The Hague Case Law: Latest Developments

In this first contribution to the Hague Case Law as managing editor of the Netherlands International Law Review, I would like to briefly take the opportunity to thank my predecessor, Anna Meijknecht, for everything she has done for the Netherlands International Law Review and for writing the Hague Case Law over the past 6 years. As usual, this blog covers the most recent case law of the international courts and tribunals seated in The Hague. In this issue, four decisions from international judicial bodies are discussed: two cases from the International Court of Justice (ICJ), one from the International Residual Mechanism for Criminal Tribunals (IRMCT) and one from an UNCITRAL arbitral tribunal administered by the Permanent Court of Arbitration (PCA).¹

International Court of Justice

• (1) Question of the Delimitation of the Continental Shelf between Nicaragua and Colombia beyond 200 nautical miles from the Nicaraguan Coast (Nicaragua v. Colombia), Judgment of 13 July 2023

The first case concerns an ICJ judgment handed down almost ten years after Nicaragua had initiated proceedings against Colombia for the first time. The Court delivered its final Judgment on 13 July 2023, although it was not anticipated that this would be the end to the case.² Rather, it was expected that the Court would only give its findings on two specific questions on which it had asked the parties to focus during the oral proceedings in December 2022 and June 2023.³ However, the Court found the answers to these questions to be sufficient and closed the case with this Judgment.⁴

Background

Nicaragua instituted proceedings against Colombia in September 2013, following an ICJ Judgment in 2012 that also addressed the issue of maritime delimitation between these states.⁵ In 2012, the Court had concluded that it could not delimit the area between Nicaragua’s and Colombia’s continental shelf and exclusive economic zones, because Nicaragua had not ‘established that it has a continental margin that extends far enough to overlap with Colombia’s 200-nautical-mile entitlement to the continental shelf’.⁶ According to the Court, in order to be able to delimit the area, Nicaragua should have first made a full submission (instead of only providing preliminary information) to the Commission on the Limits of the Continental Shelf (CLCS).⁷ After Nicaragua did so in 2013, it again initiated a case before the ICJ and in 2016, the Court’s jurisdiction was upheld in a controversial Judgment with the President casting the deciding vote.⁸

In the present case, the issue concerned ‘the delimitation of the boundaries between, on the one hand, the continental shelf of Nicaragua beyond the 200-nautical-mile limit from the baselines from which the breadth of the territorial sea of Nicaragua is measured, and on the other hand, the continental shelf of Colombia’.⁹ First, Nicaragua asked the Court to delimit the maritime boundary between Nicaragua and Colombia in the areas of the continental shelf according to the co-ordinates provided by Nicaragua. Secondly, it requested the Court to find that the islands of San Andrés and Providencia are entitled to a continental shelf, again on the basis of co-ordinates provided by Nicaragua. Thirdly, it asked the Court to declare that two other very small islands in the Caribbean Sea (Serranilla and Bajo Nuevo) have a territorial sea of 12 nautical miles.¹⁰

The questions of Law

As mentioned above, during the oral proceedings of this case in December 2022, the Court formulated two questions of law which it considered necessary in order to be able to deal with those applications and invited the parties to submit their observations on those questions:

• Under customary international law, may a State’s entitlement to a continental shelf beyond 200 nautical miles from the baselines from which the breadth of its territorial sea is measured extend within 200 nautical miles from the baselines of another State?

• What are the criteria under customary international law for the determination of the limit of the continental shelf beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured and, in this regard, do paragraphs 2–6 of Article 76 of the United Nations Convention on the Law of the Sea reflect customary international law?¹¹

The Court noted that these questions were of a ‘preliminary character’, and that it was required to answer them ‘in order to ascertain whether the Court may proceed to the delimitation requested by Nicaragua and, consequently, whether it is necessary to consider the scientific and technical questions that would arise for the purposes of such a delimitation’.¹² With these questions the Court only focused on customary law, as Colombia is not a party to the United Nations Convention on the Law of the Sea (UNCLOS).¹³ Nicaragua answered the questions in the affirmative, and, unsurprisingly, Colombia in the negative.¹⁴ Nicaragua argued that although states generally have a preference for drawing a single boundary between two overlapping continental shelves, this practice does not amount to customary international law, as it lacks opinio juris.¹⁵ According to Nicaragua, several previous judicial decisions also show that the unity of the continental shelf has been established.¹⁶ Therefore, the natural prolongation of the continental shelf prevails over the ‘distance’ criterion.¹⁷ Colombia, for its part, argued that geographical factors do not determine legal title.¹⁸ In addition, it pointed to the practice of the vast majority of states that have not claimed a continental shelf beyond 200 nautical miles encroaching upon the continental shelf of another state.¹⁹

