
15:04 1 the Tribunal has any doubts, it should consider all the
2 detailed, uncontested factual evidence which
3 comprehensively demonstrates that the Claimant has
4 a substantive business in Singapore. That evidence is
5 referred to in the Claimant's Response and Rejoinder and
6 previously filed material, and I'll return to it later
7 in my remarks.
8 The applicable legal principles are also set out in
9 the Response and the Rejoinder, and the Claimant's
10 previously filed documents, need not be repeated here.
11 By reason of these matters, the Respondent has made
12 admissions of fact [which], together with the Claimant's
13 uncontested factual evidence, are sufficient to
14 establish the Claimant has a substantive business in
15 Singapore. That being so, the Respondent's second
16 preliminary objection, in relation to denial of
17 benefits, is made contrary to its own admissions and
18 concessions and uncontested factual evidence. As such,
19 the second preliminary objection cannot be maintained
20 and should be dismissed by the Tribunal.
21 I will now address the Respondent's admissions in
22 relation to the Respondent's abuse of process objection.
23 Before addressing the nature and effect of the
24 Respondent's admissions concerning the abuse of process
25 objection, it is important to emphasise again what this
[Page 174]
15:05 1 dispute actually relates to.
2 The UNCITRAL Arbitration Rules of 2020 (sic) set out
3 the content of a notice of arbitration. And
4 Article 3(3) of the Rules states that the claimant must
5 include details of the dispute which is the subject of
6 the arbitration. The nature and the scope of the
7 dispute is therefore determined and defined by what is
8 included and described in the notice of arbitration, and
9 defined by the claimant as the party commencing the
10 arbitration.
11 The Notice of Arbitration was served on the
12 Respondent on 29 March 2023. It incorporated the Notice
13 of Intent dated 20 October 2022, by way of paragraph 4
14 of the Notice of Arbitration.
15 (Slide 33) The Notice of Arbitration thereby
16 incorporates by reference, in its entirety, the Notice
17 of Intent (C-63). And the Notice of Intent defines the
18 dispute, in section 6, line 447, as follows:
19 "The dispute to be submitted to arbitration under
20 the AANZFTA arises out of the enactment of the 2020
21 Amendment Act on 13 August 2020. This Act terminated
22 the 2020 Arbitration Agreement and thereby breached
23 Articles 6 and 9 of the AANZFTA. The dispute between
24 the Claimant and the Commonwealth first arose on
25 13 August 2020."
[Page 175]
15:07 1 Accordingly, the Claimant claims this arbitration
2 all arise out of the enactment of the Amendment Act on
3 13 August 2020, and the effect of that extraordinary and
4 unprecedented legislation on the Claimant's investments
5 in Australia, and upon the rights and the obligations of
6 the Claimant and its subsidiaries.
7 In a breathtaking display of irony, having
8 acknowledged that the Amendment Act was not foreseeable
9 because of successful duplicitous actions of the
10 West Australian government officers, including its
11 Attorney-General and Premier, the Respondent accuses the
12 Claimant of an abuse of right. [This objection] cannot
13 withstand scrutiny.
14 The test of abuse of process is a difficult test to
15 satisfy. Abuse of right is not found lightly; it is
16 an extraordinary remedy which requires proof of the
17 Respondent to a high threshold.
18 (Slide 29) In particular, the Swiss Federal Tribunal
19 explained in Clorox, which is Exhibit RLA-142, at
20 paragraph 5.2.4:
21 "It is up to the party claiming existence of
22 an abuse of rights to allege and prove the facts
23 enabling it to establish the foreseeability of the
24 dispute at the moment of the restructuring of the
25 investment ..."
[Page 176]
15:08 1 (Slide 30) In Clorox v Venezuela, being the award
2 dated 17 June 2021, which is Exhibit CLA-239, at
3 paragraph 447, that tribunal considered that:
4 "The object of foreseeability must be a specific
5 dispute."
6 And in paragraph 441, held that the test for
7 foreseeability:
8 "... must relate to the specific dispute as it is
9 shaped in the arbitration proceedings."
10 At paragraph 448, the tribunal held that:
11 "... foreseeability must refer to a specific type of
12 dispute, namely, not to any dispute in general, but to
13 a specific type of dispute that, eventually, proves to
14 be the one challenged by the restructured investor."
15 The restructured investor has only challenged claims
16 emanating from the Amend[ment] Act.
17 (Slide 31) Importantly, at paragraph 428, the Clorox
18 tribunal held that:
19 "... in the event that [a] dispute submitted to the
20 Tribunal was not foreseeable at the date of completion
21 of the corporate restructuring that allows benefiting
22 from the protection of [the] treaty, any abuse of
23 process can be excluded."
24 At paragraph 450, the Clorox tribunal held, in
25 considering a claim of an abuse of process:
[Page 177]
15:09 1 "... it is important to identify the first measure
2 or practice constituting the alleged breach of the
3 Treaty and to determine whether its adoption or
4 implementation was foreseeable at the critical date."
5 In that regard, the first measure would have been
6 the Amend[ment] Act itself.
7 Accordingly, the tribunal in Clorox determined that
8 the test of foreseeability of the dispute must be to
9 a specific dispute, not a general dispute, and that is
10 identified by reference to a specific measure challenged
11 by an investor, or a claim that gives rise to an alleged
12 breach of the treaty. This decision was upheld and
13 endorsed by the Swiss Federal Tribunal in Clorox, which
14 is Exhibit RLA-142.
15 As emphasised earlier, the foreseeable dispute must
16 be specific, not general: one that is identified by
17 reference to the claim that gives rise to the alleged
18 breach of the treaty. Once the measure which
19 constitutes the alleged breach is identified, then the
20 factual context will determine when the adoption of that
21 claim was objectively foreseeable as more than a simple
22 possibility but a real prospect.
23 (Slide 32) Authorities such as Tidewater,
24 Exhibit RLA-93, and Mobil, Exhibit RLA-92,
25 Aguas del Tunari, Exhibit CLA-185, and Clorox,
[Page 178]
15:11 1 Exhibit RLA-142, illustrate that a measure giving rise
2 to the relevant treaty claim must be well defined and
3 apparent, even in circumstances when there are existing
4 disputes, or circumstances of general enmity between the
5 investor and the host state. Usually, to be
6 foreseeable, it's [if] a requisite sense of a specific
7 claim or measure is announced or in some other way
8 communicated by the government to the claimant or the
9 wider commercial world.
10 It's not enough to establish abuse to say that
11 a claimant should have anticipated or imagined
12 an adverse measure. Governments are free to act as they
13 see fit, and it is always possible for an investor to
14 imagine any number of adverse measures which
15 a government could conceivably adopt in respect of
16 a claimant's investment. This is why they seek
17 investment treaty protection, but it does not make it
18 an abuse to do so.
19 Accordingly, the critical question is whether the
20 specific measure which gives rise to the treaty claim
21 was objectively foreseeable as a reasonable prospect,
22 not a mere possibility at the time of the relevant
23 corporate restructuring.
24 The seminal case is Philip Morris v Australia,
25 Exhibit RLA-95; and the more recent cases of Clorox
[Page 179]
15:12 1 v Venezuela, Exhibit RLA-142, Natland v Czech Republic,
2 Exhibit CLA-235, Alverley v Romania, Exhibit RLA-71, and
3 Ipek v Turkey, Exhibit RLA-99, all evidence this
4 approach.
5 It is now common ground that the enactment of the
6 Amendment Act and this dispute before this Tribunal,
7 which emanates from the Amend[ment] Act, was not
8 foreseeable at the time when the Claimant made its
9 investment in Singapore. The references to this are in
10 paragraphs 132 and 241 of the Respondent's Reply, and
11 paragraph 37 of the Procedural Order No. 4 dated
12 24 May 2024, which is set out in Exhibit CLA-261, and
13 which need not be repeated here.
14 (Slide 33) As mentioned previously, the dispute
15 before the Tribunal was defined in section 6.1 of the
16 Claimant's Notice of Intent. This was further amplified
17 in paragraph 219 of the Claimant's Response. The Notice
18 of Arbitration was served on the Respondent, as said
19 before, on 29 March 2023, and incorporated the Notice of
20 Intent dated 20 October 2022 by way of paragraph 4 of
21 the Notice of Arbitration.
22 The Notice of Arbitration incorporates by reference
23 in its entirety the Notice of Intent, as I've already
24 said; and the Notice of Intent defined the dispute in
25 section 6, from line 447, when referring to the
[Page 180]
15:14 1 Notice of Arbitration:
2 "The dispute to be submitted to arbitration under
3 the AANZFTA arises out of the enactment of the 2020
4 Amendment Act on 13 August 2020. This Act terminated
5 the 2020 Arbitration Agreement and thereby breached
6 Articles 6 and 9 of the AANZFTA. The dispute between
7 the Claimant and the Commonwealth first arose on
8 13 August 2020 ...
9 The heart of the dispute is that the 2020
10 Arbitration Agreement made in writing and executed and
11 accepted by all parties on or about 8 July 2020 was
12 terminated by the Commonwealth in bad faith by the 2020
13 Amendment Act, in breach of the Expropriation and
14 nationalization obligations of Article 9 and all of the
15 obligations of Article 6 of AANZFTA."
16 (Slide 34) Further, at paragraph 221, the Claimant's
17 Response stated, referring to the Notice of Arbitration,
18 as follows:
19 "This dispute commenced with the passing of the
20 Amendment Act which is set out in exhibit ... C-1. The
21 date of the commencement of the dispute is the date of
22 the passing of the Amendment Act which was (as per the
23 NOA, at paragraph 2) 13 August 2020. The Claimant is
24 only seeking relief in this arbitration in respect of
25 the damages caused to it by the introduction of the
[Page 181]
15:15 1 Amendment Act."
2 The Respondent's admissions on the abuse of process
3 issue will now be discussed.
4 (Slide 35) First, in lines 3 and 4 at paragraph 131
5 of the Reply, the Respondent said:
6 "... the Claimant's position is that 'the date is
7 13 August 2020, the date of the Amendment Act' ..."
8 And then at lines 7, 8 and 9, the Respondent
9 submitted:
10 "... the common ground between the Parties is that
11 the relevant date to be used by the Tribunal to assess
12 'substantive business operations' in this proceeding is
13 the date nominated by the Claimant -- 13 August 2020."
14 Secondly, the Respondent made a further admission in
15 line 6 at paragraph 132 of the Reply, which was to say
16 that:
17 "All that matters is the position as at
18 13 August 2020."
19 (Slide 36) Thirdly, the Respondent admitted at
20 paragraph 144(a) (sic) of the Reply that "Zeph's
21 activities must be assessed as at 13 August 2020".
22 The effect of the Respondent admitting in
23 paragraph 131, and again at paragraphs 132 and 144 of
24 the Response on Preliminary Objections, that the date of
25 the "substantive business operations" test is
[Page 182]
15:17 1 13 August 2020, the date that the Amendment Act was
2 enacted, it's an admission by the Respondent that
3 13 August 2020 is the date on which this dispute
4 crystallised, the date of the breach. Because
5 13 August 2020 is the date of the breach, this is
6 plainly also an admission that the dispute arises out of
7 the Amendment Act on 13 August 2020, as contended for by
8 the Claimant. This is the dispute before the Tribunal
9 in this arbitration.
10 (Slide 37) Fourthly, as earlier noted, the
11 Respondent had, at paragraphs 132 and 241 of its Reply
12 on Preliminary Objections, previously admitted that the
13 Amendment Act was not foreseeable at the time of the
14 share swap and restructuring. Respondent's admission to
15 that effect is recorded in Procedural Order No. 4, dated
16 24 May 2024, at paragraph 37, which is Exhibit CLA-261,
17 which states as follows:
18 "However, the Tribunal understands that the
19 Respondent acknowledges that the fact of the passing of
20 the Amendment Act per se was not foreseeable to the
21 Claimant at the time of the January 2019 Restructure.
22 Indeed, referring to evidence already in the record and
23 in part furnished by the Claimant, the Respondent
24 concedes that the Amendment Act was not conceptualized
25 before March-May 2020; that the draft bill that would
[Page 183]
15:18 1 become the Amendment Act was not approved before
2 July 2020; and that the draft bills were not only kept
3 secret, but were accessible only to a handful of
4 high-level public officials."
5 It bears emphasising again that it's now common
6 ground that the enactment of the Amendment Act was not
7 foreseeable at that time when the Claimant made its
8 investment. All in all, it is a further example of the
9 Respondent taking points on jurisdiction which it should
10 never have taken, especially when it purported to enter
11 into arbitrations in good faith prior to the Amendment
12 Act, which I note in passing is a further reason why
13 this dispute was completely unforeseeable at the date of
14 the Amendment Act, with the consequence that very
15 significant amounts of Australian taxpayer money have
16 been wasted fighting points which were bad as a matter
17 of fact and law.
