09R

INSTITUTE OF LAW, NIRMA UNIVERSITY MOOT COURT COMPETITION

MISCELLANEOUS VERTICAL OPEN CHALLENGERS – 2022

BEFORE THE PANEL ESTABLISHED BY WTO/DSB

LAURANIA – MEASURES RELATING TO THE ALLOCATION OF CONTRACTS FOR

DIFFERENCE IN LOW CARBON ENERGY GENERATION

QUMAR
(Complainant)

V.

LAURANIA
(Respondent)

MEMORIAL ON BEHALF OF THE RESPONDENT

 TABLE OF CONTENTS

LIST OF ABBREVIATIONS ............................................................................................................. 3

INDEX OF AUTHORITIES .............................................................................................................. 4

STATEMENT OF FACTS ................................................................................................................ 6

MEASURES AT ISSUE ................................................................................................................... 7

SUMMARY OF PLEADINGS ........................................................................................................... 8

LEGAL PLEADINGS .................................................................................................................... 10

I. LAURANIA’S SUPPLY CHAIN PLAN ARE CONSISTENT WITH ITS INTERNATIONAL TRADE
OBLIGATION WITH RESPECT TO GATT, 1994 ..................................................................................10
[A] SUPPLY CHAIN PLAN IS NEITHER DISCRIMINATORY IN NATURE NOR IN VIOLATION OF ART. III:4 OF
THE GATT 1994............................................................................................................................................ 10

[B] LAURANIA’S ACTIONS ARE IN ACCORDANCE WITH ITS INTERNATIONAL OBLIGATIONS .......................13

II. THE SCHEME OF CONTRACTS FOR DIFFERENCE IS CONSISTENT WITH THE OBLIGATIONS
UNDER TRIMS AGREEMENT .............................................................................................................15
[A] TRIMS AGREEMENT IS NOT APPLICABLE IN THE PRESENT CASE ..........................................................15
[B] IN ARGUENDO EVEN IF TRIMS AGREEMENT IS APPLICABLE IN THE PRESENT CASE LAURANIA IS IN
CONFORMITY WITH ITS OBLIGATIONS..........................................................................................................16
[C] CONTRACT FOR DIFFERENCE SCHEME IS CONSISTENT WITH TRIMS OBLIGATIONS..............................17

REQUEST FOR FINDINGS ............................................................................................................ 20

2
 LIST OF ABBREVIATIONS

Abbreviations Key
AB Appellate Body
ANNEX. Annexure
Art. Article
ASP Administrative Strike Price
CFD Contract for Difference
DSB Dispute Settlement Body
EU European Union
GATT General Agreement on Tariffs and Trade
IL International Law
ILC International Law Commission
LCCC Low Carbon Contract Company
LCR Local Content Requirement
MW Mega Watt
PARA Paragraph
PIL Public International Law
SCM Subsidies and Countervailing Measures
SCP Supply Chain Plan
SCPG Supply Chain Plan Guidance
TRIMS Trade Related Investment Measures
UK United Kingdom
USD United States Dollar
WTO World Trade Organisation

3
 INDEX OF AUTHORITIES

REPORTS

▪ Appellate Body Report, Japan – Taxes on Alcoholic Beverages (“Japan–Alcoholic

Beverages II”), WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, ¶ 5.5(b).
▪ Appellate Body Report, Korea—Measures Affecting Imports of Fresh, Chilled and
Frozen Beef, WT/DS161/AB/R, ¶ 13.
▪ Appellate Body Report, United States – Standards for Reformulated and Conventional
Gasoline, WT/DS2/AB/R (Apr. 29, 1996), ¶ 17.
▪ DISPUTE SETTLEMENT REPORTS 2002: VOLUME 9, PAGE 3736, VOLUME 9
▪ GATT Panel report, Italian Discrimination Against Imported Agricultural Machinery,
(“Italian Discrimination case”) L/833, adopted 23 October 1958, B.I.S.D. 7S/60, ¶ 13.
▪ Panel and Appellate Reports, Canada — Renewable Energy, WT/DS412/19 WT/
DS426/19, adopted on 24 May 2013, ¶ 2.6.2.
▪ Panel Report, United States – Section 337 of the Tariff Act of 1930 (“US – Section 337“),
adopted 7 November 1989, BISD 36S/345, ¶ 5.10.
▪ Panel Report, United States – Taxes on Petroleum and Certain Imported Products, (“US–
Superfund“), adopted 17 June 1987, BISD 34S/136, ¶ 5.1.9.

