Reproduced from www.worldbank.org/icsid with permission of ICSID.
Pursuant to Article 36 of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (the Convention), Rules 1 and 2 of the Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (Institution Rules), and Article IX of the Agreement between the Government of the Kingdom of Norway and the Government of the Republic of Latvia on the Mutual Promotion and Protection of Investments signed in Riga on 16 June 1992 (BIT)1, Mr. Peteris Pildegovics and SIA North Star (together, Claimants or separately a Claimant), hereby respectfully request that the Secretary-General of the International Centre for Settlement of Investment Disputes (the Centre) register this arbitration against Respondent the Kingdom of Norway (Norway) concerning the claims stated herein.
1. This matter concerns Norway's discriminatory and arbitrary actions which wiped out Claimants' integrated investment in a snow crab fishing, transformation and sales enterprise in Norway. Claimants were part of a successful joint venture conducting such businesses between 2013 and 2016, with the approval and encouragement of Norwegian authorities.
However, beginning in July 2015, and more particularly since January 2017, Norway has adopted a series of discriminatory, arbitrary and illegal actions, in violation of both Norwegian law and international law. These culminated in the arrest, on 16 January 2017, of one of Claimants' ships and in a judgment from the Supreme Court on 14 February 2019 concerning the arrest. Not only does that judgment constitute a denial of justice, but Norway's actions prevented Claimants from operating in the new and lucrative snow crab industry in Norway.
2. On the heels of the arrival of snow crabs in the Barents Sea at the turn of the twenty- first century, a substantial fishing industry developed, which involved vessels from the European Union, Norway and the Russian Federation.
3. Claimants are Latvian investors who have made substantial investments in Norway to participate in this new industry and profit from new fishing opportunities, a rare occurrence in the world of fisheries, where quotas are in general already distributed, making market entry difficult. The Claimants entered the Norwegian market notably through the acquisition of fishing vessels, fishing licences as well as the acquisition of a Norwegian company. Claimants were granted and used their licences over three years to harvest snow crabs in an area of the high seas known as the "Loophole" over which Norway exercises jurisdiction, alongside the Russian Federation, as coastal states.
Claimants also obtained licenses to harvest snow crabs in areas of Norwegian jurisdiction, within 200 nautical miles off the archipelago of Svalbard. However, Norway prevented the use of such licenses. Claimants' investments were also made through a partnership, in Norway, with investors in a Norwegian crab transformation factory, Seagourmet Norway AS (Seagourmet), based in Baatsfjord, a small town of about 2,200 inhabitants in the province of Finnmark, at the very north of continental Norway.
4. Claimants acquired fishing rights through licences issued by the Republic of Latvia.
These licences were issued under two international fisheries agreements to which Norway is a party. The first set of licences, for fishing in the Loophole, were issued under the North-East Atlantic Fisheries Convention (NEAFC) regime. The second set of licenses were issued under the 1920 Treaty concerning the Status of Spitsbergen (Svalbard) (Svalbard Treaty) for harvesting crabs in an area within 200 nautical miles off the coasts of the archipelago of Svalbard.
5. Claimants' investments were initially welcomed and acknowledged as legitimate by Norway. Norwegian dignitaries attended certain events in Baatsfjord such as the launch of Seagourmet's factory, which, through the joint venture with Claimants, allowed for the creation of over 50 jobs in Baatsfjord. Furthermore, between 2014 and 2016, Norway conducted a large number of inspections of Claimants' vessels, both at sea and in the Norwegian port of Baatsfjord, where the offloading of snow crabs was duly authorized pursuant to the NEAFC Convention. Then, starting in July 2015, Norway took a series of manifestly arbitrary and discriminatory actions against vessels flying EU flags (but not against those flying a Russian flag: a fact confirmed by Norwegian court decisions) which effectively dispossessed Claimants of their fishing rights, significantly hampered the partnership between Claimants and Seagourmet and its investors, and forced Claimants to discontinue their operations relating to snow crabs.
The discriminatory intent of such actions was confirmed in January 2017 by Norway's Minister of Fisheries, who stated that Norway will not give "a single crab" to European fishermen. In addition, the judgment of the Norwegian Supreme Court of 14 February 2019 upheld certain fines and criminal penalties against SIA North Star and one of its captains for allegedly fishing snow crabs in the fisheries protection zone around the Svalbard Archipelago. The judgment constitutes a denial of justice. The Supreme Court, in a manifestly arbitrary and discriminatory manner, refused to adjudicate certain of the defendants' defences. The Supreme Court patently did so because a consideration of these defences would have forced it to disavow the Norwegian government's position as regards the Svalbard Treaty (which position is contrary to international law and to the position of the other parties to the treaty, as further detailed below). Such a disavowal would have confirmed the Claimants' position on the merits of the claim, i.e.
that Claimants have the right to harvest snow crabs in waters over which Norway asserts jurisdiction. At the same time, the proper application of the Svalbard Treaty would also have very important economic consequences for Norway. This includes the recognition that the resources of and around the Svalbard Archipelago must be shared with other treaty parties. Norway has historically strongly resisted such an interpretation because these resources not only include snow crabs, but also potentially vast oil reserves.2
6. Claimants submit that these actions by Norway violated its obligations under the BIT, thereby causing Claimants to sustain significant economic injury for which Norway is liable to make full reparation.
II. THE PARTIES
A. THE CLAIMANTS
Mr. Peteris Pildegovics
SIA North Star
B. THE RESPONDENT
III. CONSENT TO THE JURISDICTION OF THE CENTRE
A. CLAIMANTS' CONSENT
B. RESPONDENT'S CONSENT
Claimants are Latvian "investors" under the definition of the BIT
The dispute relates to "investments" of Claimants
Claimants' investments are in the "territory" of Norway
The dispute continues to exist after a period of three months
IV. THE ISSUES IN DISPUTE
A. FACTUAL BACKGROUND
Snow crabs in the Barents Sea
Claimants' investments and operations
Norway's acceptance of, and subsequent interference with, Claimants' investments
B. THE LEGAL FRAMEWORK
The Latvia-Norway BIT
The Relevant Law of the Sea: NEAFC and UNCLOS
The Svalbard Treaty
The WTO's General Agreement on Trade in Services (GATS)
(e) The Agreement on the European Economic Area (EEA)
C. NORWAY'S VIOLATIONS OF THE BIT
Norway's conduct breached Article III of the BIT (promotion and protection of investments)
Violation of Article IV(1): Most Favoured Nation Treatment
Violation of Article VI: Expropriation and Compensation
D. CLAIMANTS' DAMAGES
V. REQUEST FOR RELIEF