18 The definition of "dispute" in the Notice of
19 Arbitration clearly states that the dispute involves the
20 termination of the 2020 Arbitration Agreement and the
21 State Agreement Arbitration by the Amendment Act. The
22 dispute defined by the Claimant is the only dispute
23 which is before this Tribunal. All of the Claimant's
24 claims arise from the passing of the Amendment Act, and
25 nothing else.
[Page 184]
15:19 1 A plaintiff in a court proceeding sets out its
2 complaint, which the defendant must answer. It's not
3 open to a defendant to answer some different complaint.
4 Likewise in arbitration, it's not open to the respondent
5 to choose to answer a different complaint, other than
6 the complaint set out [by] the claimant in its notice of
7 arbitration.
8 The Respondent is purposely answering a different
9 complaint, as it is well aware. It has no answer to the
10 real complaint made by the Claimant.
11 (Slide 38) The law relevant to the issue of
12 foreseeability is discussed in detail in the Claimant's
13 Rejoinder, and previously in the Claimant's Response.
14 The references to such discussion may be found in the
15 Claimant's Rejoinder are, inter alia, as follows:
16 paragraph 71; paragraph 304; paragraphs 312 to 362;
17 paragraph 375; paragraphs 377 to 378; paragraphs 401 and
18 402; paragraphs 528 to 531; and paragraphs 535 to 547.
19 The Respondent's acceptance at paragraph 131 of its
20 Reply that all that matters is the position at
21 13 August 2020 is an admission that this is the date of
22 breach, or the date on which dispute subject to the
23 arbitration crystallised or commenced.
24 There was not and could not be any dispute over
25 measures in the Amendment Act until the Amendment Act
[Page 185]
15:21 1 was passed, on 13 August 2020. All claims the Claimant
2 makes in this arbitration are claims first brought into
3 existence by the Amendment Act. It follows, therefore,
4 that it is the measures in the Amendment Act that are
5 subject to this dispute. The Respondent, at
6 paragraph 241 of its Reply, has not admitted that the
7 Amendment Act was not foreseeable.
8 To recap, having accepted that the dispute arose out
9 of the Amendment Act passed on 13 August 2020, the
10 Respondent is not permitted to say now that the
11 Amendment Act is not a relevant dispute [for]
12 foreseeability purposes. The Claimant submits that the
13 first measure which breaches the treaty which is before
14 the Tribunal defines the dispute.
15 (Slide 39) The reference I make to "the first
16 measure" is from the Clorox v Venezuela arbitration
17 award dated 17 June 2021, which is Exhibit CLA-239, at
18 paragraph 450, which says that, while it is not
19 necessary for the dispute to have materialised:
20 "... it is important to identify the first measure
21 or practice constituting the alleged breach of the
22 Treaty and to determine whether its adoption or
23 implementation was foreseeable at the [crucial] date."
24 The first measure constituting a breach of the
25 treaty in this arbitration is the Amendment Act. All
[Page 186]
15:22 1 the claims made by the Claimant are a consequence of and
2 from the Amendment Act.
3 As the Respondent has effectively admitted both that
4 the Amendment Act dispute is the specific dispute before
5 the Tribunal in this arbitration [and] that the
6 Amendment Act as passed into law on 13 August 2020 was
7 not subjectively or objectively foreseeable to the
8 Claimant at the time of the share swap and the
9 restructuring in 2019, the critical date for the present
10 purposes, there can be no abuse of process.
11 In this arbitration, the Claimant's claims under
12 AANZFTA arise from a specific measure, being the
13 Amendment Act that gives rise to alleged breaches of the
14 treaty, which is the dispute before this Tribunal.
15 (Slide 40) In the Clorox arbitration, Venezuela
16 unsuccessfully appealed [to] the Swiss Federal Court
17 against the award of 17 June 2021. In dismissing
18 Venezuela's appeal, the Swiss Federal Court, in its
19 decision of 20 May 2022, which is Exhibit RLA-142,
20 agreed at paragraph 5.2.4 with the arbitral tribunal's
21 conclusions that for an abuse of process to be
22 established:
23 "... a restructuring must have been carried out with
24 a view to a specific dispute at a time when its
25 occurrence was foreseeable."
[Page 187]
15:24 1 And that:
2 "... is necessary to assess the criterion
3 foreseeability of a dispute in a restrictive manner ..."
4 Having accepted that the dispute arose out of the
5 Amendment Act passed on 13 August 2020, the Respondent
6 is not permitted to say now that the Amendment Act is
7 not a dispute for foreseeability purposes. That being
8 so, the Respondent's third preliminary objection in
9 relation to the alleged abuse of process is made
10 contrary to its own admissions and concessions. As
11 such, the third preliminary objection cannot be
12 maintained; it should therefore be dismissed. This
13 Tribunal must now dismiss the Respondent's abuse of
14 process objections.
15 I have prepared a table, Madam President, in respect
16 of the Respondent's [ad]missions on the main points, to
17 assist the Tribunal. If I can distribute a copy of that
18 table to the Tribunal and the Respondent, it may help
19 them consider the submissions that I've made.
20 I would also submit it may well be -- we've been
21 going for an hour and a half: it may be a good time to
22 have a 20-minute break.
23 THE PRESIDENT: Yes. We are not yet exactly at 1 hour 30,
24 but we can very well take the break now.
25 Is this part of your PowerPoint that you've just
[Page 188]
15:25 1 printed or is it something else, what you are now
2 handing out?
3 MR PALMER: No, it's not part of the PowerPoint. We weren't
4 able to put it in that format.
5 DR KIRK: We did upload it yesterday, though, as
6 a demonstrative.
7 THE PRESIDENT: Oh, that's the demonstrative that you
8 uploaded yesterday?
9 MR PALMER: Yes.
10 THE PRESIDENT: Fine. Good.
11 MR PALMER: Is it okay?
12 THE PRESIDENT: Yes. The demonstrative has nothing in --
13 your opponents have seen it yesterday and have not
14 raised any issue, and I don't see any, because it just
15 restates matters that are in the record, if I understand
16 it correctly.
17 MR PALMER: That's right.
18 THE PRESIDENT: Just not found in this form in the record.
19 That's fine.
20 Should we take the break now?
21 MR PALMER: Yes.
22 THE PRESIDENT: Yes? Fine. Let's take 20 minutes, which
23 means we would resume at -- let's say 3.50, a little bit
24 more than 20.
25 MR PALMER: Okay.
[Page 189]
15:26 1 (3.27 pm)
2 (A short break)
3 (3.51 pm)
4 THE PRESIDENT: So we are ready.
5 MR PALMER: Madam President, perhaps I can continue.
6 THE PRESIDENT: Yes, please.
7 MR PALMER: Firstly, I must apologise: when you asked me
8 about investor/investment earlier, I went back to my
9 work and I left out two paragraphs of my submission.
10 On reviewing it, there are two items that I should
11 bring to your attention, which I intended to bring to
12 your attention. And that was: in our Rejoinder in
13 paragraphs 147 to 157 and in our Response,
14 paragraphs 271 to 247, we set out all the information
15 about contribution, investor et cetera. At that time
16 I was about to refer the Tribunal to those paragraphs.
17 THE PRESIDENT: Thank you.
18 MR PALMER: Thanks very much.
19 So in essence, the Claimant's position is that the
20 facts are agreed, and the law should be applied to those
21 agreed facts.
22 Moving on, the Claimant is here today to establish
23 its right to have its claims heard. It's not without
24 some risk that the Claimant and even I, as the
25 Claimant's representative, are here.
[Page 190]
15:52 1 I refer to the Amendment Act, which requires
2 Clive Palmer and the Claimant's subsidiaries to
3 indemnify the State against any losses, costs or
4 liabilities, inter alia, including those arising from
5 international treaties or international law, and for any
6 loss or cost or liability relating to the passage of the
7 Amendment Act. These are in Sections 14, 15, 22 and 23
8 of Exhibit C-1, being the Amendment Act itself.
9 I say these things because the Tribunal needs to
10 recognise the extraordinary and unprecedented
11 circumstances of this case and the Respondent's
12 objections, which are all an ill-founded attempt to
13 avoid liability for damage caused to the Claimant by the
14 Amendment Act. The Respondent's objection are
15 themselves, in our view, an abuse of process, especially
16 in light of their own admissions, which they must have
17 known before they lodged their application for
18 a preliminary objection.
19 The Respondent's objections are consistent with the
20 respondent's conduct as can be seen in other cases, such
21 as Timor-Leste, and including Exhibit CLA-151 and
22 Exhibits C-55 to C-61, and all of the rest of the
23 matters that Claimant has raised before the Tribunal in
24 the Claimant's interim measures application. The
25 Claimant is nevertheless here to responsibly answer the
[Page 191]
15:54 1 objections that the Respondent has brought to the
2 Tribunal's jurisdiction.
3 The Tribunal has jurisdiction to hear the Claimant's
4 claim. Claimant's claims all start in time, as we've
5 said, from the passing of the Amendment Act on
6 13 August 2020 by the Western Australian Government.
7 The Claimant brings its claims because the Amendment
8 Act destroys the rule of law, and we need to protect the
9 rule of law and our system of international dispute
10 resolution by arbitration, which protects over
11 $28 trillion of world trade and, importantly, promotes
12 peace and cooperation among nations.
13 The Claimant's Response and Rejoinder clearly set
14 out the Claimant's case. The Tribunal must apply the
15 law to the facts in reaching its conclusion, dismiss the
16 objections and grant the Claimant the relief it seeks.
17 The Respondent, in contrast to the Claimant, has not
18 provided any facts, but has made admissions upon which
19 the Claimant relies. The Respondent has always known
20 the matters the subject of the admissions, and could
21 have made them earlier; indeed, it was obliged in good
22 faith to make them earlier to the Tribunal. If the
23 Respondent was undertaking this arbitration in good
24 faith, it would have done so.
25 It's helpful to consider the impact of the
[Page 192]
15:55 1 Respondent's admissions on this arbitration in terms of
2 costs, wasted resources, increased damages in the form
3 of interest. If the Respondent had not taken its
4 objections to jurisdiction, which it should not have
5 done, the Claimant's claim for interest alone would have
6 not increased by $12 billion, Respondent would not have
7 incurred millions of dollars of cost at taxpayers'
8 expense, and the Tribunal would not have had to deal
9 with all the matters it has since the making of the
10 Respondent's objections in 2023.
11 The Claimant respectfully submits that it's
12 important for future arbitrations that this Tribunal
13 give a clear message that this type of delay, especially
14 when we consider Respondent's admissions and conduct, is
15 not acceptable in investor-state arbitrations.
16 The Tribunal should not allow itself to be
17 sidetracked or misled by the Respondent. It is not
18 necessary for the Tribunal to go beyond the admissions
19 that the Respondent has made.
20 The law that is applicable to those admissions and
21 the objections demonstrates that the appropriate course
22 is for the Tribunal to dismiss the Respondent's
23 objections and grant the Claimant the relief it seeks,
24 as set out in paragraph 724 of the Rejoinder, with the
25 proviso that costs should be awarded to the Claimant on
[Page 193]
15:56 1 an indemnity basis.
2 The Claimant's submission is that it is properly
3 documented the Claimant's case in the Claimant's
4 Response, Rejoinder, and the Claimant's expert reports,
5 witness statements and the references to the law relied
6 upon. The Claimant respectfully submits that the
7 Tribunal should forthwith dismiss the Respondent's
8 objections and grant the Claimant its relief.
9 If the Tribunal nevertheless forms the view that it
10 cannot dismiss the Respondent's objections solely after
11 considering the Respondent's admissions and the law, the
12 Tribunal must read and consider all the material filed
13 and relied upon by the Claimant in this arbitration,
14 especially the Response and Rejoinder.
15 To assist the Tribunal in that process, and to the
16 extent that it is necessary, I shall now take the
17 Tribunal to some of the key factual exhibits on the
18 record to prove the Claimant's case.
19 This is another point at which the point raised
20 above can be made again: that the treaty breaches giving
21 rise to the Claimant's claims to be arbitrated are only
22 those which commenced with and are caused by the
23 Amendment Act.
24 As previously mentioned in support of the position
25 on the preliminary objections, the Claimant has produced
[Page 194]
15:58 1 a large amount of factual evidence. This contrasts with
2 the Respondent's reliance on so-called "expert"
3 evidence, which amounts to little more than irrelevant
4 speculation and hypothesis. It is for this reason that
5 the Claimant maintains that Respondent's expert
6 statements are simply not relevant to the Tribunal's
7 task in this jurisdictional phase. Hypothesis and
8 generalisations simply cannot override or controvert
9 clear factual evidence of what actually happened, as
10 provide by the Claimant.
11 Investor/investment.
12 To start, the evidence establishes that the Claimant
13 is a Singapore entity with an investment in Australia.
14 The claim is therefore, prima facie, an investor with
15 a covered investment under the treaty. To establish
16 jurisdiction, the Claimant is required to prove it is
17 a company incorporated in Singapore.
18 (Slide 42) Exhibit C-70 is the Claimant's
19 certificate of incorporation as a Singaporean company.
20 This is not disputed, and satisfies the requirement of
21 Articles 2(d) and 2(f) of AANZFTA: that the Claimant is
22 a juridical person of a party.