AGREEMENTS

▪ Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, 1869 U.N.T.S. 14.
▪ General Agreement on Trade and Tariff Apr. 15, 1994, 1867 U.N.T.S. 187, 33 I.L.M.
1153.
▪ ILC, Fifty-third Session, 2001, 34.
▪ Responsibility of States for Internationally Wrongful Acts, art. 25, Dec. 12, 2001,
A/56/49(Vol. I).
▪ Trade Related Investment Measures 1868 U.N.T.S. 186

JOURNALS

▪ Ernst-Ulrich Petersmann, The WTO and Regional Trade Agreements as Competing Fora
for Constitutional Reforms: Trade and Human Rights, in REGIONAL TRADE

4
 AGREEMENTS AND THE WTO LEGAL SYSTEM, 281-282 (Lorand Bartels et al.
eds., 2006).
▪ PETER VAN DEN BOSSCHE & WERNER ZDOUC, THE LAW AND POLICY OF THE WORLD
TRADE ORGANIZATION, 351, (5th ed. 2022).
▪ Responsibility of States for Internationally Wrongful Acts, art. 25, Dec. 12, 2001,
A/56/49(Vol. I).
▪ Tarcisio Gazzini, The Legal Nature of WTO Obligations and the Consequences of their
Violation, EJIL (2006), Vol. 17 No. 4, 723–742.

WEBSITES

▪ CLEAN GROWTH GRAND CHALLENGE, THE GRAND CHALLENGES, DEPARTMENT OF

BUSINESS, ENERGY & INDUSTRIAL STRATEGY, GOVERNMENT OF THE UNITED KINGDOM

(DEC. 30, 2021).
▪ CONTRACT OF DIFFERENCE, DEPARTMENT OF BUSINESS, ENERGY & INDUSTRIAL
STRATEGY, GOVERNMENT OF THE UNITED KINGDOM (MAY 13, 2022).
▪ Neil Ford, France’s Contracts Action Highlights Threat To Renewable Growth, REUTERS
EVENTS (Sept. 22, 2022, 7:18 PM),
https://www.reutersevents.com/renewables/wind/frances-contract-action-highlights-
threats-renewables-growth.
▪ Ruth Wright, Community energy is a solution to the eye-watering rise in energy bills,
EURONEWS (Sept. 30, 2022, 5:25 PM),
https://www.euronews.com/green/2022/08/12/community-energy-is-a-solution-to-the-
eye-watering-rise-in-energy-bills-heres-how-sardinia.
▪ STATE AID: COMMISSION APPROVES €22.5 BILLION POLISH SCHEME TO SUPPORT
OFFSHORE WIND FARMS, PRESS RELEASE, EUROPEAN COMMISSION (MAY 20, 2021).
▪ STATE AID: COMMISSION AUTHORISES UK AID PACKAGE FOR RENEWABLE ELECTRICITY
PRODUCTION, PRESS RELEASE, EUROPEAN COMMISSION (JULY 23, 2014).
▪ Why are energy bills going up?, BLOG (Sept. 30, 2022, 5:25 PM),
https://energysavingtrust.org.uk/why-are-energy-bills-going-up/.

5
 STATEMENT OF FACTS
BACKGROUND
Laurania [“Respondent”] is an island nation, and a member of World Trade Organisation
(WTO) since its inception and has been a pioneer in moving towards clean and green economy
through offshore wind energy projects with the largest installed offshore wind capacity in the
world. Qumar [“Complainant”] is an industrialized nation which shares its waters with
Laurania and is the member of WTO which has initiated greatest number of disputes in the
WTO.
Laurania, aiming to achieve net zero carbon emissions by 2050, has launched Offshore Wind
Sector Deal consistent with the Clean Growth Green Challenge and has set out an ambitious
partnership between government and industry to raise productivity and competitiveness
wherein offshore deals are concluded through auction and contracts for difference are awarded,
setting on a path of Green Industrial Revolution
Laurania has allocated three rounds of Contracts for Difference (CFD) in 2015, 2017 and 2019
and delivered a record low price on enough clean energy to power 7 million homes. Laurania
has opened a fourth round for allocation of CFD which incorporates an initial criterion of Local
Content Requirement (LCR) reporting framework in its Supply Chain Plan (SCP) for large
scale projects of 300 MW or more and will flow down till contract value becomes less than or
equal to 10 million USD.

