GIMC 2016-Moot Problem PDF
GIMC 2016-Moot Problem PDF
GIMC 2016-Moot Problem PDF
2. Leviosa, is a developed country with a population of 250 million and has been a
champion of free trade and capitalism across the world. It has been a founding
member of both GATT and the WTO and has been on the forefront of global efforts
geared towards greater trade integration. Leviosa qualifies as a post-industrial
3. In 2006, Leviosa developed a unique technology that uses solar power to generate
energy. A scientist named Einburke developed Solar Panels, a technology which uses
photons from the sun to generate electricity through a process known as the
photovoltaic effect. Each panel is capable of generating close to 200-320 Watts. Many
developed countries have started using this technology for commercial and residential
application. An average home in Leviosa now can generate close to 3,000 kWH in
electricity each year. Moreover, while the technology had exorbitant installation costs
in 2006, the price of such panels dropped by almost 50% in 2014 making it much
cheaper than the ordinary fossil fuel generated from the grid. Solar panels have also
brought a revolution in the energy sector because of its ability to provide
decentralized off-the-grid technology, thereby facilitating access to uninterrupted
electricity for a large number of households in remote areas.
4. The technology has allowed Leviosa to significantly reduce its carbon emissions and
meet the Intended Nationally Determined Commitment (INDC) it made at the
UNFCCC Conference of Parties on Climate Change in 2012. Furthermore, Leviosa
has become the largest exporter of the Crystalline Silicon Solar Cells in the world and
many countries have initiated and executed successful solar missions, aimed at
providing solar powered electricity to households and commercial enterprises, on
account of the technology transferred by Leviosian investors.
Article 1.1
The Wingardium National Solar Mission shall be launched on 31st May 2013 in
consonance with the Socialistic, Constitutional and Environmental goals of the
Republic of Wingardium. The stated goals of the Solar Mission are as follows:
(i)
(ii)
(iii)
(iv)
(v)
Promote the use of clean solar energy across households and commercial
enterprises in Wingardium through a Feed-in-Tariff Scheme.
(vi)
Article 4
One of the important objectives of the National Solar Mission is to promote domestic
manufacturing. In view of this, the developers are expected to procure their project
components from domestic manufacturers, as far as possible. However, in the case of
Solar Photovoltaic Projects selected it is mandatory for Projects based on Thin Films
technology to use the modules manufactured in Wingardium. Photovoltaic Modules
made from Crystalline Silicon technologies or concentrator Photovoltaic cells may be
sourced from any country, provided the technical qualification criterion is fully met
for Phase-I of the Mission (Annexure I).
Article 4.1
It would be mandatory for Project developers to ensure 30% of local content in all
plants/installations under Solar thermal technology. Land is excluded.
Article 5
In order to promote the usage of Renewable Energy, the Government shall initiate a
Feed-in-Tariff scheme similar to the Ontario Feed-in-Tariff scheme but with a
domestic content requirement of 30% excluding land. This will be initiated along with
the other mission objectives of WNSM.
7. In January 2013, the President of Leviosa visited Wingardium at the behest of the
Solar industry lobby to develop a strategic partnership, wherein Leviosian
manufacturers of Crystalline Silicon technologies would be able to exploit the
economic gains that would accrue from WNSM and would get an edge over other
8. Both countries have enjoyed cordial diplomatic relations and are on the verge of
executing several important security oriented partnerships. Both countries have
publicly acknowledged the importance of building deeper strategic relations in an
emerging world, where Wingardiums competitor and neighbour, Redondo, is
expanding its sphere of influence globally. Redondo and Wingardium have had a
tumultuous relationship and have previously gone to war over land claims. Redondo
initiated economic reforms much before Wingardium and has been reaping the
benefits of the same ever since much to the chagrin of both Wingardium and Leviosa.
Leviosa wishes to use Wingardium not only for economic gains but also believes that
an economically empowered Wingardium will act as a balancer in the region and
allow Leviosa to maintain its control over the global financial and security hegemony.
Wingardium has always practiced an independent foreign policy and has been wary of
closely aligning itself with a specific world power, however the growing clout of
Redondo has compelled Wingardium to reach out to a super power like Leviosa as
they share a common agenda of halting Redondos strategic growth. The President of
Leviosa and President of Wingardium believe that deeper economic integration will
allow both nations to grow exponentially.
11. The 34 investors wrote to the President of Leviosa seeking his intervention on this
issue and compel the Wingardian Government to review its domestic content law
under WG/SM/P-1. The President of Leviosa in a letter dated 30th June, 2015
(Annexure III) wrote to the President of Wingardium stressing upon the need to create
greater investor confidence in Wingardium for both Leviosa and Wingardium to grow
economically. He requested the Wingardian President to reconsider the domestic
content requirement for the benefit of Leviosian investors and offered a commitment
to support the growth of domestic industry so that Wingardian could manage the
execution of Phase-II of WNSM by solely relying on domestic manufacturers.
