In response to Claimants' discrimination claims (which, iffounded, would amount to a violation of several treaty obligations, including the FET and "non-impairment" standards as well as the national and MFN treatments), Respondent raises the following defenses (presented by type of discrimination):

The WPT is applied with regard to all investors in the Mongolian gold sector regardless of their nationality.

Discrimination protections concern disparate treatment on account of nationality only (Feldman 169 , Champion Trading 170). The WPT is applied with regard to all investors in the Mongolian gold sector regardless of their nationality, including Mongolian gold producers, and, thus, Mongolia does not discriminate against Russian investors [lack of direct or implied animus against Russian investors]. "[…] Claimants do not allege that their Russian nationality has anything to do with the treatment they received. To the extent that Claimants make any claims on account of nationality, Claimants generically allege that the law was generally directed against foreign investors […]

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Respondent challenges Claimants' factual allegations regarding the animus against foreign investors and, relying on PSEG 172, states that "a disparate impact of a government measure on an industry sector with significant foreign participation does suffice to prove discrimination."

The WPT reasonably applies to key economic sectors.

2.1. Cross sector analyses are inappropriate to establish discrimination or failure to accord national treatment as a matter of general investment and trade jurisprudence.

"Any discrimination analysis must look to a relevant tertiumcomparationis. The criteria for such a tertium comparationis aptly have been discussed and defined in the WTO/GATT context in which questions of discrimination and nationaltreatment take a far more pronounced role than they do in investor-state arbitrations. The WTO/GATT framework makes a comparison of like products and defines such products as products which are "directly competitive or substitutable. "

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2.2. The Occidental case was decided on the basis of the specific wording of the underlying national treatment provision.

With respect to cross-sectoral discrimination, Respondentsubmits that Claimants' reliance on Occidental v. Ecuador 177 is improper as that case was adjudicated on the basis of a national treatment provision (namely Article II(1) of the U.S.-Ecuador BIT) broader than the national treatment provision of the Treaty(Article 3(2) of the Treaty) and not on the basis of the nondiscrimination provision (Article II(3)(b) of the U.S.-Ecuador BIT).

Further, the Occidental tribunal relied on the term "in likesituations" found in the applicable national treatment provision (Article II(1) of the U.S.-Ecuador BIT) whereas such term is not part of the Treaty.

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"114. […]the Occidental analysis construes the term "in likesituations" in the national treatment protection of the U.S.-Ecuador BIT —missing from the Russia-Mongolia BIT—as a technical term. […]

115.. […]The Occidental tribunal justified its cross-sectoranalysis in the national treatment context by expressly distinguishing prevalent WTO/GATT jurisprudence on national treatment exactly because the BIT used "in like situations" rather than "like products", thus implicitly acknowledging the relevant of the WTO/GATT approach in situations not involving such distinctive treaty language.

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116. The approach of Occidental is […] inapplicable inconnection with the national treatment under the Russian-Mongolia BIT. The BIT in this arbitration does not use the term "in like situations" in the national treatment provision. The BIT accordingly does not allow for a derogation from the narrower and more sensible market definition set out in the WTO context [based on a comparison of like products and defining such products as products which are "directly competitive or substitutable"]

2.3. The Occidental case has not been followed by investmentjurisprudence.

Respondent further argues that the Occidental national treatment standard analysis has not been followed in Champion Trading and Sempra.

2.4. Even if the Occidental case were applicable, the comparator is not appropriate

"Mongolia had a rational basis to apply the Windfall Profits Tax to gold and copper mining but not to other sectors".

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Even if the principle set out in Occidental v. Ecuador wereapplicable, the industry chosen by Claimants, i.e. oil extraction, would be inappropriate as Mongolia produces very small quantities of that commodity and imports most of it.

Respondent submits that Claimants' Counsel stated at theHearing that the Occidental tribunal considered measures relating to oil in connection with "other products" that were "Ecuador's major export goods". Claimants have never arguedthat oil is a "major export" of Mongolia. In fact, Mongolia is an importer of oil, not an exporter.

