Taxation-Related ISDS

No government can exist without taxation. This money must necessarily be levied on the people; and the grand art consists of levying so as not to oppress.

Frederick the Great

This chapter focuses on investment disputes in the energy sector and the state’s exercise of its sovereign right regarding its tax regime. We first look at when a dispute relating to taxation measures can be brought under international investment agreements (IIAs). Then we delve into when a taxation measure is seen to breach a standard of protection under an IIA.

When can a tax-related dispute be brought to ISDS?

Few international investment treaties define a ‘tax’ or ‘tax measure’.[2] Arbitral tribunals have relied on an autonomous understanding according to which a measure is considered a tax under international law if four requirements are met. These are: (1) there is a law; (2) that imposes a liability on classes of persons; (3) to pay money to the state; (4) for public purposes.[3] This determination is made on a case-by-case basis. As a result, faced with the same measure, investment tribunals may come to opposite conclusions.[4]

Tax measures challenged in investor-state dispute settlement (ISDS) cases have involved, among others, reforms in the feed-in tariffs and incentives to solar energy, withdrawal of VAT subsidies, VAT exceptions or non-payment of VAT refunds, increase in windfall profit taxes and royalties, imposition of capital gain taxes and initiation of tax investigations or audits.[5]

Tax-related investment disputes are covered by international investment treaties

As a preliminary matter, not every tax-related dispute can be submitted to ISDS. A distinction is drawn between tax disputes and tax-related investment disputes.

Tax disputes concern the quantum of a foreign investor’s tax liability or, more generally, the determination of whether and how a particular transaction is taxable under municipal law of one state (or several if the transaction is international). Conversely, tax-related investment disputes concern allegations of breach of an investment treaty resulting from specific sovereign measures taken by a state in the field of taxation.[6] In a tax-related investment dispute, the very legitimacy of the tax measure is put into question.[7] Only tax-related investment disputes can be submitted to ISDS.

Most older investment treaties do not exclude tax-related measures from their coverage. If not explicitly excluded from treaty coverage, tax-related disputes are generally within the scope of investment treaties.[8] In this regard, the tribunal in Cairn v. India noted that despite a ‘widespread and longstanding consensus among States that customary international law imposes few, if any, restrictions on the right of a State to set and enforce tax law’, this consensus has no impact on the arbitrability of tax-related disputes arising from an investment treaty.[9] In such cases, the arbitrability of tax-related claims is determined by the treaty, which cannot be equated to customary international law.

International investment treaties can exclude tax-related claims

The term ‘carve-out’ denotes a clause that limits the ability of investors to bring tax-related claims under an investment treaty.[10] Carve-outs are more frequent in recent treaties. However, no uniform approach exists among states as to how to structure these provisions.

Treaties with carve-out clauses fall broadly within the following three categories:

  • treaties with a general and comprehensive carve-out that excludes the application of the treaty to all matters of taxation;
  • treaties with targeted carve-outs that exclude taxation measures from the application of specific rights or standards under the treaty, such as MFN or national treatment; and
  • treaties with multi-layered carve-outs that exclude the application of the treaty to tax measures but provide for exceptions that explicitly cover taxation measures.

A taxation carve-out (either general, targeted or multi-layered) does not lead to an automatic dismissal of a claim involving tax-related measures. Depending on the wording of the treaty and the parties’ positions, it is upon the tribunal to determine jurisdiction over such claims or their admissibility.[11]

Treaties that contain a general and comprehensive carve-out

Treaties in this category generally contain a stand-alone provision that indicates that the investment treaty shall not apply to matters of taxation. The carve-out is typically found in treaty provisions dealing with the scope of application of the treaty or with exclusions therefrom.

By way of example, the India–UAE BIT states that ‘the provisions of this Agreement shall not apply to any matters of taxation.’[12] Similarly, the Denmark–Russian Federation BIT indicates that ‘the provisions of this Agreement shall not apply to taxation.’[13] Some BITs entered by New Zealand also contain a general carve-out, for instance the China–New Zealand BIT provides as follows:

the provisions of this Agreement shall not apply to matters of taxation in the territory of either Contracting Party. Such matters shall be governed by the domestic laws of each Contracting Party and the terms of any agreement relating to taxation concluded between the Contracting Parties.[14]

As a result, the treaty does not cover taxation matters.