Answers to the Questions

The Court then proceeded to answering the questions itself. While it acknowledged that ‘there is a single continental shelf in the sense that the substantive rights of a coastal State over its continental shelf are generally the same within and beyond 200 nautical miles from its baselines’, it also considered that ‘the basis for the entitlement to a continental shelf within 200 nautical miles from a State’s baselines differs from the basis for entitlement beyond 200 nautical miles’.²⁰ The ICJ also observed that ‘the vast majority of States parties to the Convention [UNCLOS] that have made submissions to the CLCS have chosen not to assert, therein, outer limits of their extended continental shelf within 200 nautical miles of the baselines of another State’.²¹ The Court found that this practice was indicative of opinio juris, although ‘such practice may have been motivated in part by considerations other than a sense of legal obligation’, and despite the fact that a small number of states had made submissions for a continental shelf beyond 200 nautical miles that encroached upon maritime areas within 200 nautical miles of other states.²² According to the ICJ, ‘the practice of States may be considered sufficiently widespread and uniform for the purpose of the identification of customary international law’.²³ It then concluded that ‘under customary international law’, a state’s entitlement to a continental shelf beyond 200 nm ‘may not extend within 200 [nm] from the baselines of another State’.²⁴

By answering the first question in the negative, the second question had become redundant, since the Court had found that there were ‘no overlapping entitlements over the same area’.²⁵ In fact, the Court argued that there was nothing to delimit due to the existence of a customary rule that prohibits a claim to a continental shelf beyond 200 nautical miles if it extends within 200 nautical miles of the baselines of another state. In the words of the Court, ‘irrespective of any scientific and technical considerations, Nicaragua is not entitled to an extended continental shelf within 200 [nm] from the baselines of Colombia’s mainland coast’ and that ‘there is no area of overlapping entitlement to be delimited’.²⁶ The Court used the same reasoning in refusing to delimit the maritime boundaries of the islands of San Andrés and Providencia. Because Nicaragua does not have an entitlement to an extended continental shelf within 200 nautical miles from the baselines of the islands, there were no overlapping entitlements and, thus, no need for delimitation.²⁷ The third request was likewise rejected on the basis of a similar reasoning.²⁸

In the operative paragraph, by thirteen votes to four, the Court rejected the request from Nicaragua to ‘adjudge and declare that the maritime boundary between the Republic of Nicaragua and the Republic of Colombia in the areas of the continental shelf appertain to each of them beyond the boundary determined by the Court in its Judgment of 19 November 2012 […]’. It also rejected, by the same ratio, Nicaragua’s request to ‘adjudge and declare that the islands of San Andrés and Providencia are entitled to a continental shelf […]’. Finally, it refused, by twelve votes to five, to deal with Nicaragua’s request ‘with respect to the maritime entitlements of Serranilla and Bajo Nuevo’.²⁹

Judges Tomka, Robinson, Charlesworth and Judge ad hoc Skotnikov voted against all decisions, including Judge Nolte on the third decision. These Judges also appended a dissenting opinion to the Judgment of the Court. Judges Xue, Iwasawa and Nolte appended separate opinions and Judge Bhandari appended a declaration. Judge Tomka strongly criticized the Court’s Judgment as presenting a ‘bifurcated procedure’ that prevented the Applicant from presenting its case in full.³⁰ According to Judge Tomka, the Court should have requested the parties’ views on this procedure as required by Article 31 of the Rules of Court.³¹ Judge Charlesworth criticized the abstract nature of the questions of law formulated and answered by the Court and argued that they were detached from the specific facts of the case.³² In her view, the ICJ should not have stopped at answering the two legal questions, but should have gone on to address the remaining issues dividing the parties.³³

• (2) Arbitral Award of 3 October 1899 (Guyana v. Venezuela), Judgment on Preliminary Objections, 6 April 2023