DISPUTE
Qumar has assumed the CFD scheme differentiates between domestic and imported products
and considers it to be one deterrent to its exports. Qumar has further falsely construed the LCR
criterion for eligibility of applicants for allocation of CFD and subsidy as discriminatory and
that it’s damaging its producers.

WTO DISPUTE SETTLEMENT PROCEEDINGS

Qumar had brought the matter to WTO and had requested the DSB to be formed. Since the
dispute was not solved and the consultations did not lead to satisfactory solution within 60
days, Qumar requested to set up a panel to rule on the matter.

6
 MEASURES AT ISSUE

LAURANIA’S SUPPLY CHAIN PLAN ARE CONSISTENT WITH ITS INTERNATIONAL TRADE
OBLIGATION WITH RESPECT TO GATT, 1994

II

THE SCHEME OF CONTRACTS FOR DIFFERENCE IS CONSISTENT WITH THE OBLIGATIONS

UNDER TRIMS AGREEMENT

7
 SUMMARY OF PLEADINGS

I. LAURANIA’S SUPPLY CHAIN PLAN ARE CONSISTENT WITH ITS INTERNATIONAL

TRADE OBLIGATION WITH RESPECT TO GATT, 1994.

Supply chain plan is neither discriminatory in nature nor in violation of Art. III:4 of the
GATT, 1994

Supply Chain Plan process is to encourage competitive, productive, and efficient supply chains
for low carbon electricity generation projects. Generators can choose their own suppliers
regardless of the origin or location of the supplier, without committing to any level of Local
Content. The assessment of the application will be done will be irrespective of the origin of the
supplier and irrespective of any anticipated levels of Lauranian content. A state measure is
inconsistent with the obligation laid down in Art. III:4 GATT, if the like products are treated
less favorably than domestic products and the measure, a requirement affecting their internal
sale and distribution. there is no mandate required to prefer inclusion of the local suppliers or
supply chains over the international suppliers. Thereby negating that there were less favourable
treatment and anti-competitive measures intended towards imported products. Moreover, even
if SCP is discriminatory, Laurania is not violative of Art. III:4 of GATT.

Laurania’s actions are in accordance with its international obligations

The body of jurisprudence surrounding the WTO is a part of the broad framework of Public
International Law and no treaty exists in clinical isolation from the general principles of IL,
such as State of Necessity and State Responsibility. Moreover, reducing reliance on energy
supplied by third parties has become a high-profile security matter in light of the war between
Russia and the Ukraine.

II. THE SCHEME OF CONTRACTS FOR DIFFERENCE IS CONSISTENT WITH THE

OBLIGATIONS UNDER TRIMS AGREEMENT

TRIMs Agreement is not applicable in the present case

8
As the agreement deals specifically in goods and the Laurania’s Wind offshore Deal is based
on renewable energy derived from natural resources and therefore cannot be defined as “goods”
within the meaning of the SCM Agreement.

Even if TRIMS agreement is applicable in the present case Laurania is

in conformity with its obligations

Laurania has set its path towards self-reliance and sustainable development goals. To achieve
these goals Laurania has set a target to become Net Zero by 2050. the local content criterion of
offshore wind deal is a basic qualification to fill the eligibility form. The purpose behind this
criterion is to bring all the interested generators at an equal footing be it domestic or
international. This criteria has been made for large -scale generators who want to setup wind
offshore of 300 MW or more or 10 million USD or more. In the current times to overcome the
energy crisis every country is shifting towards renewable energy projects. Adhering to the
international obligations several countries have launched CfD schemes to support the projects.