23 The Claimant is also required to establish that it
24 has made an investment. The Rejoinder addressed the
25 meaning of the word "investment" in the context and the
[Page 195]
15:59 1 case authorities on this issue. In that regard, I refer
2 the Tribunal to the Rejoinder at paragraph 37. For the
3 present purposes, it's sufficient to note that the
4 Claimant's evidence establishes that it acquired and
5 owns shares in Mineralogy.
6 (Slide 43) The share purchase agreement,
7 Exhibit C-562, shows the Claimant's properly and
8 legitimately purchased shares in Mineralogy from
9 Mineralogy International, and the Respondent does not
10 dispute this. As the share purchase agreement sets out,
11 in consideration for the share transfer, the Claimant
12 issued to Mineralogy International 6,002,896 shares,
13 fully paid, in the Claimant.
14 (Slide 44) Exhibit C-63 at page 158 sets out
15 a meeting on 29 January 2019 at 10.00 am. The
16 Claimant's then directors, Mr Mashayanyika as chair of
17 the meeting, myself and Mr Tan, resolved to issue to
18 Mineralogy International Limited new ordinary shares in
19 the Claimant as consideration for the purchase of the
20 fully paid ordinary shares in Mineralogy.
21 The number of ordinary shares to be issued was the
22 same, and had the same value of the shares that were
23 being purchased. All necessary actions to issue the new
24 shares and to change them took place contemporaneously
25 on settlement. All other resolutions to properly
[Page 196]
16:00 1 document and approve the transaction can be found in
2 a document known as annexure A which was attached to the
3 Notice of Intent; see Exhibit C-63 at pages 153 to 168.
4 There can be no dispute -- and the Respondent
5 accepts, as was admitted in paragraph 64 of the Reply --
6 that the transaction was both lawful and effective. The
7 Claimant acquired the Mineralogy shares and provided
8 consideration to Mineralogy International Limited for
9 that purchase.
10 It is recalled that the meaning of "investment" in
11 AANZFTA under Article 2(c) of Chapter 11 is very broad
12 and encompasses "every kind of asset", including shares.
13 The evidence is clear that the Claimant, a Singaporean
14 company, owns the shares in Mineralogy, an Australian
15 company. The Claimant paid a consideration of
16 $6,002,896 for these shares, the same amount as the face
17 value of the Mineralogy shares; see Exhibit C-63,
18 annexure A, exhibits 11, 14 and 16.
19 There was nothing nefarious, dishonest or even
20 unusual about this transaction. This was a properly
21 documented, legitimate share swap, a common mechanism
22 used when structuring a corporate group. The share swap
23 most certainly was not a sham, as alleged by the
24 Respondent.
25 In short, the evidence establishes that the Claimant
[Page 197]
16:02 1 meets all the definitions of an "investor" under the
2 treaty, and has an investment in Australia. The
3 Respondent is unable to rebut the evidence and so, as
4 mentioned earlier, has resorted to strained
5 interpretations of the phrase "make ... an investment"
6 in Article 2(d) of AANZFTA. This point is addressed
7 separately, and discussion of the law, in the Rejoinder.
8 But suffice to say the law is clear: the Claimant's
9 acquisition of Mineralogy's shares is sufficient to meet
10 any requirement of the Claimant to make an investment.
11 I will further visit this matter in our closing and
12 invite the Tribunal to make any questions they may have
13 in this regard.
14 Ongoing contribution.
15 If we consider ongoing contributions in addition to
16 the acquisition of the Mineralogy shares, the Claimant
17 has not been a passive investor in Mineralogy. It has
18 continued to invest both in terms of returns and active
19 management.
20 Under AANZFTA, returns that are invested are
21 classified as a separate investment in accordance with
22 Article 2(c). Returns are defined in Article 2(j) as
23 amounts yielded by an investment, including profits and
24 capital gains.
25 (Slide 45) At paragraph 4.5 of the first Birkett
[Page 198]
16:03 1 statement is a table which highlights the earnings and
2 reserve balances of Mineralogy's consolidated financial
3 accounts for the years 2019 and 2020, which shows the
4 retained earnings in the company.
5 Mr Birkett confirms in his supplementary report,
6 dated 2 August 2024, that retained profits may be left
7 in a subsidiary company by the parent and used by the
8 subsidiary company to further its activities. It's
9 a normal business parlance. This is particularly
10 an investment by the parent in the subsidiary.
11 It is also clear that by making more funds available
12 to Mineralogy, it was also in the best interests of
13 Mineralogy, and of the Claimant and its investment.
14 Moreover, in accordance with the plain words of
15 Article 2(j) of AANZFTA, these retained profits are
16 indeed profits that are yielded by the investment,
17 profits shared by Mineralogy as a result of its
18 activities. These profits are available to be
19 distributed to Mineralogy's sole shareholder, the
20 Claimant, through cash or other equivalents, as
21 confirmed by Mr Birkett in his second report.
22 (Slide 46) The Claimant must approve the annual
23 accounts of Mineralogy in which a decision to retain
24 profits is formalised. And the Claimant actively
25 approved retention of these profits of Mineralogy
[Page 199]
16:05 1 instead of paying a dividend to the Claimant. The
2 Claimant did so in 2019 and 2020. The resolutions
3 signed by the Claimant are exhibited in Exhibit C-546
4 for 2019 and Exhibit C-547 for 2020.
5 (Slide 47) Exhibit [C-]563, clause 22.3 -- as
6 I explained in detail in my sixth witness statement,
7 clauses 22.3 and 29 of the Mineralogy constitution
8 permit me, as a director of Mineralogy, to act in the
9 best interests of the Claimant, which in any event
10 always aligned with Mineralogy's best interests. It is
11 in Mineralogy's best interest to have more funds
12 available to pursue its activities, and not to have to
13 borrow money.
14 (Slide 48) As I confirmed in paragraph 39 of my
15 sixth witness statement:
16 "In deciding to recommend a dividend and/or
17 approving the 2019 [or] 2020 Accounts, I was acting as
18 a director of Mineralogy and the Claimant for the
19 benefit of the Claimant in accordance with Rule 22.3 of
20 the Mineralogy Constitution. At all times I acted in
21 the best interests of the Claimant to ensure [that]
22 profits of Mineralogy would be reinvested in Australia
23 to enhance the value of the Claimant's investment in
24 Mineralogy's business and Mineralogy shares owned by the
25 Claimant."
[Page 200]
16:06 1 It is clear that the retention of profits and/or
2 payment of dividends was undertaken in the Claimant's
3 and Mineralogy's best interest. The dividend of just
4 $8 million declared in 2020 was to pay off intra-group
5 loans between the Claimant and Mineralogy. This was
6 clearly done in the interests of both the Claimant and
7 Mineralogy.
8 The act of approving the Mineralogy accounts with
9 retained profits, and thus forgoing a dividend, is an
10 act of investing the yields under the treaty. On the
11 plain words of the treaty, the retained profits
12 constitute separate investments in Mineralogy.
13 I emphasise the use of the word "retained" profits,
14 which means the profits were made by the company and
15 retained within the company. And that refers directly
16 to the treaty provision. I think that's an important
17 point: they were retained profits. This meets both the
18 intent and the plain meaning of the treaty provision,
19 and it is the only plausible reading of AANZFTA.
20 Thus, the Claimant not only made an initial
21 investment in Mineralogy, through its purchase of the
22 shares from Mineralogy International Limited: it also
23 made further investments through approving the retention
24 of profits, retained earnings to be used by Mineralogy
25 to further its investments in Australia.
[Page 201]
16:07 1 I'll now deal with the question of active
2 management.
3 In the Claimant's Response and Rejoinder on
4 Preliminary Objections, the Claimant provides details of
5 a number of senior executives that have roles in both
6 the Claimant and Mineralogy. In that regard, I refer to
7 the Response at paragraphs 74 to 81 and paragraphs 248
8 to 249, [and] the Rejoinder at paragraphs 120 to 127.
9 The economic reality of these dual roles is that the
10 Claimant is constantly engaged with and involved in
11 Mineralogy's operations. It is also well accepted that
12 active management of a subsidiary includes appointing
13 and removing directors. Under Mineralogy's
14 constitution, the Claimant has the power to appoint and
15 remove Mineralogy's directors, and it does so as part of
16 its active management of Mineralogy. In fact, all
17 current directors of Mineralogy have been appointed by
18 the Claimant.
19 (Slide 49) C-522 shows the current directors of
20 Mineralogy. All those directors were appointed by the
21 Claimant. It is clear that Claimant actively manages
22 investments in Australia and is not a passive investor.
23 We can further consider the denial of benefits
24 [objection]. The factual evidence in the record clearly
25 establishes the existence of the Claimant's substantive
[Page 202]
16:09 1 business in Singapore.
2 (Slide 50) Exhibit C-77 is a copy of the Claimant's
3 business profile in Singapore, held by the Singapore
4 Accounting and Corporate Regulatory Authority, known as
5 ACRA. It shows the Claimant's registered office is at
6 80 Genting Lane, Singapore. This office is open during
7 normal business hours.
8 The same exhibit shows the Claimant has seven
9 directors, two of whom are resident in Singapore:
10 Mr Quek Ser Wah Victor -- it's "Victor Quek" actually,
11 from a European point of view, and it should be
12 "Ms Loh Chan".
13 The same exhibit also shows that the Claimant's
14 auditors are Singapore Assurance PAC, and that the
15 Claimant's company secretaries are Yee Koon Daphne Ang
16 and Zhe Lei Tan, both of Allen & Gledhill in Singapore.
17 (Slide 51) The relevant government agencies have
18 issued the Claimant with all licences required to
19 conduct its business. Copies of these licences are
20 recorded in Exhibit C-94. These licences are issued to
21 the Claimant itself, not to the joint venture or
22 Kleenmatic. It's the Claimant that holds the required
23 licences. The Claimant employs the staff. It directly
24 receives government [subsidies]. And the Claimant
25 itself pays all employee-related contributions and
[Page 203]
16:10 1 wages. The Respondent cannot overcome these facts; they
2 are supported by clear evidence.
3 (Slide 52) Exhibit C-95, page 3: the Claimant also
4 has in place relevant insurance policies for public
5 liability, workplace accident and general business
6 insurance. These policies are on record and are
7 exhibited at Exhibit C-95. Again, it is the Claimant
8 who holds these insurance policies. The Claimant's
9 business is in Singapore. It is clearly a substantive
10 business, and not a sham as alleged by the Respondent.
11 At Exhibit C-96, there is a bundle of engagement
12 letters of various professional service providers, from
13 PwC to Allen & Gledhill. To suggest that such reputable
14 firms would be engaged with a sham or a façade is highly
15 insulting at best, and defamatory at worst. When such
16 allegations are made and not particularised, and are
17 without evidence, it represents sharp practice and is
18 embarrassing.
19 (Slide 53) The Claimant also produces annual
20 independent audited accounts on a stand-alone basis,
21 which have all been provided to the Tribunal in
22 Exhibits C-79 and [C-81], together with the consolidated
23 accounts.
24 (Slide 55) In 2019 to 2022, the most recent audited
25 accounts are at Exhibit [C-]579.
[Page 204]
16:12 1 (Slide 53) Exhibit [C-]79: in June 2019, the
2 Claimant had total assets worth around SGD 8.2 million.
3 The cost of investment in Mineralogy is recorded at
4 SGD 5,803,894; Exhibit [C-]79, page 16. This figure was
5 independently audited by Hall Chadwick as at June 2020,
6 shortly before the Amendment Act was passed.
7 (Slide 54) The Claimant's assets, excluding
8 Mineralogy shares, had a value of SGD 19.1 million;
9 Exhibit [C-]81, page 7. Not only does this show
10 a substantive business: it shows the Claimant's business
11 was growing at the time the Amendment Act was passed.
12 (Slide 55) Exhibit C-579: the business continues to
13 grow, with assets valued at over SGD 173 million, and
14 income now at over SGD 12 million. This demonstrates
15 the Claimant's real -- very real -- and genuine
16 connection with Singapore since it was first
17 incorporated.
18 These accounts also provide detail of subsidies
19 received by the Claimant from the Singapore Government
20 during the Covid-19 pandemic. This in itself is
21 sufficient to combat any assertion that the Claimant is
22 a sham or lacks any genuine connection to Singapore. If
23 the Claimant were a shell or a sham, as alleged by the
24 Respondent, with no genuine connection to the business
25 in Singapore, it would have not received such
[Page 205]
16:13 1 significant subsidies from the Singapore Government
2 during the period.
3 As demonstrated by the discussion of the law on
4 denial of benefits in the Rejoinder at paragraphs 276 to
5 285, this information alone -- indeed, much less than
6 this -- has been deemed sufficient to establish
7 a substantive business.
8 (Slide 56) But there is far more evidence in the
9 record of the Claimant's business in Singapore.