Respondent further argues that:

121. The mining and petroleum industries have a completelydifferent history in Mongolia. Mongolian mining companies had a long benefit of record low tax and royalty rates. Given the state of the Mongolian mining industries, companies in that sector actually could take advantage of these rates and sell significant amounts of gold and copper with such a low regulatory exposure. The same is not true for the petroleum industry. There is thus a rational basis for a correction in the gold and copper sector that is entirely lacking in the petroleum sector: investors garnered a significant benefit from being under-taxed on significant revenue."

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The WPT reasonably distinguishes between gold and coppermining.

Respondent alleges that (1) the comparison with copper is improper (as it is not a "like product"); 188 (2) different treatment of Erdenet, the only meaningful copper producer, and gold producers is reasonable and based on differences in transparency, size and sophistication and the desire to encourage the building of a copper smelting facility in Mongolia 189 and (3) "providing a flexible cost formula [as it is the case for copper] for the setting of gold prices would have invited gold miners artificially to inflate costs to such a degree as to avoid paying the tax."

With respect to Erdenet, a copper producer, Respondent submits there is no evidence of discrimination against Russian investors (Russia and Mongolia being respectively 49% and 51% shareholders of Erdenet, which is subject to the WPT) and thatgiven the differences in cost structures and transparency inherent in dealing with an enterprise of the size and sophistication of Erdenet as compared to Golden East-Mongolia, Erdenet does not make for an adequate tertium comparationis for purposes of establishing whether companies in the copper industry or the gold industry are treated disparately.

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As to the second argument, Claimants allege that, by adopting a different taxation regime for copper, Respondent indulged into discrimination contrary to the Treaty. It is true that different tax regimes were enacted between copper and gold, even though they both attained, percentagewise, very significant tax increases; and it might have been wiser if the Great Khural had adopted similar legislation for both products. But this does not allow the Tribunal to jump to the conclusion that its failure to do so constitutes a breach of the Treaty.

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In the Tribunal's view, Claimants' reliance on the Occidental case in support of its two arguments is inapposite..

First of all, the national-treatment clause contained in that casehas a different wording than the one found in Article 3(2) of the Treaty in the present case. Article II(1) of the U.S.-Ecuador BIT establishes the obligation to treat investments and associated activities "on a basis no less favorable than that accorded in like situations to investments or associated activities of its own nationals or companies, or of nationals or companies of any third country, whichever is the most favorable". The tribunal in that case, because of the use of the words "in like situations", differentiated the interpretation to be given to those words from the words "like products" used in the WTO/GATT which, the tribunal said, "necessarily relates to competitive and substitutable products". the Treaty in the present case contains no reference to either "like situations" or "like products", thus leaving the Tribunal to rely on the general provisions of the Vienna Convention.

Moreover, the Occidental case had to deal with the interpretation of VAT legislation of general application while the WPT Law deals specifically with two minerals: gold and copper.

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The Tribunal is of the view that, before concluding to discrimination in the present case, the sectors covered should relate to competitive and substitutable products, an expressionregularly used in WTO/GATT cases. In doing so, the Tribunal is aware of the differences between the Treaty and the one governing the WTO. It merely states that such a requirement is a reasonable one to apply when considering allegations of discrimination.

There is nothing in the WPT Law which would lead the Tribunal to conclude that, by referring to such a standard, there is discrimination in the present instance either on the basis of a cross-industry (e.g. the petroleum industry) or a gold-copper comparison. As stated in the Sempra case:"(t)here are quite naturally important differences between the various affected sectors, so it is not surprising that different solutions might have been or are being sought for each". The different treatment given in this case to gold and copper compared to other industries or between gold and copper cannot support a conclusion of discrimination under the Treaty.

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Finally, Claimants argue that the WPT discriminates illegallyagainst them because it disproportionately applies to GEM. Even accepting Claimants' statement that GEM's WPT payments might have represented up to 89-93% of Mongolia's total WPT income, despite the fact that GEM had never made up more than 25% of total gold production in that country, a major factor in that disproportion results from the fact that even if Boroo Gold's production represented in 2006 some 45% of that total, 291 it benefited from a stability agreement which exempted it from the WPT. Apart from this particular stability agreement, no evidence had been adduced by Claimants to the effect that the tax burden imposed upon GEM was different from the one applying to other gold producers in Mongolia under the WPT.

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原文連結（仲裁裁決書）：