Contract for Difference scheme is consistent with TRIMs obligations

Contract for Difference(CfD) scheme is a Lauranian government mechanism to support low

carbon electricity generation. CfD incentives investment in renewable energy by providing
protection to energy generators, consumer and the climate. Now CfD is being complied as state
practice. many countries in the world like Poland, France, European Union have adopted it.
here Laurania has adopted CfD to safeguard its nation from the energy crisis.

9
 LEGAL PLEADINGS
I. LAURANIA’S SUPPLY CHAIN PLAN ARE CONSISTENT WITH ITS INTERNATIONAL
TRADE OBLIGATION WITH RESPECT TO GATT, 1994

1. Respondent submits that Laurania is in conformity with the international trade

obligation and has not violated Qumar’s trade interests. States can only avail remedies for
violation of WTO obligations when their international trade interests have been affected,1 in
actual or potential terms. 2 Respondent submits that Laurania has not hampered the international
trade prospects of Qumar. The present issue is twofold in nature, firstly The Supply Chain Plan
is neither discriminatory in nature nor in violation of Art. III:4 of the GATT 1994 [A], secondly
Laurania’s actions are in accordance with its international obligations [B].

[A] SUPPLY CHAIN PLAN IS NEITHER DISCRIMINATORY IN NATURE NOR IN VIOLATION OF

ART. III:4 OF THE GATT 1994

[i] Art. III:4 of the GATT 1994 is not violated.

2. The basic principles of Art. III prevent discrimination and domestic protectionism.
More specifically, the purpose of Art. III is to ensure that internal measures, “not be applied to
imported or domestic products so as to afford protection to domestic production.”3
3. A state measure is inconsistent with the obligation laid down in Art. III:4 GATT, if
each of the following three questions is answered in the affirmative,
a) are the imported and domestic products concerned like products?
b) are the measure, a requirement affecting their internal sale and distribution? and
c) are the imported products less favorably treated? 4
4. In the case at hand, the local content criteria are not defined, and it should be viewed in
a broader perspective. The local content can be defined as anything be labour force, logistical
support, project management, or project financers. The requirement criteria cannot be assumed

1
Tarcisio Gazzini, The Legal Nature of WTO Obligations and the Consequences of their Violation, EJIL (2006),
Vol. 17 No. 4, 723–742.
2
PETER VAN DEN BOSSCHE & WERNER ZDOUC, THE LAW AND POLICY OF THE WORLD TRADE ORGANIZATION,
351, (5th ed. 2022).
3
Panel Report, United States – Section 337 of the Tariff Act of 1930 (“US – Section 337“), adopted 7 November
1989, BISD 36S/345, ¶ 5.10.
4
Appellate Body Report, Korea—Measures Affecting Imports of Fresh, Chilled and Frozen Beef,
WT/DS161/AB/R, ¶ 13.

10
when there is no clear distinction about the same. Thereby, not able establish whether the two
products are similar or distinct in nature.
5. The fundamental objectives of the SCP process are to encourage competitive,
productive, and efficient supply chains for low carbon electricity generation projects.5
Moreover, there is no mandate required to prefer inclusion of the local suppliers or supply
chains over the international suppliers.
6. Thereby negating that there were less favourable treatment and anti-competitive
measures intended towards imported products. Thus, there is no violation of Art. III:4 of the
GATT 1994.

[ii] Supply Chain Plan is not discriminatory towards Qumar’s international trade interests.

7. Supply Chain Plan is a process in providing the Offshore Wind Sector deal, which plays
a key role in helping Laurania to meet net zero emissions target by 2050,6 consistent with its
Clean Growth Grand Challenge. 7 Supply Chain Plan process is to encourage competitive,
productive, and efficient supply chains for low carbon electricity generation projects. 8
8. The Clean Growth Grand Challenge aims that Low carbon electricity generation
projects should not only contribute to decarbonizing our economy once operational, but
throughout their lifetimes. 9 These projects benefit from locally based supply chains offering a
low carbon footprint, and global supply chains can benefit from Lauranian suppliers exporting
competitive, low-carbon goods and services. 10
9. While particularly aiming for a low carbon footprint, SCP is not looking for Generators
to commit to procure any percentage of content in the Laurania. Generators can choose their
own suppliers regardless of the origin or location of the supplier. 11 Generators are not required
to commit to any level of Lauranian content, to be awarded an Implementation Statement. 12
10. The assessment of the application will be done irrespective of the origin of the supplier
and irrespective of any anticipated levels of Lauranian content. Laurania emphasizes the need