Treaties that contain targeted carve-outs

In this category, the investment treaty is broadly applicable to taxation matters but exclusions may apply to specific standards of protection. Targeted carve-outs often exclude taxation measures from MFN and national treatment standards of protection. States structure targeted carve-outs in different ways. For example, the French Model BIT, in its national treatment and MFN provisions, contains a sub-clause indicating that ‘the provisions of this article do not apply to tax matters.’[15] The Mexico–UK BIT includes a stand-alone provision on tax exceptions to the application of national treatment and MFN.[16] Other treaties only carve out the MFN standard in relation to double taxation avoidance treaties.[17]

Treaties that contain multi-layered carve-outs

This category includes more sophisticated and complex treaties. These contain general carve-out clauses that exclude tax-related measures from the scope of the treaty. At the same time, by means of clawback clauses, they specify that certain standards of protection would apply to taxation measures. The result is that the treaty applies to certain tax-related claims, as explained below. The US Model BIT and certain multilateral investment treaties like the Energy Charter Treaty (ECT) and the North American Free Trade Agreement (NAFTA) fall within this category.[18] Below, we use the ECT to illustrate the multi-layered carve-out mechanism.

The ECT carve-out clause in Article 21(1) provides as follows:

except as otherwise provided in this Article, nothing in this Treaty shall create rights or impose obligations with respect to Taxation Measures of the Contracting Parties.

The first part of Article 21(1) indicates that the clawbacks in sub-clauses 21(2)–(5) render the treaty applicable to specific taxation claims. Arbitral tribunals have outlined the two-step test to apply Article 21(1): a characterisation of tax measure under domestic law followed by a bona fide consideration under international law.[19] Under international law, only actions motivated by the purpose of raising general revenue for the state can fall within the scope of Article 21(1). Actions taken under the guise of taxation, but that aim to achieve an unrelated purpose, such as destruction of an investment, do not fall within the scope of Article 21(1).[20] The investor seeking to exclude the application of the carve-out in Article 21(1) bears the burden of proof that the alleged tax-related measure aims to achieve an unrelated purpose.[21]

On the other hand, the clawback clauses in sub-clauses 21(2)-(5) of the ECT exclude certain standards of protection from the general carve-out. In simple terms, the clawback clauses bring certain tax-related matters back within the scope of protection of the treaty. As a result of the clawbacks, protection under the MFN standard in Article 21(3) and protection from expropriation in Article 21(5) apply to tax-related investment disputes – thus, excluding these standards from the general taxation carve-out.

The clawbacks are subject to qualifications. For instance, Article 21(3) allows for protection under the MFN standard only to matters relating to indirect taxes, and excludes from its scope of protection those relating to taxation on income or on capital or substantially similar taxes.[22] The expropriation clawback in Article 21(5) is more complex and contains a filtering mechanism that requires prior referral of the expropriation claim to taxation authorities of the host and home states. Prior arbitral tribunals have dealt with the binding nature of this precondition with different results. Whereas some tribunals acknowledge that the obligation of prior referral exists,[23] others have noted that prior referral requirement under certain circumstances would be futile and thus, a failure to do so would not be fatal to the claim.[24]

The NAFTA multi-layered carve-out mechanism is similar to the ECT mechanism in some respects. Article 2103(1) contains a general carve-out that excludes tax-related measures from its ambit. However, the exclusion is not absolute. The clawback clause in Article 2103(4)(b) makes national treatment and MFN standards applicable to tax-related measures under specific conditions. Article 2103(6) provides for protection from expropriation on the condition that the matter is first submitted to the appropriate tax authorities, as defined in the treaty, for a determination of whether the measure constitutes an expropriation.

When does a tax measure breach the standards of protection of an IIA?