12. The President of Wingardium, in a letter dated 1st July 2015 (Annexure IV) offered to
cut back on the domestic content requirement for the benefit of Leviosian investors
and diplomatic relations between Wingardium and Leviosa. Through an Executive
Order dated 2nd July 2015 (Annexure V), the President of Wingardium honored the
commitment made to Leviosa.
13. However this attempt to please Leviosa resulted in a backlash in Wingardium. The
domestic Crystalline Silicon cells and solar panels industry had employed a workforce
of 10 million people and due to this decision they were compelled to lay off more than
half of their workforce. Rising uneployment and burgeoning fiscal deficit on account
of loss of tax revenue gave the opposition party enough fodder to launch an offensive
against the Government of Wingardium in the Wingardian Parliament. For a whole
session, the debate on the Presidents ill-conceived measure stonewalled any
concrete development on other aspects of governance and law making. The policy
paralysis at the centre resulted in a hostile investor sentiment and compelled credit
rating agencies to downgrade Wingardiums credit status to negative. With impending
elections in the year 2017 and the President looking to secure a second term in office,
there was no other option left but to revert to the original scheme as laid down in
WG/SM/P-1.
14. On 4th January, 2016, The President of Wingardium through an executive order
(Annexure VI) called for the reinstatement of WG/SM/P-1 in its totality with a more
stringent domestic content requirement of 50% despite the fact that Leviosa had
transferred sufficient Know-How to establish 25 domestic companies that deal with
production of Cyrstalline Silicon Solar PV Module.
15. As a result the Leviosian investors suffered heavy losses and were compelled to abide
by the executive order. The President of Leviosa in a strongly worded letter dated 12th
16. The President of Wingardium took this threat as an opportunity to further build
popular support in his country. He had also secured an Energy Cooperation Deal with
Redondo for supply of Thin Film Technology on similar terms as stipulated under the
Energy Cooperation Agreement with Leviosa. A media report in the Wingardian
Herald mentioned that this was an attempt to bury the hatchet with Redondo and start
anew. The media report further alleged that there is a secret plan to transfer the
domestic Crystalline Silcon manufacturing industry to Redondo and gradually stop
the use of this technology for production of PV modules, in its entirety. The President
of Wingardium denied this in an interview to the Wingardian Herald but many official
sources confirmed the same on the condition of anonymity. At the same time, it was
revealed in a preliminary study by the Department of Health of Wingardium, that
Crystalline Silicon solar cells are causing many allergies and in some cases resulting
in skin cancer for individuals in close contact with such panels containing these cells.
Further, it was suggested that it would not be possible to impose a blanket ban on the
use of Crystalline Silicon cells since some domestic manufacturers were involved in
the production of the same and any such ban would lead to loss of livelihood for many
employed in such industries. The reliance on Crystalline Silicon cells had to be
reduced and the only way to reduce this was through plain packaging of all solar cells,
which would reduce the brand recognition and promote of the use of locally
manufactured Thin Film technology solar cells. The Wingardian Department of
Health issued a directive on 1st February, 2016 calling for plain packaging of all solar
cell products in the interest of public health. (Annexure VIII).
18. In late March 2016, Leviosa requested consultations with Wingardium under WTO
Dispute Settlement Understanding (DSU). The consultations witnessed widespread
protests in Wingardium who labeled the Leviosian investors as greedy and insensitive
capitalists. The Wingardian Herald noted:
The request for WTO consultations and repeated threat of litigation by the
Leviosian Government only reveals the insatiability and insensitiveness of capitalism.
Their pursuit for economic gain is in utter disregard of Wingardian goals for socioeconomic development and curtailing the adverse effects of climate change.
Wingardium deserves a healthy and prosperous existence and for that it should be
willing to take on such crony capitalists head on and without fear of reprisal.
21. Leviosa requested the establishment of a WTO Panel. Wingardium did not object to
this request. The DSB established a panel in June 2016 The WTO Director General
composed the Panel in July 2016.
22. Leviosa alleged the following in its request for establishment of Panel:
The WG/SM/P-1, FIT Scheme, Executive orders and Ministry Directives applies a
domestic content requirement and provide other benefits to local producers, which is
trade distortive and inconsistent with the following provisions of WTO Agreements.
(i) Article 2.1 of the TRIMS Agreement, because they appear to be trade-related
investment measures that are inconsistent with the provisions of Article III of
the GATT 1994.
(ii) Article III:4 and III:5 of the GATT 1994 because they appear to be laws,
regulations or requirements affecting the internal sale, offering for sale,
purchase, transportation, distribution, or use of equipment for renewable
energy generation facilities that accord less favorable treatment to imported
equipment than that accorded to like products originating in Wingardium.