5
Annex 2: Supply Chain Plan Guidance, ¶ 1.7.
6
Facts ¶ 4.
7
CLEAN GROWTH GRAND CHALLENGE, THE GRAND CHALLENGES, DEPARTMENT OF BUSINESS, ENERGY &
INDUSTRIAL STRATEGY, GOVERNMENT OF THE UNITED KINGDOM (DEC. 30, 2021).
8
Annex 2: Supply Chain Plan Guidance, ¶ 1.7.
9
Ibid. ¶ 1.9.
10
Ibid.
11
Ibid. ¶ 4.33.
12
Ibid. ¶ 4.39.

11
for coordination among various suppliers and partnering between Lauranian suppliers, as well
as between Lauranian suppliers and international suppliers. 13
11. Thus, contending that Laurania’s SCP is not discriminatory towards Qumar or any other
country’s international trade interests as it is established that SCP is in favour of participation
of both international and Lauranian suppliers in the project, and no level local content is defined
to be awarded the tender of the project.

[iii] In Arguendo, even if SCP is discriminatory, Laurania is not violative of Art. III:4 of
GATT

12. The broad and fundamental purpose of Art. III is to avoid protectionism in the
application of internal tax and regulatory measures.14 Toward this end, Art. III obliges
Members of the WTO to provide equality of competitive conditions for imported products in
relation to domestic products. 15
13. The GATT panel interpreted Art. III:4 that it is to provide equal conditions of
competition once goods had been cleared through customs.16 The intention of the drafters of
the Agreement was clearly to treat the imported products in the same way as the like domestic
products once they had been cleared through customs. Otherwise, indirect protection could be
given to the domestic products.17
14. Here, in the instant case, the wind turbines in question are not been imported into
Laurania. Wind turbines being a specific commodity required for distinct purposes, thereby it
is not available for instant disposal in the marketplace.
15. Laurania is justified, in including the local content framework of localization of supply
of wind turbines – as contented by Qumar, as the indirect protection could be given to the
domestic products when the foreign like product is yet to be imported. 18

13
Ibid. ¶ 4.46.
14
Shadikhodjaev, Sherzod, National Treatment Under GATT Article III: 2 and Its Applicability in the Context of
Korea's FTAs (June 30, 2008). East Asian Economic Review, Vol. 12, No. 1, ¶ 65-109, June 2008.
15
Panel Report, United States – Taxes on Petroleum and Certain Imported Products, (“US–Superfund“), adopted
17 June 1987, BISD 34S/136, ¶ 5.1.9; and Appellate Body Report, Japan – Taxes on Alcoholic Beverages
(“Japan–Alcoholic Beverages II”), WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, ¶ 5.5(b).
16
GATT Panel report, Italian Discrimination Against Imported Agricultural Machinery, (“Italian Discrimination
case”) L/833, adopted 23 October 1958, B.I.S.D. 7S/60, ¶ 13.
17
Italian Discrimination case, ¶ 11; Japan–Alcoholic Beverages II, ¶ 16.
18
Italian Discrimination case, ¶ 19.

12
[B] LAURANIA’S ACTIONS ARE IN ACCORDANCE WITH ITS INTERNATIONAL OBLIGATIONS

[i] The Principles of Customary International Law are applicable

16. The body of jurisprudence surrounding the WTO is a part of the broad framework of
Public International Law,19 and principles of PIL can therefore be applied to it. Even the AB
in its first report observed that no treaty exists in clinical isolation from the general principles
of IL,20 such as State of Necessity and State Responsibility. The doctrine of necessity is a well-
grounded concept in customary international law and has been codified into Art. 25 of the
International Law Commission (ILC)’s Draft Articles on State Responsibility.21
17. State of Necessity is used by the Commission to denote the situation of a state whose
sole means of safeguarding an essential interest threatened by a grave and imminent peril is to
adopt conduct not in conformity with what is required of it by an international obligation to
another state.22 The energy crisis in the Europe is grave and imminent threat which needs to be
addressed with proper measure of securing the country’s energy and efforts to become self-
sufficient by reducing dependency on third party suppliers.