The answer to this question involves the same inquiry as for other regulatory measures adopted by a host state that affect an investor’s rights under an IIA. The standards most frequently invoked by investors as being violated by the host state’s tax measures are expropriation and fair and equitable treatment (FET). Below, we discuss some prominent arbitral decisions in tax-related ISDS and the principles that we can draw therefrom.

State actions under the guise of taxation and standards of treaty protection

Arbitral tribunals have drawn a distinction between bona fide taxation measures that affect an investment, and actions taken by a state under the guise of taxation through ‘improper or abusive use of the power to tax.’[25] In the latter case, a state’s actions are not considered to relate to actual taxation measures and, therefore, will not be excluded from the scope of application of an IIA regardless of the presence of a taxation carve-out clause.

The claimants in the Yukos arbitrations successfully argued that the tax reassessments, VAT charges, fines and asset freezes, threats to revoke licences and duress to sell Yukos’ main production facility were not bona fide taxation measures. According to the tribunal:

after having now traversed, at some length, the treatment of Yukos by Russian tax authorities, the bailiffs and the courts, and having considered the totality of the evidence, especially the VAT evidence, the Tribunal has concluded that the primary objective of the Russian Federation was not to collect taxes but rather to bankrupt Yukos and appropriate its valuable assets.[26]

In some ECT cases against Spain, claimants have similarly tried to argue that the state’s taxation measures on renewable energy installations were not bona fide,[27] or were part of a scheme ‘intended to deprive the Claimants of their rights under the ECT’ [28] and a mere sham.[29] However, these arguments were rejected.[30] In Eiser v. Spain, the tribunal held that ‘the present case does not on the facts reach a situation where the tax enforcement measures are found to have been used as part of a pattern of behavior aimed at destroying Claimants.’ As a result, the tribunal ruled that the measures would not fall within the scope of the clawback clause, ‘were such a case to be made out’.[31]

Taxation measures and standards of treaty protection

In cases dealing with actual taxation-related investment disputes – as opposed to cases arising from a state’s actions under the guise of taxation – the standards most frequently invoked by investors are protection from expropriation and FET, addressed in turn below.

Expropriation

When faced with claims of expropriation, tribunals have focused on the effect of the host state’s taxation measure. The investigation involved is thus similar to cases in which claimants argue expropriation due to a host state’s regulatory measures. Substantial deprivation of property as a result of the host state’s taxation measures must be shown.

In EnCana v. Ecuador, the claimant argued that denial of VAT credits and refunds amounting to 10 per cent of the value of transactions associated with the company’s oil production and export activities amounted to expropriation under the Canada–Ecuador BIT.[32] The tribunal found that the state’s conduct did not affect the claimant’s ability to perform a normal range of commercial activities or render the value derived from its investment ‘so marginal or unprofitable as to effectively deprive them of their character as investments.’[33] It noted that ‘only if a tax law is extraordinary, punitive in amount or arbitrary in its incidence would issues of indirect expropriation be raised.’[34] The claimant also argued that by not disbursing the tax refunds, the state directly expropriated its investment. The tribunal clarified that sums owed to an investor by way of VAT refunds could, in principle, qualify as an ‘investment’ under the BIT.[35] The tribunal also acknowledged that retrospective changes in domestic law entailed a loss of the investor’s right.[36] However, according to the tribunal, the tax authorities’ policy on oil refunds did not rise to the level of repudiation of a legal right so as to amount to a direct expropriation.[37]

In Occidental v. Ecuador, the claimant similarly argued indirect expropriation due to Ecuador’s ‘refusal to refund the VAT’.[38] According to the tribunal, ‘there has been no deprivation of the use or reasonably expected economic benefit of the investment, let alone measures affecting a significant part of the investment’[39] and the claimant failed to prove that it had been substantially deprived of the value of its investment.[40]

Expropriation arguments in disputes arising from Ecuador’s Law 42 also failed. That Law granted Ecuador a participation of 50 per cent in the ‘extraordinary revenues’ from the sale of crude oil when the sale price exceeded a reference price set by the Ecuador Ministry of Energy and Mines. In 2007, Ecuador increased its participation in these extraordinary revenues from 50 per cent to 99 per cent.[41]

