brought under the dominican republic - central america - ita

the Cayman Islands, without losing any tax benefits. It made no sense to manage a
Cayman Islands company from Nevada, if that company could be domesticated to
Nevada with cost savings and no adverse tax consequences.” 12
2.22. This was an incomplete explanation on the evidential materials adduced by the
Claimant itself, particularly from its principal factual witness, Mr Shrake. Even before
the Hearing, Mr Shrake candidly acknowledged that the availability of international
arbitration (under CAFTA and ICSID) was one of the elements of its decision
to change the Claimant‟s nationality:
―The ability of Pac Rim Cayman to bring claims under CAFTA, if a dispute with El
Salvador were to arise in the future, was one of the factors I considered, and which
– with others – weighed in favour of the reorganization.‖ 13
2.23. The Claimant nonetheless submitted that the events giving rise to the Parties‟ dispute
occurred after this change of nationality on 13 December 2007; and, given that timing,
the change cannot be characterised as an abuse of process by the Claimant. It
was said that a change in nationality can be triggered by many reasons; and if nationality
planning for the purpose of international arbitration can be made in good
faith as one of several reasons before an investment is made (as the Respondent acknowledges),
then why not a change made in like good faith after an investment but
before any dispute has arisen?
2.24. In the present case, however, the timing is important. For the Respondent, CAFTA
came into force on 1 March 2006; the Claimant changed its nationality in 13 December
2007 whereupon, ostensibly, it acquired substantive and procedural rights
under CAFTA; President Saca‟s speech was publicly reported on 11 March 2008;
and the Claimant submitted its Notice of Arbitration on 30 April 2009.
2.25. From the Claimant‟s Notice of Intent onwards, the Claimant has pleaded “unlawful
and politically motivated measures” taken by the Respondent before 13 December
2007, including (as alleged) the arbitrary imposition of unreasonable delays and un-
12
13
Jurisdiction Counter-Memorial, § 138.
Mr Shrake‟s Witness Statement, § 113. See also, to the same effect, the Jurisdiction Counter-Memorial, §
139: “As part of this overall assessment of the Companies‘ organizational structure, Mr. Shrake also
considered the Companies‘ potential avenues of recourse if a dispute were ever to arise with El Salvador
in the future.‖
Part 2 – Page 7