10 Note 12(b) of Exhibit C-80: the record establishes that
11 the Claimant first purchased three engineering companies
12 for the sum of $3.6 million, which is in note 12(b) of
13 the consolidated accounts of the Claimant for the year
14 ended 30 June 2019. These engineering companies were
15 connected to Singapore's lucrative shipping industry,
16 [which] the Claimant was interested in exploring and in
17 which it saw wider synergies within the Mineralogy
18 Group. The business, employing around 60 people in
19 total, had a significant potential.
20 When the Claimant purchased these businesses, they
21 had a combined revenue of around $4.5 million per year;
22 see the Response at paragraph 430, and Exhibits C-542,
23 C-543 and C-544. However, shipping was an industry that
24 was struck particularly hard by the Covid-19 pandemic,
25 and the business ceased after the Amendment Act was
[Page 206]
16:15 1 passed in October 2020.
2 While the engineering companies were adversely
3 affected by the Covid pandemic, and were liquidated in
4 2021, they were still operating in August 2022. They
5 are no less a business activity because they failed.
6 Doing business entails a risk, and a financial failure
7 is evidence of that risk.
8 (Slide 57) On 24 January 2020, the Claimant
9 established a joint venture, having a 90% interest in
10 the joint venture. The joint venture is a mechanism
11 where each party has a direct interest in the business
12 themselves and is responsible for parts of the business.
13 The joint venture agreement, Exhibit C-469, sets out the
14 terms on which the joint venture operated, as required
15 under the agreement.
16 The Claimant, as the manager and senior joint
17 venture partner, took over all aspects of managing the
18 business, as defined in the joint venture agreement,
19 inter alia, in clauses 12, 14, and the joint venture
20 agreement itself.
21 The Claimant had a 90% interest in all joint venture
22 property and is liable for 90% of all the joint
23 venture's costs; see clause 5 of the joint venture
24 agreement.
25 The Claimant was the only joint venture partner
[Page 207]
16:16 1 authorised to enter into contracts on behalf of the
2 joint venture; see clause 9 of the joint venture
3 agreement.
4 (Slide 58) As stated previously, the Claimant
5 established a 90% interest in the joint venture. Most
6 of the employees of a previously existing business were
7 transferred to the Claimant in accordance with clause 24
8 of the joint venture agreement. Those previous
9 businesses ceased to exist.
10 (Slide 59) Exhibit C-88 contains a staff report
11 which shows the Claimant employed around 150 people at
12 the time the Amend[ment] Act was passed. The record
13 also contained the employment contracts of 146 employees
14 that were transferred from the minority joint venture
15 partners to the Claimant shortly after the joint venture
16 agreement was entered into.
17 Exhibits R-618 to R-763: currently the Claimant
18 employs around 300 people in Singapore. As a result of
19 employing so many people, the Claimant has made
20 significant contributions on behalf of those employees
21 to the Singapore Government's superannuation scheme, the
22 Central Provident Fund, or CPF, as it is known. The
23 documents at Exhibits C-89 to C-93 provide evidence in
24 detail of these payments. In the financial year ending
25 30 June 2021 -- it was the financial year in which the
[Page 208]
16:18 1 Amendment Act was passed -- the Claimant paid employee
2 contributions to the CPF of more than $500,000.
3 The Claimant operates a successful cleaning business
4 in Singapore. The fact that it, inter alia, employs
5 cleaners simply shows it's a genuine business. There is
6 nothing in Article 11 of the AANZFTA that requires the
7 Claimant to operate any type of business or employees in
8 Singapore. And the case authorities are clear that
9 a substantive business for denial of benefits purposes
10 does not have to be in the same sector as the
11 investment.
12 The fact is the Claimant operates a genuine,
13 profitable and substantive business in Singapore, and
14 has done so for the last five and a half years. The
15 Claimant's business has a real, genuine link to
16 Singapore, and it has expanded since January 2019, when
17 the Claimant commenced operations in Singapore. Each
18 year it has expanded and increased its genuine links in
19 Singapore.
20 I will now illustrate to the Tribunal the Claimant's
21 links to Singapore and its employees by quickly showing
22 a short video of the Claimant's Chinese New Year party
23 which was held in Singapore earlier this year. The link
24 was provided in paragraph 275 of the Rejoinder.
25 (Video played)
[Page 209]
16:22 1 This video shows that the connection to Singapore is
2 real, genuine and growing. It shows the Claimant's
3 annual Chinese New Year party earlier this year. You
4 can see here that those who are employed by the Claimant
5 in Singapore work day-in and day-out, for the Claimant
6 in Singapore.
7 Present at the party are Victor Quek and
8 Ms Loh Chan, the Claimant's Singapore-based directors,
9 as well as Mr Declan Sheridan and Bernard Wong, two of
10 the Claimant's Australian-based directors. Mr Sheridan
11 is also Mineralogy's head of finance and financial
12 relationships.
13 In considering the issues before the Tribunal, it is
14 important for the Tribunal to always remember that the
15 well-established view in Western Australia prior to the
16 Amendment Act was that the State Agreement would never
17 be changed unilaterally by Parliament. This is because
18 no such agreement had been changed in the 70-year
19 history, because governments over generations had given
20 representations to international investors that the
21 Government would never unilaterally change a state
22 agreement. State agreements had provisions in them that
23 could only be amended by consent.
24 (Slide 61) The Tribunal should read the review paper
25 of the former Premier of Western Australia,
[Page 210]
16:23 1 Mr Colin Barnett, to properly be informed on this
2 matter. Mr Barnett's paper was published in the
3 Australian Mining and Petroleum Law Association Yearbook
4 in 1996, where he states, in Exhibit C-104, under the
5 heading "Project security":
6 "Whereas other statutes are able to be changed at
7 will, the provisions of State Agreements are only able
8 to be changed by mutual agreement in writing between the
9 parties to each State Agreement... State Agreements
10 therefore provide certainty that ground rules for the
11 life of each agreement project cannot be changed
12 unilaterally."
13 The former Premier goes on to say, under the heading
14 "Inviolability", at page 321 of Exhibit C-104:
15 "Unlike other statutes of Western Australia that can
16 be changed by Parliament, State Agreement provisions can
17 only be amended by mutual agreement by the parties
18 thereto."
19 The Respondent placed 865 exhibits on record,
20 consisting of 7,173 pages of exhibits. 119 of those
21 exhibits have no relevance in respect of the Claimant in
22 this arbitration, and it's curious why the Respondent
23 has filed them.
24 Notwithstanding having regard to the Respondent's
25 admissions and the Claimant's uncontested evidence, the
[Page 211]
16:24 1 position is that when the law and [facts] are applied,
2 the Respondent's objections are all defeated.
3 (Slide 62) It's curious that the Respondent makes
4 a series of unfounded and unparticularised allegations
5 against me and others in respect of a sham. I have
6 a long-standing commitment to public service and
7 a proven track record in business of 40 years.
8 (Slide 63) Exhibit [C-]65. Indeed, it was,
9 inter alia, these very qualities that led to me being
10 recognised in 2012, by the Australian Government
11 magazine, as the "Entrepreneur of the Decade", as set
12 out in Exhibit [C-]65.
13 (Slide 64) And becoming the fifth wealthiest
14 Australian, as confirmed in the Australian Financial
15 Review "Rich List", Exhibit C-481. These same qualities
16 culminated in the Sino Iron Project, which involves the
17 largest investment in the world made by China outside of
18 China.
19 I have now been involved in business for more than
20 40 years. Projects which I have initiated or controlled
21 during that time have contributed to the direct or
22 indirect creation of more than 40,000 jobs in Australia,
23 and more than $10 billion of investment in the
24 Australian economy. These matters are set out in
25 paragraph 17 of my fifth witness statement.
[Page 212]
16:25 1 (Slide 65) I was Adjunct Professor at the [Faculty]
2 of Law and Business at Deakin University in Victoria,
3 Australia from 1 August 2002 till 1 August 2006, and
4 again from 12 February 2009 to 1 February 2011 (C-64).
5 I was appointed Adjunct Professor at Bond University in
6 Queensland in June 2008 (C-577).
7 (Slide 66) I was also elected a "Living National
8 Treasure" of Australia, and declared as such by a poll
9 conducted by the National Trust of Australia (C-66).
10 The award is given following selection by a popular vote
11 of the people of Australia.
12 (Slide 67) Following the largest swing of 50.3% in
13 Australian political history, I was elected as a Member
14 of the House of Representatives of the 44th Parliament
15 of Australia. I was leader of the party, and we held
16 a balance of power in the 44th Parliament.
17 During my time as a Member of the House of
18 Representatives, I served on the Parliamentary
19 Committees: the Committee on Economics from
20 4 December 2013 till 9 May 2016, the Standing Committee
21 on Infrastructure and Communications from
22 4 December 2013 to 13 October 2015, and the Joint Select
23 Committee on Trade and Investment from 2 October 2014 to
24 9 May 2016. I retired from Parliament in 2016.
25 The Parliament of Australia acknowledged my service
[Page 213]
16:27 1 to the country and contribution to Parliament. That
2 recognition was issued in writing under the authority of
3 the Speaker of the House of Representatives and the
4 President of the Senate. You can see Exhibit C-67 for
5 a copy of that.
6 (Slide 68) The Australian Financial Review, which is
7 Australia's leading financial newspaper, publishes each
8 year a "Power Index". And in 2014, I was second in the
9 Power Index, after then Prime Minister Tony Abbott
10 (C-576).
11 (Slide 69) Until May 2017, I was the world
12 secretary general of the World Leadership Alliance,
13 which is part of the Club of Madrid, an institute of the
14 largest number of former heads of government of any
15 organisation currently operating in the world. The
16 World Leadership Alliance's objective is to support and
17 foster democratic values and the rule of law throughout
18 the world (C-68).
19 During my term as secretary general of the World
20 Leadership Alliance I worked closely with our president,
21 Wim Kok, former prime minister of the Netherlands from
22 1994 to 2002; vice president Jennifer Mary Shipley,
23 former prime minister of New Zealand from 1997 to 1999;
24 and Vaira Vike-Freiberga, former president of Latvia
25 from 1999 to 2007.
[Page 214]
16:28 1 The chairman of the World Leadership Alliance in the
2 Club of Madrid was the former president William Clinton,
3 president of the United States from 1993 to 2001.
4 During my involvement with the World Leadership
5 Alliance, over 90 distinguished, democratically elected
6 former presidents and prime ministers from 60 countries
7 assisted in spreading democracy and the rule of law
8 throughout the western and eastern world.
9 (Slide 69) I'm also a former director of the
10 John F Kennedy Library Foundation of Boston, in the
11 United States of America (C-69).
12 In any event, especially following the Respondent's
13 admissions, the Claimant takes issue with all of
14 Respondent's expert evidence as not being relevant or
15 factually supported, and for that reason the Claimant
16 has not sought to cross-examine any of the Respondent's
17 witnesses.
18 When discussing what would become the Amendment Act
19 on 23 May 2020, a text exchanged between John Quigley,
20 the Attorney-General of Western Australia, and
21 Mark McGowan, the then Premier (C-432), concluded with
22 the agreement that absolute secrecy was of the essence
23 for a "very small legislative amendment" that would be
24 "a poison pill for the fat man", Mr Palmer.
25 The Amendment Act was passed in extreme urgency
[Page 215]
16:30 1 through the Western Australia legislature, between
2 5.00 pm on 11 August 2020 and 13 August 2020, devoid of
3 the usual committee processes.
4 The Claimant and Mineralogy were unaware of
5 Quigley's idea of legislative intervention: texts to the
6 Premier on 23 May 2020. The Claimant and Mineralogy did
7 not know that the idea had been developed through June,
8 July and August 2020 by a select group of Western
9 Australian officials who were secretly promulgating the
10 Amendment Act.
11 Having had the idea of the Amendment Act in
12 May 2020, Western Australia was pretending to engage
13 with the State Agreement Arbitration arbitral process,
14 while at the same time going to extreme lengths to
15 maintain secrecy of its real agenda: the promulgation
16 and passage of the Amendment Act to terminate that very
17 process. The Respondent's Statement on Preliminary
18 Objections has not mentioned this subterfuge at all.
19 Respondent has not put forward any evidence from
20 Mr Quigley or Mr McGowan, or any other Western
21 Australian government official, to otherwise explain
22 Western Australia's actions in May [to] August 2020, or
23 at any other time.
24 In those circumstances, the Claimant submits that,
25 leaving aside the Respondent's admissions regarding lack
[Page 216]
16:31 1 of foreseeability, it must inevitably be inferred that
2 Western Australia knew that the measure giving rise to
3 this treaty claim was not foreseeable, and took
4 deliberate steps to ensure that it remain so. They must
5 have known it was not acting honestly in misleading the
6 Claimant, in breach of the arbitration agreement, in bad
7 faith. The Respondent's objections have always been
8 unarguable in light of the admissions, as it has always
9 known.
10 Having successfully pulled off, as they say,
11 a "Trojan horse" manoeuvre, as per Quigley's text, to
12 pass what Quigley and McGowan acknowledged at the
13 12 August 2020 media conference to be an extraordinary
14 measure, the Respondent cannot then be heard to say that
15 the Claimant should have seen the Amendment Act, or
16 something like it, was coming along.