In Perenco, the claimant argued that this measure amounted to an expropriation of its investment under the Ecuador–France BIT. The tribunal ruled that the tax ‘came close to, but did not cross the line’ of indirect expropriation.[42] According to the tribunal, ‘the financial burden of paying 99 per cent of the revenues above the reference price, while disadvantageous to Perenco, did not bring its operation to a halt or, to revert to the tests previously cited, effectively neutralise the investment or render it as if it had ceased to exist.’[43]

In Burlington, the claimant argued that this constituted an expropriation of its investment under the US–Ecuador BIT. The tribunal rejected the claim. The measure resulted in a 58 per cent reduction in the claimant’s ‘total oil revenues’ from one block of the oil field and a 70.2 per cent reduction in respect of another block. According to the tribunal, this did not indicate a substantial deprivation, as the tax did not render the claimant’s investment ‘unprofitable or worthless.’[44]

Arguments of expropriation in a case arising from Mongolia’s decision to adopt a windfall profit tax on some commodities also failed. In Paushok v. Mongolia, claimants argued that a windfall profit tax of 68 per cent on sales of gold at prices higher than US$500 per ounce constituted an expropriation under the Russia–Mongolia BIT.[45] The tribunal was unpersuaded. An accounting loss of US$1 million for one year could not be seen as indicating the destruction of an ongoing enterprise with a history of strong annual profits, especially in the context of favourable market conditions and subsequent favourable legislation.[46] In the tribunal’s view, the measures had not led to ‘destruction’[47] of the enterprise that would qualify as ‘tantamount’ to expropriation.[48]

A finding of expropriation is, thus, a fact-based inquiry. In cases where investors have succeeded in showing substantial deprivation, tribunals have found expropriation.

In Goetz v. Burundi, a dispute under the Belgium/Luxembourg–Burundi BIT arose from Burundi’s withdrawal of tax and customs exemptions relating to the production of precious metals. The tribunal found that the BIT obligated the host state to refrain from taking any measure that would deprive or restrict the investor’s right to ownership, including any measure that would have a similar effect.[49] The state’s withdrawal of the tax exemption forced the investors to stop all activity and stripped them of any benefit they could have expected from their investment. The tribunal, as a result, found the measure to have a similar effect to one depriving or restricting ownership under the BIT.[50]

In Ampal-American v. Egypt, a dispute under both the Egypt–US BIT and the Egypt–Germany BIT arose from the revocation of tax exemptions. Per the claimants, the licence to operate under a tax-free zone system for a period of 25 years constituted an investment directly protected under the BIT.[51] The tribunal found that the claimants’ inclusion in the tax-free zone system was a fundamental part of their investment structure and that Egypt’s decision to remove the consortium’s tax-free status ‘took away a defined and valuable interest that had been validly conferred according to Egyptian law at the time that the investment was made and that had been guaranteed by the State for a defined period’.[52] It was, therefore, tantamount to expropriation.[53]

FET

In most cases, investors have also brought taxation-based claims in relation to the breach of FET. Among these, investors’ claims succeeded even though, by and large, tribunals have recognised that an investor is not immune to regulatory changes. The principle is that taxation measures must be proportional to the standard of protection granted to an investor.

For instance, in Cairn v. India, the dispute arose from retroactive taxes levied by the state by way of a legislative amendment in 2012. The tribunal recognised that the principle of legal certainty is not absolute, and some retroactive regulations could be justified by a public purpose. However, in this instance, the tribunal found that there was no ‘specific public purpose that would justify applying the 2012 amendment to past transactions’.[54] According to the tribunal, the state failed to adequately balance the claimants’ interest in legal certainty with its own regulatory interests. India’s retroactive taxation was thus ‘grossly unfair’[55] and violated the FET standard.