Another case from the ICJ is the Judgment on Preliminary Objection in the case of the Arbitral Award of 3 October 1899, between the Co-operative Republic of Guyana and the Bolivarian Republic Venezuela. The case stems from a 1899 arbitral award delivered by an arbitral tribunal, composed of two Americans, two British and one Russian member, in a dispute between Venezuela and the then colony of British Guiana over the border between the two countries.³⁴ In 1962, Venezuela renounced the validity of this award as a ‘political transaction carried out behind Venezuela’s back and sacrificing its legitimate rights’.³⁵ The course of the border has implications for the ownership of territories rich in oil and gas. The case commenced before the ICJ in 2018 when Guyana filed its application. As a result, the Court ruled in 2020 that it had jurisdiction to hear the case.³⁶ This was the first time that the ICJ had accepted jurisdiction in a case between two states on the basis of a referral by a third party. The jurisdiction of the Court was namely based on the 1966 Geneva Agreement in which a special provision is included that leaves the choice for the means of settlement of a dispute to the United Nations Secretary-General.³⁷ In January 2018, the Secretary-General informed the parties that his choice for the settlement of this dispute was the ICJ. As a result, Guyana submitted its application to the ICJ in March 2018.

Arguments of the Parties

Although the length of cases before the ICJ is usually lamented, in this case there seems to be a small upside to the long duration, as over the years Venezuela has changed its mind about participating in the case. After initially refusing to participate in the proceedings, Venezuela filed preliminary objections to the Court’s jurisdiction 18 months after the 2020 Judgment on questions of jurisdiction and/or admissibility. Venezuela argued that the Court could not accept jurisdiction in this case because the United Kingdom (UK) should be considered an indispensable third party to the dispute, which, according to the Monetary Gold Rule, would prevent the Court from having jurisdiction. According to Venezuela, the legal interests of the UK constituted the very subject matter of the dispute and the UK has not consented to the ICJ’s jurisdiction.³⁸ Guyana, on the other hand, argued that the UK has no legal interest nor claim to the territory in question and has ‘relinquished all territorial claims’ when it granted independence to Guyana in 1966.³⁹ Moreover, in Guyana’s view, the issue at stake is not the lawfulness of the UK’s conduct, ‘but rather the conduct of the arbitral tribunal’.⁴⁰ Furthermore, according to Guyana, the UK consented to the jurisdiction of the Court when it signed the 1966 Geneva Agreement and that the UK has on several occasions expressed its support for a judicial settlement between Venezuela and Guyana.⁴¹

Jurisdiction v. Admissibility

The ICJ accepted Venezuela’s preliminary objections based on the distinction between jurisdiction on the one hand, as constituting matters related to the ‘existence of jurisdiction’, and admissibility, as matters related to the ‘exercise of jurisdiction’.⁴² Although this is not the first time that the Court has drawn a distinction between these two concepts, it is the first time that is has done so in this specific formulation. It also examined the concept of res judicata in relation to the 2020 Judgment, concluding that it extends only to the question of the Court’s jurisdiction and does not preclude the admissibility of Venezuela’s preliminary objection.⁴³ In examining Venezuela’s objection, the Court carefully looked at the 1966 Geneva Convention, finding that the parties had anticipated the independence of Guyana from the UK,⁴⁴ and the acceptance by the parties that the UK would play a role in the dispute settlement procedure.⁴⁵ Furthermore, the ICJ observed that during the time of the conclusion of the treaty, the UK ‘was aware that such a settlement could involve the examination of certain allegations by Venezuela of wrongdoing’ by the UK.⁴⁶ Therefore, the Court concluded that ‘by virtue of being a party to the Geneva Agreement, the United Kingdom accepted that the dispute between Guyana and Venezuela could be settled by [the ICJ], and that it would have no role in that procedure’.⁴⁷ Hence, the Monetary Gold principle does not apply.

In the operative paragraph the unanimous bench decided that the preliminary objection raised by Venezuela was admissible. By fourteen votes to one, the Court rejected this preliminary objection. By the same ratio, it decided that it ‘can adjudicate upon the merits of the claims of the Co-operative Republic of Guyana, in so far as they fall within the scope of paragraph 138, subparagraph 1, of the Judgment of 18 December 2020’.⁴⁸ Judge ad hoc Couvreur voted against the decisions and appended a partially separate and partially dissenting opinion to the Judgment of the Court.