17 The Respondent's plea of bad faith and abuse of
18 process by the Claimant is the height of hypocrisy if
19 the Respondent's own duplicity to connect the situation
20 and deceive the Claimant is considered. In other words,
21 Western Australia has gone to considerable lengths to
22 keep the prospect of any amendment to the State
23 Agreement adverse to Mineralogy a secret, while now
24 maintaining that Claimant should have expected that it
25 was likely that such extraordinary, unprecedented
[Page 217]
16:32 1 legislation be passed.
2 The Respondent's position is incongruous and
3 unsupportable. The Respondent has always known that the
4 Claimant had a substantive business in Singapore and was
5 an investor with substantial investment in Australia.
6 Determining these preliminary objections is therefore
7 very straightforward. The Respondent's case simply
8 cannot succeed when the correct law is applied to the
9 established facts.
10 In conclusion, I respectfully submit that in its
11 written and oral submissions, the Claimant has shown
12 that it is uncontested that the Claimant has
13 legitimately acquired the shares in Mineralogy, [and]
14 has also reinvested significant amounts into Mineralogy
15 in the form of retained profits, which are themselves
16 investments. There is and can be nothing more required
17 to make an investment or be an investor under AANZFTA,
18 on the plain language of the treaty, properly
19 interpreted.
20 The Claimant is an investor with an investment and
21 is entitled to bring this claim. This objection must be
22 dismissed. The Claimant has already shown beyond any
23 shadow of doubt that it has, and had at all relevant
24 times, a real, genuine business and link with Singapore.
25 It is not a shell company but a substantial entity that
[Page 218]
16:33 1 employees hundreds of people, operates a large and
2 profitable business on a day-to-day basis, and has
3 Singaporean-based directors and company secretaries that
4 ensure its Singapore operations continue to grow and
5 prosper.
6 The Respondent's "sham" allegations are deeply
7 flawed and must be rejected. The Claimant's business
8 operations are substantive by any measure, and far
9 exceed the standards set in the settled jurisprudence on
10 this issue. There is simply no basis for the Respondent
11 to deny the benefits under the treaty. This objection
12 must be rejected.
13 Finally, the Amendment Act was not foreseeable, nor
14 was the dispute which emanates from it. This should be
15 agreed. This dispute arises solely out of the Amendment
16 Act. The Claimant's claims are based on it and nothing
17 else. It is impossible to define the dispute in any
18 other way, and impermissible to suggest that the dispute
19 is some broad, nebulous disagreement or discord between
20 the parties.
21 The law, particularly the Swiss law, is clear: the
22 specific dispute must be reasonably foreseeable. It was
23 not. The objection must fail.
24 The law is clear; the facts are established. The
25 Tribunal should not hesitate to dismiss the preliminary
[Page 219]
16:35 1 objections and see them for what they are: a last-ditch
2 attempt to avoid liability for an unprecedented,
3 draconian and, quite frankly, shocking Amendment Act
4 which sought to shatter the rule of law and abuse
5 political power to strip the Claimant of its lawful
6 rights.
7 In conclusion, by reason of the matters to which
8 I have referred, it is clear that the Tribunal has
9 jurisdiction to hear the Claimant's claims. The
10 Respondent's preliminary objections should be dismissed,
11 the Tribunal should grant the Claimant the relief it
12 seeks, and the matter should proceed to a hearing on the
13 merits. It is what it is. The Claimant reserves its
14 rights and its remaining time today to prepare for
15 cross-examination and other ways in the hearing.
16 Thank you, Madam President.
17 THE PRESIDENT: Thank you.
18 Do my colleagues have questions for Mr Palmer at
19 this stage, in clarification or ...? No?
20 MR KIRTLEY: They can wait, I think.
21 THE PRESIDENT: Yes. If they can wait, yes, that's for you
22 to say. Yes, good.
23 Fine.
24 Then I think that completes our day for today.
25 Tomorrow morning we will start with the examination of
[Page 220]
16:36 1 Mr Palmer, and then hopefully we will have time to also
2 examine Mr Birkett tomorrow. We have provided for
3 a continuation in case it is needed. But we'll see
4 tomorrow how we proceed; unless the Respondent wants to
5 give an indication of the examination time?
6 DR DONAGHUE: We're content with what you said there. We'll
7 have to see how we proceed. But we have planned on the
8 basis that we hope it will be possible to complete the
9 cross-examination tomorrow.
10 THE PRESIDENT: It would be neater in terms of our
11 organisation, absolutely.
12 DR DONAGHUE: Yes.
13 THE PRESIDENT: Fine. Is there anything else that you wish
14 to raise before we adjourn for the day?
15 DR DONAGHUE: Not for our part, thank you.
16 MR PALMER: Not from our side, Madam President.
17 THE PRESIDENT: Not from your side.
18 Then I wish everyone a good evening, and we see each
19 other tomorrow and we start at 9.30 again. Goodbye,
20 everyone.
21 (4.38 pm)
22 (The hearing adjourned until 9.30 am the following day)
23
24
25
[Page 221]
A
AANZFTA 9:8 23:7 23:15 24:6,25 25:6 25:12 26:7 28:21 31:9 33:2,21 37:15 38:2,4,17 67:22 70:10 72:20 80:5 117:18 118:8 119:15 121:8,19,21 126:13,22 128:2 149:7 154:18 159:20 160:4,13 161:5,8,23,24 165:13,16 166:10 167:8 168:12 171:16 174:20,23 180:3,6,15 186:12 194:21 196:11 197:6,20 198:15 200:19 208:6 217:17
abandoned 98:23 108:7 146:11
abandoning 100:9
Abbott 213:9
abbreviated 118:25
able 25:20 33:19 82:25 139:14,16 188:4 210:6,7
about 16:2,4 21:16 26:15 27:4 28:25 42:19 68:22 72:12 73:24 78:18 79:20 81:12 84:9,11 85:11 86:17 103:10 105:5 133:16 135:12 139:3 141:23 143:25 144:6 145:11 150:10 154:14 172:25 180:11 189:8,15,16 196:20
above 26:10 28:4 67:23 84:13 153:20 193:20
abrogates 155:4
absence 16:15 28:3 33:8 44:19
absent 59:17 125:15
absolute 214:22
absolutely 66:2 132:21 220:11
absolved 152:18
abstract 37:23
absurd 32:4
abuse 7:5 93:14,19 94:21 95:20 96:5 97:16 111:14,15 112:23 113:9,16 114:13,24 116:25 117:18 132:12 150:3 151:21 152:4 154:23 158:6 173:22,24 175:12 175:14,15,22 176:22,25 178:10 178:18 181:2 186:10,21 187:9,13 190:15 216:17 219:4
abusive 95:16 149:23
academic 9:2
accept 14:21 16:13 21:10 41:14 71:17 88:12 134:22
acceptable 153:18,21 192:15
acceptance 77:24 184:19
accepted 77:14 109:6 180:11 185:8 187:4 201:11
accepting 39:19 41:18
accepts 41:24 54:12 69:14 113:7 126:8 196:5
access 16:21 95:23 101:18
accessible 183:3
accessing 91:14
accident 203:5
accordance 4:24 160:3 197:21 198:14 199:19 207:7
according 91:1
accordingly 14:16 67:8 96:4 157:1 158:14 161:17 166:4 175:1 177:7 178:19
account 12:17 15:16 16:1 46:21 60:14 115:6 126:7 154:18 155:19
accountable 154:8
accounting 10:2 202:4
accounts 81:11 88:7 89:20 90:18 198:3 198:23 199:17 200:8 203:20,23,25 204:18 205:13
accrued 107:13
accurately 31:2
accusations 134:19
accuses 175:11
achieve 16:22 156:14
achieved 49:21
achieving 68:6
acknowledged 104:4 147:16 159:10 167:9 169:11 175:8 212:25 216:12
acknowledges 71:5 124:22 169:3 171:9 182:19
acquiescence 7:7 118:2 125:12 127:22,24 128:10
acquire 35:11 36:5,8 37:2 47:8 50:16 88:24
acquired 9:11 29:1 30:19 34:11,17 37:12,14 47:24 48:22 70:18 71:9 86:10,11,16 93:8 95:10 97:9 167:2 195:4 196:7 217:13
acquiring 18:7 27:9 70:12 87:25 109:19
acquisition 47:20,23 54:2 58:7 64:10 70:19 71:18 72:3,7 72:17 86:2,18 87:3 87:24 93:1 99:24 159:16 161:16 166:3 197:9,16
Acquisitions 118:24
ACRA 202:5
across 47:13
acted 96:13 131:7 140:17 199:20
acting 56:18,19,24,25 57:6,11,16 113:18 199:17 216:5
action 31:15 41:17,21 42:2 44:5,20 46:1 46:15 54:16 78:25 98:14 109:20,23 110:1,23 114:23 115:5 131:15
actions 99:22 175:9 195:23 215:22
activate 107:23,24
activation 107:18,22
active 23:5 29:19 33:4 39:1 42:12 44:2 46:4 49:20 51:9,13 159:14 197:18 201:1,12,16
actively 50:1 92:2 198:24 201:21
activities 23:10 68:4 70:15 72:21 73:21 76:24,24 77:5,6,7,9 77:11,12,21,22 78:3 78:4,9,11,12,22,23 79:8,11 90:3 167:5 169:8,13 171:10 172:3,17 181:21 198:8,18 199:12
activity 39:6 45:3,18 46:14 76:14 98:7 171:18,20,24 172:16 206:5
acts 118:1 121:3 127:7 127:11 128:10
actual 1:5 35:2 36:11 39:24 42:4 48:20 98:18 113:2 142:15 149:19 150:19 172:13
actually 14:20 27:15 30:9 47:17 50:6 64:19 88:24 104:15 109:15 116:16 117:11 163:5 174:1 194:9 202:10
Adani 136:15,17,19
addition 29:25 197:15
additional 19:14 143:19
address 4:23 7:2,4,5,7 11:11 12:21 37:13 61:22 68:24 70:19 72:15 93:13 117:24 119:13 136:7 141:21 142:11 146:1,18 151:3 173:21
addressed 10:17 50:3 65:5 68:20 73:7,9 75:24 83:9 108:10 113:25 122:15 126:5,17 133:19 136:10 151:2 155:21 167:22 194:24 197:6
addresses 11:17,25 37:17 80:25
addressing 37:21 66:12 173:23
adds 48:6
adduce 141:24
adduced 125:16
adequacy 49:14,18