In Perenco, in view of Law 42 explained above, the tribunal ruled that Ecuador’s decision to increase the state’s participation in the ‘extraordinary revenues’ to 99 per cent resulted in ‘effectively removing virtually all of the upside potential above the reference [sale] price’ for crude oil set by the Ecuadorian authorities. Through this measure, the state was effectively forcing the investors to surrender their rights under the participation contracts and migrate to service contracts.[56] This constituted a breach of the FET undertaking.

Likewise, and in relation to the same Law 42, the Murphy v. Ecuador tribunal found that Ecuador’s measure not only ‘fundamentally, and prejudicially’ changed the business and legal framework, but did so ‘within the context of an increasingly hostile and coercive investment environment’.[57] Ecuador’s behaviour breached FET standard.[58]

At times, a claimant has succeeded in establishing a violation of FET although the tribunal did not make a finding of expropriation in relation to the same measure. For instance, in Occidental v. Ecuador, the tribunal upheld Occidental’s claims under the BIT’s FET standard on the basis that Ecuador’s denial of Occidental E&P’s VAT reimbursement applications significantly changed the framework under which its investment had been made.[59] Other tribunals have similarly found a violation of FET despite finding that no expropriation occurred.[60]

Argentina’s measures between 2004 and 2007, raising export taxes on crude oil and fuel, also gave rise to a series of cases. In Total v. Argentina, the claimant argued that Argentina’s imposition of export taxes on crude oil, natural gas and LPG breached the FET standard in the France–Argentina BIT. The investor argued that the export taxes violated the guarantees contained in a series of decrees adopted by Argentina, which provided that producers would have the right to receive compensation if the government restricted the export of crude oil and its derivatives. [61] The tribunal rejected the claim. In the tribunal’s view, the export taxes constituted ‘fiscal measures (to which oil producing and exporting countries normally have recourse) that are generally applicable to crude oil exporters (and not addressed specifically to Total)’.[62] These export taxes, the tribunal added, are part of the general fiscal legislation to which the investors were subject, unless their application was shown to be discriminatory.[63] Moreover, the concession did not promise ‘fiscal stability’ or an exemption from potential government intervention.[64]

Arbitral tribunals thus strive to balance states’ right to make regulatory changes and investors’ right to operate within a stable regulatory framework.

To conclude, states maintain considerable discretion on how they wish to structure their tax regimes. However, this discretion is not unfettered. If a state has entered into IIAs that do not exclude taxation measures, in certain cases the manner in which specific tax measures are applied to investments protected under those IIAs could lead to a breach of a state’s treaty undertakings.


Notes

[1] Anna Crevon-Tarassova is a partner and Francisco Garcia-Elorrio and Asha Rajan are senior associates at Dentons.

[2] Noting that Article 21(7) ECT, Article 2107 NAFTA and Article 19 of the 2019 Argentina–Chile FTA provide guidance on the definition of ‘tax’ and ‘taxation measure’.

[3] EnCana v. Ecuador, LCIA Case No. UN3481, Award and Partial Dissent, 3 February 2006, para. 142; Duke Energy v. Peru, ICSID Case No. ARB/03/28, Award, 18 August 2008, para. 174; Burlington v. Ecuador, ICSID Case No. ARB/08/5, Decision on Jurisdiction, 2 June 2010 para. 165; Murphy v. Ecuador, (II), PCA Case No. 2012-16, Partial Final Award, 6 May 2016, para. 159; Sun Reserve v. Italy, SCC Case No. V (2016/32), Award, 25 March 2020, para. 521; Yukos v. Russian Federation, PCA Case No. AA 227, Award, 18 July 2014, para. 1407 (defining taxation measures under Article 21 ECT as ‘actions that are motivated by the purpose of raising general revenue for the State.’).