[ii] Laurania is justified in including the Local Content Requirements

18. The geopolitical angle in Europe plays a crucial role. Part of the purpose of the CfD
programme is to safeguard the UK's energy supply. Reducing reliance on energy supplied by
third parties has become a high-profile security matter in light of the war between Russia and
the Ukraine. Russia which fulfills 40% of the Europe’s gas and oil, has significantly reduced
its export post the invasion of Ukraine. 23
19. This has led to the unprecedented energy crisis across the continent resulting in
electricity cut downs, and soaring energy prices. In the UK, costs have soared by 215 per cent

19
Ernst-Ulrich Petersmann, The WTO and Regional Trade Agreements as Competing Fora for Constitutional
Reforms: Trade and Human Rights, in REGIONAL TRADE AGREEMENTS AND THE WTO LEGAL
SYSTEM, 281-282 (Lorand Bartels et al. eds., 2006).
20
Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline,
WT/DS2/AB/R (Apr. 29, 1996), ¶ 17.
21
Responsibility of States for Internationally Wrongful Acts, art. 25, Dec. 12, 2001, A/56/49(Vol. I).
22
ILC, Fifty-third Session, 2001, 34.
23
Why are energy bills going up?, BLOG (Sept. 30, 2022, 5:25 PM), https://energysavingtrust.org.uk/why-are-
energy-bills-going-up/.

13
in the last year, while the EU average is a 41 per cent increase. 24 The situation is further going
to deteriorate in the coming winter.
20. Laurania is thereby justified in including the Local Content Requirement so as to
safeguard itself from unforeseeable risks and being self-sufficient in producing electricity and
in safeguarding its citizens from any catastrophic crisis.

24
Ruth Wright, Community energy is a solution to the eye-watering rise in energy bills, EURONEWS (Sept. 30,
2022, 5:25 PM), https://www.euronews.com/green/2022/08/12/community-energy-is-a-solution-to-the-eye-
watering-rise-in-energy-bills-heres-how-sardinia.

14
 II. THE SCHEME OF CONTRACTS FOR DIFFERENCE IS CONSISTENT WITH THE
OBLIGATIONS UNDER TRIMS AGREEMENT

21. Respondent submits that Laurania’s scheme of Contract for Difference is consistent
with the obligations covered under the GATT 1994 and TRIMs Agreement. The present issue
is threefold in nature, firstly TRIMs Agreement is not applicable in the present case [A],
secondly In arguendo even if TRIMs agreement is applicable in the present case Laurania is in
conformity with its obligations [B], thirdly Contract for Difference scheme is consistent with
TRIMs obligations [C].

[A] TRIMS AGREEMENT IS NOT APPLICABLE IN THE PRESENT CASE

22. Art. 1 of TRIMs agreement clearly specifies that the present agreement will “apply to
investment measures related to trade in goods only.”25 Moreover, renewable energy derived
from natural resources which cannot be defined as “goods” within the meaning of the SCM
Agreement.26 Furthermore, the right of exploitation of such natural resources does not fall
within the ambit of “provision of goods” in Article 1.1(a)(1)(iii) of SCM agreement. 27
23. Laurania’s main goal is to provide electricity service in every household. The country
aims to fulfil the electricity need by renewable energy source to achieve its aim of net zero by
2050 and protect climate. 28
24. Any exploitation of natural resource with purpose of electricity production will come
under the ambit of services and not goods. As electricity is not a physical substance, nor it is a
fuel. It cannot be stored, and the requirement is that it must be consumed as it is produced. 29
25. Electricity comes under the ambit of energy, whereas the international trade agreements
like GATT and TRIMs deal generally, nowhere does it specifically mention “energy” or
“electricity”. Therefore, the contention of electricity being a good is invalid.
26. Trade in renewable energy shall be dealt with appropriate organization, having
jurisdiction of the same so the procedure and procurement relating to it will be considered as

25
Art 1, TRIMs Agreement.
26
DISPUTE SETTLEMENT REPORTS 2002: VOLUME 9, 3735.
27
Panel and Appellate Reports, Canada — Renewable Energy, WT/DS412/19 WT/ DS426/19, adopted on 24
May 2013, ¶ 2.6.2.
28
Facts ¶ 2.
29
Thomas Cottier, Garba Malumfashi, et al., Energy in WTO law and policy,
https://www.wto.org/english/res_e/publications_e/wtr10_forum_e/wtr10_7may10_e.pdf.