adequate 24:7
adjourn 220:14
adjourned 129:5 220:22
Adjunct 212:1,5
administration 79:3
administrative 2:10 4:12 78:25 118:4
administrator 2:7 4:10
admission 48:6 49:22 125:16 126:24 135:17 142:6 157:8 160:5,23 161:1,3,13 161:14,18 165:6,8 165:10,25 166:1,5 166:20 181:14 182:2,6,14 184:21
admissions 14:15,19 14:22 117:25 125:9 125:10,23 126:3,3,7 126:11,15,16 127:4 128:9 135:3 141:17 142:4,11,25 146:17 149:6,8,11 150:23 154:25 156:19,21 157:2,18 158:3,9,10,17,22,25 159:3,23 160:1 166:15,18 168:20 170:17 173:12,17 173:21,24 181:2 187:10 190:16 191:18,20 192:1,14 192:18,20 193:11 210:25 214:13 215:25 216:8
admit 168:9
admits 99:7
admitted 130:10 135:24 150:25 156:2 159:6 161:22 163:7 166:8,12 167:9,15 168:22 170:1,4,7,13 181:19 182:12 185:6 186:3 196:5
admitting 181:22
adopt 89:14 135:6 178:15
adopted 67:8 96:16,20 97:1 114:3 116:14
adoption 177:3,20 185:22
adopts 114:24 115:12
advancing 16:17
advantage 67:16 94:3 102:5 106:12,23
advantages 12:10 106:7 107:13,19
adverse 83:13,25 84:6 92:14 104:13 109:25 110:23 114:23 115:5 178:12,14 216:23
adversely 109:20 206:2
advertisement 22:4
advice 15:16 16:2,5 21:15,18 84:11 104:8,13,15 105:9 107:21
advised 11:5,24 12:8 15:23 21:12 26:23 27:8 124:19
advising 15:22
advisor 2:11 4:16 27:19
advisors 171:1
ad]missions 187:16
affairs 3:2 3:5 85:8 92:12 134:5
affect 109:10,20 113:13 116:16
affected 113:22 206:3
afforded 67:17
affords 134:8
after 8:17 13:20 21:21 22:10 28:25 29:11 29:21 31:7 37:15 54:17 69:25 70:4,12 70:17 71:2 80:13,15 82:17 86:17 88:25 90:13 92:23 97:9 100:8 104:24 137:12 150:3 170:11 193:10 205:25 207:15 213:9
afternoon 40:2 129:19
afterwards 99:25
again 11:11 21:24,25 22:23 25:14 27:18 28:7 29:5,6,11 34:13 37:21 42:23 47:3 56:14 61:17 62:18 72:5,15 73:8 76:13 84:2 91:17 104:5,23 105:5 108:13 115:2 116:4 119:1 120:6,13 173:25 181:23 183:5 193:20 203:7 212:4 220:19
against 8:24 10:23 24:13 31:9,15 32:7 33:10 35:4 47:16 67:17 114:23,25 115:5 131:18 149:20 153:25 157:18 159:22 170:24 186:17 190:3 211:5
age 131:2
agencies 202:17
agenda 4:22 215:15
aggregate 77:9
ago 14:11 69:18
agree 99:2,11 112:4
agreed 28:20 78:15 131:19 157:24 186:20 189:20,21 218:15
agreeing 72:20
agreement 17:5 18:11 18:12,14,18 19:7,17 19:19 20:4,21 22:2 23:12,20 25:3,22 29:24 30:5,18 31:17 31:22 89:3,12,13,16 90:2 93:23 96:12,17 97:12 110:16,24 117:9 122:13 130:7 130:8,15,20 131:10 131:13 135:22 139:10,16,17,19,23 139:24 140:3,10 141:8 143:12 151:15 152:12,12 152:15,25,25 162:16 167:3 169:6 174:22 180:5,10 183:20,21 195:6,10 206:13,15,18,20,24 207:3,8,16 209:16 209:18,22 210:8,9 210:11,16,17 214:22 215:13 216:6,23
agreements 20:16 23:22 31:15 32:2 67:12 139:15,18 140:5,19 209:22 210:7,9
agreement's 38:4
agrees 74:12
Aguas 177:25
ahead 145:4
aims 27:25
Air 46:20
Aircraft 46:20
Alapli 46:12 47:5
albeit 76:11
Alberto 147:11
alerted 84:15
alia 23:21 24:6 136:24 151:14 152:10,22 168:13 184:15 190:4 206:19 208:4 211:9
aligned 131:9 199:10
allegations 128:4
[Page 222]
130:24 170:24 203:16 211:4 218:6
allege 150:3 175:22
alleged 12:18 14:19 51:12,20 52:18,19 53:25 79:19 100:12 102:1,10,19 103:15 103:20 104:9 105:22 106:22 108:6,17 121:18 124:2 125:20 126:2 177:2,11,17,19 185:21 186:13 187:9 196:23 203:10 204:23
allegedly 117:25
alleges 80:1 124:2
Allen 21:2 26:20,23 27:4,12 171:1 202:16 203:13
Alliance 213:12,20 214:1,5
Alliance's 213:16
allocation 5:18 164:17
allow 114:21 192:16
allowed 83:19,20 145:21
allows 176:21
all-defining 36:9
all-encompassing 59:16
almost 11:14 14:4 20:9 52:8 87:13
alone 94:10 103:3 170:17 192:5 205:5
along 216:16
alongside 136:18
already 2:12 19:14 37:8 40:11 42:17 48:21 50:3 52:1,12 53:15 54:1 55:17 58:13,17 59:14 65:5 69:23 71:12,22 75:24 76:4,10 78:6 86:8 92:10 93:25 94:24 96:8 97:6 106:4 109:19 114:8 126:17 179:23 182:22 217:22
altering 20:21
alternative 99:21 126:25 138:22
alters 23:19
although 30:8 33:12 34:22 41:16 45:10 77:19 99:5 104:15 147:21
Alverley 74:19,21 75:25 76:2 97:18 115:20,22,24 179:2
always 5:9 89:17 131:7 134:23 178:13 191:19 199:10 209:14 216:7,8 217:3
ambit 17:2
amend 19:19 23:12 31:22 110:15 amended 18:13 139:24 209:23 210:17
amending 24:11 32:6
amendment 30:5 31:11 79:25 93:23 96:22,25 110:24 111:7 117:5,9 129:23 130:3,13 131:22,23 132:2,14 135:17 141:17 143:18,20 151:5,6,7 151:8,12,18,22,25 152:6,8,22 153:8,11 153:14,16,21 154:1 154:5,8 156:1 167:12 174:21 175:2,8 179:6 180:4 180:13,20,22 181:1 181:7 182:1,7,13,20 182:24 183:1,6,11 183:14,21,24 184:25,25 185:3,4,7 185:9,11,25 186:2,4 186:6,13 187:5,6 190:1,7,8,14 191:5 191:7 193:23 204:6 204:11 205:25 208:1 209:16 214:18,23,25 215:10,11,16 216:15,22 218:13 218:15 219:3
Amend[ment 130:9 130:10 131:19 152:10,17,21 176:16 177:6 179:7 207:12
America 214:11
AMF 45:19,22
among 38:7,15 191:12
amount 25:4 44:6 47:15 53:6,16 55:10 194:1 196:16
amounts 51:21 154:23 183:15 194:3 197:23 217:14
amplified 179:16
amply 117:12
AMTO 67:3
analogous 33:15 43:17 50:23 62:4
analogy 50:6
analyse 123:9
analysed 71:19
analyses 86:18
analysing 122:24
analysis 41:4,11 76:6 87:7 88:6,18 89:12 107:13 113:6 114:10 150:15 156:6
ancillary 99:8
and/or 149:6 199:16 211:1 217:8
Ang 202:15
Angus 24:17
Anna 2:5,6 3:24 4:5 annex 5:3
annexes 124:15
annexure 91:9 168:6 171:5 196:2,18
Annie 3:3 2:19 3:2
announced 112:7 130:4 178:7
annual 198:22 203:19 209:3
annulment 148:15
another 18:24 36:14 38:21 39:13 46:17 62:13 119:16 120:24 139:14 193:19
answer 13:15 15:13 56:16 117:3 133:1,3 134:2 137:25 162:10,13,13 164:5 184:2,3,5,9 190:25
answering 133:4 184:8
answers 5:21
anticipated 178:11
Antonio 148:13
anyone's 135:4
anything 5:23 6:3 34:9,18,21 44:14 45:13 46:7 47:25 50:5 52:17 80:15 91:12 220:13
anywhere 121:4
APEC 67:11
Apologies 164:21
apologise 189:7
apparent 18:3 28:3 30:14 74:9 178:3
apparently 84:17 90:13,25 98:8
appeal 153:9 186:18
appealed 186:16
appearance 18:5 70:13 72:10
APPEARANCES 2:1
appeared 1:21 86:22 105:14
appears 20:22 38:23 40:4 41:14,18 48:16 56:16 74:16 98:22 125:1 136:2
applicable 75:7 78:1 124:13,24 147:19 173:8 192:20
application 65:2 67:22 76:2 118:16 122:24 148:11 167:18 190:17,24
applied 79:14 114:6 118:6 119:1,4 120:15 142:24 145:22 147:20 150:25 189:20 211:1 217:8
applies 37:10 52:13 56:11 61:25 172:7
apply 5:11 95:7 115:17 149:6 191:14 applying 74:13 77:12 97:14 120:3 122:8
appoint 201:14
appointed 34:25 51:19 52:4,9 131:3 201:17 201:20 212:5
appointing 201:12
appreciated 145:15
approach 22:1 113:16 114:3,6,11 115:15 133:20 134:1 135:6 138:25 179:4
approaches 172:2
approbation 118:1 127:4 128:9
appropriate 28:23 74:22 109:18 128:21 150:24 151:4 192:21
approval 124:20
approve 18:16 55:16 196:1 198:22
approved 143:10 167:16 183:1 198:25
approving 199:17 200:8,23
approximately 29:3,4 48:18 56:9 89:9 144:2
arbitral 18:22 62:8 147:19 157:5 186:20 215:13
arbitrated 193:21
arbitration 1:1,1,4,22 3:23 4:19 6:19 9:7 14:25 109:11 113:14,23 130:5,7 131:15,22 132:24 147:4,6 148:23 150:24 151:9,11,14 151:22 152:11,25 154:17 157:2,4,21 158:1 174:2,3,6,8 174:10,11,14,15,19 174:22 175:1 176:9 179:18,21,22 180:1 180:2,5,10,17,24 182:9 183:19,20,21 184:4,7,23 185:2,16 185:25 186:5,11,15 190:17 191:10,23 192:1 193:13 210:22 215:13 216:6
arbitrations 146:21 183:11 192:12,15
arbitrator 18:23 132:6,18
area 150:17
Argentina 157:11
argue 123:16
argued 78:18
argues 31:25 49:23 91:15 121:18 132:14
argument 5:25 40:6 48:1 49:18,19 50:3 51:17 62:6 128:15 163:14 164:11,12
arguments 5:17,21 10:10 126:25
Aris 76:12
arise 59:8 126:24 127:5 131:23 175:2 183:24 186:12
arises 13:1 90:22 100:12 174:20 180:3 182:6 218:15
arising 154:2 190:4
Armenia 62:13
arose 18:25 106:7 174:24 180:7 185:8 187:4
around 9:1 26:16 27:18 31:1 82:16 100:8 204:2 205:18 205:21 207:11,18
arrangements 63:21 79:16 141:2
arranging 101:5
article 20:7 33:1 35:6 35:13 36:18,25 37:4 37:11,16 38:5,13 39:1 48:7 53:1,3,5 53:11,12,14,21 54:9 54:10,17 58:17 59:5 59:6 60:1,7,20 61:5 61:11,12 66:15 67:22 68:9,11,24 69:1 70:3 72:9,20 73:12 74:13 77:3,8 77:13 85:15 117:17 125:11,13 137:2,5 138:1 159:19 160:13 161:5,9,23 164:7 165:12,17 166:10 167:8 174:4 180:14,15 196:11 197:6,22,22 198:15 208:6
articles 26:3 54:5 62:1 162:25 174:23 180:6 194:21
articulated 97:14 127:18
articulation 115:16
artifice 90:8 93:11
artificial 79:16
artificiality 91:3
artificially 114:18
Asia 47:5 64:6,14 95:2 97:15 111:22 114:12
ASIC 118:12 119:11 126:15 167:20
ASIC's 118:15
aside 215:25
asked 21:16 189:7
asks 21:9
aspects 206:17
assembled 9:16
asserted 12:10 23:1,3 25:1 71:1 82:9 85:20 103:25 115:14
asserting 20:11 70:3 91:3 93:4,9
assertion 85:13 86:1 92:1 204:21
assertions 51:2 70:2 103:16 168:19
asserts 48:12 99:5 104:10 107:12 168:16
assess 99:3 181:11 187:2
assessed 79:22 98:16 162:21 181:21
assessing 18:1 69:21 74:23 98:22,25
assessment 80:2
asset 23:25 27:24 28:5 35:11 36:19,22 37:2 44:1,6 54:15 58:18 58:22 59:4 60:12,24 62:16,24 63:6 160:15 161:2 164:8 165:9 196:12
assets 34:5 38:20 41:3 44:24 49:4 54:18 59:18,21 62:14,19 63:2 204:2,7,13
assigned 63:7
assist 73:1 88:17 91:18,22 100:14 133:8 146:23 167:25 170:15 187:17 193:15
assistance 88:13