[4] For example, Ecuador’s Law 42 amended the Hydrocarbon Law and granted Ecuador a participation of initially 50 per cent and then 99 per cent in the ‘extraordinary revenues’ from the sale of crude oil when the sale price of the oil exceeded a reference price. This was considered as a tax measure by the Burlington and Perenco tribunals while the Occidental and the Murphy tribunals considered that Law 42 was not a tax measure (see Burlington v. Ecuador, above note 3, para. 167; Perenco v. Ecuador, ICSID Case No. ARB/08/6, Decision on Jurisdiction and Liability, 12 September 2014, para. 375; Occidental v. Ecuador, ICSID Case No. ARB/06/11, Award, 5 October 2012, para. 509; Murphy v. Ecuador (II), above note 3, para. 190).

[5] UNCTAD, ‘International investment agreements and their implications for tax measures: what tax policymakers need to know’, U.N. Doc. UNCTAD/DIAE/PCB/INF/2021/3, 2021, p. 7.

[6] Cairn v. India, PCA Case No. 2016-07, Final Award, 21 December 2020, para. 834; William W Park, ‘Arbitrability and Tax’ in Loukas A Mistelis and Stavros L Brekoulakis (eds.), Arbitrability: International & Comparative Perspectives (Kluwer Law International 2009) p. 183.

[7] Park, above note 6, p. 183.

[8] UNCTAD, above note 5, p. 16.

[9] Cairn v. India, above note 6, para. 834.

[10] Matthew Davie, ‘Taxation-Based Investment Treaty Claims’, in Thomas Schultz (ed.), Journal of International Dispute Settlement, Oxford University Press 2015, Volume 6 Issue 1 pp. 202–227.

[11] For example, in Occidental I, Ecuador pleaded that the objection based on the taxation carve-out in the treaty should be addressed as an issue of jurisdiction, whereas the objection based on the specific measures covered by taxation (clawback for expropriation) should be addressed as an issue of admissibility (see Occidental v. Ecuador, LCIA Case No. UN3467, Award, 1 July 2004, para. 37); also in Yukos, the Russian Federation argued that the carve-out in Article 21 ECT was a matter of jurisdiction, and claimants pleaded that the carve-out went to admissibility/merits because it related to the existence of rights and obligations with respect to the alleged taxation measures (Yukos v. Russian Federation, PCA Case No. AA 227, Interim Award on Jurisdiction and Admissibility, 30 November 2009, para. 568).

[12] India–United Arab Emirates BIT, 2013, Article 2(3).

[13] Denmark–Russian Federation BIT, 1993, Article 11(3).

[14] China–New Zealand BIT, 1998, Article 5(2); also see Argentina–New Zealand BIT, 1999, Article 5(2); Chile–New Zealand BIT, 1999, Article 8; Hong Kong, China SAR–New Zealand BIT, 1995, Article 8(2).

[15] France BIT Model 2006, Article 5.

[16] Mexico–United Kingdom BIT, 2006, Article 5(b) (excluding the application of the national treatment and MFN standard in relation to ‘any international agreement or arrangement relating wholly or mainly to taxation or any domestic legislation relating wholly or mainly to taxation.’)

[17] See Lao People’s Democratic Republic–Viet Nam BIT, 1996, Article 4(c); also Cambodia–Malaysia BIT, 1994, Article 3(3)(b).

[18] NAFTA, Article 2103; US Model BIT, 2012, Article 21; United States of America–Uruguay BIT, 2005, Article 21.

[19] Antaris v. Czech Republic, PCA Case No. 2014-01, Award, 2 May 2018, para. 224; Voltaic v. Czech Republic, Award, PCA Case No. 2014-20, 19 May 2019, para. 260; Photovoltaik v. Czech Republic, PCA Case No. 2014-21, Award, 19 May 2019, para. 249; WA v. Czech Republic, PCA Case No. 2014-19, Award, 19 May 2019, para. 327; I.C.W. v. Czech Republic, PCA Case No. 2014-22, Award, 19 May 2019, para. 308.

[20] Yukos v. Russian Federation, above note 3, para. 1407; Voltaic v. Czech Republic, above note 19, para. 265; I.C.W. v. Czech Republic, above note 19, para. 313; Photovoltaik v. Czech Republic, above note 19, para. 254; and WA v. Czech Republic, above note 19, para. 332.