Although Venezuela could now again decide not to participate in the merits phase of the case, such a decision would reflect badly upon it, since it has in fact just rejoined the case. Be that as it may, this Judgment may have the effect of lengthening the duration of cases in the future by ruling that admissibility issues may be raised after a decision on jurisdiction.⁴⁹

International Residual Mechanism for Criminal Tribunals (IRMCT)

Prosecutor v. Jovica Stanišić and Franko Simatović, Judgment of the Appeals Chamber (31 May 2023), MICT-15-96-A

This is probably the last case to be dealt with by the IRMCT during its existence. With the closure of this case, there is now only one case still pending before the Mechanism: the Kabuga case. Last August, the Appeals Chamber issued a Decision on Kabuga’s health and fitness to stand trial.⁵⁰ It is likely that a decision to stay the proceedings will be issued in the near future. As this case is currently before the IRMCT’s branch in Arusha (Tanzania), this Decision will not be discussed in this edition of the Hague Case Law.

Background

On 31 May 2023, the Appeals Chamber of the IRMCT delivered its Judgment in the case against Jovica Stanišić and Franko Simatović.⁵¹ With this Decision, the case that began 20 years ago and involved many trials, acquittals, retrials and convictions finally came to an end. Both Accused were arrested as a consequence of their involvement in crimes committed against humanity in Bosnia. Stanišić had been the Deputy Chief and later Chief of the State Security Service of the Serbian Ministry of Interior, and Franko Simatović was the State Security Service’s senior intelligence officer.⁵² After their arrest in 2003, Stanišić and Simatović were acquitted in 2013 by the International Criminal Tribunal for the former Yugoslavia (ICTY) for aiding the commission of crimes, due to a lack of evidence.⁵³ In 2015, the Appeals Chamber of the ICTY ordered a retrial. On 30 June 2021, the Trials Chamber of the IRMCT (which had taken over the responsibilities of the ICTY) found the two Serbian Accused responsible for aiding and abetting the crime of murder, as a violation of the laws or customs of war and a crime against humanity, and the crimes of deportation, forcible transfer, and persecution, as crimes against humanity, committed by Serb forces following the takeover of Bosanski Šamac in April 1992. They were each sentenced to 12 years imprisonment.⁵⁴

Joint Criminal Enterprise

In its Judgment of 31 May, the Appeals Chamber rejected all grounds on which the Defence had relied upon in the Appeal.⁵⁵ It granted part of the Prosecution’s appeal, finding that the Trial Chamber erred in not convicting Stanišić and Simatović under the mode of joint criminal enterprise liability and instead only of aiding and abetting the crimes as formulated in the Indictment. It held that all reasonable doubt was eliminated as to the required mens rea to establish participation in a joint criminal enterprise (first category).⁵⁶ According to the Appeals Chamber, both Accused had been responsible for payments made to the Serbian Volunteer Guard members who participated in the commission of the 1995 killings in Sanski Most. These payments demonstrated, in the view of the Appeals Chamber, a ‘systemic support to the ability of the Serbian Volunteer Guard, as an organization, to perpetrate organized criminal conduct targeting non-Serbs in Sanski Most in September 1995’.⁵⁷ The Appeals Chamber recalled that ‘the significance of an accused’s contribution to the common criminal purpose is relevant to assessing his or her mens rea in connection with his or her alleged joint criminal enterprise liability’.⁵⁸ While the Trial Chamber had expressed its doubts in the 2021 Judgment regarding the mens rea of the two Accused, the Appeals Chamber found that ‘the full extent of Stanišić’s and Simatović’s contributions to the common criminal purpose, which, although not reflecting authority over the perpetrators when the crimes were committed, are consistent with their capacity to further the common criminal purpose based on Stanišić’s and Simatović’s positions in the State Security Service’.⁵⁹

Furthermore, the Appeals Chamber concluded that ‘from the time Stanišić and Simatović organized the training of Unit members and local Serb forces at the Pajzoš camp and through their subsequent deployment during the takeover of Bosanski Šamac in 1992’, both Accused shared the intent to achieve the common criminal objective to remove the majority of non-Serbs from large parts of the territory of Croatia and Bosnia.⁶⁰

Thus, the Appeals Chamber held Stanišić and Simatović liable as members of a joint criminal enterprise for crimes committed by various Serb forces in Bosnia and Herzegovina in 1992, such as deportation, inhumane acts and persecution in Bijeljina; murder, deportation, inhumane acts and persecution in Zvornik; murder, deportation, inhumane acts and persecution in Bosanski Šamac; inhumane acts and persecution in Doboj; and deportation, inhumane acts and persecution in Sanski Most.⁶¹ In addition, they were held responsible for various crimes committed in 1995 in Trnovo and Sanski Most (murder and persecution).⁶² The Appeals Chamber also found them responsible for the murder of Marija Senasi committed in Croatia, in June 1992.⁶³ All crimes were found to be war crimes and/or crimes against humanity.