assistant 1:21 2:10,11 2:12 3:3 2:19 4:12
assisted 10:15 95:2 214:7
assisting 2:4,5,5,6,6,7 2:8,8,14,19 3:3,25 4:1,2,4,5,8,9,11,14 4:19 129:15
Associate 12:5 106:2
associated 28:11 139:5
association 163:1 210:3
assume 64:2
assumed 64:4 65:7
assuming 121:13
assumption 65:10
Assurance 202:14
ΑΤΟ 118:21 119:12 124:19
attached 5:15 196:2
attacking 149:17
attacks 134:12,17 142:20,21
attempt 15:13 16:10 26:10 29:9 31:6 72:8,10,19,20 93:2 123:16 190:12 219:2
attempted 92:20
attempts 18:5
attended 129:9
attention 9:5 60:19 66:18 93:12 114:14 189:11,12
[Page 223]
attitudes 9:4
Attorney-General 122:16 175:11 214:20
Attorney-General's 2:11
attract 30:4 85:9
attracting 101:10
attractive 138:5
attributable 76:25 77:6,23
attributed 13:13 88:3
AUD 7:13,20 17:13 31:7 48:18 56:9 104:2 105:15 144:24 162:25
audited 203:20,24 204:5
auditors 202:14
August 14:10 39:15 79:23 80:9 86:6 88:25 91:25 97:1 111:8 146:10 152:8 166:22 167:11 169:4,22 170:12 174:21,25 175:3 180:4,8,23 181:7,13 181:18,21 182:1,3,5 182:7 184:21 185:1 185:9 186:6 187:5 191:6 198:6 204:6 204:11 205:25 208:1 209:16 212:3,3 215:2,2,8 215:22 216:13
Australian 2:20 8:3,6 8:7,11,19,19 11:13 11:22 17:22 18:15 18:20 19:10,12,24 22:4,13,22 23:25,25 24:18 25:15,20 28:17 31:3,6,16,21 33:16,20 34:20 55:18 72:24 75:22 83:2,3,6,14 84:23 85:1,9,12 92:8 96:18 99:14 100:25 104:3 105:3 106:5 106:11 107:17 110:13 111:8 112:7 117:10 118:5,11,13 118:21,23 125:2,4 131:11,17 136:24 139:7 140:15,25 143:11 152:9 153:5 175:10 183:15 191:6 196:14 210:3 211:10,14,14,24 212:13 213:6 215:9 215:21
Australians 6:17
Australian-based 209:10
Australia's 7:1 8:4 12:21 13:3,8,10,18 15:13 17:8 23:14 32:12,24 38:24 42:5 48:2 58:23 59:1 71:10 93:18 94:4 96:10 100:17 108:5 115:15 118:9 120:7 121:9 123:22 124:1 124:3,8 125:20 126:19 128:12 135:3 152:15 213:7 215:22
authentic 73:16 74:15
authenticity 74:7
author 30:15
authorised 207:1
authorities 116:10 118:6 122:6,16 177:23 195:1 208:8
authority 42:22 120:23 153:5 157:9 202:4 213:2
automatically 118:16
avail 80:4
availability 103:12
available 3:12 56:4 102:18 134:1 138:3 198:11,18 199:12
avoid 83:16 111:4 124:24 132:25 136:6 137:22 190:13 219:2
avoiding 84:6
award 10:16 47:4 50:8 74:19 97:15,20 98:2 98:13 110:2,10 111:2,24 114:3,8 115:25 116:1 122:21 125:25 148:17 176:1 185:17 186:17 212:10
awarded 192:25
awards 115:20 153:1 153:2
aware 70:7 94:21 109:9 113:12,18,21 170:1 184:9
awareness 26:12 70:10
away 40:7 143:1 144:13 154:7
B
b 59:11 80:24 167:2
back 6:17 11:4 18:8 18:13 23:17 43:11 53:23 92:22 140:14 144:15 145:7 163:4 163:21 164:2 189:8
backdrop 35:4 47:16
backed 141:10
background 10:20,23 33:11 96:8 154:20 159:22
backwards 13:17
bad 113:18 146:25 180:12 183:16 216:6,17
baited 133:6
balance 147:14,20 212:16
balances 198:2
Baljeet 2:7 4:10 Balmoral 18:17 96:21
bank 11:8 46:11 89:19 90:18 137:2,3,6,7
banks 100:15,23 101:4,11
Bankside 3:24
Bankswitch 122:11
banning 136:25
bare 119:5
barely 94:14
Barnett 139:7 210:1
Barnett's 210:2
barrister 11:16
based 51:14 81:23 83:24 87:4 133:11 134:3,16 150:16 170:17 218:16
bases 31:11
basic 37:10 40:11 50:14 52:13 55:24 64:8 90:21 101:14
basis 28:3 78:23 90:2 100:23 101:8 119:25 126:3 130:20 132:22 158:7 171:14 193:1 203:20 218:2,10 220:8
BDO 4:15 105:14 171:1
bear 63:8 67:23
bearing 63:24
bears 64:2 147:13 183:5
became 10:4 15:4 105:16 160:22 165:4 167:12
become 25:6 44:21 110:1 112:23 162:6 183:1 214:18
becomes 29:11
becoming 15:10 44:15 46:7 211:13
bed 134:14
before 1:10 1:4,6 5:24 6:13 18:23 30:12,18 31:10 45:6,14 48:20 55:11,13 71:8 73:18 79:17 85:17 86:10 87:14 88:10 89:18 89:22 93:7,8 98:13 103:13 120:14 122:12 124:21 126:5,6 129:13,22 129:24 130:3,8 131:24 132:3 133:14 136:3,24 140:17 142:5,20 143:4 144:12 146:2 150:19 152:3 156:6 156:15 157:3,5 170:11 173:23 179:6,15,19 182:8 182:25 183:1,23 185:13 186:4,14 190:17,23 204:6 209:13 220:14
begin 6:13 21:3 96:7 143:4
begins 61:1
behalf 4:1,8 6:11 105:15 129:18 207:1,20
behind 95:16 97:17 98:25 113:16
being 1:5 20:2 26:17 37:14 39:17 41:5 49:11 50:16 52:3 57:24 58:21 73:16 74:9,20 81:17,25 105:17 114:11 115:9 116:17 118:17 119:4 120:1 124:12,14 125:3 130:2,19 136:18 138:7 145:14 161:21 163:12 166:7,13,24 167:11 173:15 176:1 186:12 187:7 190:8 195:23 211:9 214:14
belated 73:4
belatedly 38:23 146:17
believe 105:12 134:8
believed 101:9
believing 100:23
bell 1:11
belt 144:10
benchmark 62:25
beneficiary 20:17
benefit 23:23 28:5 37:24 40:23 47:11 68:6 120:25 123:23 158:16 168:1,3,4 171:23 199:19
benefiting 176:21
benefits 7:4 16:22 25:10,12 26:13 66:13 67:5,14,24 68:18 72:9 73:2,21 76:3,23 79:1 104:9 104:11 124:1 126:19 128:2 166:19 168:12 173:17 201:23 205:4 208:9 218:11
BENJAMIN 1:21
Bernard 209:9
best 3:21 56:20 57:3,4 140:15 198:12 199:9,10,11,21 200:3 203:15
better 17:17 138:10 164:22
between 8:18 17:6 18:9,12,20 19:1,15 20:5 28:22 30:10 38:17 44:2 51:4 61:11 73:23 74:16 76:17 77:25 80:7 89:3 93:1 95:5 101:1 110:5,12 132:8,15 141:3,11 168:24 174:23 178:4 180:6 181:10 200:5 210:8 214:19 215:1
beyond 56:12 192:18 217:22
Big 171:25
bill 136:22,23 182:25
billion 7:13,13,20 11:6 17:13 31:7 136:15 144:24 192:6 211:23
billions 25:5 137:14
bills 183:2
binding 125:15
Birkett 2:13 4:15,15 197:25 198:5,21 220:2
bit 44:4,25 56:23 61:12,21 75:7,15 146:16 163:3,14 164:23 188:23
bite 54:9
BITS 62:25 63:5
blanked 35:20
bleak 87:24
blown 90:10
blueprint 68:5
bluff 141:5,6
bluster 141:5
board 48:21 52:4 81:22 118:20
bona 94:11
Bond 212:5
book 71:7 87:14
borne 154:20
borrow 63:22 199:13
Boston 214:10
both 9:1 10:6 25:9 43:5 48:5 68:11,16 70:3 80:15 85:8,16 85:19 105:2,20 110:14,18 120:3 127:10 134:10 135:16 159:6,20 165:22 172:19 186:3 196:6 197:18 200:6,17 201:5 202:16
bottom 41:12
bought 71:22 86:23
bound 122:25 127:18 157:1,4
Bowett 125:13
Bowett's 125:11
box 30:15
breach 23:14 80:1 124:24 152:15 155:16 177:2,12,18 177:19 180:13 182:4,5 184:22 185:21,24 216:6
breached 124:20 174:22 180:5
breaches 154:18 185:13 186:13 193:20
break 20:5 66:1,3,6 128:23 129:8,10 187:22,24 188:20 189:2
breathtaking 175:7
Bridgestone 78:14
brief 9:23 22:21 79:20 143:8
briefly 45:21 54:21 62:12 65:2 145:14
bring 29:22 154:17 189:11,11 217:21
bringing 93:22 156:14
brings 40:21 191:7
Brisas 44:17,23
Bristow 2:19 3:4
broad 123:15 196:11 218:19
broader 27:24 123:3
broadsheet 25:16
brought 7:15 8:16 133:3 185:2 191:1
Brown 2:18,22 4:6 2:15 3:8 7:5 93:13 93:16
Browning 2:8 4:8,8
Bruno 12:14
BRYCE 1:20
BSIOP 152:17,20,23 153:7,10,13,15 154:1,4
budget 120:10
buildings 144:10
built 59:14
bundle 116:10 203:11
burden 63:24 64:3 141:23 147:12,13 147:15,15 148:7 151:2
burdened 158:15
bureaucrats 153:19 154:8
businesses 27:10 88:25 93:9 167:11 205:20 207:9
businessman 134:6
business's 89:21
Bydder 3:3 2:19
Byrne 2:5 4:1,1
C
C 131:1,3 199:5 203:25 204:1,4,9 211:8,12
САВ 44:16,22
CAFTA 77:8,12
calendar 80:20
call 13:21 51:9 57:13 135:1 141:6,6
called 11:1 19:2 28:6 29:14 34:15
calls 51:13 61:8
Cambridge 172:9
came 18:2 34:19 37:14 37:15 45:15 112:24
capable 73:15 107:2 115:12
capital 34:6 35:11,16 43:1 48:20 53:8 60:3 197:24
[Page 224]
car 145:10
card 53:25
care 62:21 74:23
career 134:19
Carlos 147:24
carried 89:18 92:9 155:25 186:23
carries 91:16 156:3
carrie[d 25:24
carry 10:24 15:20 89:17 91:19 170:5
carrying 167:17
Cascade 98:1,12 109:13,22 110:2 114:7 115:16
case 1:3,21 3:12 5:10 7:21 8:23 9:11,15 9:17 10:21 11:2 13:10,16,19 15:8 16:15,19 17:8,15,21 26:8 36:17 38:24 39:21 40:2,8,10,14 41:18 42:4,5 43:14 44:4 45:1,5,7,10 46:12,23 47:5 51:16 52:22 53:10,18 54:7 58:12 62:3,8,13 63:10 64:23 65:3,7 67:6 75:20 76:2,9 110:3 111:22 112:6 112:19 114:7 116:18 120:12 122:4,6 123:19 127:7,14 132:10,19 132:20,23 133:11 133:25 134:11 135:3 136:3 138:24 142:3 146:5,7,11,12 149:11,16 150:16 162:24 168:2 170:22 178:24 190:11 191:14 193:3,18 195:1 208:8 217:7 220:3
cases 33:13 40:3 42:6 42:15 45:19 46:4 47:7 60:10,15,19 65:11 95:5 109:22 113:24 114:6 115:18 121:25 171:21 178:25 190:20
case-by-case 78:23<
[Page 22]
108:13
withdrew 13:23
withstand 100:18
109:2 175:13
witness 2:13 4:15 5:11
9:22 10:21 12:13,20
14:2,13,24 71:14
80:18 85:21 103:8,9
105:14 107:2
108:10 131:6,7
136:10,16 137:10
138:4 147:5,9
148:22 150:6
155:22,23 168:14
171:6 193:5 199:6
199:15 211:25
witnessed 7:25
witnesses 12:20 13:3,8
13:18,22,23 14:9,12
15:2,7,11 16:8
52:15 84:16 94:18
103:17 135:1
214:17
witness/expert 5:12
Wong 209:9
word 35:24 36:3,9,10
36:16 37:1,18 39:5
194:25 200:13
wording 40:12,17,19
40:20,24 41:15,20
42:18 43:2,6
words 37:11,12 41:6,7
41:8 42:14,25 53:16
69:1,2 73:25 95:11
110:8 112:15
116:21 198:14
200:11 216:20
Wordsworth 2:17 4:4
2:14 7:2 22:18 29:7
32:18,21 65:1 75:23
work 36:21 96:2
171:11 189:9 209:5
worked 213:20
workers 90:7
working 170:2
workplace 203:5
world 9:1 11:7 143:24
178:9 191:11
211:17 213:11,12
213:15,16,18,19
214:1,4,8
worse 155:17
worst 203:15
worth 7:13 11:6 17:12
45:14 112:17 204:2
worthwhile 152:5
write 138:22
writing 24:1 137:23
139:16 180:10
210:8 213:2
written 11:2 14:1
25:13 35:20 73:23
80:6 93:7 100:3
137:19 138:9 139:6
146:6 217:11
wrong 36:4 38:3 56:6