15
service itself.30 Therefore, the TRIMs Agreement will not be applicable. As Laurania is not
dealing in any kind of Goods.

[B] IN ARGUENDO EVEN IF TRIMS AGREEMENT IS APPLICABLE IN THE PRESENT CASE

LAURANIA IS IN CONFORMITY WITH ITS OBLIGATIONS

27. Preamble of TRIMs states "Following an examination of the operation of GATT

Articles related to the trade restrictive and distorting effects of investment measures,
negotiations should elaborate, as appropriate, further provisions that may be necessary to avoid
such adverse effects on trade";31
28. Article 2(1)of the TRIMs Agreement (TRIMS) provide, “… no Member shall apply
any TRIMS that is inconsistent with the provisions of Article III or Article XI of GATT 1994.
TRIMS article 2(1) mandates every contracting party to not apply any conditions 32 that are
inconsistent with provisions of Art. III of General agreement on trade and tariffs. 33 Moreover,
as per the reading of:
• Annex 2(a) of the TRIMS agreement, any contracting party cannot apply any restriction
on the volume of production of a particular goods. Furthermore,
• Annex 2(b) of the agreement specifies that no country can apply such measures that
restricts the importation of any product against a domestic product. 34
29. Now, in the present case Laurania has set its path towards self-reliance and sustainable
development goals. 35 To achieve these goals Laurania has set a target to become Net Zero by
2050.36 Additionally, the local content criterion of offshore wind deal is a basic qualification
to fill the eligibility form. The purpose behind this criterion is to bring all the interested
generators at an equal footing be it domestic or international. This criteria has been made for
large-scale generators who want to setup wind offshore of 300 MW or more or 10 million USD
or more. As the generators below these guideline require no local content requirement. 37

30
Timothy J. Richards, Lawrence Herman, Relationship between International Trade and Energy,
https://www.wto.org/english/res_e/publications_e/wtr10_richards_herman_e.htm.
31
Preamble; TRIMs Agreement.
32
Art. 2 (1) TRIMs Agreement.
33
Art. III GATT.
34
Annex 2: TRIMs.
35
Facts ¶ 1.
36
Facts ¶ 2.
37
Facts ¶ 6.

16
30. Moreover, as mentioned under Laurania’s Supply chain guidance that no generator will
be penalised for choosing a non Lauranian supplier.38 The generators under the Lauranian
scheme has an equal opportunity to choose their supplier regardless of the Origin or location
of the supplier.39 In contrast, even if a domestic supplier is chosen before any outside supplier
the Generator has an additional discretion to change its supplier whenever it deems fit. 40
31. This clearly depicts that Lauarnia has not restricted on the basis of territory as
categorized under Annexure 2(b) of TRIMS agreement. Furthermore, there are no restriction
or sanctions on the volume of production of any supplier be it domestic or Imported.
32. Qumar has wrongly interpreted Laurania’s LCR being violative of his rights. Laurania
is not violative of any international measure on any grounds. Therefore, in the present case
Laurania is in conformity with all its international agreements.

[C] CONTRACT FOR DIFFERENCE SCHEME IS CONSISTENT WITH TRIMS OBLIGATIONS

[i] Contract of Difference scheme and its Role

33. Contract for Difference (CfD) scheme is a Lauranian government mechanism to support
low carbon electricity generation. CfD incentives investment in renewable energy by providing
protection to energy generators, consumer and the climate. 41 CfD is a contract, in private law,
between the electricity generator (in this case, a wind farm) and the Low Carbon Contracts
Company (LCCC), which is a government-owned company that oversees the administration of
the contract.42
34. In Laurania CfD are awarded through an auction procedure and these renewable
projects contracts last for 15 years.43 This is the fourth round of the auction. Here the energy
generators of clean power projects bid for CfD where they have to mention the size and the
strike price (a price for electricity reflecting the cost of investing in a particular low carbon
technology).44

38
Annex 2: Supply Chain Plan Guidance.
39
Ibid, ¶ 4.36.
40
Ibid, ¶ 4.38.
41
Contracts For Difference; https://www.gov.uk/government/publications/contracts-for-difference/contract-for-
difference.
42
Facts ¶ 8.
43
Facts ¶ 4.
44
Facts ¶ 6.

