brought under the dominican republic - central america - ita

2.19. In presenting this main objection, the Respondent does not object to prospective nationality
planning made in good faith before any investment. The Respondent objects
to the Claimant‟s change of nationality because of its timing at a much later
date, made in deliberate bad faith:
“What Claimant and its parent company did in the present case, however, is not prospective
nationality planning but a retrospective gaming of the system to gain jurisdiction
for an existing dispute based on existing facts over which there would not
otherwise be jurisdiction. This is an abuse of the international arbitration system
and process.” 9
2.20. The Respondent‟s position was summarised at the outset of its Post-Hearing Submissions:
“Pacific Rim Mining Corp., a Canadian corporation, through its wholly-owned shell
subsidiary, Pac Rim Cayman, has abused the international arbitration process by
changing Pac Rim Cayman's nationality from the Cayman Islands to the United
States, and then using this nationality to initiate ICSID arbitration proceedings for a
pre-existing dispute and assert claims under CAFTA and the Investment Law of El
Salvador as a national of the United States. The consequence of this abuse can only
be the dismissal of this entire arbitration.” 10
(04) The Claimant’s Case
2.21. In summary, the Claimant submits that its change of nationality was not an abuse of
process because it was part of an overall plan to restructure the Pac Rim group of
companies. According to the Claimant, “(i)n 2007, the Companies were looking for
ways to save money;” 11 and as a result, changes are alleged to have been envisioned,
as follows:
“This led to an examination of the overall corporate structure of the Companies.
There were administrative costs involved in maintaining Pac Rim Cayman as a
Cayman Islands entity. At the same time, the Companies were advised that there
would be no adverse tax consequences to domesticating Pac Rim Cayman to Nevada
– the jurisdiction from which it had been effectively managed by Mr. Shrake since
1997. In other words, the Companies believed that by domesticating Pac Rim Cayman
to Nevada, they could eliminate the costs of maintaining Pac Rim Cayman in
9
10
11
Jurisdiction Memorial, § 18. Emphasis by the Respondent.
The Respondent‟s Post-Hearing Submissions, § 2.
Jurisdiction Counter-Memorial, § 136.
Part 2 – Page 6