Sentence

Having regard to the circumstances of the case and relevant health issues, the Appeals Chamber found the severity of the crimes of such gravity that it decided to increase Stanišić’s and Simatović’s respective sentences to 15 years of imprisonment.⁶⁴ The Accused have already been imprisoned for a number of years, and this Judgment adds a few years to the period before they can apply for early release.

Permanent Court of Arbitration

Antonio del Valle Ruiz and others v. The Kingdom of Spain, Award of 13 March 2023, PCA Case No. 2019-17

This is the first case of an UNCITRAL arbitral tribunal dealing with the consequences of the Single Resolution Mechanism (SRM) that was adopted by the European Union (EU) in 2013 to supplement the other pillars of the EU banking union. The regulation establishing a SRM was proposed by the European Commission with a view to ‘set[ting] out a framework that allows for the in-depth restructuring of banks by authorities whilst avoiding the very significant risks to economic stability and costs derived from their disorderly liquidation under national insolvency laws, and putting an end to the need to finance the process with public resources’.⁶⁵ It was created after the 2008 financial crisis when banks that were ‘too big to fail’ relied on public money to be saved. The Intergovernmental Agreement on the transfer and mutualisation of contributions to the Single Resolution Fund was signed by 26 Member States in May 2014.⁶⁶

Background

In 2017, the Banco Popular in Spain collapsed and was placed under the SRM. It was the first case in which the EU intervened in this way to prevent a bailout.⁶⁷ The Banco Popular was sold to Santander for €1 and the losses were covered by the shareholders and debt holders. In 2017, a group of 54 affected Mexican investors initiated a claim under the Bilateral Investment Treaty (BIT) between Mexico and Spain. They claimed that due to the resolution, they had lost ‘their entire original investment, which […] was of more than €470 million’.⁶⁸ According to the claimants, the Bank was a ‘solvent and valuable financial institution that never should have been placed into resolution’ and that Spain acted unlawfully by ‘precipitating Banco Popular’s liquidity crisis and then using it to justify the bank’s resolution and “sale” to Santander’.⁶⁹ Spain’s acts and omissions led to a violation of the claimants’ rights under the BIT, ‘including its rights to fair and equitable treatment […] national treatment and most favored nation treatment […]’.⁷⁰

Jurisdiction

In deciding on its jurisdiction, the Tribunal confirmed that the claimants had waived their rights to initiate proceedings under other administrative or judicial tribunals,⁷¹ even though they had already begun proceedings at the Court of Justice of the European Union (CJEU). The Tribunal argued that this was not a violation of the waiver since the Respondents before the CJEU were the EU institutions whereas the Respondent in this arbitration was Spain.⁷² Furthermore, the Tribunal found that the claims before the CJEU and the Tribunal were not the same.⁷³ The other objections to jurisdiction, such as the dual nationality of the claimants and the ‘clean hands’ argument were also rejected.⁷⁴

Fair and Equitable Treatment

Regarding the merits of the case, the Tribunal first looked at the obligation of fair and equitable treatment (FET), as formulated in Article IV of the BIT between Mexico and Spain. In doing so, the Tribunal considered that under this obligation several types of conduct may be considered to be in violation of the obligation, such as: ‘arbitrariness; “gross” unfairness, injustice or idiosyncratic conduct; discrimination; “complete” lack of transparency and candor in an administrative process; lack of due process “leading to an outcome which offends judicial propriety”; and “manifest failure” of natural justice in judicial proceedings’.⁷⁵ The Tribunal also held that it ‘cannot simply put itself in the position of the S[t]ate and weigh the measure anew, particularly with hindsight’.⁷⁶

The first contested measure under the FET obligation was the withdrawal of large numbers of deposits. The Tribunal considered that the claimants should prove that the Respondent had an ‘obligation to prevent the deposit withdrawals and that its failure to do so violated FET’.⁷⁷ The Tribunal, however, found that no such obligation existed for Spain. According to the Tribunal, the claimants ‘have pointed to no legal basis allowing, let alone obliging Spain to order its public entities to suspend withdrawals’.⁷⁸ In fact, the governmental authorities had tried to stop the withdrawals at the time, but they were unable to do so because ‘these government bodies follow their own rules or policies with a view to protection of their assets’.⁷⁹