[21] Novenergia II v. Spain, SCC Arbitration 2015/063, Final Arbitral Award, 15 February 2018, para. 521.

[22] Infra Red v. Spain, ICSID Case No. ARB/14/12, Award, 2 August 2019, para. 318; NextEra v. Spain, ICSID Case No. ARB/14/11, Decision on Jurisdiction, Liability and Quantum Principles, 31 May 2019, para. 383.

[23] Plama v. Bulgaria, ICSID Case No. ARB/03/24, Award, 27 August 2008, para. 266.

[24] Yukos v. Russian Federation, above note 3, para. 1428; Isolux v. Spain, SCC Arbitration V2013/153, 12 July 2016, para. 758.

[25] Eiser and Energia Solar v. Spain, ICSID Case No. ARB/13/36, Final Award, 4 May 2017, para. 271.

[26] Yukos v. Russian Federation, above note 3, para. 756.

[27] Eiser and Energia Solar v. Spain, above note 25, para. 259.

[28] RREEF v. Spain, ICSID Case No. ARB/13/30, Decision on Jurisdiction, 6 June 2016, para. 190.

[29] id, para. 191.

[30] Eiser and Energia Solar v. Spain, above note 25, para. 270; RREEF v. Spain, ICSID Case No. ARB/13/30, Decision on Responsibility and on the Principles of Quantum, 30 November 2018, para. 188.

[31] Eiser and Energia Solar v. Spain, above note 25, para. 270.

[32] EnCana v. Ecuador, above note 3, para. 177.

[33] id., para. 174.

[34] id., para. 177.

[35] id., above note 3, para. 183.

[36] id. para. 187.

[37] id. para. 197.

[38] Occidental v. Ecuador, above note 11, para. 79.

[39] id. para. 89.

[40] ibid.

[41] id., para. 20.

[42] Perenco v. Ecuador, above note 4, para. 684.

[43] id., para. 685.

[44] Burlington v. Ecuador, ICSID Case No. ARB/06/08/5, Decision on Liability, 14 December 2012, para. 450.

[45] Paushok and others v. Mongolia, UNCITRAL, Award on Jurisdiction and Liability, 28 April 2011, para. 334.

[46] ibid.

[47] ibid.

[48] id., para. 336.

[49] Goetz v. Burundi [I], ICSID Case No. ARB/95/3, Decision on Liability, 2 September 1998, para. 124 (translation from French by authors: ‘il ressort des termes mêmes de l’article 4 que cette disposition ne vise pas seulement les mesures privatives et restrictives de propriété stricto sensu, mais régit plus largement toutes mesures “ayant un effet similaire”’).

[50] ibid.

[51] Ampal-American and others v. Egypt, ICSID Case No. ARB/12/11, Decision on Liability and Heads of Loss, 21 February 2017, para. 158 citing claimant’s position.

[52] id. para. 183.

[53] ibid.

[54] Cairn v. India, above note 6, para. 1816.

[55] ibid.

[56] Perenco v. Ecuador, above note 4, paras. 603–606.

[57] Murphy v. Ecuador (II), above note 3, para. 281.

[58] id. para. 282.

[59] Occidental v. Ecuador, above note 11, para. 190. Conversely, in Encana, a case based on the same measure, in the absence of any wording in the Canada-Ecuador BIT requiring the State to accord fairness, the tribunal recognised that a foreign investor ‘has neither the right nor any legitimate expectation that the tax regime will not change, perhaps to its disadvantage, during the period of the investment’, EnCana v. Ecuador, above note 3, para. 173.

[60] CMS Gas v. Argentina, ICSID No. ARB/01/8, Award, 12 May 2005, para. 281; Sempra v. Argentina, ICSID Case No. ARB/02/16, Award, 25 September 2007, paras. 303–304; Occidental II, above note 4, para. 455; Novenergia v. Spain, above note 21, paras. 760–763.

[61] Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/1, Decision on Liability, 27 December 2010, paras. 352–354.

[62] id. para. 434.

[63] ibid.

[64] id. para. 435.

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