17
35. The Government sets out a pot of money for the auction in advance – this represents
the total amount of money available for the auction The Government caps the maximum
amount a project can bid for by setting administrative strike prices (ASPs). CFD contracts
stabilises the revenue of the generator through a relationship between the strike price of the
contracts and the reference price. 45
36. The government has replaced variable future revenue by fixed income. When the strike
price is above the market price the generators pay back the difference to the LCCC, and hence
back to the consumers and when the reference price is lower than the strike price , the generator
is paid by the government.46

[ii] States following the practice of Contract of Difference

37. The scheme of CfD is a beneficial scheme for all the parties the government, generator
and consumer. This scheme was first brought by UK government with the aim of decarbonising
and acquiring energy projects. As this was a successful policy for the UK. Several have adopted
it. For the establishment energy projects.47
38. European Union in 2014 after analysing the policy of CfD under its new rules on state
aid for environmental protection and energy. As the scheme was on the same lines without
distorting the energy market and non- discriminatory procedure to allocate the aid. 48
39. France have also launched the CfD scheme for the procurement of energy project and
facilitate and protect the generators and consumer. France contended this scheme has helped
and reassured the developers the protection and achievement and long term goal to meet the
energy requirement.49

45
Rebecca Explains It All: The CfD, BLOG (Sept. 30, 2022, 5:25 PM),
https://www.blog.renewableuk.com/post/cfdexplainer.
46
Facts ¶ 9.
47
CONTRACT OF DIFFERENCE, DEPARTMENT OF BUSINESS, ENERGY & INDUSTRIAL STRATEGY, GOVERNMENT OF
THE UNITED KINGDOM (MAY 13, 2022).
48
STATE AID: COMMISSION AUTHORISES UK AID PACKAGE FOR RENEWABLE ELECTRICITY PRODUCTION, PRESS
RELEASE, EUROPEAN COMMISSION (JULY 23, 2014).
49
Neil Ford, France’s Contracts Action Highlights Threat To Renewable Growth, REUTERS EVENTS (Sept. 22,
2022, 7:18 PM), https://www.reutersevents.com/renewables/wind/frances-contract-action-highlights-threats-
renewables-growth

18
40. Poland has started CfD scheme recently to extend its offshore wind projects. They have
launched the scheme in two parts for the auction which will be valid till 25 years. This scheme
is approved by the European Commission as it follows the rules and regulation. 50
41. These examples of State Aid show that in times of energy crisis one must be self-reliant
and thus, every country is shifting towards renewable energy projects. Here the respondent’s
main contention is to safeguard its nation and become independent source of energy for itself.
42. Hence to aid the energy generators and the consumer Laurania launched the CfD’s as
other countries, which is a general practice, in the field of energy generation to stabilise the
ever volatile prices. Therefore the CfD is consistent with the TRIMs Agreement.

STATE AID: COMMISSION APPROVES €22.5 BILLION POLISH SCHEME TO SUPPORT OFFSHORE WIND FARMS, PRESS
50

RELEASE, EUROPEAN COMMISSION (MAY 20, 2021).

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 REQUEST FOR FINDINGS

Wherefore in light of the measures at issue, legal pleadings, reasons given, and authorities
cited, Laurania, the RESPONDENT, respectfully requests the Panel to

▪ Find that Lauranian Content Requirement in Supply Chain Plan does not violate
Art. III:4 of the GATT 1994.

▪ Find that Laurania’s actions do not violate Art. 2.1, TRIMs Agreement.

▪ Find that Laurania’s Contract for Difference scheme Does not violate the TRIMs
Agreement.

All of which is respectfully affirmed and submitted

Agents of the Government of Laurania

(RESPONDENT)

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