132:21 146:12
153:17
wrote 20:10 22:22
23:16 31:14 82:18
X
X 114:25
Y
Y 114:25
year 72:12 80:20
205:13,21 207:24
207:25 208:18,22
208:23 209:3,3
213:8
Yearbook 210:3
years 8:7 11:16,23
12:6,15 19:8 52:2
82:1,3 88:25 89:9
89:11 100:8,20
131:12 134:5
138:20 140:2 198:3
208:14 211:7,20
Yee 202:15
yesterday 188:5,8,13
Yevheniya 2:13 4:14
yield 102:5
yielded 53:6,17
197:23 198:16
yields 200:10
York 157:12
Z
Zealand 11:16,19 22:9
23:5 24:21,23 25:22
28:14,20,22,23
29:12 31:5,8 85:6
92:25 105:2 108:4
108:16,22 213:23
Zeph's 10:9,10,11
11:11 12:17 16:19
36:16 40:2 42:4
48:19 49:17 52:18
54:7 56:16 65:7
72:7 81:21 82:11
89:9 91:10 94:10
97:1 103:23 107:23
117:17,24 118:3,16
119:5 121:12
124:17 125:6
126:19 128:1
181:20
zero 49:6
Zhe 202:16
$
$1 34:3,7,14 45:14
48:21 136:15
$10 211:23
$12 192:6
$240 124:6
$28 191:11
$3.5 87:8,13
$3.6 205:12
$4.5 205:21
$400,000 168:2
$45Bn 24:12 32:7
$500,000 208:2
$6,002,896 196:16
$8 200:4
1
1 1:7 5:1 13:6 34:6
38:3 80:24 187:23
212:3,3,4
1(c) 38:5
1(d) 38:13
1(1)(b) 73:12
10 22:20 43:4 57:12
120:18 147:12
153:3
10am 27:1
10.00 195:15
10.12.2 77:8,13
10.4.13 158:2
10.4.14 157:22
100 103:23
101 59:25 104:22
102 59:25 106:8
103 106:19 130:21
104 60:16 107:15
105 108:19
106 60:16 109:6
107 111:21
108 112:14
109 114:7
11 23:16 28:21 33:1,6
37:24 60:21 62:1
66:15 67:22 68:18
72:9,20 80:4 85:15
117:18 119:15
147:13 153:8
159:20 160:13
161:5,9,23 164:7
165:12,17 166:9
167:8 168:12
196:11,18 208:6
215:2
11(1)(b) 68:9,11,24
69:1 70:3 73:20
74:13 167:8
11(2)(b) 77:3
11.10 27:12 66:5
11.31 66:7
11.82 122:19
11.83 122:19
110 116:6 159:18
111 117:23
112 118:10
113 119:16 136:11
155:23
114 120:8
116 110:10 122:2
117 4:7 122:11,20
118 122:20 123:2
119 137:10 210:20
12 24:5 42:17 136:13
148:11 204:14
206:19 212:4
216:13
12(b) 205:10,12
12.54 129:4
120 125:24 201:8
121 126:8
122 130:21 137:10
123 127:6 136:16
137:10
124 127:16
126 138:4
127 201:8
128 69:13
128(e) 69:13
129 4:8,9 168:23
13 24:16 79:23 80:9
111:8 149:20 152:8
166:22 167:11
169:4,22 170:12
174:21,25 175:3
180:4,8,23 181:7,13
181:18,21 182:1,3,5
182:7 184:21 185:1
185:9 186:6 187:5
191:6 212:22 215:2
130 138:4
131 167:12 181:4,23
184:19
132 39:3 179:10
181:15,23 182:11
135 39:3
137 76:12
139 136:11 155:23
14 22:7 25:14 31:12
33:17 80:5,8 149:25
157:14 190:7
196:18 206:19
140 91:10,10
144 181:23
144(a) 181:20
146 91:8,9,11 166:21
169:2,12,22 170:2
207:13
147 147:25 189:13
148 62:3
149 48:13
15 12:15 26:3 31:12
43:16 71:7 87:13
143:25 144:7 190:7
150 95:18 207:11
153 62:3 196:3
155 42:23
157 189:13
158 39:8 195:14
16 1:7 1:1 22:10 26:15
34:4 42:22 97:20
157:9 196:18 204:4
161 4:10
162 43:15
165 39:15
166 39:9
168 48:16 169:14
196:3
17 26:22 123:6 157:15
176:2 185:17
186:17 211:25
170 43:3 170:3,7,14
172 43:3
173 204:13
175 64:19
177 64:20
18 22:20 27:3 32:8
120:19 144:24
153:17 160:5
181 56:5
182 7:13
188 60:16
19 26:19 27:7 34:16
120:16 153:8
160:13
19.1 204:8
193 60:16
195 125:13
1980s 52:7
1981 10:4
1989 11:5
1993 214:3
1994 213:22
1996 210:4
1997 213:23
1999 213:23,25
2
2 3:7 6:21 21:25
136:12 163:11
164:10 180:23
198:6 212:23
2(a) 37:11
2(c) 36:18 37:4 53:1
53:12 54:5,10,17
58:17 59:5,6 60:7
60:20 62:1 159:19
160:13 161:5 164:7
165:12 196:11
197:22
2(d) 33:1 35:6 36:25
37:16 39:1 48:7
161:9,23 165:17
166:10 194:21
197:6
2(f) 194:21
2(j) 53:5,11,14,21 54:5
54:9 197:22 198:15
2.00 128:23 129:5
2.02 129:6
2.03 129:17
2.10 148:19
2.100 109:7 113:6
2.96 112:20
2.99 112:23
20 11:16 27:12 31:12
66:4 89:9 114:9
117:17 130:3 132:2
145:11 151:17
153:17 161:6
174:13 179:20
186:19 188:22,24
20-minute 66:3
187:22
200 144:3
2001 214:3
2002 18:13 212:3
213:22
2006 212:3
2007 213:25
2008 18:14 98:23
212:6
2009 212:4
2011 212:4
2012 18:16 96:21
152:16 211:10
2013 11:9 95:19
212:20,22
2014 212:23 213:8
2015 10:5 212:22
2016 212:20,24,24
2017 101:1 136:13,23
213:11
2018 16:1 18:8 19:24
20:10,25 21:1,12,19
21:20,25 34:4 86:10
88:9 94:6 96:12
99:4 105:21 110:8
130:4 131:2,12
136:8 137:9,13
138:16
2019 15:19 18:3 22:20
24:15 25:15 28:25
31:12,12,12,13
32:15 34:16 48:22
52:3,10 54:22 55:25
70:16 86:23 94:6
96:13 97:8 99:4,24
101:2 104:24
105:22 117:7,12
124:18 130:4 131:4
131:12 167:2,16
182:21 186:9
195:15 198:3 199:2
199:4,17 203:24
204:1 205:14
208:16
2020 54:22 56:8 72:13
79:23 80:5,9,13,15
80:20 86:6,7 88:15
88:23 89:4 91:25
97:1 111:8 152:8
166:22 167:5,11
169:4,8,21,22
170:12 174:2,20,21
174:22,25 175:3
180:3,4,5,8,9,11,12
180:23 181:7,13,18
181:21 182:1,3,5,7
182:25 183:2,20
184:21 185:1,9
186:6 187:5 191:6
198:3 199:2,4,17
200:4 204:5 206:1,8
214:19 215:2,2,6,8
215:12,22 216:13
2021 1:2 98:3 114:9
176:2 185:17
186:17 206:4
207:25
2022 62:3 88:25 97:20
124:22 174:13
179:20 186:19
203:24 206:4
2023 62:13 174:12
179:19 192:10
2023-40 1:3
2024 1:7 1:1 14:10
39:12,15 105:10,21
179:12 182:16
198:6
206 84:9
21 14:10 27:15 161:13
166:20
21st 27:11
213 69:4
215 148:16
216(c) 88:5
[Page 23]
217 69:5
218-219 64:7
219 179:17
22 25:15 27:18 104:24
168:4 190:7
22.3 56:21 57:2,19
199:5,7,19
220-221 65:13
221 180:16
222 79:11
223 76:5
226 76:11
23 28:16,17 52:10 81:4
147:16 168:22
190:7 214:19 215:6
234 84:9
237 63:18
24 29:8 30:12 93:7
106:10 167:5 169:2
169:8,21,21 179:12
182:16 206:8 207:7
240 148:17
241 114:2 179:10
182:11 185:6
244 148:18
245 112:13
247 189:14
248 201:7
249 201:8
25 30:7 31:13 106:10
144:13 169:14
250 75:9 122:21
254U 55:19
256 148:20
258 112:13
26 30:25 67:13 124:15
170:3
260 68:21
262 35:22 68:21
264 114:2
265 39:11
266 39:11
27 31:24 124:15
168:14 171:7,25
270 41:1
271 189:14
275 208:24
276 205:4
277 125:25
279 36:1 39:11 111:2
28 32:23 168:6
280 111:2
285 205:5
286 172:1
29 20:25 28:25 32:25
48:22 83:19 98:3
117:7 120:5 167:16
174:12 175:18
179:19 195:15
199:7
290 78:18
291 78:16
3
3 5:3,17 7:12 19:24
30:23 59:6 84:24
136:21 181:4 203:3
3(3) 174:4
3.27 189:1
3.4.2.7 41:13
3.5 87:1
3.50 188:23
3.51 189:3
3.6 71:5
30 11:23 12:6 21:1
33:24 100:20
120:16 157:10,15
176:1 187:23
205:14 207:25
300 7:13,20 17:13
207:18
303 52:23
304 184:16
305 114:1
31 34:10 70:16 83:22
86:23 124:22 167:2
176:17
31.1 55:5
312 184:16
316 114:1
317 139:8
32 4:4 35:4 43:22
177:23
320 115:25
321 139:21 210:14
322 168:7
33 35:9 131:5 174:15
179:14
338 87:6
339 86:21
34 35:21 180:16
340 98:2 107:4
341 98:2 107:5 111:23
343 87:10
345 110:1
347 110:2
348 87:16
35 36:1 43:22 132:6
181:4
350 114:15,17
351 114:15 115:2
354 116:25
358(g) 52:23
36 36:14 80:19 181:19
362 184:16
37 37:10 43:25 49:1
80:19 179:11
182:10,16 195:2
373 62:21 69:9
375 184:17
376 97:19
377 184:17
378 184:17
38 37:19 184:11
380 99:9
383 99:9
385 115:24
39 38:1 131:6 185:15
199:14
395 126:23
4
4 14:7 29:10 30:1,8
37:20 57:12 93:6
97:8 132:7 137:1
174:13 179:11,20
181:4 182:15
212:20,22
4.38 220:21
4.5 197:25
4.52 27:3
40 39:10 134:5 186:15
211:7,20
40,000 211:22
401 184:17
402 184:18
41 40:25
42 194:18
42-43 42:8
428 176:17
43 42:16 127:17 195:6
430 205:22
437 90:10
44 43:11 44:11 195:14
44th 212:14,16
441 176:6
447 174:18 176:3
179:25
448 176:10
45 31:7 45:22 197:25
450 45:23 176:24
185:18
453 46:3
455 76:8
456 46:10
457 46:18
458 79:13 98:13
458(a)) 74:6
46 33:22 46:10 198:22
462 99:2
463 99:2
465 77:16
466 77:16
47 47:2 199:5
479 131:1,3
48 48:24 155:24
199:14
49 50:14 201:19
495 148:15
5
5 4:24 5:16 19:23
137:25 206:23
5,803,894 204:4
5.00 215:2
5.2.4 150:1 175:20
186:20
5.6 116:8
50 52:18 202:2
50.3 212:12
51 52:25 54:13 81:4
202:17
513 107:20
52 55:4 131:6 203:3
523 31:24
527 71:25
528 184:18
529 102:13,17
53 58:15 203:19 204:1
531 184:18
535 184:18
539 149:22
54 55:23 60:17 204:7
540 102:3
542 102:4
547 184:18
55 60:17 203:24
204:12
554 95:12 111:24
56 55:23 60:22 205:8
560 125:9
563 126:9 199:5
57 61:1 206:8
579 73:8 203:25
58 61:10 207:4
583 10:17
59 62:9 207:10
592 73:8
593 102:8
595 102:8
6
6 4:1,2 20:9,10 22:12
29:3,4 34:1 48:18
91:11 139:4 162:25
174:18,23 179:25
180:6,15 181:15
6,002,896 195:12
6.03 26:22
6.1 179:15
6.5 5:19
6.7 13:5
60 62:12 205:18 214:6
606 47:4
609 125:7
61 63:13 85:22 131:6
209:24
61(a) 49:16
612 125:7
62 63:16 64:23 211:3
63 64:6 211:8
64 48:3 64:18 131:2
135:25 159:5 160:6
196:5 211:13
65 64:21 211:8,12
212:1
66 4:5 65:15 212:7
67 52:13 66:11 212:12
68 66:14 159:9 213:6
685 124:3
686 124:22
69 67:3,4 213:11 214:9
692 125:7
7
7 2:18 4:3 20:13 57:12
127:12 141:10
181:8 204:9
7,173 210:20
70 67:11 140:2
70-year 209:18
71 68:14 159:12
184:16
713 104:4
72 69:12 155:24
159:15
724 192:24
74 71:9 201:7
75 60:24 71:24
76 74:3
77 61:1 75:8
78 43:10 61:4 76:7
79 61:10 76:21 204:1,4
8
8 21:1 95:19 141:21
157:14 180:11
181:8
8(1) 35:13
8(1)(a) 60:1
8.05 26:19
8.1 56:9
8.2 204:2
80 43:10 62:6 77:14
80:23 202:6
81 78:14 201:7 204:9
82 79:23 168:15 171:7
827 50:14
828 50:15
83 81:3 157:12
83(b) 71:14
84 62:9 82:10
85 83:9
86 84:18
865 210:19
87 85:17
88 86:16
89 86:24
89(d)(iv) 71:4
9
9 21:24 118:15 143:4
152:24 174:23
180:6,14 181:8
207:2 212:20,24
9.25 1:2
9.30 1:10,11 220:19,22
9.39 6:10
9.43 27:7
9.5 5:19
90 87:6 104:2 105:15
214:5
90% 206:9,21,22
207:5
91 87:16
92 89:5,5
93 4:6 90:5
94 93:18
95 97:5
96 97:18
97 99:5
98 100:19
99 101:23