(iii)Article III:1 of the GATT 1994 because the measures appear to require the
mixture, processing or use of equipment for renewable energy generation
facilities supplied from Leviosa in specified amounts or proportions, being
applied so as to afford protection to Wingardian production of such
equipment.
10
(vi) Article 16.1 of the TRIPS Agreement, because Wingardium prevents owners of
registered trademarks from enjoying the rights conferred by a trademark
under the Wingardian Trademark Act (In Pari Materia, the Indian Trademark
Act, 1999).
(vii) Article IX:4 of the GATT 1994, because Wingardium imposes requirements
relating to the marking of imported Crystalline Silicon Cells which materially
reduce their value and/or unreasonably increase their cost of production.
(viii) Article 2.2 of the TBT Agreement, because Wingardium imposes technical
regulations that create unnecessary obstacles to trade and are more traderestrictive than necessary to fulfil a legitimate objective taking into account
the risks that non-fulfilment would create.
11
The following are the technical measures required to ensure quality of the PV modules used
in grid solar power projects.
1.2 In addition, PV modules must qualify to IEC 61730 for safety qualification testing and
IEC 43070 for health hazards1. For the PV modules to be used in a highly corrosive
atmosphere throughout their lifetime, they must qualify to IEC 61701.
This is a fictional standard that requires testing of modules for allergens and radiation in order to prevent cases of
fatal allergies and skin cancer.
1
12
All grid solar PV power plants must install necessary equipment to continuously measure
solar radiation, ambient temperature, wind speed and other weather parameters and
simultaneously measure the generation of DC power as well as AC power generated from the
plant. They will be required to submit this data to Ministry of Renewable Energy,
Government of Wingardium or any other designated agency online and/or through a report on
regular basis every month for the entire duration of PPA.
13
The Parties to this Agreement recognize the greater need of energy cooperation between
Wingardium and Leviosa. In doing so the Parties:
Recognize that energy efficiency and widespread utilization of clean energy is paramount in
reaching development and climate change goals.
Resolve that all forms of facilitation and cooperation will be provided to each other in the
interest of common goals.
Acknowledge that Wingardium is a developing country and must develop an efficient solar
power industry for which Leviosa will provide the necessary technology.
Confirm that any disagreements will be settled through peaceful and diplomatic negotiations.
Resolve that in pursuit of mutual economic gain neither Party will create any unnecessary
obstacles to trade and investment.
NOW, THEREFORE, the Parties, through mutual negotiations and based on the principle of
equality and mutual benefit, hereby agree as follows:
Article 2
(i)
14
(ii)
Article 3
(i)
(ii)
Article 4
(i)
(ii)
Article 5
(i)
(ii)
15
(iii)
16
To,
The Honorable President,
Republic of Wingardium
Parrot Hill, Tesori,
Wingardium
30.06.2015
Re: Request to Reduce the Domestic Content Requirement under WG/SM/P-1 and FIT
Scheme
I am extremely distressed to hear from our solar industry representatives that the domestic
content requirement is causing them, and thereby, our economy, significant loss. I would
request you reconsider the domestic content requirement under Articles 4 and 5 of
WG/SM/P-1 for the mutual benefit of both of our nations. As you are aware, the Consortium
of Leviosian investors have honored the commitments made under the Energy Cooperation
Agreement in its totality and have transferred substantial know how for the development of
your domestic industry. However, the high domestic content requirement, which is part of
your WNSM scheme and the Feed-in-Tariff Scheme, has resulted in huge economic losses
for our investors. This is so because a substantial part of the investment was speculative and
despite the commitment under the Economic Cooperation Agreement no substantial reduction
has taken place in this requirement. I hereby request you to reconsider your governments
17
Warm Regards,
Antony Caplan
President,
Republic of Leviosa
18
To,
The Honorable President,
Republic of Leviosa,
Mansioni Di Presdente, Khimer,
Leviosa
1.07.2015
Dear Mr. President,
Re: Wingardiums Domestic Content Requirement under WNSM
I duly acknowledge your concern and appreciate the efforts made by Leviosian investors to
help in building our domestic solar industry. As such, the impressive transfer of Know How
and the High quality of PV Modules developed by the investors has allowed us to meet our
targets at a much faster pace. I also acknowledge our common long-term concerns and
strategic objectives and will do everything possible to honor our commitment. The Leviosian
investors have consistently met the quality and safety standards and their products have
ushered a solar revolution in Wingardium. The technology developed by Dr. Einburke and
adopted by our domestic manufacturer will most certainly bring about a positive change in
our development and environmental agenda. I thank you for your interest in maintaining
cordial relations with the State of Wingardium. I shall ease the restrictions on the Leviosian
investors with immediate effect through an executive order.