The second contested measure were the statements or non-statements of the government officials that allegedly harmed the Bank. The Tribunal asserted that in order to be in breach of the FET obligation, these statements should have been ‘arbitrary, grossly unfair, unjust, idiosyncratic or discriminatory’.⁸⁰ After carefully reading through the statements, the Tribunal concluded that none of the statements were ‘unprecedented and alarming, irresponsible or damning’.⁸¹ Despite the ambivalence of the non-statements, the Tribunal here too concluded that there was no breach of the BIT.⁸²

The group of investors also contended that Spain should have imposed a short sales ban on the Bank’s shares and that this failure was arbitrary and discriminatory. This constituted the third contested measure. In addressing this point, the Tribunal acknowledged that it owes deference to the authorities and not to ‘second-guess the correctness of its decision’.⁸³ Only if the failure could be established to be ‘an excess or abuse of discretion, on prejudice or personal preference’, could the Tribunal establish the arbitrary nature thereof. According to the Tribunal, however, the evidence contained no indication that Spain’s decision was arbitrary,⁸⁴ and that a difference in treatment with the Liberbank was justified and therefore did not constitute discrimination.⁸⁵

The fourth contested measure was the failure to grant Emergency Liquidity Assistance (ELA) of €9.5 billion as a discretionary measure. The claimants argued that Spain had abused its discretion,⁸⁶ by making the Bank believe that €9.5 billion was forthcoming, while in reality it was not.⁸⁷ The claimants alleged that the process was poorly managed and that it was incomprehensible why the ELA process had been stayed. One of the requirements for receiving assistance is that the bank is clear about the potential collateral. According to the Tribunal, in this procedure, ‘a financial institution cannot expect that it will necessarily receive ELA, nor does it have an entitlement to ELA’ and it ‘cannot second-guess the appropriateness of granting or refusing ELA in the specific circumstances’.⁸⁸ After carefully reviewing the events leading to the decision to refrain from granting the ELA to the Banco Popular, the Tribunal concluded that ‘there was nothing unreasonable or arbitrary in the conclusion of the Bank of Spain that Banco Popular had not managed to provide sufficient collateral […]’.⁸⁹

The final contested measure under the FET obligation was the sale of the Bank to Santander. The group of Mexican investors argued, among other things, that Spain should have looked into alternative solutions and that it had brokered a backdoor deal. According to the Tribunal, however, the claimants did not succeed in proving that the resolution was ‘engineered’ and that it was a ‘sham auction'.⁹⁰ Instead, the Tribunal noted that Spain’s conduct in this regard was ‘almost inevitable in order to ensure the continuity of the critical functions of Banco Popular, avoid the risk of contagion to other financial institutions and business, and protect the stability of the financial system’.⁹¹

In sum, none of these claims succeeded.

National Treatment

Under the National Treatment (NT) obligation, Article III of the BIT, the claimant argued that Banco Popular had been treated less favourably than at least three other national banks.⁹² For this purpose, the Tribunal looked at the question of whether the Mexican investors were granted similar treatment compared to Spanish investors, who, according to the Tribunal, found themselves in similar circumstances.⁹³ Here the Tribunal concluded that the difference in treatment was ‘not unjustified under the circumstances’.⁹⁴ The Tribunal, however, saw no evidence of the two groups being treated differently.

Expropriation

Finally, the claimants argued that Spain had indirectly expropriated the Bank (Art. V(1) of the BIT).⁹⁵ In the Tribunal’s view, however, the measures that would constitute creeping expropriation are the same as addressed under the FET obligation, and therefore, the conduct of Spain amounted to ‘legitimate acts’ which did not amount to expropriation.⁹⁶

Costs

Although the claimants prevailed on the issue of jurisdiction and admissibility, the Tribunal ordered them to pay 70% of the respondent’s legal fees, because the respondent prevailed on the merits of the case (liability).⁹⁷ Therefore, the Tribunal decided that the group of Mexican investors should pay to the Kingdom of Spain an amount of €717,339.93 as a reimbursement of the costs of the arbitration and €7,213,136.44 as a contribution to the legal fees and other expenses incurred in connection with the arbitration.⁹⁸