Warm Regards,
Reefer John,
President,
Republic of Wingardium
19
By the power vested in me as President by the Constitution and the laws of the Wingardium,
it is hereby ordered as follows:
Section 1: Amendment to Article 4 WG/SM/P-1: It is established that Article 4 of
WG/SM/P-1 shall be amended to remove the requirement of domestic content sourcing for
production of Solar PV modules. To this extent the requirements contained under Article 4
and 4.1 pertaining to Crystalline Silicon Technology shall stay suspended till further notice.
Further the Feed-In-Tariff that is part of WG/SM/P-1 shall be suspended with immediate
effect and no income support would be provided to any manufacturer dealing in Solar PV
Modules.
Section 2: Purpose of the Amendment: The purpose of the amendment is to boost foreign
investment in the solar power sector and provide ample room for economic growth of foreign
investor so that there can be a steady flow of transfer of technology for the development of
domestic Solar PV Modules industry.
Section 3: General Provisions: (a) This order shall be implemented in accordance with
applicable law and subject to the availability of appropriations.
(b) Nothing in this order shall be construed to impair or otherwise affect:
i.
ii.
iii.
(c) This order is not intended to, and does not, create any right or benefit, substantive or
procedural, enforceable at law or in equity by any party against the Government of
Wingardium, its departments, agencies, or entities, its officers, employees, or agents, or any
other person.
20
Reefer John,
President of Wingardium,
Parrot Hill,
Tesori, Wingardium.
21
Annexure-VI
By the power vested in me as President by the Constitution and the laws of the Wingardium,
it is hereby ordered as follows:
Section 1: Amendment to Article 4 WG/SM/P-1: It is established that Article 4 of
WG/SM/P-1 shall be reinstated to include requirement of domestic content sourcing for
production of Solar PV modules. To this extent the requirements contained under Article 4
and 4.1 pertaining to Crystalline Silicon Technology shall require 50% domestic sourcing.
Further the Feed-In-Tariff that is part of WG/SM/P-1 shall be reinstated with immediate
effect.
Section 2: Purpose of the Amendment: The purpose of the amendment is to provide relief to
millions of workers who have suffered a loss of job due to the previous Executive Order
WG/SMEO/118. I recognize the importance of the growth of the domestic product industry,
which hasnt received substantial know how from the Consortium of Leviosian Investors.
The Leviosian investors have exploited the provisions of the previous Executive Order for
their benefit but havent passed on the same to domestic manufacturers in Wingardium.
Section 3: General Provisions: (a) This order shall be implemented in accordance with
applicable law and subject to the availability of appropriations.
(b) Nothing in this order shall be construed to impair or otherwise affect:
i.
ii.
iii.
(c) This order is not intended to, and does not, create any right or benefit, substantive or
procedural, enforceable at law or in equity by any party against the Government of
22
23
To,
The Honorable President,
Republic of Wingardium
Parrot Hill, Tesori,
Wingardium
12.01.2016
24
Warm Regards,
Antony Caplan
President,
Republic of Leviosa
25
Annexure VIII
Department of Health
Republic of Wingardium,
Tesori, Wingardium
1.02.2016
26
27
The brand, business or company name for the Solar cell and
Solar Panel products, country of origin information,
alphanumeric code and any variant name for such products.
Any relevant legislative requirement contained in
WG/SM/P-1.
The brand, business, company and variant names must be
displayed in a uniform typeface, font, size, color and
placement. The font should be Times New Roman and must
not exceed 24 points. It should be Pantone 448 in color and
can only be placed on the side of the package.
-/Mariassa Coressa
Chief Medical Officer
Department of Health
Republic of Wingardium
28
Annexure IX
To,
The Honorable Minister of Commerce,
Republic of Wingardium
Commerce City, Tesori,
Wingardium
10.03.2016
I am writing this mail to you to bring to light the displeasure expressed by the Consortium of
Leviosian Investors over the recent Health Directive issued by the Wingardian Department of
Health. The measures taken under the said Health Directive infringe upon the Trademark
Rights of our investors and are based on inconclusive scientific evidence. A Leviosian based
NGO, Health For All, has confirmed that Cyrstalline Technology Solar Cells are completely
safe and do not have any harmful effects. In addition to this, the products of our investors
have passed every quality, safety and health standard stipulated under the Technical
Regulation under WG/SM/P-1. In this regard your Health Directive acts as a technical barrier
to trade and has depleted our market share substantially in Wingardium. This is in violation
of several commitments made by your nation to the WTO. I urge you to suspend the Health
29
Warm Regards,
Rick Cantor
Permanent Trade Representative,
Republic of Leviosa
30